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S. HRG. 111–808 

OPPORTUNITIES AND CHALLENGES PRESENTED 

IN INCREASING THE NUMBER OF ELECTRIC 

VEHICLES IN THE LIGHT DUTY AUTOMOTIVE 

SECTOR 

HEARING 

BEFORE A

SUBCOMMITTEE OF THE 

COMMITTEE ON APPROPRIATIONS 

UNITED STATES SENATE 

ONE HUNDRED ELEVENTH CONGRESS 

SECOND SESSION 

SPECIAL HEARING 

FEBRUARY 23, 2010—WASHINGTON, DC 

Printed for the use of the Committee on Appropriations 

( 

Available via the World Wide Web: http://www.gpo.gov/fdsys 
(II) 

COMMITTEE ON APPROPRIATIONS 

DANIEL K. INOUYE, Hawaii, Chairman 

ROBERT C. BYRD, West Virginia 

PATRICK J. LEAHY, Vermont 

TOM HARKIN, Iowa 

BARBARA A. MIKULSKI, Maryland 

HERB KOHL, Wisconsin 

PATTY MURRAY, Washington 

BYRON L. DORGAN, North Dakota 

DIANNE FEINSTEIN, California 

RICHARD J. DURBIN, Illinois 

TIM JOHNSON, South Dakota 

MARY L. LANDRIEU, Louisiana 

JACK REED, Rhode Island 

FRANK R. LAUTENBERG, New Jersey 

BEN NELSON, Nebraska 

MARK PRYOR, Arkansas 

JON TESTER, Montana 

ARLEN SPECTER, Pennsylvania 

THAD COCHRAN, Mississippi 

CHRISTOPHER S. BOND, Missouri 

MITCH MCCONNELL, Kentucky 

RICHARD C. SHELBY, Alabama 

JUDD GREGG, New Hampshire 

ROBERT F. BENNETT, Utah 

KAY BAILEY HUTCHISON, Texas 

SAM BROWNBACK, Kansas 

LAMAR ALEXANDER, Tennessee 

SUSAN COLLINS, Maine 

GEORGE V. VOINOVICH, Ohio 

LISA MURKOWSKI, Alaska 

CHARLES J. HOUY, Staff Director 

BRUCE EVANS, Minority Staff Director 

SUBCOMMITTEE ON ENERGY AND WATER DEVELOPMENT

BYRON L. DORGAN, North Dakota, Chairman 

ROBERT C. BYRD, West Virginia 

PATTY MURRAY, Washington 

DIANNE FEINSTEIN, California 

TIM JOHNSON, South Dakota 

MARY L. LANDRIEU, Louisiana 

JACK REED, Rhode Island 

FRANK R. LAUTENBERG, New Jersey 

TOM HARKIN, Iowa 

JON TESTER, Montana 

DANIEL K. INOUYE, Hawaii (ex officio) 

ROBERT F. BENNETT, Utah 

THAD COCHRAN, Mississippi 

MITCH MCCONNELL, Kentucky 

CHRISTOPHER S. BOND, Missouri 

KAY BAILEY HUTCHISON, Texas 

RICHARD C. SHELBY, Alabama 

LAMAR ALEXANDER, Tennessee 

GEORGE V. VOINOVICH, Ohio 

Professional Staff 

DOUG CLAPP

ROGER COCKRELL

FRANZ WUERFMANNSDOBLER

CAROLYN E. APOSTOLOU (Minority) 

TYLER OWENS (Minority) 

LASHAWNDA SMITH (Minority) 

Administrative Support 

MOLLY BARACKMAN-EDER
(III) 

C O N T E N T S 

Page 

Opening Statement of Senator Byron L. Dorgan .................................................. 1 

Opening Statement of Senator Robert F. Bennett ................................................ 7 

Statement of Senator Lamar Alexander ................................................................ 8 

Statement of Dr. Henry Kelly, Principal Assistant Secretary for Energy Efficiency and Renewable Energy, Department of Energy ..................................... 9 

Prepared Statement ......................................................................................... 11 

Electric Drive Vehicle Capabilities ......................................................................... 12 

EV Battery Technology and Ongoing Research .................................................... 12 

Recovery Act Impact ................................................................................................ 14 

Advanced Technology Vehicle Manufacturing Loan Program ............................. 14 

EVs and the Electric Grid ....................................................................................... 15 

Statement of Frederick W. Smith, Member, Electrification Coalition; Chairman, President, and CEO, FedEx ....................................................................... 15 

Prepared Statement ......................................................................................... 16 

Statement of Richard Lowenthal, Founder and CEO, Coulomb Technologies ... 31 

Prepared Statement ......................................................................................... 34 

Some Definitions ...................................................................................................... 35 

Policy Recommendations ......................................................................................... 36 

Statement of Alan I. Taub, Ph.D., Vice President, Global Research and Development, General Motors ...................................................................................... 38 

Prepared Statement ......................................................................................... 40 

Statement of Kraig T. Higginson, Executive Chairman of the Board, Raser 

Technologies ......................................................................................................... 42 

Prepared Statement ......................................................................................... 50 

American Automotive Renaissance ........................................................................ 52 

High Volume & High Margin ................................................................................. 52 

Why Trucks? The Greatest Good ............................................................................ 52 

Why Fleets? Fleets Will Lead the Way .................................................................. 53 

Green Fleet Program ............................................................................................... 54 

Minimal Changes ..................................................................................................... 54 

Offsetting Battery Costs With Mobile Exportable Power and Additional 

Value ..................................................................................................................... 54 

Key to OEM Profitability ........................................................................................ 54 

Bridge to High Volume ............................................................................................ 54 

Market Drivers ........................................................................................................ 55 

Good for the Grid ..................................................................................................... 55 

Mass Market Penetration Range & Infrastructure .............................................. 55 

Flexibility ................................................................................................................. 55

Fuel Cell Ready ........................................................................................................ 55 

Well to Wheel Emissions, Improving ..................................................................... 55 

Current Status of Electric Vehicle Development .................................................. 56 

How Much Will it Cost? .......................................................................................... 57 

Economies of Scale—Sharing Common Components ............................................ 57 

What is Needed ........................................................................................................ 57 

Manufacturing Incentives ....................................................................................... 58 

Early Adopting Fleet Incentives ............................................................................. 58 

Consumer Incentives ............................................................................................... 58 

Electric Fuel Charging Incentives .......................................................................... 58 

Low Carbon Fuel Incentives. .................................................................................. 58 

Sales Tax the Highest Polluters ............................................................................. 58 

Discounts in State Registration Fees for Electric Vehicles .................................. 58 

Statement of Mary Ann Wright, Vice President and Managing Director, 

Power Solutions Division, Johnson Controls ..................................................... 59 

Prepared Statement ......................................................................................... 61 
Page

IV 

Our New Li-ion Battery Production Facility ......................................................... 61 

The Challenge—Demand for Electric Vehicles ...................................................... 63 

Leveraging the ARRA Manufacturing Investment ............................................... 64 

Electrification Coalition Ecosystem Cities ............................................................. 64 

Research and Development—The Future .............................................................. 64 

Additional Consideration—Tax Treatment of ARRA Grants ............................... 65 

Additional Committee Questions ............................................................................ 73 

Questions Submitted to Dr. Henry Kelly ............................................................... 73 

Questions Submitted by Senator Robert F. Bennett ............................................ 73 

Questions Submitted to Richard Lowenthal .......................................................... 76 

Questions Submitted by Senator Robert F. Bennett ............................................ 76 

Integration Into the Electric Grid .......................................................................... 76 

Questions Submitted to Alan Taub ........................................................................ 78 

Questions Submitted by Senator Robert F. Bennett ............................................ 78 

Questions Submitted to Mary Ann Wright ............................................................ 79 

Questions Submitted by Senator Robert F. Bennett ............................................ 79 

Meeting DOE Goals for Cost and Performance of Batteries ................................ 79 

Warranting Batteries .............................................................................................. 79 

Uncertainties and Trade-Offs With Durability, Safety, and Cost ....................... 79 

Standardization of Technology ............................................................................... 81 

Prepared Statement of PG&E Corporation ........................................................... 83 

Prepared Statement of Lindsay Leveen, Tiburon, CA .......................................... 84 
(1) 

OPPORTUNITIES AND CHALLENGES PRESENTED IN INCREASING THE NUMBER OF 

ELECTRIC VEHICLES IN THE LIGHT DUTY 

AUTOMOTIVE SECTOR 

TUESDAY, FEBRUARY 23, 2010 

U.S. SENATE, 

SUBCOMMITTEE ON ENERGY AND WATER DEVELOPMENT, 

COMMITTEE ON APPROPRIATIONS, 

Washington, DC. 

The subcommittee met at 10:17 a.m., in room SD–192, Dirksen 

Senate Office Building, Hon. Byron L. Dorgan (chairman) presiding. 

Present: Senators Dorgan, Cochran, Bennett, and Alexander. 

OPENING STATEMENT OF SENATOR BYRON L. DORGAN

Senator DORGAN. I’m going to call the subcommittee hearing to 

order. 

This is the Energy and Water Subcommittee on Appropriations, 

and we’re holding a hearing today on the subject of electric vehicles 

and an electric drive future for America. 

Let me talk first, in an opening statement, about some of the 

reasons that bring us to this judgment and to have this hearing. 

I think that moving toward an electric drive future makes a 

great deal of sense for our country, for a number of reasons. The 

most compelling reason to me is national energy security. Each 

day, we consume about 20 million barrels of oil a day in our country. Seventy percent goes into the transportation sector. I want to 

go through some charts, just very briefly, that describe, graphically, 

the case for this. 

As I indicated, the first chart shows that the oil demand, by sector—72 percent of oil demand is for transportation. By far, it exceeds everything else. 
2 

The second chart shows that, in transportation itself, petroleum 

accounts for 94 percent of the energy used, only 6 percent comes 

from other sources. 
3 

The next chart shows the top oil producers in 2008. You can’t see 

the top line very well, unfortunately, but Saudi Arabia is at the 

top, and it exceeds all the other countries. And this shows where 

the United States is versus the Saudis, the Russians, and others. 

Those are the top oil producers in 2008. We are the top consumer, 

obviously, but not the top producer. 

The next chart shows the top oil consumers. You see it’s quite 

clear that the United States has a prodigious appetite for oil. 
4 

Finally, the fuel mix for electricity, which, in my judgment, is 

where we’re headed, in terms of an electric drive future, is much 

different. The fuel mix for electricity is coal, natural gas, nuclear, 

hydro. And again, compared to the previous chart, where you have 

substantial oil intensity for our transportation system, this makes 

us much, much less dependent on foreign oil. 
5 

In terms of considering electric drive vehicles, the final chart I 

have is the average miles driven per trip, which I think is very interesting. Nearly 60 percent of the travel in this country, the trips 

in this country, travel less than 6 miles. Those are all the things 

that we need to understand as we talk about the need to move toward a different kind of future to power our transportation fleet. 

We use 24 percent, 22 percent, somewhere in that range, of the 

world’s oil production. We produce only 10 percent, and we have 

less than 3 percent of the world’s reserves. Well, that just doesn’t 

add up, in terms of the use of oil and the intensity of that oil use 

in transportation. 
6 

So, the transportation sector, in my judgment, can be powered by 

electricity. It would rely much, much more, as you saw from the 

chart, on domestic fuels, and that would make us less dependent 

on foreign oil. 

We can cut our dependence on foreign sources of oil, cut our 

smog and greenhouse gas emissions. There are a good number of 

things that, in my judgment, would suggest that we move toward 

an electric drive future. 

I’ve worked with my colleagues on increasing funding for vehicle 

technologies, which include electric vehicles. Last year, the Vehicle 

Technologies Program was funded at about $300 million. President 

Obama has set a goal of getting 1 million electric vehicles on the 

road by 2015. The Department of Energy’s budget request for 2011 

includes a 14-percent increase in electric-drive-specific programs, 

most of which will fund research and advanced battery technology 

which is one of the keys to this issue of conversion to an electric 

drive future. 

Now, like most things, this is not a new idea. One hundred years 

ago, 25 percent of the cars made in America were electric vehicles. 

The year 1900 was the heyday of electric cars. At that time, they 

all sold all other types of cars, and it wasn’t until the Model T that 

electric cars began to decline. I happened to have owned a 1924 

Model T that I bought as a young kid for $25 and restored lovingly. 

So, I understand that genesis of the internal combustion engine in 

the Model T. 

In 1909, President Taft made an official decision to change from 

horses to cars. He ordered four cars, one of which was the Baker 

electric car. So, you know, we sit here, 101 years later, and the 
7 

more things change, the more they remain the same. We are now 

talking about electric cars. 

I understand that there are issues here that we need to resolve 

and think about. A 40-mile range will be possible with the Volt, 

they say. That covers 90 percent of consumers’ driving habits. But, 

they’re also talking about how to extend that with the Volt. We 

need to be able to deploy a recharging infrastructure so that the 

American public is confident they can get to point A from point B 

without running out of power. 

The cost of the battery is one of the main reasons why electric 

vehicles are much more expensive than their internal combustion 

engine counterparts at this point. But we have sunk a massive 

amount of money into new battery technology. We now have new 

companies that are opening plants in this country to produce batteries. We’re making significant strides in new battery technology. 

And we want to lead the world in battery technology. 

We see the Chevy Volt, and the Nissan Leaf, which I saw advertised on the Olympics last evening. The technology needed to 

produce commercial electric cars is well within our grasp. The electricity to power those cars in this country can come from many different sources, which makes us, as I said, much less dependent on 

foreign oil. 

So, there are so many things that are moving toward an electric 

drive vehicle system that are advantageous for our country. 

I’m a great believer in not letting things happen, but, instead, 

making things happen. I mean, so much of what we do in this 

country is, we sit around, we let things happen to us, and then we 

respond to it. It is much more preferable to me that we would decide, here’s the kind of future we want, and here are the things 

that we need to do to achieve that future. That’s the purpose of 

holding this hearing, to talk about where we are with the funding 

that we have committed and where we need to go if our country, 

indeed, wants to have a different kind of future and be less dependent on foreign oil. 

I’m going to make one final point. It is not lost, it seems to me, 

on people who think for a living that we could wake up one morning and discover that our unbelievable dependence on oil that 

comes from outside of our country is interrupted. And if that is the 

case, our economy will be flat on its back. I mean flat on its back. 

We are so unbelievably dependent. That is not healthy for our 

country, for our future. And so, because an overwhelming amount 

of oil is used in our transportation sector, and because, at the same 

time, we are trying to see how do we reduce emissions and do all 

the things that will help protect our planet, it seems to me this discussion of moving toward an electric drive vehicle future is timely 

and critically important for our country. 

Let me call on Senator Bennett for any comments you might 

have, Senator. 

OPENING STATEMENT OF SENATOR ROBERT F. BENNETT

Senator BENNETT. Thank you very much, Mr. Chairman. I appreciate your holding the hearing, and apologize for being a bit tardy. 

I’ve been driving a hybrid car for about 9 years now and have 

seen some all-electric vehicles with a booster kind of activity from 
8 

a gasoline thing that has come from a car developed in the State 

of Utah. And I think the direction away from a pure fossil-fueldriven car is one that we’re moving very strongly. So, I thank you 

for calling the hearing, and I look forward to hearing what our witnesses have to say. 

Senator DORGAN. Senator Bennett, thank you very much. 

Senator Alexander. 

STATEMENT OF SENATOR LAMAR ALEXANDER

Senator ALEXANDER. Thanks, Mr. Chairman. I’m—I thank you 

for this hearing and for your approach. 

You know the buzz word this week in Washington seems to be 

that Washington doesn’t work, that’s not necessarily true on electric cars or even clean energy. I mean, we have—I mean, all Republican Senators and many Democrats, you know, want to greatly 

increase nuclear power production. And the President, over the last 

month, has taken a number of significant steps in that direction. 

So, we agree on that. The President’s been a leader on electric cars, 

and all 40 Republicans have endorsed the idea of doubling—of 

making electric cars and trucks our—you know, half of our vehicles. And if you add to that offshore exploration for natural gas and 

the fact that we also agree on the importance of energy research 

and development for the 500-mile battery and the 50-percent-efficient voltaic cell for rooftops, we have a lot of agreement. We can 

get into a disagreement over economy wide cap-and-trade, but 

there’s plenty to agree about on clean energy. And this is certainly 

one of those subjects. 

Eighteen months ago, I bought a Toyota Prius, and—that was 

converted with an A123 battery, so I plug it in every night, and I’ve 

driven it to work every day for the last 18 months, and I’ve had 

no problems with it, and I think I get extra mileage from it, and 

my electric bill hasn’t gone up much. So, it seems to be working, 

except that the battery costs too much. But, it works fine. 

And, of course, we’re very excited, in Tennessee, that Nissan’s 

going to be building not only the Leaf there, it’s going to be building the batteries there for the Leaf, at the plant there. And we’re 

very proud of Federal Express. Fred Smith stuck his neck out several years ago, and Federal Express has gone ahead with electric 

and plug-in vehicles, including trucks, and then his leadership nationally on helping remind us of this. 

I’ve been fascinated, Mr. Chairman, by this from the first time 

I heard about it, because I simply had not realized how much unused electricity we have in the country, until a few years ago. I 

mean, that should be perfectly obvious to all of us, but it reminds 

me of Ross Perot’s story, you know, in the 1960s of—in Texas, he 

noticed all the banks were locking up at 5 o’clock and not using 

their computers, so he went around and bought their unused computer time, and came around and sold it to governors at cheap 

rates to manage their Medicaid data, and made a billion dollars. 

And I know that in the TVA region, Tennessee Valley Authority 

region, we have the equivalent of six or seven nuclear power plants’ 

worth of unused electricity every night. So, if we could figure out 

how to take all these cars and plug them in at night, according to 
9 

many estimates, we might double—we might electrify half our cars 

and trucks without any new power plants. 

I talked to the Austin, Texas, utility head. They’ve been very progressive on this subject. And he thought it was realistic that, under 

some circumstances, they could electrify half their cars and trucks 

in the Austin, Texas, area without building any new plants. 

So, I’ll be very interested to hear from our witnesses exactly, you 

know, What are the steps we ought to take? We’re at a time when 

we don’t have a lot of extra money. You know, our deficits are high, 

so we have to be careful with that, and here on the Appropriations 

Committee. And we don’t want to put into the law subsidies that 

just go on forever and distort the marketplace’s ability to make its 

own decisions about what works. But, it seems to me that this is 

a no-brainer, that probably the best way to reduce our dependence 

on foreign oil, to clean the air, to deal with climate change, et 

cetera, et cetera— 

And I’m delighted the chairman has called the hearing, and 

I’m—I welcome it as an opportunity for us to work together to help 

our country move ahead. 

Thank you. 

Senator DORGAN. Senator Alexander, thank you very much. 

You’re right that there is more agreement than is apparent sometimes. But, agreement is good news, and that never leads the news. 

There’s an old saying, ‘‘Bad news travels half way around the world 

before good news gets its shoes on.’’ And that certainly is the case 

here in Washington, DC. 

We are pleased to introduce the first panel: Dr. Henry Kelly, the 

Principal Deputy Assistant Secretary for Energy Efficiency and Renewable Energy at the Department of Energy. Throughout his career, Dr. Kelly has been a leader in the development of new energy 

technology. And during the Clinton administration, he served as 

the Assistant Director for Technology for the Office of Science and 

Technology Policy, in which he helped negotiate and implement administration research partnerships in energy technology, including 

new automobile and truck technology. 

He’ll be followed by Fred Smith, president and CEO of the FedEx 

Corporation, if there’s anybody in America who knows how to make 

things happen, it certainly must be Fred Smith. He is a chairman 

of the Energy Security Leadership Council and a member of the 

Electrification Coalition. Now, that Energy Security Leadership 

Council brings together America’s most prominent business and 

military leaders for a major effort to support a comprehensive, 

long-term policy to reduce U.S. oil dependence and to improve our 

energy security. 

Dr. Kelly, you may proceed, and then we’ll call on Mr. Smith. 

STATEMENT OF DR. HENRY KELLY, PRINCIPAL ASSISTANT SECRETARY FOR ENERGY EFFICIENCY AND RENEWABLE ENERGY, 

DEPARTMENT OF ENERGY 

Dr. KELLY. Chairman Dorgan, Ranking Member Bennett, Senator Alexander, thank you for the opportunity to talk about the Department of Energy’s programs in building safe, affordable transportation systems that also reduce our dependence on foreign oil 

and reduce greenhouse gas emissions. 
10 

Now, Senator Dorgan’s introductory remarks eloquently showed 

how important this issue is. And we, in DOE, have designed a portfolio of research designed to try to attack this problem. We’ve, of 

course, invested in renewable fuels and advanced engines for using 

them. We’ve invested in fuel cells. But, importantly, we’ve also invested in electric and hybrid vehicles of various kinds. 

Now, this is an interesting moment in the history of these technologies—these technologies are going to compete. It’s very difficult, at this point, to find out what the market is going to be. But, 

consumers are likely to choose a number of these options, perhaps 

choosing different vehicles for different specialized purposes. 

I’m going to focus, today, of course, primarily on electrics and hybrids. To begin with, the environmental benefits of these technologies depend heavily on the source of electricity. And, of course, 

the Department has major programs to try to invest in low carbonemitting electricity generation—renewables, nuclear, and coal with 

capture and sequestration. 

