Is A123 Systems' bankruptcy filing an indication of a larger problem within the electric vehicle industry? During today's OnPoint, Brian Wynne, president of the Electric Drive Transportation Association, explains why he believes, despite negative media and political attention, the electric vehicle sector is performing to expectations. He also discusses the industry's continued need for government assistance.
Monica Trauzzi: Hello and welcome to OnPoint. I'm Monica Trauzzi. Joining me today is Brian Wynne, president of the Electric Drive Transportation Association. Brian, thanks for coming back on the show.
Brian Wynne: Great to be back, thanks.
Monica Trauzzi: Brian, many questions have been raised over the last week about the viability of the electric vehicle industry following the bankruptcy of A123. Is the skepticism valid?
Brian Wynne: Well, first off, before I answer that question I just wanted to say that you and I have had this dialogue going for quite sometime now and it's always been very meaningful and I really appreciate the opportunity to come back on.
Monica Trauzzi: Thank you for coming on.
Brian Wynne: This is another situation where I think perspective is needed. We're in the political season and so much context is missing for what's going on. From my perspective, some of our companies have had some very high profile setbacks, and that's obscuring some real progress that's going on. We have vehicle sales that are actually trending very nicely. We're up 180 percent year on year in plug-in vehicles. We have 14 plug-in vehicles in the marketplace today. We'll have upwards of 40 over the next 2 years, and they're coming into markets in greater volumes and larger availability for consumers at different price points. We're building out charging infrastructure, and to your point, we're also building out the upstream manufacturing capability that's so necessary in order to get these vehicles into the marketplace, get across the early adopter phase and into the mainstream. And I think we're doing very, very well. We have actually 300 manufacturing sites in the country that are manufacturing equipment parts etcetera for electric drive cars. That's tens of thousands of workers. And again, we've had a couple of high-profile setbacks. But generally speaking, I think there's great progress being made.
Monica Trauzzi: But is the industry meeting expectations, some of those expectations that were said a few years back, or is it falling short?
Brian Wynne: Well, you have to review where these expectations come from. From my perspective it's good that we've got people's attention. Expectations I think are a function of people really want to see this succeed, and it is succeeding. We have this steady march going forward from hybrids now into plug-in vehicles, and there are three different kinds of plug-in vehicles and fuel cell vehicles ultimately. All of them use the same kinds of platforms and the same kinds of parts that are really important. Indeed, some of the energy storage that's being built out is also being sold for grid storage as well. So there are a number of different things that are going on here that I think have an impact on the way we use energy in this country. The expectations are really difficult to control and I think if we map out where we are relative to how we started with hybrids and the skepticism that was associated with that, Prius is now the number one selling car in California. But I remember the same kinds of questions about will this ever be successful? And we're rolling these cars out and the plug-in variety much, much more rapidly, and we're accessing for consumers a dollar a gallon essentially of fuel. So I think we've got a very good story here and I think we need to keep that context.
Monica Trauzzi: So Tesla recently opened six super chargers in the west that they built to sort of help facilitate long-distance travel. It takes 30 minutes to half-charge a battery and that 30-minute charge will last you 150 miles. Doesn't that sort of get to the core of EV acceptance and the issues that we see with that? Because you're basically asking someone to spend nearly six figures on a vehicle and then they have to wait 30 minutes for it to charge, it's only going to take them 150 miles. Isn't that the critical problem?
Brian Wynne: I don't think it's a critical problem at all. It really depends on how you use your vehicle. And let's not forget, this isn't just about Tesla, although the model S got a wonderful review when it came out and it's really a stunning car. And the first time that you can buy a different size battery depending upon how much money and how much range you need. So that actually proves that we're offering consumers different kinds of choices as we go forward. This is also about vehicles that move around that are connected to the grid for ground support at the airport. We're not even counting those numbers. It's about military bases and moving people and goods on a military base in a way that saves fuel, and the military is the number one fuel user in the country, and they're really motivated to try and figure out ways to diversify their fuel structure. So we have to view this in the perspective of how are we going to use the vehicle. For some people, most of the time, and this is true for me of course, my vehicle is sitting either at my house or it's sitting at the office. There's plenty of time to charge it. And I don't drive far enough each day, although I'd love to cut down on my commute, to ever get to the end of what I need in the charge. I never actually fully run that battery pack out for the vast majority of driving that I do. But the key thing here is to educate consumers about what's available, give them lots of choices, and that's the beauty of electric drive, we can configure it lots of different ways.
Monica Trauzzi: So many people say that the industry is failing. What market signal would you accept as a sign that the industry is in fact failing and that the US consumer just doesn't accept this technology and this vehicle structure?
Brian Wynne: Well, that's the best story of all, and I don't know where failure comes from here. Because if you ask the 50,000 of us that are driving cars that plug into the grid, you get the highest customer satisfaction survey ratings of all. So this is part of the story that I think is going completely unreported. We actually have very, very good reception in the marketplace from the people that are getting the vehicles. It's just a function of how fast can we accelerate the adoption. And clearly, we started two years ago. We started two years ago. That's when the Volt and the Leaf, the first two plug-in vehicles entered the market. We're at the two-year anniversary of that. And of course they came into limited markets and limited volumes. Now they're available nationwide and you see a growing trend for those sales numbers. So I think we're doing fine and I don't agree that we're failing at all.
Monica Trauzzi: What should Washington be doing to help the industry, get the industry on track if it needs to be on track?
Brian Wynne: Washington is, you know, I think we're all looking at where do we go from an energy security point of view. We need an energy security strategy. There's a billion dollars a day going out of this country for imported oil, and that's something that has to be addressed, and when we address it, as we address it, electric drive plays an enormous part in that. Our vehicles need to be more efficient going forward; electric drive can help with that, no matter what kind of vehicle platform you're talking about. Washington has been helpful, and of course we're here in Washington talking to policymakers all the time. We'll continue to work across the aisle to make certain that we have, we advance batteries, for example, and energy storage again not just helps us in transportation, it helps us use our grid more efficiently in how we use energy in general. We need to continue to help consumers. I think that we are still at the early stages of this and tax credits for vehicles will remain extremely important as we go forward. We need to continue to understand how people are going to charge their cars. It's different. It's actually in some ways much better to plug in your car than to have to go to a gas station because you can do it in places that are more convenient. But it won't work for everyone so we need to understand that better. We have programs that are in place and we're just beginning to get data as volumes start to increase. So these are all things that working with the industry we'll learn more about how to accelerate the adoption.
Monica Trauzzi: At what point will the industry be able to demonstrate its viability without needing to continue to use all of these incentives and tax credits for consumers to actually purchase these vehicles?
Brian Wynne: Well, that's a good question. I think the bottom line here is that the Federal government plays an extremely important role in energy, it plays an extremely important role in the environment and protecting the environment, and it plays an extremely important role in transportation. To the extent that you're going to have policies in each of these areas, I would suggest that we're going to need to look at solutions for creating greater diversity in the fuels that we use. Right now we have a monopoly fuel, that's oil. If we can move more and more people to using electricity, which is domestically produced, that's a really good thing. And I think that's a very appropriate role for Washington to keep in view over the medium in the long term. Having said that, clearly we had incentives for hybrids when they first came out. We no longer have incentives for hybrids. There's a time limited element of all of these things. We will be successful when we are commercially competitive across the board. But in many instances I emphasize this, we are commercially competitive today for the way people use their cars, we just need to do a better job educating people about that.
Monica Trauzzi: All right, we will end it right there. Thank you for coming on the show.
Brian Wynne: Always a pleasure.
Monica Trauzzi: And thanks for watching, we'll see you back here tomorrow.
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