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U.S. resets expectations for electric vehicle sales

A Nissan Leaf electric car is plugged into

A Nissan Leaf electric car is plugged into a charging station at the Seward Park Co-op apartments on the Lower East Side of Manhattan. (May 6, 2011) Credit: AFP/Getty Images

WASHINGTON/DETROIT - The U.S. Department of Energy on Thursday eased off President Barack Obama’s stated goal of putting 1 million electric cars on the road by 2015, and laid out what experts called a more realistic strategy of promoting advanced-drive vehicles and lowering their cost over the next nine years.

Since Obama announced the goal in his 2011 State of the Union speech, auto analysts and executives have doubted American consumers would buy a million electric vehicles by 2015.

"Whether we meet that goal in 2015 or 2016, that’s less important than that we’re on the right path to get many millions of these vehicles on the road," an Energy Department official said, in advance of remarks by Energy Secretary Steven Chu in a speech at the Washington D.C. auto show.

The proposal to lower electric vehicle costs represents the first look at how U.S. auto policy may take shape during Obama’s next four years. His first term saw a flurry of initiatives related to the auto industry, beginning with government rescues of General Motors Co and Chrysler Group LLC.

Chu told reporters after his speech that he was excited by the advances in vehicle technology.

Asked about the 1 million electric vehicles goal, Chu said: "It’s ambitious, but we’ll see what happens."

Promoting plug-in hybrids and electric vehicles has been another long-running focus for the White House, which has also pushed for more stringent standards on fuel economy. Overall, U.S. federal policies to promote electric vehicles will cost $7.5 billion through 2019, the Congressional Budget Office said in September.

That includes $2.4 billion in grants to lithium-ion battery makers and projects to promote electric vehicles as well as $3.1 billion in loans to auto companies, intended to spur production of fuel-efficient vehicles.

But demand for hybrids and electric vehicles has been weaker than expected. Last year, nearly 488,000 hybrids, plug-in hybrids and electric cars were sold in the United States, accounting for 3.3 percent of the overall auto market, according to green-car website

For the administration to meet its 2015 goal, electrified vehicles would have double their market share to roughly 6 percent of the U.S. auto market, which automotive consulting firm Polk estimates will reach 16.2 million vehicles that year.

Poor demand has hurt lithium-ion battery makers, pushing two DOE grant recipients, A123 Systems Inc and EnerDel, to file for bankruptcy protection.

Dow Chemical Co took a $1.1 billion charge last year, related in part to a writedown of its lithium-ion battery business, Dow-Kokam LLC.

Under the new strategy outlined on Thursday, the DOE is supporting research into new battery technologies and manufacturing methods that would lower the cost of lightweight materials and improve vehicles’ fuel-efficiency.

Chu stressed that it was important to set high goals for electric car technology, because advanced vehicles will eventually be competing with internal combustion vehicles that get 45 miles per gallon fuel economy.

The DOE also confirmed its goal to lower the cost of lithium-ion batteries to $300 per kilowatt hour by 2015 from the present $650. The department eventually hopes to get the cost down $125 per kilowatt hour.

Ultimately, the department’s goal is to have about 500 companies offer workplace charging over the next five years. Several companies are already on board, including Google Inc, Verizon and General Electric Co.

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