Now, as Senator Dorgan pointed out, electric cars have been 

around for a long time. They lost out to the Model T and other internal combustion engines because of cost, convenience; and that’s 

the way the situation has really been until very recently. But, the 

introduction of the potential for extremely low cost and reliable 

safe batteries has really changed the rules of that competition. And 

we’re certainly seeing that reflected in the market. 

Hybrid electrics are now 3 percent of the market. This year, 

we’re likely to see three or four major manufacturers have a plugin hybrids and electric vehicles on the market. This has been driven, in no small part, by the public investment we’ve had through 

the Recovery Act and through the Department of Energy’s continuing investment in research and advanced batteries, including 

the lithium-ion battery. Now, there’s a lot of work ahead of us. We have asked for $120 

million in the fiscal year 2011 budget, plus additional money for 

transportation systems, to work on further battery research and 

the motors and controls and other devices are needed to put us on 

a continuous improvement path. 

In the Recovery Act, we invested $2.4 billion in advanced battery 

and electric transportation. A lot of these battery plants are being 

built now. We supported the installation of over 10,000 charging 

sites, provided $2 billion in tax credits for manufacturing and for 

the purchase of electric vehicles and plug-in hybrids. We’ve had a 

$25 billion auto loan, Advanced Technology Vehicles Manufacturing 

Loan Program which has also covered a number of firms that are 

investing in advanced electric vehicles. And the 48C tax credit supported a number of firms that are investing in battery manufacturing and other technologies. 

So, collectively, this work is helping put us in a position where 

U.S. firms will be able to produce batteries for half a million plugin hybrids by the year 2015 and is leading rapidly to a point where 

the technology of electrics and hybrids of all kinds can be fully 

competitive with standard automobile prices and expected prices 

for future gasoline. 

Now, clearly if electrics and hybrids become a big part of the Nation’s transportation system, it’s going to have an impact on utili-
11 

1Transportation Energy Data Book: Edition 28, Table 2.1 and Table 1.16. 

2 Assumes an average of approximately three trillion miles driven annually (http:// 

www.fhwa.dot.gov/policyinformation/travel/tvt/history/) and a distance from the sun to Proxima 

Centauri of about 24.7 trillion miles (http://heasarc.gsfc.nasa.gov/docs/cosmic/nearestlstarlinfo.html). 3Transportation Energy Data Book: Edition 28, calculated from data in Table 1.13 and Table 

1.16. 

ties. Hopefully, a large fraction of the resource can be met with existing generating plants, but, of course, it doesn’t mean that you’ll 

have the transmission facilities in place to move the power where 

you need it. It’s one of the reasons for the Smart Grid. You need 

to have charging stations in residences, in parking spaces, and 

we’re working very closely with electric utilities to make sure that 

we can do this expeditiously. 

Now, the businesses that will manufacture electric vehicles, batteries, motors, controls, and the maintenance can create a lot of 

new business opportunities throughout America, including manufacturing. And the research that we’ve done over the years has put 

us in a position where we can, I think rightly, claim leadership in 

this area. But, there’s absolutely no cause for complacency. A number of well-managed, well-funded projects in advanced batteries 

and vehicle technologies are underway around the world. Markets 

will move quickly. Competition will be ruthless. And new technologies will require continuous improvement. 

PREPARED STATEMENT

Well-managed Federal research programs in the 20th century 

spurred the kind of innovation in the U.S. leadership in areas 

ranging from commercial aircraft to the Internet. And I’m absolutely convinced that wise management of public investment in 

electric vehicles can do the same thing and put us in a position 

where we can, in fact, lead world markets. 

Thank you for the opportunity of talking here, and I’d be happy 

to answer questions. 

[The statement follows:] 

PREPARED STATEMENT OF DR. HENRY KELLY

INTRODUCTION

Chairman Dorgan, Ranking Member Bennett, and members of the subcommittee, 

thank you for the opportunity to appear before you today to discuss the Department 

of Energy’s (DOE) efforts to help provide Americans with attractive, safe, affordable 

transportation options that sharply reduce imported fuel use and greenhouse gas 

(GHG) emissions. A number of new technologies—particularly rapid advances in 

batteries, motors, and other essential components of electric and hybrid electric vehicles—open exciting new possibilities to achieve these goals while generating many 

new opportunities for business growth and job creation. 

Transportation is a central part of the Nation’s energy and environmental challenges. It is responsible for about 30 percent of all U.S. energy use and two-thirds 

of total U.S. petroleum consumption.1 The work required to build, fuel, and maintain transportation systems makes the transportation sector one of the Nation’s 

largest employers as well. 

Within that transportation system, driving, in particular, consumes a significant 

amount of energy while emitting GHGs; and Americans drive a lot. The vehicle 

miles Americans travel in just over 8 years is roughly equal to the distance to the 

star nearest to the sun, Proxima Centauri.2 Automobiles and light trucks alone are 

responsible for nearly one-half of U.S. petroleum consumption.3 In 2007, gasoline 
12 

4Transportation Energy Data Book: Edition 28, calculated from data in Table 11.4 and Table 

11.6. 5 J. Ward, internal DOE analysis, January, 27, 2010 based on A. Elgowainy, ANL GREET 

analysis, January 27, 2010. 6Memorandum for the President from the Vice President, December 15, 2009: http:// 

www.whitehouse.gov/sites/default/files/administration official/ 

vicelpresidentlmemolonlcleanlenergyleconomy.pdf. 7Transportation Energy Data Book: Edition 27 (2008), p. 8–19, citing work done by Danilo 

Santini at Argonne National Laboratory. 8 Green Car Congress reporting Autodata 2009 sales figures, January 7, 2010: http:// 

www.greencarcongress.com/2010/01/hybsales-20100107.html. 

use in transportation contributed to 16.4 percent of total U.S. carbon dioxide emissions.4

DOE designed a portfolio of research projects that can help meet the challenge 

of producing safe, affordable, energy-efficient, and environmentally-friendly highway 

transportation. This portfolio includes balancing investments in basic science, highly 

innovative but high-risk research, and applied research focused on areas where 

risks and other factors have led to underinvestment by private firms. Investing the 

public’s research money in several promising research pathways, the portfolio includes advanced engines for using new fuels from renewable resources, fuel cell vehicles, hybrid electric vehicles (including plug-in hybrid electric vehicles, or PHEVs), 

and all-electric vehicles, or EVs. Each of these technologies can contribute to the solution. However, it is impossible to determine which technologies will be ‘‘winners’’ 

in the future since customers will choose different cars for different missions, making vehicle markets complex and sufficiently difficult to predict in the coming decades. 

The environmental benefits of PHEVs and EVs depend heavily on the fuels they 

use. EVs and hydrogen-powered vehicles can achieve very low net emissions if electricity and hydrogen are produced largely from low-carbon resources—renewable energy, fossil-powered generation with carbon capture and sequestration, and nuclear 

power. DOE is making major investments in the research needed to ensure that 

these energy resources are available as quickly as possible. If the Department’s 2050 

goals are met, the GHG emissions of PHEVs and EVs would be five times lower 

than those produced by today’s internal combustion engine cars.5

My remarks today focus on the recent progress being made in hybrid electric vehicles and all-electric vehicles. DOE’s Vehicle Technologies Program (VTP) manages 

research on improving the cost and performance of advanced batteries, efforts supported by funding from the Recovery Act, and efforts of the Advanced Technology 

Vehicle Manufacturing Loan Program (ATVM). Collectively, this work is helping develop the advanced battery manufacturing capacity needed to produce half a million 

PHEVs per year by 2015.6

ELECTRIC DRIVE VEHICLE CAPABILITIES

Hybrid electric vehicles, which are now familiar to most Americans, operate from 

fuel-powered internal combustion engines and from electric motors provided by batteries charged by the engine. Energy wasted by conventional vehicles during braking can be captured by hybrid cars to recharge batteries, and the fuel-powered engines can simply turn off when not needed—including during periods of idling. Virtually all hybrids on the road today can only operate for short distances without 

needing the engine to recharge the battery. Plug-in hybrids have batteries large 

enough to enable operation over significant distances using batteries alone. Many 

of the plug-in hybrids DOE supports can travel up to 40 miles on battery power 

alone. This means that most of the daily trips taken by Americans could avoid using 

any gasoline.7 The fuel-powered engine would be available to support longer trips. 

EVs eliminate the engine entirely and operate only in all-electric mode. The EVs 

being tested on American roads today are designed to travel 100 to 200 miles or 

more on a single charge. 

EV BATTERY TECHNOLOGY AND ONGOING RESEARCH

Approaching 3 percent of new car sales, hybrid electric vehicles are now common 

on American highways 8 and electric drive vehicles are beginning to enter the market. In 2008, an American manufacturer launched a highway-capable production 

electric car for sale in the United States; another American manufacturer expects 

to release a PHEV in 2010; a Japanese company’s new EV will soon be available 

in several West Coast cities; and a major American company will launch sales of 

an all-electric delivery van by the end of 2010. 
13 

9http://www.henryfordestate.org/claracar.htm. 

10TIAX, PHEV Battery Cost Assessment, page 32, LiMn2O4 high case, with 50 percent useable energy. 11 A. Brooker, M. Thornton, and J. Rugh, Technology Improvement Pathways to Cost-Effective 

Vehicle Electrification (preprint of a conference paper—NREL/CP–540–47454), February 2010. 12From the VTP’s published program goals in Department of Energy fiscal year 2011 Congressional Budget Request, http://www.mbe.doe.gov/budget/11budget/Content/Volume%203.pdf, and 

from the Early Release Annual Energy Outlook 2010, U.S. Energy Information Administration 

(EIA). 13 U.S. Department of Energy fiscal year 2011 Congressional Budget Request, http:// 

www.mbe.doe.gov/budget/11budget/Content/Volume%203.pdf. 

Electric cars are nothing new. Henry Ford’s wife, Clara, loved her EV in 1916.9

Still, electric vehicles lost to internal combustion engines in the marketplace because of the convenience and low cost of internal combustion engines and gasoline. 

Storing energy in a gas tank was easier than storing it in a battery; and a gas tank 

could be filled in minutes while batteries took hours to charge. However, significant 

improvements in the performance of batteries, controls, and electric motors have 

changed the scope of the market. 

The promise of advanced lithium-ion batteries has had the most dramatic impact. 

These batteries have the potential to be much lighter, smaller, safer, and less expensive than their predecessors. Working with industry partners over the past decade, 

DOE research has helped make steady gains in all of these characteristics. The most 

important remaining challenge is to cut costs. One lithium-ion battery produced 

today is projected to use 8 kilowatt-hours (kWh) of energy (of a total capacity of 16 

kWh) and costs roughly $6,500–$8,000 ($800–$1,000/kWh of useable energy) when 

produced in high volume.10 DOE and its research partners believe that the cost 

could likely be reduced to $2,400 ($300/kWh of useable energy) by 2014 with a combination of better materials, optimized battery designs, and improved manufacturing. At this price, the cost of driving a mile in an electric or plug-in hybrid electric vehicle would be roughly comparable to that of today’s conventional cars.11 The 

initial price of new vehicles would be higher, but the energy costs for driving would 

be much lower. Additionally, it can be expected that the battery prices will continue 

to fall while gasoline prices increase in the coming decades.12

Cost-reducing battery advances require a close partnership between government 

and industry. These partnerships are clearly visible in the way industry converted 

publicly-funded basic and applied research into commercial products and jobs. For 

example, DOE supported the development of the first lithium-ion battery for a production vehicle, which started manufacture in the summer of 2009. At the recent 

Washington Auto Show, two major American manufacturers showcased cars that 

utilize lithium-ion batteries. DOE supported the research and development (R&D) 

that provided the basis for both of these batteries. 

These commercial successes do not mean that the role DOE’s R&D role in battery 

technologies is complete, but rather that the Department will need to address additional challenges in the sector. DOE’s fiscal year 2011 budget request includes $120 

million to continue work focusing on a wide range of research barriers facing developers of hybrid and electric vehicles, including specific materials problems that limit 

battery lifetimes, safety, charging rates, and production costs.13

DOE has already begun to address these barriers through investments in the next 

generation of battery technologies. Lithium-ion batteries include a family of chemistries, each of which has advantages and disadvantages based on the cost of materials and safety. Other chemical systems, such as lithium metal polymer batteries 

and lithium-sulfur batteries, remain in the research stage and have shown promise 

in the laboratory. However, these will require significant additional work before 

they can become viable products. 

The Department’s Vehicle Technologies Program currently funds 17 industrial 

lithium-ion battery and materials development contracts. VTP also sponsors two 

major coordinated efforts spanning 10 National Laboratories and 12 universities. 

These efforts include those at the Lawrence Berkeley National Laboratory (LBNL) 

and Argonne National Laboratory. LBNL leads the Batteries for Advanced Transportation Technologies effort which focuses on relatively long-term R&D associated 

with advanced materials, modeling, and diagnostics. Argonne National Laboratory 

leads the Advanced Battery Research initiative which focuses on more immediate, 

or short-term evaluation and demonstration of new materials and technologies in 

advanced batteries. The 57 projects in these 2 efforts received approximately $30 

million in fiscal year 2010. 
14 

14 Ralph Broddarp, Broddarp of Nevada, Inc., speaking at the 2nd International Conference 

on Advanced Lithium Batteries for Automobile Applications, Tokyo, Japan, November 26, 2009. 

RECOVERY ACT IMPACT

In addition to the ongoing R&D concentrated on overcoming technical barriers to 

widespread adoption, the Department is supporting the development of advanced 

battery technology for EVs and PHEVs. In August 2009, President Obama announced award selections for up to $2.4 billion in Recovery Act funds to accelerate 

the manufacturing and deployment of the next generation of U.S. batteries and EVs. 

Vice President Biden, Secretary Chu and three other Cabinet members participated 

in events across the country to mark this historic announcement—the single largest 

investment in advanced battery technology ever made. 

The Recovery Act supports 48 new projects for advanced battery and electric drive 

components manufacturing and electric drive vehicle deployment in more than 20 

States. Funding for those projects includes up to $1.5 billion dedicated to building 

battery manufacturing facilities that provide an opportunity for the United States 

to lead the world in lithium-ion battery technology. Today, most lithium-ion batteries are made for consumer electronics applications such as mobile phones and 

notebook computers. More than 95 percent of these batteries are made in Japan, 

China, and South Korea, as East Asia is the epicenter of consumer electronics manufacturing. However, when the Recovery Act funded manufacturing plants are completed, the United States will have the capacity to make batteries for half a million 

PHEVs per year. 

The revenue generated by the lithium-ion battery market for vehicles could be as 

much as 10 times larger than that for consumer electronics batteries since the size 

and energy storage capacity for a PHEV or EV battery pack is several thousand 

times that of a mobile phone battery.14 Battery manufacturing is also a highly automated system. With low production costs that do not depend on low-wage labor, U.S. 

battery manufacturing can compete with producers anywhere in the world. Furthermore, the jobs that are created by domestic manufacturing will be well-paid. New 

domestic battery facilities will be able to supply advanced batteries for defense applications, consumer electronics, power tools, utility voltage regulation, and truck 

idling mitigation. 

In addition to building U.S. manufacturing capacity, Recovery Act funds support 

the installation of over 10,000 charging sites for PHEVs and EVs that will serve 

more than 5,000 PHEVs being tested in on-road use. This is the largest number of 

PHEVs ever on U.S. roads, and the in-use, operational, and charging data gathered 

in this effort will help inform how additional PHEVs and EVs can be introduced in 

the future. The Recovery Act is also funding the first programs to educate first responders and emergency personnel in how to deal with accidents involving EVs and 

PHEVs. 

Moreover, the Recovery Act includes $2 billion in tax credits ranging between 

$2,500 and $7,500 for the purchase of PHEVs and EVs. Credits also cover 10 percent of the cost of converting hybrids or internal combustion engine vehicles to 

PHEVs and EVs. 

ADVANCED TECHNOLOGY VEHICLE MANUFACTURING LOAN PROGRAM

Separate from the Recovery Act programs above, the Department’s ATVM Program strives to support the growth of domestic advanced vehicle technology manufacturing. The ATVM Program is authorized to make up to $25 billion in loans 

available to auto manufacturers and their suppliers for the cost of re-equipping, expanding, or establishing U.S. manufacturing facilities to produce qualified advanced 

technology vehicles or components. To be eligible to receive these loans, companies 

must be engaged in manufacturing ‘‘advanced technology vehicles’’ (ATVs) or components for these vehicles. ATVs must be light-duty, meet 125 percent of the miles 

per gallon achieved by ‘‘substantially similar vehicles’’ in 2005, and they must meet 

existing and any new emissions standards for fine particulates. Qualifying components must be specifically designed for installation in qualifying ATVs and must 

contribute to the qualifying ATV’s performance requirements. 

So far, the program has awarded loans to five companies, amounting to almost 

$9 billion. Four auto manufacturers—Ford Motor, Nissan Motor, Tesla Motors, and 

Fisker Automotive—received loans to produce more fuel-efficient vehicles, including 

EVs and PHEVs. A fifth company, Tenneco Inc., will design, engineer, and produce 

emission control components for gas, hybrid, and diesel-powered vehicle engines. 
15 

15Kintner-Meyer M, Schneider K and Pratt R (2007) Impact Assessment of Plug-in Hybrid 

Vehicles on Electric Utilities and Regional U.S. Power Grids, Online Journal of EUEC 1:Papers 

#4 and #5. 16 A123Systems press release, 2008: http://ir.a123systems.com/ 

releasedetail.cfm?ReleaseID=403097. 

EVS AND THE ELECTRIC GRID

If PHEVs and EVs become a major part of the Nation’s transportation system, 

investments in the Nation’s electrical grid need to be made to support the new demand for electricity. Charging facilities will need to be installed in residences, parking facilities, and other sites. DOE is working with utilities and other partners to 

explore how this can best be accomplished. It is expected that PHEV owners will 

typically charge their vehicles at night, which will limit the impact on the electric 

grid and allow consumers to take advantage of off-peak electricity rates. A study by 

the Pacific Northwest National Laboratory shows that up to 70 percent of the U.S. 

vehicle fleet could be comprised of PHEVs without a significant impact on the electric power grid.15

Given the sophisticated controls possible with electric meters and other smart grid 

technologies, the electricity storage capacity of EVs and PHEVs could be a valuable 

asset to utility grids by helping utilities manage loads more efficiently without compromising service quality or reliability. These controls could ensure that vehicles are 

charged at times when generation costs are low (in many cases this may be when 

most of the electricity comes from more efficient, environmentally attractive plants), 

and thus, could lead to lower utility costs for all customers. It could also be possible 

to design systems that provide homes connected to electric vehicles with backup 

electric power during power outages. All of these functions have been demonstrated 

in limited experiments, such as in A123Systems’ two megawatt grid stabilization 

batteries for AES Energy.16

CONCLUSION

PHEVs and EVs show enormous promise to help the United States cut dependence on imported petroleum and meet national environmental goals with cars that 

are safe, reliable, and fun to drive. The businesses that will manufacture these vehicles—and the batteries, motors, controls, and other components they contain—can 

create new business opportunities and many new manufacturing jobs in America. 

The research DOE has funded over the years has put the United States in a position to lead in many key areas of battery, EV and PHEV development. Recovery Act 

investments provide America with the opportunity to lead the world in this critical 

new technology. However, there is no room for complacency. A number of well-managed, well-funded projects in advanced battery and vehicle technologies are underway around the world. Markets will move quickly, competition will be ruthless, and 

new technologies will require continuous improvement. 

Well-managed Federal research programs in the 20th century spurred tremendous 

innovation and U.S. economic leadership in areas ranging from commercial aircraft 

to the Internet. I am optimistic that similar sustained U.S. research investment in 

21st century technologies like electric vehicles will provide renewed U.S. scientific 

leadership, economic growth, and job creation. It will enable the United States to 

meet its national energy and environmental goals while providing export opportunities that support global sustainability efforts. 

I would be pleased to answer your questions. 

Senator DORGAN. Dr. Kelly, thank you very much. 

And, Mr. Smith, I’ve already properly introduced you, I think, 

and we’re really pleased that you’re here. You may proceed. 

STATEMENT OF FREDERICK W. SMITH, MEMBER, ELECTRIFICATION 

COALITION; CHAIRMAN, PRESIDENT, AND CEO, FEDEX 

Mr. SMITH. Thank you very much, Senator Dorgan, Senator Bennett, Senator Alexander, always good to be with you, in Washington or Tennessee. We appreciate the opportunity to put the 

views of the Energy Security Leadership Council and the Electrification Coalition present. 

Mr. Chairman, I think you set the issue up very clearly. After 

nuclear proliferation and weapons of mass destruction, this is the 
16 

Nation’s biggest economic and national security issue. In 2008, we 

had a very visible example of the effects of precipitous run-ups in 

fuel prices. There’s just no question that the $147-a-barrel oil 

prices that we saw in July 2008 were the match that lit off the financial crisis. People literally had to choose between making their 

mortgage payments or driving to and from work. And as we’ve 

looked at this problem over the last several years, with the reports 

that the Energy Security Leadership Council put out and the Electrification Coalition report that was released in 2009, this really is 

the only solution to significantly reducing our dependence on petroleum, and particularly on petroleum imported from places around 

the world which are hostile to the interests of the American people. 

