Chu Sets Electric Vehicle Target Price at $23,000 in 10 Years

By · June 26, 2012

Energy Secretary Chu

Chu says the ultimate goal should be to sell unsubsidized electric vehicles within 10 years that are cost competitive with conventional automobiles.

President Obama’s goal of putting 1 million plug-in vehicles on U.S. roads by 2015 is not likely to happen. That seems evident based on 2012 EV sales so far, and the roadmap for new electric car introductions in the coming three years. Falling short of the goal—which after all was aspirational and not based on any hard number forecast—is perhaps why U.S. Energy Secretary Steven Chu is on the road promoting plug-in cars.

Chu was in Dearborn, Michigan last Thursday attending one of a series of D.O.E. workshops designed to recruit scientists, engineers and businesses so that US firms can sell plug-in vehicles that are cost competitive with conventional automobiles—without subsidies. Chu said that today's plug-in vehicles are too expensive for the average American family. “Realistically, we think a plug-in hybrid at 340-350 miles [of range], or a car at double the Nissan LEAF range can satisfy a lot of needs,” he said. “And there, we think, the price point of $25,000 is a very real price that we can maybe achieve in a decade.”

Chu said the Nissan LEAF is roughly $10,000 too expensive to be considered affordable. The fact that Chu specifically called out plug-in hybrids suggests that he believes that plug-in cars with relatively smaller batteries, and a back-up gas engine on board to extend range, might be a more feasible way to bring down costs.

Reducing the cost of batteries is the key to reducing the price of EVs. Chu said the U.S. will have the capacity to make 500,000 batteries a year by 2015—and that prototypes using breakthrough battery technology will be ready for testing by 2020. The Department of Energy is also working on supporting advances in power electronics, motors, lightweight materials and fast-charging infrastructure technology.

These long-term goals will require long-term support from the government. Last week, Chu said that plug-in incentives would most likely be phased out prior to his 2022 target date for making EVs affordable.

The future political climate for supporting EVs is not certain. In a March 19 speech at the University of Chicago, Republican presidential hopeful Mitt Romney called both Tesla and Fisker examples of “crony capitalism.” In response, Tesla CEO Elon Musk, speaking at the delivery of the first Model S production models, said, “Romney is not really against electric vehicles. He might not be as for them as President Obama is, but I don’t think he’s necessarily against them either.” Musk added that, “Romney would have a minor impact, but I think President Obama would have a more positive impact.

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