U.S. financing of sustainable energy technologies, such as for the high-performance batteries that are the limiting factor in high-performance plug-in hybrids, has been dreadfully small ever since President Ronald Reagan reversed the energy investments started by President Jimmy Carter. According to International Energy Agency data, U.S. federal spending on all energy R&D (solar, wind, nuclear, clean coal, batteries, bio-fuels, and others) amounted to just $3 billion or so per year in recent years—less than two days of Pentagon spending, and roughly a tenth of U.S. federal outlays for health technologies at the National Institutes of Health. Annual federal spending on battery research has been in the tens of millions of dollars, when tens of billions of dollars are at stake. This neglect is finally changing with the pledge of $25 billion in loans for technological upgrading approved in last year’s energy legislation. Direct grants for R&D to companies, academia and government laboratories should also be increased.
U.S. society, politicians and the Big Three are finally waking up to the imperatives of energy security and climate-change mitigation. The move to high-mileage automobiles is real, and the effort will shape U.S. international economic competitiveness for decades. The U.S. needs a public-private technology policy, not merely finger-pointing at the private sector. GM’s Chevy Volt, Chrysler’s new Extended Range Electric Vehicles and the large-scale efforts of GM and others to produce a fuel-cell vehicle within a decade, all require public backing, with R&D for basic technologies, policy and financial support for early-stage demonstrations and diffusion, higher taxation of gasoline to reflect security and climate costs, and public investments in complementary technologies, such as a clean-power grid built on solar and wind power distributed over a direct-current high-voltage grid to charge the automobiles. This is the future of the auto industry. It would be a mistake of historic proportions to let the industry die on the threshold of vital transformative change.
Note: This article was originally printed with the title, "Transforming the Auto Industry".
This article was originally published with the title Transforming the Auto Industry.