As was pointed out, the infrastructure already exists. That’s very 

different than any other potential solution. The sources of supply 

are highly diversified. The sources of supply, relative to the types 

of automotive and transportation power that we are currently consuming, are very clean. We have substantial spare capacity, as 

Senator Alexander pointed out. 

And, to me, probably the most important element here is that, 

after the transitional period, it’s quite obvious that the electrification of a large segment of our short-haul transportation is highly 

cost efficient. Our estimate, in the report that we produced, is that 

an electric plug-in vehicle or a grid-enabled vehicle, with gasoline 

at about $3 a gallon, costs about 2.5 cents per mile to produce a 

mile of transportation in a personal vehicle. That contrasts to 

about 10 cents a mile in a gasoline-powered vehicle. Now, the reason for that, quite simply, is that electricity has a higher efficiency 

of conversion into power than an internal combustion engine. The 

energy conversion ratio is about 90 percent for electrical power. It’s 

about 25 to 27 percent for an internal combustion engine. 

So, the relative issues of converting to a modern grid, putting the 

recharging stations in place from a national productivity standpoint are highly effective. Our recommendations, in the electrification roadmap, are about $120 billion, spread over 8 years, about 

$15 billion a year. But, contrast that into the U.S. Department of 

Energy estimate that U.S. oil dependence costs were $577 billion 

in 2008 alone. And, of course, we’re spending enormous amounts of 

our national wealth protecting the oil trades, and are involved in 

two shooting wars, in large measure because of this issue. 

PREPARED STATEMENT

So, we think that the expenditure of $15 billion a year to make 

this transition in order to eventually end an addiction, that you 

laid out there that costs us upwards of $600 billion a year in perpetuity, is a very good expenditure, and we would recommend that 

the Nation move along this electrification path. 

Thank you. 

I have a complete statement I’ve submitted for the record. 

[The statement follows:] 

PREPARED STATEMENT OF FREDERICK W. SMITH

Good morning, Chairman Dorgan, Senator Bennett, and members of the subcommittee. I would like to thank you for giving me this opportunity to speak to you 

regarding one of the great challenges facing our country today: ending the very real 

and pressing threats posed to our Nation by our dependence on petroleum. 
17 

These are threats, Chairman Dorgan, that I know you are very familiar with. You 

have been one of the Senate’s most stalwart champions in finding real solutions to 

our energy security challenges, and I thank you for your dedication and leadership. 

I am proud to serve both as co-chairman of the Energy Security Leadership Council and as a member of the Electrification Coalition, two organizations dedicated to 

facing these threats head on. 

The Energy Security Leadership Council, formed in 2006, is a coalition of business 

executives and retired national security leaders who believe that our dependence on 

oil, much of it imported from unstable and hostile regimes, poses an unacceptable 

economic and national security threat. 

The Electrification Coalition, formed in 2009, is a group of business leaders who 

represent the entire value chain of an electrified transportation sector and who are 

committed to promoting policies and actions that facilitate the deployment of electric 

vehicles on a mass scale. 

I became involved in these organizations for a single reason: it is my belief that 

after terrorism and the proliferation of weapons of mass destruction, our increased 

dependence on petroleum represents the biggest single threat to our Nation’s economy and national security. 

I can speak to this issue personally. FedEx delivers more than 7 million packages 

and shipments per day to more than 220 countries and territories. In a 24 hour period, our fleet of aircraft flies the equivalent of 500,000 miles, and our couriers travel 2.5 million miles. We accomplish this with more than 275,000 dedicated team 

members, 670 aircraft, and some 70,000 motorized vehicles worldwide. 

FedEx’s reliance on oil reflects the reliance of the wider transportation sector, and 

indeed the entire U.S. economy. Oil is the lifeblood of a mobile, global economy. We 

are all dependent upon it, and that dependence brings with it inherent and serious 

risks. 

In 2008, Americans consumed nearly 20 million barrels of oil a day—one-fourth 

of the world’s total. We imported 58 percent of the oil we consumed, leading to a 

U.S. trade deficit in crude oil and petroleum products that reached $388 billion— 

56 percent of the total trade deficit. 

At the crux of America’s oil dependence is the energy demand of the transportation sector. Transportation accounted for almost 70 percent of American oil consumption in 2008. Cars and trucks were 94 percent reliant on oil-based fuel for their 

energy, with no substitutes immediately available in anything approaching sufficient quantities. 

The volatility of oil prices affects every American. At the beginning of 2001, oil prices were steady at $30 per barrel. Over the subsequent 5 years, prices steadily 

rose, reaching $75 per barrel in June of 2006. After retreating slightly, benchmark 

crude prices jumped 50 percent in 2007, from $60 per barrel in January to more 

than $90 in December. In 2008, oil prices soared rapidly, eventually reaching their 

all-time high of more than $147 per barrel on July 3. 

We are all aware of the sharp financial burden on U.S. households that faced— 

and still face—resets in their adjustable rate mortgages. But it is important to understand that increases in energy costs have been on the same, or even a greater, 

order of magnitude for the entire American economy. A typical subprime borrower 

with a poor credit history who bought a $200,000 house in 2006 with a 2 year/28 

year ARM with a 4 percent teaser interest rate for the first 2 years would have seen 

monthly mortgage payments increase from about $950 a month before the reset to 

about $1,330 after the reset—an increase of about $4,500 a year. In the meantime, 

between 2001 and 2008, the average retail price of gasoline increased from $1.46 

to $3.27, costing typical households $1,990 a year in increased fuel expenses. And 

that increase in energy costs affected all U.S. households—not just the one household in 20 that held a subprime mortgage. 

This burden, multiplied across millions of households, was a major contributor to 

the ensuing economic slowdown. We saw an explosion in home ownership, with 

many purchases being made by people who had heretofore not qualified for mortgages. When the price of oil and the price of gasoline began to rise, and inflation 

on commodities began to take hold, and interest rates began to increase, you had 

a tremendous diminution in purchasing power and cash flow, which contributed to 

people having to walk away from their mortgages. The rise in oil prices was the 

match that lit the fuse of the mortgage mess and the subsequent recession. 

The U.S. economy lost more than 700,000 jobs between December 2007 and the 

beginning of September 2008, and the unemployment rate increased from 4.5 percent to 6.1 percent—all before the financial crisis truly hit later in September. In 

fact, as early as August 2008, many economists believed the U.S. economy was already on the verge of recession, largely driven by sharply rising and volatile oil 

prices. 
18 

And the steps we usually would take to help strengthen the economy and create 

jobs in times of weakness are just as easily overcome by oil price volatility. The total 

effect of changes to the Federal tax code from 2001 to 2008 code was a decrease 

in annual Federal income and estate taxes by about $1,900 for the median household. But a typical household’s energy costs rose more than that. In other words, 

every penny that the most Americans saved due to Federal income and estate tax 

cuts over the past 8 years was spent on higher gasoline bills. All told, U.S. families and businesses spent more than $900 billion on refined oil 

products in 2008, representing 6.4 percent of GDP. Today, prices have receded. But 

for how long? Many of the underlying fundamentals that pushed oil prices up are 

still present today, and once demand—temporarily reduced due to the recession— 

begins to pick up again, prices are likely to follow. Our oil dependence could strangle an economic recovery just as it is beginning to take hold. 

The threat to American national security is equally as urgent. The vulnerability 

of global oil supply lines and infrastructure has driven the United States to accept 

the burden of securing the world’s oil supply. Much of the infrastructure that delivers oil to the world market each day is exposed and vulnerable to attack in unstable 

regions of the world. According to the U.S. Department of Energy, each day more 

than 50 percent of the world’s oil supplies must transit one of six maritime 

chokepoints, narrow shipping channels like the Strait of Hormuz between Iran and 

Qatar. Even a failed attempt to close one of these strategic passages could cause 

global oil prices to skyrocket. A successful closure of even one of these chokepoints 

could bring economic catastrophe. 

To mitigate this risk, U.S. armed forces expend enormous resources patrolling oil 

transit routes and protecting chronically vulnerable infrastructure in hostile corners 

of the globe. This engagement benefits all nations, but comes primarily at the expense of the American military and ultimately the American taxpayer. A 2009 study 

by the RAND Corporation placed the cost of this defense burden at between $67.5 

billion and $83 billion annually. 

Oil dependence also constrains U.S. foreign policy. Whether dealing with uranium 

enrichment in Iran or a hostile regime in Venezuela, American diplomacy is distorted by the need to minimize disruptions to the flow of oil. Too often, oil dependence requires us to accommodate hostile governments that share neither our values 

nor our goals, putting both the United States and its allies at risk. 

Finally, petroleum consumption poses a long-term threat to global environmental 

sustainability. Curbing emissions is a global issue, and there is not yet an international consensus on a long-term stabilization objective or on the changes in emissions trajectory needed to meet such a goal. International discussions are increasingly centered on a stabilization level that ranges between 450 and 550 parts per 

million (ppm) CO2 equivalent (CO2-eq). Regardless of the exact nature of a final 

emissions stabilization target, what is clear is that the transportation sector is going 

to have to play a major role in virtually any carbon abatement scenario. 

We cannot continue down this path. We cannot continue to send untold billions 

of dollars and jobs overseas to pay for our addiction. We cannot continue to send 

men and women into harm’s way to protect an increasingly vulnerable supply line. 

We cannot continue to put our future in the hands of hostile nations or fanatical 

terrorists who can turn off our crucial oil lifeline at the drop of a hat. 

There is a solution. The lynchpin of any plan that is serious about confronting 

oil dependence must be a transportation system that today is almost entirely dependent on petroleum. The solution can be found in something that nearly every 

single one of you has either on your belt or on the table in front of you. The lithium 

ion batteries that power our cell phones and laptop computers can one day form the 

nucleus of an electrified transportation sector that is powered by a wide variety of 

domestic sources: natural gas, nuclear, coal, hydroelectric, wind, solar, and geothermal. No one fuel source—or producer—would be able to hold our transportation 

system and our economy hostage the way a single nation can disrupt the flow of 

petroleum today. 

Electricity represents a diverse, domestic, stable, fundamentally scalable energy 

supply whose fuel inputs are almost completely free of oil. It would have clear and 

widespread advantages over the current petroleum-based system: 

—Electricity is Diverse and Domestic.—Electricity is generated from a diverse set 

of largely domestic fuels. Among those fuels, the role of petroleum is negligible. 

In fact, just 1 percent of power generated in the United States in 2008 was derived from petroleum. An electricity-powered transportation system, therefore, 

is one in which an interruption of the supply of one fuel can be made up for 

by others. This ability to use different fuels as a source of power would increase 

the flexibility of an electrified light-duty vehicle fleet. As our national goals and 

resources change over time, we can shift transportation fuels without having to 
19 

overhaul our transportation fleet again. In short, an electrified transport system 

would give us back the reins, offering much greater control over the fuels we 

use to support the transportation sector of our economy. Moreover, while oil 

supplies are subject to a wide range of geopolitical risks, the fuels that we use 

to generate electricity are generally sourced domestically. All renewable energy 

is generated using domestic resources. We are a net exporter of coal, which 

fuels about one-half of our electricity. Although we currently import approximately 16 percent of the natural gas we consume, more than 90 percent of those 

imports were from North American sources (Canada and Mexico) in 2008. And 

in fact, recent advancements in the recovery of natural gas resources from unconventional reservoirs like shale gas, coal bed methane, and tight gas sands 

have led to wide consensus that our domestic undiscovered technically recoverable reserves are well in excess of 1,000 trillion cubic feet. We do import a substantial portion of the uranium we use for civilian nuclear power reactors. 

Forty-two percent of those imports, however, are from Canada and Australia. 

—Electricity Prices are Stable.—Electricity prices are significantly less volatile 

than oil or gasoline prices. Over the past 25 years, electricity prices have risen 

steadily but slowly. Since 1983, the average retail price of electricity delivered 

in the United States has risen by an average of less than 2 percent per year 

in nominal terms, and has actually fallen in real terms. Moreover, prices have 

risen by more than 5 percent per year only three times in that time period. This 

price stability, which is in sharp contrast to the price volatility of oil or gasoline, 

exists for at least two reasons. First, the retail price of electricity reflects a wide 

range of costs, only a small portion of which arise from the underlying cost of 

the fuel. The remaining costs are largely fixed. In most instances, the cost of 

fuel represents a smaller percentage of the overall cost of delivered electricity 

than the cost of crude oil represents as a percentage of the cost of retail gasoline. Second, although real-time electricity prices are volatile (sometimes highly 

volatile on an hour-to-hour or day-to-day basis), they are nevertheless relatively 

stable over the medium and long term. Therefore, in setting retail rates, utilities or power marketers use formulas that will allow them to recover their costs, 

including the occasionally high real-time prices for electricity, but which effectively isolate the retail consumer from the hour-to-hour and day-to-day volatility 

of the real-time power markets. By isolating the consumer from the price volatility of the underlying fuel costs, electric utilities would be providing to drivers 

of GEVs the very stability that oil companies cannot provide to consumers of 

gasoline. 

—The Power Sector has Substantial Spare Capacity.—Because large-scale storage 

of electricity has historically been impractical, the U.S. electric power sector is 

effectively designed as an ‘‘on-demand system.’’ In practical terms, this has 

meant that the system is constructed to be able to meet peak demand from existing generation sources at any time. However, throughout most of a 24-hour 

day—particularly at night—consumers require significantly less electricity than 

the system is capable of delivering. Therefore, the U.S. electric power sector has 

substantial spare capacity that could be used to power electric vehicles without 

constructing additional power generation facilities, assuming charging patterns 

were appropriately managed. 

—The Network of Infrastructure Already Exists.—Unlike many proposed alternatives to petroleum-based fuels, the Nation already has a ubiquitous network 

of electricity infrastructure. No doubt, electrification will require the deployment of charging infrastructure, additional functionality, and increased investment in grid reliability, but the power sector’s infrastructural backbone—generation, transmission, and distribution—is already in place. 

—Electric Miles are Cheaper Than Gasoline Miles.—Operating a vehicle on electricity in the United States is considerably less expensive than operating a vehicle on gasoline. In large part, this is due to the high efficiency of electric motors, 

which can turn more than 90 percent of the energy content of electricity into 

mechanical energy. In contrast, today’s best internal combustion engines have 

efficiency ratings of just 25 to 27 percent. With gasoline at $3.00 per gallon, the 

operating cost of a highly-efficient internal combustion engine vehicle (30 miles 

per gallon) is 10 cents per mile. For current pure electric vehicles, assuming an 

average electricity price of 10 cents per kilowatt hour, operating costs are only 

2.5 cents per mile. Recent research confirms the potential savings of electric 

propulsion. The Electric Power Research Institute (EPRI) has determined that 

a compact size plug-in electric hybrid vehicle will use only 160 gallons of gasoline a year, compared to 300 in a gasoline electric hybrid and 400 in a conventional internal combustion engine compact car. With gasoline at $3 a gallon, a 
20 

plug-in hybrid would save its owner $10,000 over the course of the vehicle’s lifetime compared to a conventional vehicle. —Electric Miles are Cleaner Than Gasoline Miles.—Vehicle miles fueled by electricity emit less CO2 than those fueled by gasoline. Several well-to-wheels analyses conclude that vehicles powered by the full and proportionate mix of fuel 

sources in the United States today would result in reduced carbon emissions. 

As renewable power increases its share of the electricity portfolio, and to the 

extent that new nuclear power comes on line, which I believe is important, the 

emissions profile of the U.S. power sector and the GEVs powered by it will continue to improve over time. Moreover, to the extent that GEVs are charged 

overnight using power from baseload nuclear or off-peak renewable power, their 

emissions footprint can be nearly eliminated. In 2007, the Natural Resources 

Defense Council and the Electric Power Research Institute published a well-towheels analysis of several different automotive technologies fueled by a range 

of sources commonly used to generate power. Their analysis concluded that 

using a PHEV would reduce carbon emissions as compared to a petroleumfueled vehicle even if all of the exogenous electricity used to charge the PHEV 

was generated at an old (relatively dirty) coal power plant. Whereas a conventional gasoline vehicle would be responsible for emissions, on average, of 450 

grams of CO2 per mile, a PHEV that was charged with power generated at an 

old coal plant would be responsible for emissions of about 325 grams of CO2 per 

mile, a reduction of about 25 percent. Emissions attributable to the vehicle 

could be reduced to as low as 150 grams of CO2 per mile if the exogenous power 

was generated at a plant without carbon emissions and ranged between 200 and 

300 grams of CO2 per mile if the power used was generated using other fossil 

fuel generation technologies. In other words, no matter where the power consumed by a PHEV is generated, the overall level of emissions attributable to 

its operation are lower than those of a conventional gasoline vehicle. 

In short, high penetration rates of grid-enabled vehicles—vehicles propelled in 

whole or in part by electricity drawn from the grid and stored onboard in a battery—could radically minimize the importance of oil to the United States, strengthening our economy, improving national security, and providing much-needed flexibility to our foreign policy while clearing a path toward dramatically reduced economy-wide emissions of greenhouse gases. 

No other alternative to petroleum can claim these widespread advantages. This 

is not to say that other alternatives have no role to play in a post-petroleum transportation sector. On the contrary. Natural gas, for example, may be used successfully in fleet vehicles, particularly those that can be centrally refueled, such as taxis, 

buses, specialized harbor and airport vehicles, and refuse-collection trucks. Even 

more importantly, natural gas will play a crucial role in providing electricity, a role 

in which it can be far more efficiently deployed than in actual vehicles. Other alternatives may also offer advantages in niche uses. But none offers the array of advantages that electricity does. 

We also recognize that there may be unforeseen challenges to an entirely new 

transportation system. For example, some have raised concerns about the supply of 

lithium, which is crucial for the batteries that will drive the cars and trucks of the 

future. We have examined this issue and found that, because the vast majority of 

material in lithium ion batteries is recyclable, the increased use of grid-enabled vehicles does not present the United States with additional resource dependency. Particularly when recycling is assumed, global lithium reserves are adequate to support 

even the most bullish GEV deployment scenarios. Moreover, at a structural level, 

dependence on lithium is unlike dependence on oil. Vehicles do not deplete batteries 

as we drive; they deplete the energy stored within them. In other words, batteries 

are like the engines in conventional vehicles of today; though their life span is finite, 

they last for many years. Coupled with the fuel diversity of the electric power sector, 

grid-enabled vehicles generally insulate consumers from volatile commodity markets. 

The logical next question is how we can successfully devise and deploy an electrified transportation system. 

Make No Mistake.—Electrification at a mass scale is a complex undertaking. We 

are not only talking about cars here. We are talking a highly-integrated system of 

batteries, vehicles, generation, transmission and charging, in which every part depends on the other. We would see few results if we improved transmission in the 

northeast, created a smart grid in the northwest, and introduced more electric cars 

in the deep south. 

In November 2009, the Electrification Coalition released its Electrification Roadmap, a sweeping report outlining a vision for the deployment of a fully integrated 

electric drive network. The report details the dangers of oil dependence, explains the 
21 

benefits of electrification, describes the challenges facing electric cars—including 

battery technology and cost, infrastructure financing, regulatory requirements, electric power sector interface, and consumer acceptance issues—and provides specific 

and detailed policy proposals to overcome those challenges. 

Perhaps most importantly, the Roadmap proposes the selection and creation of 

specific geographic areas in which all of the elements of an electrified transportation 

system are deployed simultaneously and beyond early adopters, thus providing a 

crucial first step toward moving electrification beyond a niche product into a dominant, compelling, and ubiquitous concept. These geographic concentrations of electrification would: —Drive Economies of Scale.—Concentrating resources in a limited number of geographic areas will allow participants in the GEV value chain to take advantage 

of economies of scale, particularly with respect to the deployment of charging 

infrastructure. Utilities will incur fixed costs to support the operation of GEVs; 

those costs will be more affordable if spread over a greater number of vehicles. 

Power providers also can reduce the cost of charging infrastructure through 

economies of scale. While it is unclear how many public vehicle chargers will 

be necessary for a GEV transportation system to operate smoothly in a given 

community, it is clear that some public charging facilities will be needed. Previous pilot studies demonstrate that the cost of installing charging facilities can 

be reduced significantly when groups of facilities are installed at once. Furthermore, these geographic concentrations will stimulate demand for grid-enabled 

vehicles at a rate that is likely to be far greater than if the vehicles are simply 

purchased by early adopters scattered around the United States. Early on in the 

process, this higher level of demand will simply be the result of magnified consumer incentives. Subsequently, as individual metropolitan areas gain exposure 

to GEVs and confidence increases, adoption rates should be measurably expedited. —Demonstrate Proof of Concept Beyond Early Adopters.—By demonstrating the 

benefits of grid-enabled vehicles in a real world environment, this deployment 

plan will make consumers, policymakers and industry aware of the tremendous 

potential of electrification of transportation. Most Americans are familiar with 

traditional hybrids, having seen them on the road for most of the past decade; 

far fewer drivers are familiar with electric vehicles. In general, consumers are 

probably unaware that GEVs have evolved to the point where they can meet 

most individuals’ daily driving needs. In addition, electric drive vehicles generally have faster acceleration and operate more quietly than internal combustion engine vehicles. They hold out the promise of offering drivers a wide range 

of features, based on the electronic package in the vehicle, that are beyond our 

imagination today in the same way that iPhone applications would have been 

beyond our imagination a decade ago. The problem is that consumers are not 

aware of the opportunities presented by GEVs and are not yet convinced that 

they can operate reliably and affordably at scale. Concentrating investments 

and other efforts in a limited number of communities will accelerate the opportunity to demonstrate that grid-enabled vehicles can meet drivers’ needs. In addition, these projects will demonstrate that a community is capable of putting 

the infrastructure in place, operating the vehicles over their lifetimes, and disposing of them after their useful life has ended, all in a manner that profits 

the participants in the value chain. 

