President Obama announces $1B National Community Deployment Challenge to spur deployment of alternative-fuel vehicles; new purchasing incentives; new EV Everywhere research grand challenge
March 7, 2012

US President Barack Obama announced a new $1-billion National Community Deployment Challenge to spur deployment of advanced alternative fuel vehicles in communities around the country. The deployment Challenge is designed to catalyze up to 10 to 15 model communities to invest in the necessary infrastructure, remove the regulatory barriers, and create the local incentives to support deployment of advanced vehicles at critical mass.

The President also announced a new research Clean Energy Grand Challenge—EV Everywhere—to make electric-powered vehicles as affordable and convenient as gasoline-powered vehicles for the average American family within a decade. The President announced the initiatives during a visit to the Daimler Trucks North America Mount Holly Truck Manufacturing plant in Mount Holly, North Carolina, as part of a talk about the need to take a sustained, all-of-the-above approach on energy, responsibly expanding domestic production of natural gas and oil, improving the efficiency of our cars and trucks, and making the long-term investments in alternatives to oil.

National Community Deployment Challenge. This proposal embraces a strategy similar to that outlined by Senators Merkley and Alexander in their Promoting Electric Vehicles legislation, the White House noted. The President’s proposal, however, is fuel-neutral, allowing communities to determine if electrification, natural gas, or other alternative fuels would be the best fit.

Deployment Communities would serve as real-world laboratories, leveraging limited federal resources to develop different models to deploy advanced vehicles at scale. The program would also support the development of up to 5 regional Liquefied Natural Gas (LNG) corridors where alternative fuel trucks can transport goods without using a drop of oil.

Tax credits. The President also proposes to improve the current tax credit for electric vehicles by:

  • Expanding eligibility for the credit to a broader range of advanced vehicle technologies;
  • Increasing the amount from $7,500, making it scalable up to $10,000;
  • Reforming the credit to make it available at the point-of-sale by making it transferable to the dealer or financier, allowing consumers to benefit when they purchase a vehicle rather than when they file their taxes; and
  • Removing the cap on the number of vehicles per manufacturer eligible for the credit and, instead, ramping down and eventually eliminating the credit at the end of the decade.

The President is also proposing a new tax incentive for commercial trucks that provides a credit for 50% of the incremental cost of a dedicated alternative-fuel truck, including trucks powered by natural gas or electricity, for a five-year period.

This incentive—paired with support through programs such as the US Department of Energy’s (DOE) National Clean Fleets Partnership which provides technical assistance to large company fleets interested in moving toward vehicles that rely on little or no oil—will not only drive down domestic demand for oil, but also drive up demand for advanced alternative vehicles.

EV Everywhere. EV Everywhere is the second in a series of Clean Energy Grand Challenges designed by the DOE. EV Everywhere is intended to enable companies in the US to produce electric vehicles at lower cost, with an improved vehicle range and an increased fast-charging ability.

The President’s FY13 Budget includes $650 million to advance vehicle and battery technologies at the Energy Department, including investments that support this new grand challenge. EV Everywhere will invest in breakthrough R&D for advanced batteries, electric drivetrain technologies, lightweight vehicle structures, and fast charging technology.