—Facilitate Learning by Doing.—While GEVs present a great opportunity, their 

deployment also raises a number of questions. Deploying large numbers of 

GEVs in concentrated areas will allow for the collection of information and experience that is needed to successfully deploy GEVs nationwide. It will help 

automakers learn how much consumers are willing to pay up front for a car 

that costs less to operate and has a lower total cost of ownership over its lifetime. It will allow utilities and charging station providers to learn when and 

where drivers want to charge their vehicles. It will allow utilities and other 

aggregators to learn who can best sell power to drivers and what types of rate 

structures meet both drivers’ and utilities and aggregators’ needs. It will help 

determine whether there is a viable business model for public charging infrastructure. It is clear that for GEVs to succeed there must be a model in which 

each party in the value chain is able to operate profitably, or in which the Government determines that, as a matter of public policy, certain aspects of the 

system should be publicly supported in a manner that facilitates further competition. Deploying GEVs in a series of geographic regions around the country 

where resources can be concentrated and data can be collected and studied will 

ultimately accelerate wide-scale GEV deployment. Therefore, rather than allowing the market to develop scattershot across the country, it is critical that the 
22 

market be encouraged to develop at a deliberate pace in clearly identified geographic regions in which a large number of vehicles can be deployed in a relatively short period of time. 

The success of this path will require focused and sustained public support. Ideally, 

the technology and deployment of electric vehicles would emerge through regular 

market mechanisms. Unfortunately, events conclusively demonstrate that this path 

to wide-spread electrification is unlikely. 

We understand that this is a challenging time for suggesting increased Government expenditures for any project, no matter how worthwhile. We also, however, believe that certain aspects of the threat of oil dependence and the solutions we recommend make this a unique issue. 

First is the urgent national security threat posed by our dependence on oil. While 

we cannot and should not ignore costs, threats to national security have always occupied a unique place of priority in our budget considerations. And make no mistake: the dangers posed by our oil dependence are not theoretical. Our safety and 

security are threatened by oil dependence, and every single day that we do not act 

is another day that we remain vulnerable. 

Second is the economic cost of inaction. The total cost of provisions that we rec- ommend in the Electrification Roadmap is approximately $120 billion spread over 

8 years. But Department of Energy researchers have estimated that U.S. oil dependence costs were $577 billion in 2008 alone, including $333 billion from transfer of 

wealth, $168 billion from economic dislocation, and $76 billion in foregone GDP. 

Shortly after completing the Electrification Roadmap, the Electrification Coalition 

commissioned the Interindustry Forecasting Project at the University of Maryland 

and Keybridge Research to study the long-term economic effects of our policy proposals. This expert modeling team collectively has decades of experience building 

and performing simulation studies with large-scale econometric models and conducting public policy research on energy and macroeconomic issues. Our goal was 

to produce a detailed, sober analysis based on conservative, realistic assumptions 

stretching out over the next 20 years. 

We have not yet released the resulting report, but I wanted to share with the subcommittee some of the key findings in advance. 

If the policies we recommend were passed today, the resulting effect on the annual Federal deficit would turn positive by 2020. Even more importantly, on a cumulative basis, the budget effect would turn positive by 2025. By 2030, the total 

positive impact on the Federal budget would be $336 billion (in between $135 and 

$156 billion in current dollars). 

It is important to remember that one of the results of our oil dependence is the 

direct transfer of enormous amounts of wealth and capital overseas. Our economy 

benefits when we reduce oil dependence because we are using more of our own 

wealth productively here at home instead of sending it to others. 

Job creation would also benefit. Enacting these proposals would result in a total 

of 1.9 million new jobs by 2030, mostly in the manufacturing sector and in direct 

or indirect support of the motor vehicle industry. Job creation would start immediately with 227,000 in 2010 alone, growing to 700,000 in 2015 and almost 900,000 

in 2020. Most importantly, these would not be jobs that we stimulate once and go 

away once the stimulus is gone. These are jobs that would be a permanent part of 

a new, ongoing industry. 

The U.S. trade balance, which remains one of our Nation’s greatest fiscal challenges, would improve by $127 billion—0.35 percent of GDP—by 2030 under the 

policies we recommend. 

The final report, when we release it shortly, will detail additional economic and 

fiscal benefits, including to household income and GDP. 

In short, this economic modeling makes explicit what common sense perhaps already should make clear: if we can spend approximately $15 billion a year for 8 

years in order to eventually end an addiction that would otherwise cost us upwards 

of $600 billion a year in perpetuity, does it not make wise budgetary sense to do 

so? 

The dangers we face are not going to go away on their own. We have before us 

a responsibility, a necessity to act to put our Nation on a pathway toward once and 

for all ending our dangerous dependence on petroleum and leaving a stronger, safer 

America in its place. 

It is also an opportunity to strengthen our economy, create jobs, reduce our carbon 

footprint, and help to balance our budget in the long term. 

This is not a question of technology. The technology is there. If anyone on this 

subcommittee has been watching the Olympics, you’ve seen the commercials for the 

Nissan Leaf. You know the Chevy Volt is just around the corner. You’re about to 

hear from business leaders what they can already produce. But the technology is 
23 

not enough without the support needed to build infrastructure, encourage manufacturing and consumer acceptance—in short, to create in a few short years an entirely 

new transportation system. This is not pie-in-the-sky. It’s simply a matter of organization, and—more importantly—a matter of will and a matter of execution. 

Here is what I know, as the leader of a company that both depends on and helps 

to strengthen the mobility upon which our global economy is built: If the Government supports this new path, if it helps to build these concentrations of electrification that are so crucial to jumpstarting a new, national transportation system, then 

that is a game changer. It is a game changer for businesses like mine, for employees, for consumers, for the economy, and for the country. A new future is ours for 

the taking, but only if we choose it and support it. 

Thank you for your attention. 

Senator DORGAN. Without objection, we’ll include the complete 

statement of all the witnesses today in the record. 

Let me begin. Dr. Kelly, fast-forward 5, 7, or 10 years. You know 

the amount of money that we have put into battery technology. We 

are seeing new plants being built in the United States. We’re 

pumping a massive amount of money into new battery technology. 

Is it your assessment that, in 5, 7, or 10 years, that we are going 

to make substantial strides in the new batteries that will make the 

electric cars much, much more attractive to consumers? 

The reason I ask the question is there are some consumers that 

are just very worried about getting in an electric car and running 

out of power and not having a gas station to pull into. So, give me 

your assessment, going forward, on battery technology. 

Dr. KELLY. Well, of course, for one thing the hybrids run the 

gamut from the Prius, which, of course, is largely electric with a 

comparatively small battery, and go all the way up to all-electric 

batteries. So, if you’re concerned about running out on a long trip, 

you can always get a vehicle that has an onboard engine. And the 

plug-ins are categorized by how many miles they’ll operate without 

any backup of fuel power. And 40 miles seems to be one of the 

sweet spots, and that’s been where a number of the major companies are going. 

In terms of the batteries themselves, we’re very optimistic. We’ve 

been, of course, in very close conversations with battery producers, 

in the process of reviewing bids for the Recovery Act, and right now 

the goal we’ve set is reducing the price of the lithium-ion battery 

from what we think is now around $800 a kilowatt hour down to 

about $300 a kilowatt hour. That seems very feasible in the fairly 

near term, 2014 or something like that. 

In the future, we have our bets on a number of even more advanced technologies that may drive the price down even further. 

So, I think that the consumers should be optimistic that this problem of battery costs, performance, safety, and lifetime is under control. 

Senator DORGAN. Mr. Smith, while there may be a national urge 

to reduce dependence on foreign oil, and a lot of reasons to move 

toward a different type of vehicle—electric drive vehicle, in this 

case—the fact is, if you build a product and consumers don’t buy 

it, you know, it’s not going to succeed. We’ve seen that. A great example is the Edsel car, which a number of us in this room remember. You’re a consumer. You, at FedEx, run a lot of vehicles. I don’t 

know how many. But, you’re a consumer. Evaluate this from the 

perspective of a consumer. 
24 

Mr. SMITH. Well, Senator, we operate over 70,000 vehicles, so we 

have a keen appreciation for the exact point that you’re making. 

That’s why, in my summary of my testimony, I tried to focus on 

the productivity improvements inherent in electrification. Your 

chart, that showed the significant percentage of U.S. automotive 

trips being less than 40 miles, mean that this concern about running out of electrical power should not be the case for the vast majority of people in the vast majority of instances. 

And I don’t think that you’ll see the country convert completely 

to electric vehicles, any more than aviation has done away with 

turbo props in the era of the Jet Age. But, when you start talking 

about productivity numbers of per-mile cost with a grid-enabled vehicles of 21⁄2 cents a mile versus 10 cents a mile for an internal 

combustion powerplant over the course of the lifetime of that vehicle, that’s about a $10,000 savings. 

So, really the issue, I think, is getting the charging stations out. 

And people, I don’t think, should be intimidated by that. Fifteen 

years ago, I don’t think many of us were equipped with one of these 

devices, which has, obviously, electrical power. We monitor it with 

a little gauge up here. We clearly know when we have to plug it 

in to stay in communication, and so forth. And I think this whole 

psychology of electrical power has been not only held by the lithium-ion battery development because of telecommunications and 

information technology, it’s also been a psychological thing where 

people feel pretty comfortable with electrical power because it powers so much of our life. 

So, I think if you can get these things into scale production 

where the costs come down, I believe consumers will adopt them, 

you know, for a lot of their utilization, contrary to a lot of the 

naysayers. I don’t think that today that’s a problem. 

I’d also point out that one of the things that the Electrification 

Coalition looked at was whether we would go from a dependence 

on imported petroleum from hostile regimes to being held hostage 

to the importation of lithium from hostile areas of the world. And 

our research indicates, for many reasons, not the least of which 

that lithium is recyclable, that there is plenty of lithium available 

from a diverse number of suppliers to allow the electrification of an 

enormous part of our transportation system and a significant reduction in our dependence on petroleum. 

Senator DORGAN. Well, a couple of things. No. 1, I think consumers will beat a path to the door behind which they believe are 

advantages. So, the cell phone you held up, you know, 15 years ago 

I think there were some cell phones, but they were the size of a 

small shoe box, and heavier. And I think the point you made earlier about ramping up from $38 to $147 in day trading, with the 

price of oil run by speculators who have made money on the way 

up and money on the way down, leaves consumers very uneasy. I 

think once we have a circumstance with the product, the infrastructure, and understanding that there’s an inherent advantage 

for consumers and for the country, my guess is that this country 

is going to move very quickly to it. 

The new technologies have persuaded consumers to move very 

quickly when they think it’s in their advantage or when they think 

it offers something to them that is new and better. 
25 

Senator Bennett. 

Senator BENNETT. Thank you, Mr. Chairman. 

Ms. Smith, I think you hit on a very important point when you 

were talking about the existing infrastructure. And I’m a little concerned about having charging stations. Let me again use my own 

example, which I don’t think is that atypical. I’ve been driving a 

hybrid car, as I say, for about 8, 9 years now. I started out with 

the Honda Insight. Senator McConnell called it the car you put on 

like a pair of pants and everybody was wondering how I was able 

to get in and out of one. 

But, I was, and, after a while, decided I wanted a little more car 

around me for safety purposes, and so, I am now driving a Ford 

Escape. 

And clearly the vast majority of my trips are under 40 miles a 

day. I commute back and forth. It’s about 41⁄2 miles from my house 

in Arlington to the Capitol. And there’s plenty of room to do that 

and take a few trips downtown and so on. And then the end of the 

week comes and I have to go to Dulles Airport. And there’s no way 

I can drive that car to Dulles Airport and back with a 40-mile 

range limit. And may—there’s probably, if I’ve been using it for the 

running around town, the time I have to go to Dulles Airport, I 

can’t even get there, let alone get back, with the 40-mile circumstance. So, it becomes very limiting, and the cost of building a 

charging station at the kind of convenience that we have for gasoline stations becomes an infrastructure expense. 

So, let me take you to the car that we have going in Utah that 

I have seen. And this is not a commercial for the company, but the 

simplicity of the idea struck me as being so obvious, I wondered 

why the company in Utah was the only one that had come up with 

it. 

They put me in a Hummer. Now, I don’t much like a Hummer, 

but they put me in a Hummer because it’s the symbol of the American consumption of gasoline. And the Hummer runs 100 percent 

on electric power. But, they do have a small gasoline engine on the 

back of the Hummer. It has nothing to do with driving the Hummer. It is tuned to its most efficient capacity to get the highest 

quality—or, pardon me, the highest productivity out of the gasoline. It doesn’t start up and have all of the inefficiencies connected 

with a gasoline engine that has to power your jackrabbit start 

when the gas—when the light changes or any of the rest of it. It 

only operates at one very narrow band, the most efficient, to run 

a charger. So, this very small gasoline engine is running a charger 

on the back of the Hummer so that there’s enough range that I 

could drive 400 miles in that Hummer without ever having to stop 

to a charging station, therefore duplicate the kind of range that I 

have in a regular car. And the efficiency of the gasoline motor is 

substantially better than the efficiency of a gasoline motor tied to 

a truck or a—take a FedEx truck going around neighborhoods, 

going to deliveries—relatively short number of miles traveled, but 

you fill the gasoline tank and the entire power comes from electricity. 

It seems to me it would be easier for us to build those kinds of 

vehicles, and concentrate on that as our first goal, than to say let’s 

make the national investment of trying to have a charging station 
26 

everyplace where you have a gasoline station, and then people have 

to wait while it’s charging, and so on and so forth. I’d like your reaction to that technology and that thought. 

Mr. SMITH. Well, Senator, I completely agree with you. I mean, 

if you think about the evolution of a lot of technology, its turning 

things on its head. In aviation, of course, propellers were the first 

power plant. 

Senator BENNETT. Right. 

Mr. SMITH. And then, Sir Frank Whittle and Ohain, in Germany, 

figured out how to take a propeller, put a shroud on it, and a compressor, where you then vastly increase the efficiency and the 

power that you could produce. But, the concept was essentially the 

same. So, today every one of our automobiles has a big internal 

combustion engine and a very small battery. The battery starts the 

car and does this and that, and then it is just regenerated. 

Well, what you just described is just turning everything on its 

head, where the powerplant that does the work with the efficiency 

that I mentioned, of 90 percent, where the electrical power is, you 

know, turning the wheels at a much, much higher efficiency of the 

internal combustion engine, and a small internal combustion engine that serves as a generator that keeps the vehicle charged. And 

I believe that will be the way this technology goes out, rather than 

pure electrics, for the reasons that you just say. That way, you 

have the ability to operate all electric on the majority of your shorthaul trips. But, when you go to Dulles or wherever you might be 

driving this, several hundred miles, you’ve got the capability to do 

that. 

I—just as there are turbo props left in aviation, I don’t think 

that the technology you described will preclude all-electrics. But, I 

certainly think that a mix will be the same. And when you do have 

that kind of technology that you just mentioned, you can put your 

charger at your home garage. 

Senator BENNETT. Right. 

Mr. SMITH. And, in fact, putting 220-volt capabilities in most 

homes and apartment buildings is not that big a deal. And, in fact, 

many of the more modern apartment buildings and electrical installations have 220-volt things. So, your charging stations will become much less of an issue. 

But, I agree with you, that technology makes a lot more sense 

to me. 

Senator BENNETT. Dr. Kelly, have you ever heard of anything of 

that kind or had done any research in that area? 

Dr. KELLY. Well, agreeing with Mr. Smith, that technology probably will be the dominant technology for most vehicles. When you 

say ‘‘hybrid vehicle,’’ what you mean is a device that is both powered by electricity and by some kind—— 

Senator BENNETT. That’s correct. 

Dr. KELLY [continuing]. Of engine. 

Senator BENNETT. The ones I drive now, you’re driving sometimes with the gas, you’re driving sometimes strictly with the electric motor, and sometimes with both. 

Dr. KELLY. Right. The virtue of the plug-in is that when you 

have utility power available, it’s probably cheaper and more efficient to buy it from a utility—— 
27 

Senator BENNETT. Yes—— 

Dr. KELLY [continuing]. Than to generate the electricity on 

board. But, plainly, if you’ve got the engine on board, then you 

have unlimited range. You can drive across Utah with it with no 

problem. It’s actually one of the dilemmas of trying to figure out 

how to calculate miles per gallon for—— 

Senator BENNETT. Yes. 

Dr. KELLY [continuing]. These hybrids, because the ratio of 

charging to gasoline consumption is going to vary. 

Senator BENNETT. Well, they—this company said if you’re just 

making the short trips and you never have the gasoline engine go 

on, because you can charge it at home, you—it’s the equivalent of 

800 miles to the gallon, or something like that. And then, they 

said, if you drove across the country and never charged it, so that 

it was entirely charged by the little gasoline engine, its 60 miles 

to the gallon. So, in any event, it’s substantially better than anything we’re getting now. Yes. 

Thank you, Mr. Chairman. 

Senator DORGAN. Right. 

Senator Alexander. 

Senator ALEXANDER. I think we will find—it’s always interesting 

to watch how this technology develops—I think we’ll find, if you 

drove across the country, that might be true if you drove at 35 

miles an hour and never accelerated very rapidly and never turned 

on the air conditioner, because soon as you do, the gasoline engine 

goes on and—— 

But, the plug-in—I mean, as I mentioned—we’re all talking 

about our own experiences—every night—I just have a regular plug 

outside my house. I just plug it in every night. And that’s the way 

the one I have works. 

Mr. Smith, the—there’ve been some widely varying estimates of 

how rapidly we might be able to make our cars and trucks electric. 

The National Research Council had a very limited view of what 

might happen, recently. What’s your view? I mean, is it unrealistic 

to think that, in 20 or 30 years, we might electrify half our cars 

and trucks? Is that just way out of the ball park? Or is the National Research Council too conservative in its estimates? 

Mr. SMITH. We think that they’re far too conservative in their estimates. The electrification roadmap would indicate that a much 

higher percentage of the U.S. automotive fleet can be converted to 

grid-enabled vehicles, either pure electrics or electric hybrids, by 

2025, 2030. And the reduction—I don’t recall them right off the top 

of my head that are in the report—but, the reduction in U.S. oil 

consumption as a result of this is—it’s really dramatic. As I recall, 

it’s something like 5 or 6 million gallons of—is that right—a day? 

Senator ALEXANDER. By 2030, it will be 3.2 million barrels a day. 

Mr. SMITH. Yes, 3.2-million-barrels-a-day reduction by 2030, with 

the electrification laid out in that road. 

Senator ALEXANDER. Government subsidies are a problem, in the 

sense that, once they get started, they’re hard to stop. You know, 

we—I’ve been a critic of the subsidy for wind, because it may have 

been fine in 1992, but suddenly wind gets subsidized, per megawatt-hour, 25 times all of the forms of producing electricity, which 

was not what was originally intended. My question is, about re-
28 

search and development—Dr. Chu, I believe, has talked about a 

500-mile battery as a grand goal someday. And I have thought, and 

proposed actually, that we have a mini Manhattan Project on advanced batteries, and just do whatever it took to try to get the battery up to 300, 400, 500 miles per hour. What’s the likelihood of 

that? And why would that not be where we ought to put our greatest effort? Because if we were to get the battery cost down from 

$7,000, $8,000, $10,000 to a lot less, wouldn’t that just create all 

the other consequences that make electric vehicles marketable? 

Dr. KELLY. Well, I think that if you’re going to make a short list 

of grand challenges in all energy that would be one of them. And 

we are, in fact, trying to put together a very aggressive program 

in this area. You may know that we have a proposal in our budget 

for a hub built specifically around advanced battery technology. 

The Office of Science has been aggressively looking at new materials. And we, of course, are continuing to work with our industrial 

partners to try to look, not just at the current generation of lithium-ion batteries, but look at lithium-air batteries and a whole 

range of really interesting, more advanced concepts. So, it’s a 

project certainly worth investment. We think we’ve got an aggressive program in the works and we’d be anxious to talk to the subcommittee about any other ideas. 

One of the dilemmas we have with the National Academy study 

was I think that they were very pessimistic about driving down the 

cost of batteries. And I think that their estimates are going to be 

proven untrue by what’s going to actually be in the market in the 

next few years. So, we’re looking forward to sitting down with them 

and finding out whether we can work through the differences, because I think that we have a very compelling case that dramatic 

reductions in battery prices and increases in performance are very 

plausible. 

Senator ALEXANDER. Dr. Kelly, I—just as one Senator, but I 

think there are a lot of Senators on the Republican side, as well 

as the Democrat, who would say the same thing—I strongly endorse the ideas that Dr. Chu has talked about, about these innovation hubs or mini Manhattan Projects, in a limited number of 

areas. I mean, you know, the highly efficient photovoltaic cell, 

whatever else we could figure out about recapturing carbon, that’s 

sort of a—in a way, that’s the next Nobel Prize, if you figure that 

out of—coming out of coal plants. Advanced biofuels would be another. But, the advanced battery would be one. And though—that 

also seems to me to be a more—the most appropriate use of Federal dollars. I mean, Federal R&D is something we’re comfortable 

with, and is easy to justify. It doesn’t interfere with the market too 

much. It doesn’t duplicate as much what is naturally done in the 

private sector. So, I want to congratulate you for those objectives 

and encourage you, especially, just to—if you’re doing three acts, 

to try to do four acts or five acts or six acts, in terms of advanced 

batteries. 

Thank you. 

Senator DORGAN. Senator Alexander, thank you. 

I just would observe, if you take a look at previous 

supplementals, the omnibus and the Economic Recovery Act, we almost have—both in terms of grants, direct appropriations, and loan 
29 

guarantees, a kind of a mini Manhattan Project on batteries. There 

is a massive amount of money moving in that direction from several different sources. So, I certainly support the thought of the 

Senator from Tennessee. I think this investment can yield very significant results. 

Senator Cochran. 

Senator COCHRAN. Mr. Chairman, first, let me thank you for calling the witnesses to this subcommittee to discuss these interesting 

issues. 

I’m particularly glad to be here and welcome my friend Fred 

Smith. We appreciate Dr. Kelly’s participation, as well. 

I was looking through the electrification roadmap recommendation that has been developed—I guess, by the Coalition, which 

you’re chairing—and I wonder, specifically what can Congress do 

now that will help encourage or give direction to those who will be 

involved in moving us into this new era of electrification of our 

transportation system? Is there a roadmap for us in Congress, as 

well as a road map for policymakers and business and industry 

that you are recommending that we consider? 

Mr. SMITH. Okay. Well, Senator, yes, sir. In that roadmap, there 

were several recommendations for the Government. 

Before I get into that, let me just mention a couple of numbers, 

because they’ll relate to the recommendation. The Electric Power 

Research Institute estimated that a plug-in hybrid vehicle, like 

Senator Bennett mentioned, will consume about 160 gallons of gasoline a year. That compares with a—the current gasoline electric 

hybrid, which has, essentially, two power systems in there, one 

electric and one gasoline, of about 300 gallons per year, and a conventional internal combustion engine, of about 400. So, I mean, it 

is order-of-magnitude savings. And over the lifetime of that car, 

that’s about $10,000 less expense to the driver, based on electrical 

power at today’s grid rate. 

So, the issue is not that these vehicles can’t be cost effective; it’s 

not like wind power, where we just don’t know how to make wind 

power that is competitive with coal power, nuclear power, natural 

gas power, hydroelectric power. This technology is cheaper than the 

technology it replaces on an operating basis. So, it’s the upfront 

capital costs. 

And so, the number-one thing is to drive the economies of scale. 

And our recommendations in that report is to concentrate the efforts in a few areas so that you have the vehicle technology and 

the grid technology coming to fruition at the same time—that’s one 

thing—and to continue to demonstrate the benefits of the technology by deploying a lot of these vehicles in a few locations, where 

it becomes obvious to people that these economics are correct. 

And I believe, based on my experience in—and again—I hate to 

keep going back to aviation, because—but it’s very similar, in many 

ways. There were so many things that, when they first came out, 

the production cost of them, relative to the technology that they replaced, was very, very high. But, after they began to be adopted, 

they became quite cheap. And in aviation, as you know, the Government subsidized aviation for many years through airmail contracts, because there simply was no airplane that could earn its 

own way. And then Donald Douglas built the DC–3, and the DC– 
30 

3 was the first airplane that could make money carrying passengers and a little bit of air express. And World War II came 

along, and they produced thousands of them, and we were literally 

off to the races, in terms of modern aviation standing on its own. 

So, this technology has a return on investment right now. It’s 

simply that people—unlike a business, if the car costs more to buy, 

they don’t look at the net present value of that $10,000 of savings. 

So, you’ve got to drive the production costs down so they can have 

their cake and eat it, too. They can have comparable acquisition 

costs and less operating costs, both. 

Senator COCHRAN. Well, thank you very much. 

And thank you both for the contributions you’re making to this 

national debate—improving our information base, leading us in the 

direction of better decisions. 

Thank you. 

Senator DORGAN. Senator Cochran, thank you very much. 

Let me thank both Dr. Kelly and Frederick Smith. Thank you for 

being here today, and thank you for your testimony. And we’d like 

to have you available to respond to written questions if we submit 

written questions to you. 

The second panel today will be Richard Lowenthal, founder and 

CEO of Coulomb Technologies. They’ve been a leader in the development of technology for electric vehicles. They currently offer a 

wide range of products and services that provide charging infrastructure for plug-in vehicles. 

Mr. Alan Taub, who is the vice president for research and development at General Motors, he’s responsible for GM’s advanced 

technical work activity which manages major innovation programs 

within the company. He has also worked at Ford Motor Company 

for 8 years, where he was manager of the material science department and manager of vehicle engineering for the Lincoln brand. 

Mr. Kraig Higginson, chairman and founder of Raser Technologies, is chairman and founder of a clean energy company focused on comprehensive low carbon strategies through the development of new geothermal and electric vehicle technologies, and 

Mary Ann Wright, vice president and managing director of Johnson 

Controls. Ms. Wright is leading a dedicated global project team to 

oversee the Department of Energy ARRA Grant Program for advanced energy storage, including the launch of Johnson Control’s 

first U.S. manufacturing facility in Holland, Michigan. She also 

previously worked at Ford Motor as a director of sustainable mobile technologies and the hybrid vehicle programs. And while at 

Ford, she served as the chief engineer of the 2005 Ford Escape Hybrid, the industry’s first full-hybrid SUV. 

Senator BENNETT. Mr. Chairman, if I may, Mr. Higginson is the 

CEO of the company that put me in the hybrid, and the—put me 

in the Hummer, rather—and the technology that I described is his 

company’s technology. I wanted, while the experts were here, to 

keep it plain vanilla, but now that the constituent is here I want 

to say, very directly, that Raser is—Raser Technologies is the company that has developed that. They actually have a car, it does 

work. And they did not charge it off the grid. They do geothermal, 

and they charged the Hummer that I drove entirely out of heat 

coming out of the ground. So, I’m happy to acknowledge you’re the 
31 

constituent here, and do a little bit of hometown home cooking now 

that he’s here at the table. 

Senator DORGAN. Well, thank you, Senator Bennett. By the way, 

how heavy is that Hummer? 

Senator BENNETT. It’s as heavy as any other. 

Well, ask Mr. Higginson, he can tell you that. 

Senator DORGAN. One other question. I got a call from the Governor of California, Governor Schwarzenegger, one day, thanking 

me for my work on hydrogen and so on, and he talked about his 

Hummer. Were you involved with his Hummer? 

Mr. HIGGINSON. We actually took the Governor to lunch in the 

Hummer, so he’s driven it. 

Senator DORGAN. Aha, okay. 

Well, thank you, Senator Bennett, for the additional information 

and the hometown commercial. 

Let me thank all of you for being here. Your entire statements 

will be part of the permanent record. You may proceed. 

Mr. Lowenthal, you first. 

STATEMENT OF RICHARD LOWENTHAL, FOUNDER AND CEO, COULOMB TECHNOLOGIES 

Mr. LOWENTHAL. Thank you very much, Chairman Dorgan and 

the members of the subcommittee. We appreciate the opportunity 

to be here today to talk about this tremendous opportunity for our 

country. 

I’m the founder and CEO of Coulomb Technologies, a company 

that is deploying charging stations and business software systems 

for electric vehicle charging, a necessary ingredient for the successful adoption of electric vehicles. 

Recently, Coulomb Technologies was selected by the Department 

of Energy to participate in an Electrification of Transportation Program that was recommended for funding by this subcommittee. 

Thank you very much. This public/private partnership, entitled 

‘‘Charge America,’’ will deploy a charging infrastructure in 12 

American cities. We’ll begin to deploy technology almost immediately, creating American jobs in engineering, manufacturing, and 

installation. 

Electric vehicles will begin to appear on American roads and 

highways this year. But, for electric drive technology to be truly 

transformative, the market will need assistance in overcoming a 

number of challenges. Beyond financial issues, there are a set of 

regulatory issues that will need to be addressed at the Federal 

level. 

Electric vehicle charging stations, known formally as Electric Vehicle Supply Equipment or EVSE, are available in three levels. 

Level I EVSEs are based on 110-volt household electricity. Level I 

charging is slow. A 30 kilowatt-hour battery, like the one in my 

BMW MINI–E, takes 23 hours to charge on Level I. Smaller PHEV 

batteries, like the plug-in Prius, will take less time. And the Chevrolet Volt, which you’ll hear more about, I’m sure, is specified to 

take approximately 10 hours to charge completely at Level I. 

The Level I charger times will likely convince most EV owners 

to opt for higher voltages and faster Level II charging. 
32 

Level II charging is specified at 220 volts, similar to an electric 

clothes dryer. With a Level II charger, vehicles will take about 4 

hours to charge. 

Level III, or DC chargers, can charge vehicles in under an hour. 

DC fast-charging equipment will be significantly more expensive 

than Level I and Level II chargers, and it’s expected to be available 

only at commercial charging establishments. 

Setting aside technical specifications, charging infrastructure can 

generally be divided into two categories: private charging infrastructure, for in the home, and shared charging infrastructure, for 

places like condominiums, apartments, retail centers, public parking facilities in the workplace, and along transportation arteries. 

As important as access to home charging will be for achieving 

high rates of electric vehicle deployment, shared charging is arguably even more important during the early stages of EV adoption. 

Drivers are accustomed to being able to fill up using the ubiquitous 

gasoline infrastructure developed over the last 100 years. Insufficient public charging opportunities will generate hesitancy and 

could hinder the adoption of electric vehicles. Studies show that 80 

percent of EV owners will want to charge the cars more than once 

a day. 

Range anxiety on the part of consumers remains a substantial 

challenge for EV adoption. People are afraid that their vehicle will 

be incapable of traveling the long distances required or that they 

will be unable to get the necessary recharge along the way. Despite 

the fact that data on consumer habits shows that drivers rarely 

travel long distances, when asked their opinions, they express 

unease over range. Early research supports the conclusion that reliable access to public charging infrastructure diminishes this anxiety. 

The first mass-produced, fully-electric vehicles in the U.S. markets will have an all-electric range of approximately 100 miles. 

With these vehicles, when the battery is depleted, it must be recharged before the vehicle can be driven again. Consumers are unlikely to purchase a vehicle unless they have confidence that it can 

be conveniently refueled. 

So, I have some policy recommendations. Permitting electrical 

work is a local issue, typically the responsibility of a city or a county government, and rules vary widely between jurisdictions. The 

process of requiring an electrician to obtain a permit and schedule 

an inspection can stretch an otherwise short and simple electrical 

upgrade into a burdensome, several-weeklong process, a concern 

that was confirmed by several participants in the recent project 

conducted by BMW in Los Angeles, New York, and New Jersey. 

So, first, policy, we need streamlined permitting processes nationwide for the installation of EVSE in order to get those times 

to reasonable levels. 

Second, today there are roughly 54 million private garages for 

the 247 million light-duty vehicles that we have in the United 

States. For consumers who park in parking lots or curbside at 

night, overnight charging requires shared stations. By treating 

electricity as a transportation fuel, regulators can foster competition in the nascent EV infrastructure marketplace and help to facilitate a rapid deployment of public charging infrastructure. 
33 

The California Public Utilities Commission recently indicated 

that it is not inclined to regulate electricity for sale for EVs. Nonetheless, the decision is not yet finalized and represents the opinion 

of only a single PUC. 

In many cases, current regulations require a seller of electricity 

to be treated as a regulated utility. In other words, if an apartment 

building, shopping center, or fast food restaurant has been—has 

charging stations, it could be subject to the full range of regulatory 

compliance mechanisms that affect utilities. This level of regulation 

would likely present—prevent even minimal deployment of charging infrastructure in the public, in private garages, in condominiums, apartments, and the workplace. 

Rather than depending on the Nation’s public utilities commissions to rule on this, we would ask that the Federal Energy Regulatory Commission ensure that electric vehicle charging is a competitive marketplace with market-based pricing. 

I’ll leave some of these issues, because I’m running out of time, 

for you to read it at your leisure. Let me skip a couple, hit on one 

that was mentioned earlier. 

The electric power sector has substantial untapped generating 

capacity offpeak, which can already allow millions of EV batteries 

to be charged without adding power generation or transmission. 

However, consumers will likely require incentives to charge 

offpeak, and disincentives to charge during peak demand, high-cost 

hours. Utilities and equipment providers should provide Smart 

Grid integration technology for demand response and time-of-use 

charging. 

Let’s see, I’m going to skip the next one. 

EV charging stations are designed and manufactured in the 

United States, and distribution is available nationwide. Our products are ‘‘shovel-ready’’ and require the skills of local electricians 

and contractors to install, providing jobs nationwide. Each station 

we install employs three people for a day. 

Our company has faced the classic chicken-and-egg problem. 

Consumers will not adopt electric drive technology if they’re not 

confident in their ability to refuel. At the same time, there is little 

incentive for companies to install charging infrastructure before 

cars arrive. 

The Federal Government can, and is, playing an important role 

as it considers stimulus spending and other financial incentives to 

assist this nascent market for electric vehicle charging infrastructure. And so, I recommend that—public investment in EV infrastructure that creates jobs and addresses this chicken-and-egg 

problem. 

Next, currently there’s a 50-percent tax credit available for 

charging-infrastructure installations, which expires at the end of 

this year. We would like to see that extended. The time—the vehicles have not rolled out yet, and it would be very helpful for that 

to be extended, and, in addition, for it to be improved. 

PREPARED STATEMENT

Finally, let me add one other comment in support of the Electrification Coalition. We would like to see targeted spending, as the 

DOE has recommended and deployed in other cases, where par-
34 

ticular areas of the country are focused on for deployment of electric vehicles in order—and infrastructure—in order to ensure these 

programs have the scale necessary for success. 

Thank you very much. 

[The statement follows:] 

PREPARED STATEMENT OF RICHARD LOWENTHAL

Good morning Chairman Dorgan, Senator Bennett, and members of the subcommittee. Thank you for the opportunity to speak with you regarding a tremendous opportunity for our country—the transition to electric-drive transportation. I’m 

the founder and CEO of Coulomb Technologies, a company that is deploying charging stations and business software systems for electric vehicle charging, a necessary 

ingredient for the successful adoption of electric vehicles. 

Recently, Coulomb Technologies was selected by the Department of Energy to participate in the Electrification of Transportation program that was recommended for 

funding by this subcommittee. This public/private partnership entitled ‘‘Charge 

America’’ will deploy charging infrastructure in up to 12 American cities. We will 

begin to deploy technology almost immediately, creating American jobs in engineering, manufacturing, and installation. 

An electric drive future is one that leverages the diversity, flexibility, and stability 

of the electric power sector to sustainably power our transportation sector. Today, 

our cars and trucks rely on a single energy source—petroleum—for more than 95 

percent of their delivered energy. This heavy reliance has generated profound economic, national security, and environmental risks for the United States. In contrast, 

vehicles that draw power from the grid—grid-enabled vehicles (GEVs)—derive their 

energy from the full range of fuel sources that produce electricity in the United 

States today. These fuel sources are stable, domestic, and diverse. 

Grid-enabled electric drive systems can be either pure electric vehicles (EVs) or 

plug-in hybrid electric vehicles (PHEVs). Both EVs and PHEVs store energy from 

the grid in on-board batteries. Energy from the battery powers a highly efficient 

electric motor that propels the vehicle. EVs substitute an electric drivetrain for all 

conventional drivetrain components. PHEVs retain the use of a down-sized internal 

combustion engine that supplements a smaller battery. 

Both EVs and PHEVs provide consumers and the broader economy with two distinct advantages compared to conventional vehicles. First, electric miles are cheaper 

than gasoline miles. Operating a vehicle on electricity in the United States is considerably less expensive than operating a vehicle on gasoline. In large part, this is 

due to the high efficiency of electric motors, which can turn 90 percent of the energy 

content of electricity into mechanical energy. In contrast, today’s best internal combustion (IC) engines have efficiency ratings of just 25 to 27 percent. With gasoline 

at $3.00 per gallon, the operating cost of a highly efficient IC engine vehicle (30 

miles per gallon) is 10 cents per mile. For current pure electric vehicles, assuming 

an average electricity price of 10 cents per kilowatt hour, operating costs are only 

2.5 cents per mile. 

Second, electric miles are cleaner than gasoline miles. Vehicle miles fueled by 

electricity emit less CO2 than those fueled by gasoline—even with today’s mix of 

generating resources. As renewable power increases its share of the electricity portfolio, and to the extent that new nuclear power comes on line, the emissions profile 

of the U.S. power sector will continue to improve over time; this improvement will 

directly enhance the emissions benefits of grid-enabled vehicles. 

By adopting these technologies at scale, the United States would dramatically reduce its dependence on petroleum, achieve significant reductions in energy-related 

greenhouse gas emissions, and catalyze the next generation of industry and manufacturing jobs that could be the backbone of our country’s economic competitiveness 

in the decades to come. Ultimately, moving to an electric-drive transportation sector 

would also substantially increase disposable income for American households, because overall spending on energy would decrease. 

This transition is not only technologically possible, it is fundamentally necessary 

if we are to improve our economic and national security while preserving our natural environment. However, the wide-scale transformation of our petroleum-based 

transport system to one powered by electricity is far from certain today. There are 

a number of challenges facing electrification that, if not addressed in the near-term, 

could postpone or prevent progress toward a more secure, efficient transportation 

sector. 

I want to be clear in stressing that these challenges are not technological problems with batteries, vehicles, or chagrining infrastructure. While ongoing research 
35 

and development will be critical, battery technology has advanced to the point at 

which grid-enabled vehicles will provide consumers with the performance, safety, 

and durability that they require. To be sure, cost continues to be a factor. However, 

it is important to note that based on existing Federal tax credits, and at today’s gasoline prices, a plug-in hybrid electric vehicle will already provide consumers with 

a net economic benefit over the life of the vehicle. 

Electric vehicles will begin to appear on American roads and highways within a 

year. But for electric drive technology to be truly transformative, the market will 

need assistance in overcoming a number of challenges. Beyond financial issues, 

there is a set of regulatory issues that will need to be addressed at the Federal 

level. 

SOME DEFINITIONS

Electric Vehicle charging stations, known formally as electric vehicle supply 

equipment (EVSE), are available in three ‘‘Levels’’. Level I EVSEs are based on 110- 

volt household electricity. Level I charging is slow. A 30 kWh battery in a pure EV 

could take as long as 23 hours to fully charge. Smaller PHEV batteries will take 

less time, with the Chevrolet Volt specified to take approximately 10 hours to completely charge at Level I. 

These Level I charge times will likely convince most EV owners to opt for higher 

voltage and faster Level II charging. Level II charging is specified at 220 volts, similar to an electric clothes dryer. With a Level II charger, vehicles will take about 4 

hours to charge. 

Level III, or DC chargers, can charge vehicles in under an hour. DC fast-charge 

equipment will be significantly more expensive than Level I or II chargers and is 

expected to be available only at commercial charging establishments. 

Setting aside technical specifications, charging infrastructure can generally be divided into two categories: shared and private. Private charging infrastructure would 

include a charging station installed in a private home for dedicated use by a single 

customer. Shared charging infrastructure would include units installed in condominiums, apartments, retail centers, public parking facilities, the workplace, or along 

major transportation arteries. 

For drivers with access to a dedicated outlet, the most convenient time to charge 

their GEV will be overnight at home. Most passenger vehicles sit parked during the 

hours between roughly 8 p.m. and 6 a.m., which could provide ample opportunity 

to supply consumers with the charge levels required for typical daily usage of GEVs. 

Moreover, by concentrating charging during off-peak hours, the electric power sector 

could today charge more than 100 million GEVs (if the vehicles were entirely 

PHEVs, the number could be as high as 160 million) without the need to install significant additional generating capacity. While Level I charging will be an option for 

some PHEV owners, most consumers will prefer Level II charging in their homes. 

As important as access to home charging will be for achieving high rates of electric vehicle deployment, shared charging is arguably even more important during 

the early stages of EV adoption. Drivers are accustomed to being able to fill up 

using the ubiquitous gasoline infrastructure developed over the last 100 years. Insufficient public charging opportunities will generate hesitancy and could hinder the 

adoption of electric vehicles. Studies show that 80 percent of EV owners will want 

to charge more than once a day. 

Range anxiety on the part of consumers remains a substantial challenge for EV 

adoption. People are afraid that their vehicle will be incapable of travelling the long 

distances required, or that they will be unable to get the necessary recharge along 

the way. Despite the fact that data on consumer habits shows that drivers rarely 

travel long distances, when asked their opinions, they express unease over range. 

Early research supports the conclusion that reliable access to public charging infrastructure diminishes this anxiety. 

The first mass-produced fully-electric vehicles (BEVs) to reach U.S. markets will 

have an all-electric driving range of approximately 100 miles. With these vehicles, 

when the battery is depleted, it must be recharged before the vehicle can be driven 

again. Consumers are unlikely to purchase a vehicle unless they have confidence 

that it can be conveniently refueled. 

Regardless of which technology—PHEV or EV—captures the dominant share of 

the market at any time, consumers will demand access to public charging infrastructure. Whether one is concerned about operating efficiency or basic necessity, 

grid-enabled vehicles will need to charge their batteries conveniently. If the market 

fails to meet this standard upfront, high operating costs and consumer anxiety 

about range will simply prevent grid-enabled vehicles from reaching mass market 

penetration. In this sense, we are faced with a classic problem of coordination. Con-
36 

sumers will not adopt electric drive technology at scale if they are not confident in 

their ability to refuel. At the same time, there is little incentive for the private sector to install public charging infrastructure if that equipment is expected to sit idle. 

POLICY RECOMMENDATIONS

Permitting electrical work is a local issue—typically the responsibility of city or 

county governments—and rules vary widely between jurisdictions. The process of requiring an electrician to obtain a permit and schedule an inspection can stretch an 

otherwise short and simple electrical upgrade into a burdensome, several week-long 

process, a concern that was confirmed by several participants in a recent pilot 

project conducted by BMW in Los Angeles, New York, and New Jersey. Market participants have suggested allowing third parties to inspect newly installed equipment 

and even to allow installers to self-certify the installation. 

Policy 1.—We Need Streamlined Permitting Processes Nationwide for Installation of 

EVSE 

Today, there are roughly 54 million private garages for 247 million light-duty vehicles (cars and SUVs). For consumers who park in parking lots or curbside at 

night, overnight charging requires shared stations. 

By treating electricity as a transportation fuel, regulators can foster competition 

in the nascent EV infrastructure marketplace and help to facilitate rapid deployment of public charging infrastructure. The California Public Utilities Commission 

recently indicated that it is not inclined to regulate electricity sales for EVs. Nonetheless, the decision is not yet finalized and represents the opinion of only a single 

PUC. 

One critical issue is that electricity for GEVs is not yet viewed as a transportation 

fuel. For public charging infrastructure, this precedent could present particularly 

burdensome regulatory issues. In many cases, current regulations require a seller 

of electricity to be treated as a regulated utility. In other words, if an apartment 

building, shopping center, or fast food restaurant has charging stations, it could be 

subject to the full range of regulatory compliance mechanisms that affect utilities. 

This level of regulation would likely prevent even minimal deployment of shared 

charging infrastructure in the public, in private garages, in condominiums, apartments, and the workplace. 

Rather than depending on all of the Nation’s public utility commissions to come 

to the conclusion that we need a competitive commercial market for vehicle charging, we need a national policy of allowing free-market vehicle charging, potentially 

through Federal Energy Regulatory Commission policy and authority. 

Policy 2.—FERC Should Ensure That Electric Vehicle Charging is a Competitive 

Market With Market-Based Pricing for Charging Vehicles 

The United States has over 3,000 electric utilities. Drivers will charge in several 

different utilities’ service areas. Because no third-party provider is likely to be ubiquitous, some type of ‘‘roaming’’ capability will likely be necessary. On longer trips, 

this is sure to be the case. 

It is important that the responsibility not be placed on drivers to establish billing 

relationships with all utilities within whose service area they may charge. 

Policy 3.—Payment Systems That Allow for Consumer Roaming Should Be Encouraged 

Today, the electric power sector has substantial untapped generating capacity off 

peak, which can already allow millions of EV batteries to charge without adding 

power generation or transmission capacity. However, consumers will likely require 

incentives to charge off-peak and disincentives to charge during peak demand, highcost hours. Utilities and equipment providers should include smart-grid integration 

technology for demand response and time-of-use charging plans. 

Policy 4.—Smart Grid Integration, Demand Response, and Time of Use Pricing 

Should Be Required 

Coulomb has developed electric vehicle charging stations and business software 

systems that ensure EV charging is a sustainable, scalable business. Our stations 

include a business software suite that includes a billing system that provides money 

to pay for all recurring costs, and asset management tools to allow infrastructure 

to be well-managed. We have the capability to build charging infrastructure that 

will enable rapid growth of the electric vehicle market, and we have been shipping 

these products since 2008. 
37 

Policy 5.—Charging Infrastructure Selection Must Consider Life Cycle Costs 

EV charging stations are designed and manufactured in the United States and 

distribution is available nationwide. Our products are ‘‘shovel-ready’’ and require 

the skills of local electricians and contractors to install, providing jobs nationwide. 

Each station we install employs three people for a day. 

Our company has faced a classic chicken and egg problem. Consumers will not 

adopt electric drive technology if they are not confident in their ability to refuel. At 

the same time, there is little incentive for companies to install charging infrastructure before the cars arrive. 

The Federal Government can play an important role as it considers stimulus 

spending and other financial incentives to assist the nascent market for electric vehicle charging infrastructure. Public sector investment in shared charging infrastructure during the early phases of EV deployment can help overcome consumer 

range anxiety and enable those who don’t have home charging stations to buy these 

cars. 

Policy 6.—Public Investment in EV Infrastructure Creates Jobs and Addresses the 

Chicken and Egg Problem 

Currently, there is a 50 percent tax credit available for infrastructure installations, which expires at the end of this year. 

Congress should extend the tax credit for alternative fueling facilities and make 

it useful by making it convertible to a rebate or to a payroll tax credit. 

There are far too many restrictions in the current tax credit. For example, it cannot be used for station owners who pay the alternative minimum tax or for companies with tax loss carry forward. 

Policy 7.—Extend and Improve the Infrastructure Tax Credit That is About to Expire 

In order to benefit from Level II charging in their homes, a large percentage of 

EV consumers will require the installation of a dedicated 220 volt circuit in their 

garages or car ports. These installation costs can be dramatically reduced if garages 

are pre-wired for electric vehicle charging. 

While building codes are generally a local/municipal issues, I cannot stress their 

importance enough. All new garages and parking lots should be required to include 

wiring for future electric vehicles. This will significantly lower the cost of adding 

EVSE later. 

Policy 8.—The Federal Government Should Use its Clout To Ensure That Building 

Codes Nationally Require all New Parking Places Include Wiring for Future EVs 

Finally, like Mr. Smith, who spoke on your first panel, I am a member of the Electrification Coalition, a group of CEOs from companies that represent the entire 

value chain of electrification. The Coalition and its members are committed to promoting policies and actions that facilitate the deployment of electric vehicles on a 

mass scale in order to combat the economic, environmental, and national security 

dangers caused by our Nation’s dependence on petroleum. 

As a final policy recommendation, I would like to stress the importance of the concept of targeted investment in a limited number of electrification ecosystems. Such 

a program will accomplish a number of important objectives: it will prove that electric vehicles work as a concept; it will help drive economies of scale for a number 

of businesses; and it will facilitate critical research on technology and driver behavior. Most critically, it will create the local networks in which electric vehicles can 

thrive. 

This technology is here today. We have the capability right now to deploy an electrified transportation sector that will dramatically improve our Nation’s trade balance, national security, and environment, and reduce consumers cost of transportation. What is required is coordination and support to push past initial regulatory 

and financial hurdles. This is the right thing to do for our Nation, and I urge you 

to move forward. 

Thank you for your time and your attention. 

Senator DORGAN. Mr. Lowenthal, thank you very much, next, 

Alan Taub, vice president for research and development at General 

Motors. 

Mr. Taub, thank you for being here. 
38 

STATEMENT OF ALAN I. TAUB, Ph.D., VICE PRESIDENT, GLOBAL RESEARCH AND DEVELOPMENT, GENERAL MOTORS 

Mr. TAUB. Pleasure to be here today and, in particular, to talk 

about General Motors plans for vehicle electrification, and specifically the Chevrolet Volt. I couldn’t have done a better job than Mr. 

Bennett just did to describe the philosophy of the consumer that 

was behind the Chevy Volt theory. 

What we do on the Volt is have it plug into the grid; put the electricity into the battery, and that will enable 40 miles of driving 

range. When, in the course of the drive, that battery is depleted, 

we have a motor—an engine generator on board to allow the consumer to go the additional 300 miles they’re used to today. It’s the 

way to get the best of today’s vehicle technology and introduce this 

breakthrough of electric drive systems. We’re hoping that’s actually 

the car you’ll be choosing next. 

We’re going to be launching the vehicle this—— 

Senator BENNETT. Can I ask you, does the gasoline engine drive 

the wheels or the—— 

Mr. TAUB. No. In our full hybrids, our two-mode hybrids, say, we 

have on the Escalade, that’s what’s called a parallel hybrid and 

goes—— 

Senator BENNETT. Right. 

Mr. TAUB [continuing]. Straight to the wheels. This is called a series hybrid, which is what you’re describing—— 

Senator BENNETT. It does the same thing that Mr. Higginson—— 

Mr. TAUB. It’s the same concept, with different embodiments. 

Senator BENNETT. Okay. Thank you. 

Mr. TAUB. And so, ours will be launching, this November. In its 

first year, we’ll be selling thousands of these, and, as we ramp up 

in subsequent years, tens of thousands a year is in our production 

plans. 

Clearly, the success of any vehicle electrification requires not just 

the vehicle solution, but the infrastructure. And it’s important that 

we design that infrastructure to meet the consumer needs. So, 

we’ve been studying this problem with EPRI, with electric utilities, 

with other interested parties and battery makers. 

Our conclusion is that the research shows that consumers refuel 

close to home and close to work. And so, we believe the first priority for the infrastructure should make easy charging for the consumer at home. And Mr. Lowenthal spoke about some of those options. Then move the infrastructure to the workplace. And because 

our Volt technology eliminates the range anxiety, we really think 

the public charging infrastructure should happen, but later on in 

the development of the infrastructure. 

You asked us to talk about how we get this to high volume. 

Clearly, we need the refueling infrastructure to keep up with the 

vehicle, infrastructure in the vehicle production. But, I also want 

to emphasize, we need to get through making this technology affordable in the right value equation for the consumer. Traditionally 

in the automotive industry, that means three cycles of learning, 

three cycles of technology development, and three cycles of commercialization. It’s in that third cycle, where the technology has become robust, cost effective, and is able to go into the tens of millions of units, that we feed into the car park. 
39 

In order to get to the first generation of technology, the efforts 

of this subcommittee, the Department of Energy, and the other 

agencies, have really allowed us to accelerate up to that first cycle. 

So, whether it’s the Freedom Car funding, the fuel partnership, or 

the stimulus funding, which allowed us to go forward for domestic 

production by GM of motors and battery packs, that’s the first step. 

Our view is to keep up the momentum on this key technology. 

We need to find a way to take our private/public partnership 

through generation two. It’s at generation three, we’ve met the consumer value equation and it’s self-sustaining. It’s the partnership 

through generation one and two, both technology development and 

commercialization, that’s key. 

So, to summarize, in terms of the priorities as we see them, first, 

again, focus the initial infrastructure for charging on the home. 

Second and I want to remind the subcommittee that the batteries, right now, are the most expensive element of electric vehicles, but similar efforts are needed on electric motors and power 

electronics. The breakthroughs in technology are required on all 

three components, and we need to ensure that production of those 

three is also done domestically. 

Third key is, as we develop automotive batteries, at the end of 

vehicle life they are still good batteries for other applications. And 

as the Electric Coalition pointed out, there are ways we can put in 

place to incentivize the use of these batteries after vehicle use, 

such as putting a floor on the value of the automotive batteries if 

they make their way into the stationary grid. 

The last point I want to make is a reminder that—for General 

Motors and, I think, for the industry, electrification means the vehicle is powered by—moved by motors that are powered by electrons. There are two ways to do that on a vehicle. One is the battery electric vehicle we’ve been talking about. The other is a fuel 

cell vehicle, which still has the same motors, power electronics, and 

other drive elements. Fuel cells have the advantage of being applicable to larger vehicles and also having larger vehicle range. What 

that means is, as we see the future of vehicle electrification, it’s not 

an either/or, it’s an ‘‘and’’ solution. A plug-in grid, battery vehicles, 

augmented by the auxiliary power units that we described, our 

Voltec technology, and for larger vehicles, the hydrogen fuel-cell 

economy. 

PREPARED STATEMENT

And so, relative to that, in addition to continuing to support the 

battery work, we really would like to see the United States remain 

the leader in fuel cell technology, as well. And specifically, what 

we’d like to recommend is extending the present Fuel Cell Test and 

Validation Program into fiscal year 2011, and also to think about 

incentivizing the marketplace by a pre-commitment of Government 

fleets for fuel cell vehicles, in order to enable that technology to 

move. And just like you’re having this hearing, the question is, how 

do we ensure the United States puts in the infrastructure for not 

just electrification, but for hydrogen, so we keep pace with Japan 

and Germany in that regard? 

I’ll look forward to your questions. Thank you. 

[The statement follows:] 
40 

PREPARED STATEMENT OF ALAN I. TAUB, PH.D. 

Mr. Chairman and subcommittee members, thank you for the opportunity to testify today on behalf of General Motors. I am Alan Taub, Vice President of Global 

Research and Development. I lead GM’s worldwide R&D efforts on advanced technology. 

I am pleased to be able to speak to you today regarding our plans for the Chevrolet Volt and our other electrically driven vehicles. I also look forward to discussing 

the infrastructure that will be needed to ensure that recharging and refueling options are available to American consumers. 

This is an important time in the history of the automobile industry. The world 

we live and do business in is changing. Automotive technology is clearly changing 

and the challenges and opportunities faced by our industry continue to evolve. 

For these reasons, GM has placed very high priority on vehicle electrification. We 

believe electric vehicle technology is one of the best long-term solutions to simultaneously increase energy independence and security, remove the automobile as a 

source of emissions, and enable more sustainable energy pathways. 

The electrification of the vehicle will also allow automakers to create exciting new 

vehicles that customers will want to drive and own. This is critical. Achieving highvolume sales of advanced technology vehicles is the only way to realize the largescale energy and environmental benefits we are seeking. 

To support our focus on bringing the right products to market, at the right time, 

for the right cost, GM has an advanced propulsion technology strategy that addresses both energy efficiency and energy diversity. 

As part of this strategy, we are working to dramatically improve the efficiency of 

our conventional engines and transmissions, as we’ve been doing for decades. We 

have also been working hard to improve overall vehicle efficiency by reducing vehicle weight and improving aerodynamics and rolling resistance. 

At the same time, we have intensified our efforts to displace petroleum-based 

fuels by building more vehicles that run on alternative fuels. This includes biofuels 

such as ethanol and biodiesel. In fact, of the 7.5 million E85 flex-fuel vehicles currently on U.S. roads, more than 4 million are GM cars and trucks. GM, along with 

Ford and Chrysler, has committed to make one-half of our vehicle production flexfuel-capable by 2012, provided there is steady growth in the fueling station infrastructure. 

Our commitment to alternatives also includes expanding and accelerating our development of electrically driven vehicles. 

Today, I want to highlight our progress on GM’s broad-based plans for vehicle 

electrification, which includes the Chevrolet Volt extended-range electric vehicle, 

plug-in hybrids, and fuel cell-electric vehicles. GM is working on all of these vehicle 

solutions because they are all electrically driven, yet each offers unique attributes 

that align with different driving needs. 

Electrification simply means the vehicle is powered by electrons that energize the 

motor. There are two ways to accomplish this. One is to use a battery that draws 

electricity when it is plugged into the grid. The other way is to store electrical energy in the form of hydrogen on board the vehicle and convert it into electricity in 

real time. 

Developing a variety of electric vehicles is also the best way to meet the driving 

needs of our customers. Those needs can involve a short commute to work, longerrange driving, or the requirement to carry more passengers or haul cargo. In other 

words, we think consumers will love the compact Chevrolet Volt extended-range 

electric vehicle for city and suburban driving. Meanwhile, our Chevrolet Equinox 

fuel cell EV—which has logged more than 1.2 million miles of driving through our 

Project Driveway market test—would appeal to drivers who need a larger vehicle. 

Since electrically driven vehicles use many common components and subsystems, 

technology developments can be applied across the range of EV options. 

GM believes there are many benefits available with electrically driven vehicles. 

They have the potential to: 

—Reduce petroleum consumption. 

—Create the pathway to new energy sources. 

—Reduce CO2, especially as utilities add renewable energy sources to their portfolio. 

—Create new technology jobs in areas such as cell chemistry, batteries, motors, 

power electronics and controls, and vehicle systems. Today, the Volt supply base 

already includes 196 suppliers in 24 States. And that’s just beginning to scratch 

the surface of the potential for advanced vehicles to be a real driver for economic and jobs growth. 
41 

Beyond these societal benefits, the electrification of the vehicle also enables auto 

manufacturers to design a better vehicle. The instant torque at the wheels available 

with electric drive makes the vehicle more fun to drive. Electrification frees vehicle 

designers and engineers to develop exciting new architectures. It also enables faster, 

more capable, more responsive vehicle subsystems, features, and accessories. 

The Volt combines the best aspects of battery electric propulsion with the technology on today’s vehicles to deliver a superior consumer experience. It will deliver 

up to 40 miles of electric-only, gas-free, emissions-free driving. And when the battery is depleted, its extended-range capability provides up to an additional 300 miles 

of range, supplying electricity to the drive unit while also sustaining the charge of 

the battery. 

GM is targeting the launch of the Volt in November. We have announced our initial markets, which include the greater Los Angeles area, Detroit, and Washington, 

DC and we will be expanding beyond these three markets. We are working on a 

managed start and we will build thousands the first year and tens of thousands 

after that. 

GM is working with the Electric Power Research Institute, electric utilities, and 

other interested parties on launch market plans that include home, work, and public 

charging. We are grateful to the Department of Energy for the grant provided under 

the American Recovery and Reinvestment Act (ARRA) that will allow us and our 

utility partners to demonstrate how the Volt interacts with the electric grid. Our 

research shows that consumers refuel close to home and work. For this reason, we 

believe efforts to support initial infrastructure investment should focus on home and 

work location opportunities, then public charging. 

You have asked us to address the issue of how to get electric vehicles to high volume. In addition to creating the refueling infrastructure for electric vehicles, this 

will require vehicle solutions that are robust and affordable for consumers. This is 

a question not only of technological maturity, but of getting through the 2–3 cycles 

of learning needed to reach high-volume production. 

With respect to the technology, we still need to achieve cost breakthroughs, faster 

recharge, and good low-temperature performance with lithium-ion batteries. We also 

need to address technical challenges related to electric motors and power electronics. 

Along with batteries, these are the other key components of electric vehicle systems. 

In both these areas, we need to realize materials, cost, design, and efficiency breakthroughs. 

DOE has been supporting vital research on batteries, motors, and other electric 

vehicle technologies through the FreedomCAR and Fuel Partnership. The Department is also helping build U.S. manufacturing capability through ARRA funding. 

GM is grateful for the grants we received to help us open our new battery manufacturing plant in Brownstown Township, Michigan and our electric drive production 

center in White Marsh, Maryland. These two facilities are among the first advanced 

battery and electric motor manufacturing plants in the United States to be operated 

by a major auto company. They will enable us to gain valuable learning as we move 

down the cost curve on these technologies. 

Reducing cost is crucial because today’s first-generation technology remains out 

of reach for many buyers. In our industry, driving to the right value equation for 

consumers generally takes three cycles of learning before a technology can become 

cost-competitive. For the automotive industry, this period from first commercialization to the third cycle of learning is a critical time when a new technology can either 

take off, become a niche play, or even fade away entirely. If we cannot get beyond 

this period, a new technology will never get to large volumes—and will not significantly impact our national petroleum consumption or greenhouse gas emissions. 

Transitioning to the point where the technology can be used in enough cars to 

achieve the necessary economies of scale to make it affordable is a large challenge. 

Historically, Government technology development programs have ended before this 

point. In many of these programs, the goal is to meet a series of technical milestones. These may get you to first-generation technology, but if our metric is how 

much a technology decreases petroleum consumption or greenhouse gases, we really 

need to move the focus to that third generation of the technology, when high-volume 

manufacture and sales are possible. This will require more than just consumer tax 

credits for new technologies. It really means deeper re-thinking of our efforts to accelerate the deployment of advanced automotive technologies. 

The challenge of getting through the first few cycles of learning is compounded 

by the need to create a new infrastructure. At GM, we are making a very large commitment in dollars and manpower to bring our extended-range electric vehicle technology to market this year. In order to reach our national goals, we need a similar 

commitment to infrastructure development. 
42 

What does all this mean for the subcommittee? In preparing this year’s Energy 

and Water Appropriations bill, we urge the subcommittee to consider the following: 

—First, focus any funding for EV infrastructure on making home recharging easy 

for the consumer. This should be followed by workplace charging. Public charging facilities will become more important over time, but if we do not make home 

chargers work for the consumer, we are not going to get EVs to a scale where 

public charging makes sense. 

—Second, increase the level of DOE’s efforts on reducing the cost of electric motors and power electronics. To make EVs affordable, we need to reduce these 

costs, not just the cost of the batteries. 

—Third, there are a number of options for repurposing automotive energy storage 

batteries after their initial use in electric vehicles. Congress has a role in 

incentivizing the creation of these options. It should consider adopting either 

the concept of a battery warranty fund or the proposal of the Electrification Coalition to establish a floor on the value of advanced automotive batteries that 

are repurposed for use in stationary energy storage. 

—Fourth, remember that electric vehicles powered by batteries are not the only 

type of electric vehicles—and, in fact, are not the best vehicle solution in some 

market segments. I urge the subcommittee to extend the Fuel Cell Test and 

Validation Program in fiscal year 2011 with technology insertion to ensure that 

we have the latest in fuel cell technology on U.S. roads. Congress should also 

begin to fund section 782 of the Energy Policy Act of 2005, which will pay for 

the cost differential for Federal and State fleet purchases of fuel cell vehicles. 

This funding should also be available until expended, so that auto companies 

can plan on early fuel cell purchases in the 2012–2015 timeframe, when early 

Federal purchase of even a few thousand vehicles will have a huge impact on 

accelerating the technology. 

—Fifth, ensure that the United States keeps pace with Germany and Japan on 

hydrogen infrastructure, but focus these efforts in 2–3 regions of the country 

where commercialization can start. For example, 40 hydrogen stations in the 

Los Angeles metro area would be a game-changer. 

—Finally, reframe multi-agency goals and priorities for advanced technology vehicles, from the point where technology metrics are met to the point where highvolume production is possible—basically, at the third cycle of learning. 

GM needs support for all advanced technologies, including the Volt. We welcome 

Government and cross-industry partnerships to accelerate both technology development and early commercialization. 

Thank you for the opportunity to testify today. I look forward to your questions. 

Senator DORGAN. Mr. Taub, thank you very much. 

Next we’ll hear from Kraig Higginson, the chairman and founder 

of Raser Technologies. 

Mr. HIGGINSON. 

STATEMENT OF KRAIG T. HIGGINSON, EXECUTIVE CHAIRMAN OF THE 

BOARD, RASER TECHNOLOGIES 

Mr. HIGGINSON. Thank you, Chairman Dorgan and Senator Bennett and Senator Cochran. It’s my pleasure to be here today to testify. 

I’m the chairman of Raser Technologies. And 8 years ago, it was 

our mission to develop advanced geothermal power plants and electric power plant—powertrain technologies to build what we called 

a ‘‘wells-to-wheels’’ solution to the energy problem in this country. 

We did that on private financing, and got to a significant point in 

that development. In fact, our new 10 megawatt geothermal power 

plant, that just came online this year in southern Utah, is now 

powering Anaheim, California, and our favorite, Disneyland. So, 

we’ve been successful on the geothermal power plant side, worked 

closely with United Technologies in developing a technology that’s 

doing some things pretty incredible in that front. 

At the same time, we teamed with General Motors on a project 

to develop the vehicle that you see in that picture over there. It’s 

an electric Hummer. 
43 

We began our quest for this solution back in 2002. We were 

drawn to a chart—to this chart, if you’ll look at the chart that identifies what Senator Dorgan had talked about earlier, and that 

was—there’s an interesting dynamic—that most of the vehicles out 

there drive less than 25 miles a day. In fact, many of them drive 

far less than that. But, at that range, you can solve this problem. 

And this—we started looking at this back in 2001, 2002, probably 

one of the earlier people to look at this idea of saying, ‘‘Okay, if we 

can solve the problem at the short range of these electric vehicles, 

we will have the solution.’’ 
44 

What we did was, we went on to deal with the average daily 

driving cycle, and then extend the range for the occasional longer 

trips by using a small onboard generator, as the good Senator described that for us. 

In 2004, we founded the Plug-in Hybrid Development Consortium with Pacific Gas and Electric, Southern California Edison, 

and other leading utilities, along with technology companies such 

as A123 Systems and other companies. Recently we completed a 2- 
45 

year program with General Motors to develop an extended-range 

electric powertrain, similar to the Chevy Volt, but designed for 

larger vehicles, including trucks, SUVs. Working with GM, we introduced this technology at the SAE Conference in a midsized sport 

utility vehicle, that beautiful red Hummer that we see again. 
46 

Since most people drive less than 40 miles a day, on most days 

this vehicle will not burn a drop of gasoline. Applying this 

powertrain to light-duty trucks, gas consumption could reasonable 

be cut more than in half in America’s top-selling vehicles. 

The key to achieving the maximum benefits of electrification was 

designing an electric powertrain for heavier vehicles that optimized 

the vehicle battery for the average miles driven. 
47 

The fact is the United States has led the world in the development of electric motors, drives, and battery technologies needed for 

electrification of vehicles. Yet, today the U.S. is in a high-risk position of losing its leadership in both automotive manufacturing and 

electric vehicle technology to foreign competitors, who have significant government backing at this time. At one time, the United 

States had more than a 10-year lead in the world on electric vehicle development. With GM’s foresight in launching the EV1 program, we were the clear leaders. 

People ask me the question, and I’ve heard it asked here today, 

‘‘Why trucks, why SUVs?’’ and even more specifically, ‘‘Why the 

Hummer?’’ The Hummer is clearly the vehicle of choice when it 

comes to the car that everyone hates to love; it’s the vehicle that’s 

got the reputation of having the worst fuel economy on the planet. 

By the way I don’t necessarily agree with that reputation, but that 

is its reputation. And that’s exactly why, back 4 or 5 years ago, I 

said, ‘‘Let’s do it in the Hummer.’’ Nothing could be more dramatic 

than demonstrating a vehicle as egregious as a Hummer getting 

more and better fuel economy than a Toyota Prius. And that’s what 

we did. 

Working with the PHEV Consortium, Raser has initiated a 

Green Fleet Program to introduce extended-range fleet vehicles and 

fleet trucks, beginning with the Nation’s largest utility, Pacific Gas 

and Electric. 

It is clear that electrification of transportation is the most practical and immediate way to reduce dependence on oil and dramatically reduce greenhouse gas emissions. In your efforts to encourage 

automakers to improve fuel economy, Federal fleets can provide 

tremendous support to the market by simply leading the way to 

purchase plug-in electric fleet vehicles. It’s the smart thing, and it’s 

the right thing to do. We can now build clean electric working 
48 

trucks and SUVs, and in doing so, we can cut gas consumption in 

half in this country. 

If you look at this chart—our prior panelist, Fred Smith, referred 

to this earlier—and this is a chart that shows that—if you look on 

the far right-hand side, this is identifying trucks and SUVs as the 

largest consumer. This is a—the purple is the current utilization 

of fuel in these vehicles. And if you go over to the right, to the orange column, which is about one-third of the consumption of fuel, 

that would be the Hummer that we’ve designed and built and are 

driving today. So, there is significant savings to come from using 

this in these larger vehicles. 
49 

I want to just add one point, as I close, that it is the larger vehicles, the working vehicles in America, that do, in fact, create the 

biggest problem of pollution. It’s not the Toyota Prius, or it’s not 

even the Chevy Volt, that we’re going to be worried about. It’s the 

trucks. The working trucks of American working people. If we can 

solve the problem at that level, we solve the majority of the problem. 
50 

Senator DORGAN. Are you talking about fleet trucks, or are you 

talking about individually-owned trucks? 

Mr. HIGGINSON. I’m talking about everything from light-duty 

pickup trucks to a Federal Express truck. Our system was designed 

for that market. So, we’ve designed, from the ground up, for the 

larger, heavier vehicle market for a plug-in series hybrid. 

PREPARED STATEMENT

I want to thank you for the opportunity to share, today, our vision of the electrification of the transportation industry. We, as a 

country, find ourselves in a position of tremendous opportunity. We 

can once again lead the world if industry and government join in 

this most important mission. That is our generation’s mission. Our 

parents’ and grandparents’ mission was to put a man on the moon, 

and they did it. It’s now our turn. We have the technology, we certainly have the need. Let us work together so that future generations will able look back at us with pride and say that, ‘‘We did it. 

We led the world out of dependence on oil and air pollution.’’ 

Thank you. 

[The statement follows:] 

PREPARED STATEMENT OF KRAIG T. HIGGINSON

Thank you for the opportunity to participate in this hearing today. My name is 

Kraig Higginson. I am the chairman of Raser Technologies, a public company on the 

New York Stock exchange. We develop advance geothermal energy and electric 

powertrain technology, a ‘‘Well-to-Wheels’’ approach to reducing our Nation’s de-
51 

pendency on oil and green house gas emissions. In our automotive division, we work 

with Tier 1 suppliers and OEMs. Alan Perriton, a former senior executive at GM 

is on our board. 

In 2004, we co-founded the Plug-in Hybrid Development Consortium with Pacific 

Gas & Electric, Southern California Edison and other leading utilities along with 

technology companies such as A123 Systems & others. Recently we completed a 2 

year program with GM to develop an extended range electric powertrain, similar to 

the Chevy Volt, but for larger vehicles including trucks & SUVs. Working with GM, 

we introduced this technology in a GM mid-size SUV, demonstrating between 30 

and 100 mpg in gas fuel economy for the average driver using electricity as the primary fuel. Because most people drive less than 40 miles a day, on most days it 

won’t burn a drop of gas, driving its first 40 miles on electricity using advanced lithium ion batteries. Applying this powertrain to the light duty truck, America’s top 

selling vehicle, gas consumption could reasonably be cut in half or more. And we 

can begin doing this beginning today and begin commercialization with America’s 

fleets. 

TABLE 8.12.—HOUSEHOLD VEHICLE TRIPS, 2001 NHTS 

Number of daily 

vehicle trips 

Average vehicle 

trip length 

(miles) 

Daily vehicle 

miles of travel 

1990 ........................................................................................................... 3.3 8.9 28.5 

1995 ........................................................................................................... 3.6 9.1 32.1 

2001 ........................................................................................................... 3.4 9.9 32.7 

Source.—U.S. Department of Transportation, Summary of Travel Trends, 2001 Household Travel Survey, December 2004, p. 12. 

Trucks and SUVs account for about one-half of the vehicles sold in this country 

with light duty trucks constantly the No. 1 selling vehicle in America. We can improve their fuel economy through electrification by as much as 100 percent or more 

depending on the route. This significant reduction in petroleum consumption will 

lead directly to greater national energy security, economic growth and reduce our 

trade deficit resulting from exporting cash for oil , cleaner air and most importantly 

new American jobs with a sustainable future. 

The key to achieving the maximum benefits of electrification is designing an electric powertrain that optimizes the vehicle’s battery range for the average miles driven. According to the Department of Transportation (figure 1) most Americans today 

drive less than 40 miles a day. An electric vehicle with 20 to 40 miles of battery 

electric range and a small gas/electric generator or range extender, could provide 

most of the benefits of an electric vehicle while removing critical barriers to mass 

market penetration such as range limitation and charging infrastructure. 

It is becoming clear that Electrification of Transportation is emerging as the most 

practical and immediate way to reduce dependency on oil and to reduce green house 

gas emissions. 

Why Extended Range Electric?—This is due to the many advantages of electric 

transportation. We have a well-established electric infrastructure in place, capable 

today of accommodating millions of additional electric vehicles. Electric motors are 

much more efficient, about 90 percent efficient compared to about 15 percent for gas 

engines. According to a study by the Electric Power Research Institute, charging 

electric vehicles from today’s grid would cut GHG emissions in half, even with today’s coal fired power plants. As States meet their renewable portfolio standards, 

the grid continues to become cleaner. The two key steps to meeting the Nation’s energy goals are (1) plugging in electric vehicles to the grid, and then improving the 

grid with renewable energy. The United States has the advantage of massive reserves of alternative fuels and renewable energy including the world’s largest reserves of geothermal energy. 

In fact, the United States has led the world in the development of electric motor 

drive and battery technologies needed for vehicle electrification including, the invention of the Nickel Metal Hydride and Lithium Ion batteries and advanced AC induction and hybrid motor designs. 

Yet at the same time, the United States is at high risk of losing its leaderships 

in both automotive manufacturing and electric vehicle technology to foreign competitors with government backing. 

At one time, the United States had a 10–20 year lead on electric vehicle development. But sadly we have a history of being excellent at innovation, but poor at commercialization, failing to capitalize on our own intellectual property in emerging 

new industries. 
52 

As a case in point, although the LCD display technology was invented here in 

United States, foreign competitors now manufacture over 90 percent of world’s LCD 

screens, which have nearly completely replaced traditional cathode ray tube or CRT 

displays. This was due to closer cooperation between private industries and government in countries like Korea. 

AMERICAN AUTOMOTIVE RENAISSANCE

My company has struggled with these very issues. Today we stand together at the 

crossroads. We can look back and remember the days when America led the global 

automotive industry, or look ahead to an American Automotive Renaissance inspired by clean electric vehicle technology: the RIGHT STUFF in the RIGHT 

PLACE at the RIGHT TIME. My message to you today is that we have the technology in hand to solve these very significant challenges. Of course we will grow 

through generations of improvements, just as we have in the computer and networking industries. 

Now, I’d like to share with you my thoughts on where we get the most ‘‘bangfor-the-buck’’ so to speak. 

I confess, that when I imagined the ‘‘car to save the planet,’’ I had something 

more like the sexy Tesla Roadster in mind, or the elegant Fisker ‘‘Karma.’’ (Don’t 

tell my friends at GM but I have already placed an order for the Fisker Karma.) 

However there is another less flashy vehicle that I believe we will also need on the 

road to electrification. It is a vehicle very unique to America’s working class. A vehicle that is so important to our economy that it has been the number one selling vehicle in this country for the past several decades. It is the humble but hard working 

pick up truck. This is an important vehicle both for the rebuilding of the economy 

and the automotive industry. 

HIGH VOLUME & HIGH MARGIN

For a significant reduction in nationwide gas consumption and green house gas 

emissions, high volume market penetration is imperative. Therefore, the ideal vehicle for early commercialization would have both high volume and high margin. It 

is very difficult for automakers to add $25,000 of advance technology and batteries 

to an economy car with very low margin and stay profitable. Light duty trucks have 

both high volume, and high profit margin and can better accommodate the additional cost of new technology. 

WHY TRUCKS? THE GREATEST GOOD

Light duty trucks are the number one top selling vehicles in America (figure 2). 

When combined with SUVs and vans, they make up about one-half the vehicles sold. 

Trucks & SUVs are also responsible for a majority of vehicle emissions and fuel consumption. Trucks are the vehicle of choice of America’s small businesses. Trucks are 

not driven on Wall Street, but they do drive hard working families in America’s 

heartland back to work. I’ve heard it said that behind every Prius owner is a friend 

with a truck, to move-in, to build or repair their home or take their family camping. 

Trucks are also the number one vehicle in America’s working fleets It will be hard 

to rebuild the housing industry without the trucks we use to build our houses. It’s 

hard to put a 4 by 8 sheet of plywood in the back of a Prius. America’s government 

and utility fleets are among the highest truck users. If we’re going to clean up the 

air, we need to clean up our trucks. 
53 

On the other hand, the greatest reduction in GHG and fuel consumption can result through electrification of America’s working trucks. But can it be done? Is it 

practical? Is it even possible? 

America leads the world in electric vehicle powertrain development for this class 

of vehicles. Another case in point: I refer again to Raser and GM the first to build 

and demonstrate a full performance four wheel drive extended range electric vehicle 

powertrain for SUVs and trucks. 

Auto sales are nearly matched by the sale of light trucks, but suffer more as gas 

prices increase. 

WHY FLEETS? FLEETS WILL LEAD THE WAY

Working with the PHEV Consortium, Raser has begun a ‘‘Green Fleet Program,’’ 

to introduce electric fleet trucks in the Nation’s largest utility fleet, Pacific Gas & 

Electric. David Meisel, Director of Fleet Services for PG&E comments: 

‘‘In a continuing battle to reduce operating costs, fleets prefer the stable low cost 

alternative to gas. In most States as in California, utilities Fleets have strong inherent drivers for early adoption of plug-in electric vehicles led by concerns over rising 

gas prices and a desire to reduce emissions. Working fleet trucks typically need both 

fuel economy and occasional light payload. The ideal fleet vehicle has the gas fuel 
54 

economy of a Prius, with the payload of a pick up. In the past, trucks have been 

largely excluded from significant increases in emissions standards. Utility fleets are 

strong supporters of plug-in electric vehicles. Additional funding and incentives to 

the Nation’s public and private fleets who are willing early adopters of electric work 

vehicles majority of duty is ‘hauling people’ with occasional moderate payloads.’’ 

GREEN FLEET PROGRAM

Raser is leading a good example of the role that fleets can play. In addition to 

being one of the Nation’s largest and cleanest utilities, PG&E is also a leader in 

the development, demonstration and deployment of clean alternative fuel fleet vehicles with over 1,500 alternative fueled vehicles operating in its fleet today. 

PG&E is co-founder of the Plug-In Hybrid Development Consortium and has been 

working with Raser Technologies to demonstrate six new plug-in electric fleet pickup trucks. PG&E operates more pick-up trucks than any other vehicle in their fleet, 

and with the extended range electric trucks developed by Raser, PG&E can confidently deploy these trucks throughout their service territory as a solution to many 

of their business goals, including reducing emissions while lowering fuel costs, and 

helping to address the Nation’s dependence on imported oil. 

MINIMAL CHANGES

The pick up truck has a very high volume to weight ratio giving it the room and 

payload needed to accommodate the additional weight of a large lithium ion battery 

pack safely between the frame rails without reducing cargo or cabin area. 

OFFSETTING BATTERY COSTS WITH MOBILE EXPORTABLE POWER AND ADDITIONAL VALUE

In addition, the incremental cost of batteries, particularly in early stages of low 

volume production, can be largely offset by the additional value of mobile exportable 

power in extended range electric trucks equipped with a 100 kW generator used to 

provide additional power to the motor and to recharge the vehicles batteries and 

when driving beyond battery range. That’s enough to power construction tools or the 

entire construction site or enough to provide power to run your home and six of your 

neighbors in an emergency. Municipal and maintenance crews use Utility fleets and 

highly value the mobile emergency power built into the truck. Unlike consumer vehicles, working fleets find enough value in the mobile power generation to nearly 

offset the incremental cost of batteries. 

KEY TO OEM PROFITABILITY

In a recent article, the Wall Street Journal sites trucks as key to GM’s profitability due to higher margins and high volume. To offset reduces sales due to higher 

gas prices, GM plans to improve truck fuel economy to meet the 24.1 mpg CAFE 

standard set for 2011. High vehicle profit margins are needed to absorb additional 

cost of new technology. The Ford F–150 is the top selling vehicle model in America 

followed by the Chevy Silverado. However, if combining both the SilveradoTM and 

the GMC Sierra brand which is essentially the same truck, then GM would hold 

top honors. 

Trucks offer U.S. automakers a position of strength upon which to rebuild profitability if they can overcome sagging sales due to rising gas prices. Shifting from the 

more volatile gasoline to electricity will allow U.S. automakers to maintain truck 

sales volumes while dramatically improving CAFE fuel economy in trucks. This in 

turn puts Americans back to work building a clean truck with a sustainable future 

powered primarily by electricity. 

Fleets sales constitute a significant portion of truck sales volumes and are strategically important to GM and other OEMs. Utility Fleets seek lowest volume pricing 

for gas vehicles, while tolerating a higher price for very clean vehicles that meet 

their customers expectations for environmental responsibility. Pick up trucks are 

the most popular vehicle with both Fleets and with consumers. The vehicle of choice 

by America’s Heartland and working families. 

BRIDGE TO HIGH VOLUME

Rapid acceleration to high volume is one of the best ways to amortize the tremendous costs of new technology. Fleets are key to early adoption, rapid market penetration and can provide a crucial bridge to volume. Pacific Gas & Electric’s fleet 

alone contains over 12,000 vehicles with over 8,000 trucks. Government fleets are 

required to meet EPAct with 75 percent of all new fleet purchases being alternative 

fueled vehicles. Government fleets including municipal, State and Federal, are some 

of the largest users of light trucks & SUVs. In their efforts to encourage automakers 
55 

to improve fuel economy, Federal fleets can provide tremendous stimulus to the 

market by ‘‘walking-their-talk’’ and purchasing plug-in electric fleet vehicles and 

trucks given the right incentives. 

MARKET DRIVERS

The most powerful market driver for electric vehicles is the comparatively low cost 

of grid electricity when charging at night during off peak hours. With a national 

average of about 6 cents per kilowatt hour, a fleet truck can drive on electricity for 

about 60 cents per equivalent gallon. This could translate into a 75 percent reduction in fleet fuel costs. For large fleet operators, such as FedEx, UPS, Comcast, 

AT&T and others, the fuel savings can increase dramatically over a mild hybrid or 

even a plug-in HEV that remains gas-engine dependent representing often a 75–100 

percent improvement over mild hybrids. This savings is particularly augmented 

when vehicle route & duty cycle can be matched to the battery range. 

For most working fleets, fuel is the highest operational expense. On average, electricity costs about one-fourth as much as petroleum nationwide. Because of the benefits of ‘‘load leveling’’ by charging in ‘‘off peak’’ hours, most utilities now offer or 

plan to offer a nighttime ‘‘off peak’’ electric vehicle charging program. Pacific Gas 

& Electric offers a night-time EV rate of just 6 cents per kWh. This translates into 

less than 60 cents per equivalent gallon. SMUD, the Sacramento Utility District offers a 50 percent discount for nighttime charging of electric vehicles. The Los Angeles Department of Water and Power (LADWP) offers a discounted rate of just 2.5 

cents/kWh for electricity used to charge EVs during off-peak times. Southern California Edison offers a discount program of about 8 cents per kWh and San Diego 

Gas & Electric offers about 9 cents per kWh. This translates into about a 75 percent 

reduction in fuel costs, a powerful market driver. (source DOE Department of Energy Efficiency & Renewable Energy http://www.afdc.energy.gov/afdc/progs/ 

viewlindlmtx.php/in/DICS/CA/0) 

GOOD FOR THE GRID

Plugging in at night is good for the consumer and good for the utility. Night time 

off peak vehicle charging offers load leveling benefits to the utility improving grid 

efficiency. 

MASS MARKET PENETRATION RANGE & INFRASTRUCTURE

Two of the most significant barriers to high volume market penetration of electric 

vehicles has historically been (1) range limitations and (2) infrastructure. Extended 

range electric vehicles can bring benefits of immediate electrification without the requirement of huge investment in infrastructure. Mass penetration of alternative 

fueled vehicles has historically been limited by range and infrastructure issues. 

In addition to the benefits to the environment, a national fleet of thousands of 

extended range electric vehicles offers National security of mobile emergency power 

generation for municipal, military and other critical operations. 

FLEXIBILITY

To adapt to best available alternative fuels, the extended range electric vehicle 

can accommodate a variety of fuels including diesel, bio diesel, CNG, and others providing a high degree of flexibility 

FUEL CELL READY

The United States has invested billions of dollars into hydrogen fuel cell research. 

The extended range electric powertrain is by nature ‘‘fuel cell’’ ready. The combustion generator in an EREV can be replaced with a fuel cell generator for zero emission operation in the future. Hydrogenics, a leading fuel cell company sees this as 

a more practical pathway to commercialization for fuel cell technology, significantly 

reducing the size and cost of the fuel cell stack. 

WELL TO WHEEL EMISSIONS, IMPROVING

Driving on grid electricity will provide over a 60 percent reduction in total wellto-wheels emissions in California according to an EPRI study. More importantly, as 

the State’s grid improves to meet new RPS (renewable portfolio standard) in the 

next few years, the total well-to-wheels emissions will continue to decrease as the 

percentage of renewable energy increases. PG&E in California offers one of the 

greenest energy mixes in the country with over 50 percent of its power coming from 

low emission sources such as hydroelectric, nuclear, geothermal, wind and solar. As 
56 

the United States moves to meet a national RPS, the well-to-wheels emissions will 

continue to go down. This is part of the long-term advantage of the plug-in electric 

vehicle that aligns well with the Nations overall energy plan. 

CURRENT STATUS OF ELECTRIC VEHICLE DEVELOPMENT

Raser Technologies recently completed a program with General Motors to develop 

an extended range electric demonstration vehicle. The Demonstration vehicle selected was a midsized SUV. The gas powertrain was replaced with an extended 

range electric powertrain designed for larger vehicles. In testing the 6,000 lb vehicle 

achieved over 40 miles in electric range on a mixed city/highway drive cycle using 

about 50 percent of the available battery pack. We are now applying the powertrain 

to popular pick up trucks to demonstrate in the Nation’s leading fleets beginning 

with the largest utility fleet, Pacific Gas & Electric. 

David Meisel, Director Fleet Services for PG&E comments: 

‘‘In addition to being one of the Nation’s largest and cleanest utilities, PG&E is 

also a leader in the development, demonstration and deployment of clean alternative 

fuel fleet vehicles with over 1,500 alternative fueled vehicles operating in its fleet 

today. PG&E is co-founder of the Plug-In Hybrid Development Consortium and has 

been working with Raser Technologies to demonstrate six new plug-in electric fleet 

pick-up trucks. PG&E operates more pick-up trucks than any other vehicle in our 

fleet, and with the extended range electric trucks developed by Raser, PG&E can 

confidently deploy these trucks throughout our service territory as a solution to 

many of our business goals, including reducing emissions while lowering fuel costs, 

and helping to address the Nation’s dependence on imported oil.’’ 

In southern California Raser is working with the city of Anaheim to begin implementation of ultra low emission extended range electric fleet trucks. Fleet Superintendant Karl Hopfer writes: 

‘‘Anaheim City is proud to offer its customers clean electric power from Raser’s 

geothermal power plant. In addition, we have teamed with Raser to demonstrate 

how much cleaner plug-in electric fleet trucks can be, especially when charged with 

electricity from a zero emission geothermal power plant. Extended range electric 

trucks offer us the electric range we need for typical daily routes, with the flexibility 

for longer trips. For us the E–REV truck is like a pick up truck and is just what 

fleets like ours are looking for. Fleets can play a key role in bringing this new cleaner technology to the market. We are in favor of any additional incentives that may 

be available to help early adapting fleets.’’ 

—Karl Hopfer, Director Fleet Superintendent, Anaheim Public Utility. 

The city of Anaheim also provides power to help Mickey Mouse’s home town ‘‘go 

green as well’’. 

Working with consortium partners, over 11,000 soft orders for plug-in electric fleet 

vehicles have been acquired from over 76 cities, 166 public utilities and 17 State 

and Federal agencies. The green fleet program could soon be ready to convert those 

soft orders to purchase orders as it completes its beta and field testing. For example, 

we were recently invited to meet with the city of Seattle who is scheduled to receive 

$20 million in stimulus funding in association with Clean Cities, to purchase clean 

fleet vehicles. Matching fleet demand with fleet incentives to can provide tremendous velocity to commercialization. There are hundreds of cities across the country 

like Seattle, Anaheim and others who are seeking to use stimulus funds to buy new 

clean vehicles. 

Due to current low volumes, battery pricing still remains high. However, we are 

now receiving bids from battery companies with high volume capacity that now approach $500 per kilowatt hour, with lower prices closer to the DOE targets on the 

horizon given adequate volumes. The key seems to be getting batteries to a high 

volume capacity. We believe that working with fleets will provide an essential 

bridge to volume early to accelerate commercialization. 

Many fleets are willing to pay more for clean vehicles if the value is there including a more significant improvement fuel economy over previous models. Our market 

research shows that an improvement of over 50 percent in gas fuel economy can 

drive a higher vehicle price particularly as gas prices are predicted to continue rising as global demand outpaces supply due to emerging economies such as China and 

India with a large energy appetite. However additional value is needed to overcome 

the anticipated incremental vehicle costs during low volume. For working fleets, 

such as utilities, maintenance crews, contractors, farmers and others, the additional 

value of mobile power generation may offset a significant portion of battery costs. 
57 

HOW MUCH WILL IT COST?

In volume we are targeting a 30 percent incremental cost for the Advanced Technology package for consumers. Statistics from the Commerce Department show that 

the average truck price is about $30,000, or 20 percent over base vehicle. In addition, nearly 25 percent of all trucks are sold with options adding over 25 percent 

to vehicle price. We anticipate that an Advanced Technology Package, with Ultra 

High Fuel Economy of 50 mpg or higher in a truck, will capture significant market 

share from 15 mpg competitors and may command a 25 percent premium package 

option price. This price point has already been established by consumers who regularly spend 25 percent more for other high-end options such as a comfort package 

including leather, wheels, navigation, additional horse power and an entertainment 

system. Selling value for price is an appropriate strategy. 

Incentives such as the current $7,500 tax credit (applicable to EREV–40 trucks) 

and other incentives are key to bridging to high volume. 

ECONOMIES OF SCALE—SHARING COMMON COMPONENTS

Greater economies of scale are needed to reduce rapidly the cost of new technology. Similar to the way we build on the economies of scale applying a number 

of different vehicles to a common chassis, we need to find the same economies of 

scale by leveraging a common electric powertrain class that can be applied in tandem to a chassis class to power a broader number of vehicles. For example, the cost 

of a specialty delivery vehicle for FedEx, USPS or the military can be greatly reduced if it shares a common powertrain with light trucks already in high volume 

production. The computing industry has successfully leveraged this strategy in the 

popular ‘‘WinTel’’ model providing flexibility and economies of scale. For example, 

we have carefully selected the 2500 class chassis due to its high potential for commonality among a number of high value vehicle platforms shared in common with 

high volume light duty trucks. 

A 20 mile plug-in has the potential to cut gas consumption in half, and a 60 mile 

EV range vehicle can cut gas consumption by over four times according to this analysis by EPRI. 

WHAT IS NEEDED

Four areas of policy support are needed to aid in the commercialization of vital 

advanced electric vehicle technologies, manufacturing and consumer incentives, and 
58 

incentives for early adopting fleets and streamlining of emissions and vehicle certifications. 

MANUFACTURING INCENTIVES

For smaller innovative technology companies, capital-intensive operations such extended R&D and new tooling for manufacturing of new technology can be prohibitive. Technology suppliers and tier one suppliers play an important role in supporting the Nation’s larger automakers with the innovations needed to leap ahead. 

Loan guarantees for suppliers working with OEMs can be tremendously helpful. 

Once manufacturing can be achieved, then tax credits can take affect. 

EARLY ADOPTING FLEET INCENTIVES

The most near-term and effective incentives that are needed should be provided 

to early adopting fleets who replace low fuel economy trucks & SUVs for electric 

trucks & SUVs. Many fleets especially government fleets are unable to take advantage of tax credits. Due to the key role that early adopting fleets play in the acceleration of commercialization of electric vehicles, additional incentives need to be offered to fleets to help bridge to volume and reduce the incremental cost of clean 

electric vehicles. This would allow government fleets to lead the way without exceeding current replace purchasing budgets for a limited time, say 3 years. 

CONSUMER INCENTIVES

Several consumer incentives for electric vehicles can help accelerate commercialization and increase total volume. The vehicle’s all electric range correlates directly with the amount of petroleum displaced. Therefore purchase incentives tied 

directly to the vehicles all electric range can be in the public’s interest and justified 

to bridge to volume production. This can be called Petroleum displacement credits 

valued by the electric vehicles incremental improvement or reduction of emissions 

over the gas version. This would provide a one-time incentive for owners of so-called 

‘‘gas guzzler’’ vehicles to upgrade to an electric version which would provide a greater overall reduction in emissions and fuel consumption. 

ELECTRIC FUEL CHARGING INCENTIVES

Incentives to charge vehicles at night would benefit the utility and the national 

grid. Incentives should increase for households who select night time and renewable 

energy charging options. Overall utility rates can also be discounted with temporary 

Federal and State subsidies. 

LOW CARBON FUEL INCENTIVES. 

Provide additional incentives for clean fuel graduating by lowest carbon content. 

SALES TAX THE HIGHEST POLLUTERS

An environmental recovery tax on vehicles that do not meet C.A.F.E would encourage automakers and consumers to reduce the number of high emissions vehicles 

and provide funding needed for electric vehicle incentive programs. 

DISCOUNTS IN STATE REGISTRATION FEES FOR ELECTRIC VEHICLES

—Streamline Safety & emissions testing for pre-certified vehicles with new clean 

powertrains 

—Mandate Government Fleets to order first 

—Fund study quantifying TOTAL cost of ownership of cleaner vehicles including 

total ownership costs including fuel, hidden costs to government and society 

—Loss of life 

—Damage to environment from emissions 

—‘‘cost of carbon’’ 

CONCLUSION

I feel it a privilege to be alive today, to be apart of this great change for the better. It has been my passion and my pleasure to be a small apart of what I consider 

to be the greatest challenge of our time. I believe that our success in going to the 

moon four decades ago, served to teach us that we can meet any challenge if we 

work together and set a clear objective. How much more important is our challenge 

today . . . to make a giant leap for mankind. Until now, we have lacked only the 

will to do it. We have built this vehicle. It’s not perfect, but its more than good 
59 

enough to begin the journey. In Neal Armstrong’s words, ‘‘It’s time to take the first 

small step!’’ 

ADDITIONAL RESOURCES

Extended Range Electric Fleet Trucks http://www.rasertech.com/media/videos/ 

rasers-extended-range-electric-fleet-truck. 

Forty mile range test of Extended Range Electric SUV—100 mpg http:// 

www.rasertech.com/media/videos/test-drive. 

EREV Powertrain 3D Animation http://www.rasertech.com/media/videos/seriesphev-drive-system-video. 

Governor Schwarzenegger Introduces EREV Hummer http://www.rasertech.com/ 

category/media/videos. 

Senator DORGAN. Mr. Higginson, thank you very much for being 

here and for your testimony. 

Next, we’ll hear from Mary Ann Wright, vice president and managing director of Johnson Controls. 

You may proceed. 

STATEMENT OF MARY ANN WRIGHT, VICE PRESIDENT AND MANAGING DIRECTOR, POWER SOLUTIONS DIVISION, JOHNSON CONTROLS 

Ms. WRIGHT. Thank you, Chairman Dorgan and Senator Bennett 

and Senator Cochran. And I’m glad to see you like your Escape hybrid, because that was probably the best project I ever worked on 

at Ford Motor Company. I’m very proud of it. 

Well, we left the batteries for last, so let’s talk about the state 

of play of what’s going on in the batteries, and the challenges and 

the opportunities that are facing us so that we can drive to mass 

commercialization. 

As a way of background, Johnson Controls and our partner, Saft, 

opened our first mass production facility in France in 2008, where 

we support Daimler and BMW for their first generation of lithiumion batteries. We also are supporting, on a preproduction basis, 

Ford Motor Company/Azure Dynamics for commercial applications, 

VW, and other global OEMs. So, we’re already in production. And, 

thanks to the vision and the foresight of the legislators, we also 

were recipient of an ARRA grant. And the importance of that grant 

is that it allowed us to make our next investment—our expansion 

of our capacity—in the United States versus and going and expanding in Europe or Asia. And that’s really important, because that 

wasn’t in our plan originally. So, we were very appreciative of that. 

Now, our grant was based on our commitment that we wouldn’t 

just build a manufacturing facility, but that we would lead in 

standing up an industry all the way from the raw material suppliers to the end-of-life recycling infrastructure. I’m very proud to 

say that, as of today, we’ve already recruited two Asian raw-material suppliers to the State of Michigan and—who will be supporting, not only Johnson Controls and Johnson Controls staff, but 

other manufacturers in the United States. We’ve developed strategic relationships with battery recycling partners so that we can 

drive for the end-of-life and the responsible disposition of these batteries. 

I certainly want to tell you that the plant that we’re putting up 

in the United States is going to be located in Holland, Michigan, 

which is—if you’re not from Michigan—is over here. And we’re on 

track to launch it in September of this year, where we’ll be sup-
60 

porting our first U.S. customer, Azure Dynamics, and then, next 

year we go into production with Ford Motor Company for their first 

plug-in hybrid mass production. And we are their exclusive supplier. 

What’s also really important is, by 2012 we will move all of our 

production, that’s currently in Europe, to the United States, to this 

Holland facility. And you probably don’t hear that very often, 

where U.S. guys are bringing stuff back and we’ll be exporting it 

again. So, we’re very proud of that. 

So, lots of good news. We have good customers. We’re very fortunate to have our feet underneath us. But, here’s the challenge: We 

simply do not have enough demand to efficiently and economically 

operate our facilities. The capacity that’s being installed is on a 

mass scale, and this industry requires scale to drive down the cost. 

And the biggest factor for our cost is, really, volume—about driving 

our raw material prices down, our processing costs, our manufacturing technology. 

And so, what we—what we’re going to talk about today, and 

where we’re going to need help, is in demand creation. Just a couple of facts that will—should be rather startling to you, if you think 

about between now and 2015, there is estimated 2-million-vehicle 

demand globally for any level of hybridization, from hybrids all the 

way to electric vehicles. There will be 4 million units of installed 

capacity for batteries. Two million of that capacity will be here in 

the United States. So, we have a very significant gap in our demand. 

But, we have some solutions. And, Craig, you talked about them. 

And that is, we have a great opportunity in the transition of our 

government fleets. Starting with the Federal fleets, if you look at 

the GSA, the Postal Service, the DOD, they operate over a million 

vehicles. All of them are ideally suited for some level of electrification, whether they are mild hybrids all the way to full EVs. And 

if you look at a particular fleet, the Postal fleet that is an ideal— 

when you look at—most of the miles driven are only less than 18 

miles per day. 

Given that we’re running a bit short on time, I think the key 

point that I would leave with you is that these fleet programs are 

a great way to stimulate demand. We really need to leverage the 

ARRA investments that the U.S. taxpayers have made, to put these 

assets on the ground and to help us establish a domestic battery 

industry. 

You know, I’d have to ask the question; shouldn’t we give preference to vehicles with batteries made by companies which receive 

taxpayer stimulus dollars? The risk is—if we don’t utilize these investments, is that our tax could go to purchase vehicles with components made in foreign countries, and strand these assets that we 

put in place. 

PREPARED STATEMENT

Finally, as we look to the future—and Dr. Kelly talked about it, 

and so did you, as well—the need for ongoing research and development. The technology is very complex. And if we want this 500- 

mile battery, we’re going to have to collaborate very closely, as a 

private sector and the national labs, so that we can take these 
61 

great technology ideas and get them out on the street for commercial success. And so, we’re going to look for continued support from 

the government, in terms of funding, as well as, enabling us to collaborate on a closer basis. 

So, I thank you very much for the opportunity to testify. We look 

forward to answering questions. 

And thank you. 

[The statement follows:] 

PREPARED STATEMENT OF MARY ANN WRIGHT

Mr. Chairman and members of the subcommittee, my name is Mary Ann Wright. 

I am the Vice President and Managing Director, Business Accelerator Project, Power 

Solutions Division of Johnson Controls, Inc. We are the leading independent supplier of battery systems for hybrid vehicles, plug-in hybrid vehicles, and electric vehicles. Johnson Controls is a founding member of the Electrification Coalition. In 

addition, I serve on the Board of Directors of the Electric Drive Transportation Association (EDTA). 

I greatly appreciate the opportunity to discuss with you today the current status 

of batteries for electric vehicles and the opportunities and challenges we face. I am 

honored that you have asked me to speak before you today on a topic so critical to 

the security, economic vitality, and environmental stability of our country and planet. 

OUR NEW LI-ION BATTERY PRODUCTION FACILITY

Let me start with an important status update on our first lithium-ion automotive 

battery manufacturing plant in the United States. As background, Johnson Controls, in a joint venture with Saft America, named Johnson Controls—Saft Advanced 

Power Solutions, launched the world’s first automotive lithium-ion cell manufacturing and battery assembly facility in Nersac, France in 2008. That facility is currently mass producing lithium-ion cells and packs for Mercedes and BMW hybrid 

vehicles. 

In August 2009 we were awarded an ARRA matching grant to create an advanced 

battery manufacturing industry in the United States. This grant, along with significant incentives from the State of Michigan, played a key role in our decision to build 

a manufacturing plant for advanced batteries in this country. Without this support 

from the DOE, we would have likely built our second lithium-ion battery plant in 

Europe or Asia. 

We are not just building a domestic advanced battery manufacturing plant. We 

are also building a domestic supply chain and recycling infrastructure for the manufacture of lithium-ion batteries for electric drive vehicles. This initiative includes 

suppliers of critical materials and components in addition to U.S. equipment suppliers for the specialized machinery the industry will need. To date, we have helped 

recruit two Asian materials suppliers to the U.S. (Michigan). We have formed strategic partnerships with global battery recyclers to implement battery collection, 

transportation, recycling and material recovery and reuse processes. The Recovery 

Act funding for advanced battery manufacturing is stimulating economic activity in 

many industry sectors including one of critical strategic importance—the development of a lithium mine in northern Nevada. Our technology partners include the 

Department of Energy’s Argonne National Laboratory, who will help us accelerate 

commercialization and validation of cell materials. We also have partnered with the 

DOE’s Oak Ridge National Laboratory under a separate contract to validate and implement manufacturing process enhancements for lithium-ion cells. We have established commercial viability through customers who have awarded us long-term production contracts. We have production contracts with Ford, Daimler, BMW and 

Azure Dynamics. Notably, we have pre-production development contracts with several global customers, including Jaguar Land Rover and Volkswagen, in support of 

their production program plans. Below is a diagram of our advanced battery initiative funded in part by the ARRA grant. 
62 

We have chosen an existing manufacturing location on our technical campus in 

Holland, Michigan to site the plant. We are drawing on a workforce from an area 

rich with skilled automotive workers. Through the reemployment of local talent, we 

will help reverse the recent trend of job loss in the automotive industry generally 

and the Midwest specifically. 

This investment is an important step toward creating and building an industry 

in the United States that addresses market requirements and long-term opportunities for growth and new jobs in this country. Construction of our plant in Holland, 

Michigan is progressing as planned with battery pack assembly set to begin in August of this year and cell production starting in 2011. 

We will support several important customers from this facility. Johnson Controls 

is the exclusive supplier for the complete battery system for Ford Motor Company’s 

first series production plug-in hybrid electric vehicle (PHEV), which will be introduced in 2012. In October it was announced that we will supply batteries for the 

Ford Transit Connect commercial van in 2010 in collaboration with Azure Dynamics. We are working with Azure to supply batteries for other commercial delivery 

trucks that will start in production in 2010. In addition, we will supply batteries 

for the Mercedes S-Class and BMW 7-Series mild hybrids, presently produced in 

France. 
63 

THE CHALLENGE—DEMAND FOR ELECTRIC VEHICLES

Congress has shown vision and determination in appropriating $2 billion in ARRA 

funding to support the development of a U.S. manufacturing industry for advanced 

batteries and for electric drive components. However, the sustained success of this 

investment will depend ultimately upon creating demand for electric drive vehicles. 

We run the risk of creating more capacity to build batteries and critical components 

for new electric drive vehicles than what the market will demand, particularly during the early stage of commercialization. Of concern is the near-term, i.e., 2010 

through 2015 when market demand, if left uncatalyzed will lag manufacturing capacity. The bar chart shown below underscores the challenge—we estimate that by 

2015 domestic capacity in vehicle units will exceed demand by approximately 1.35 

million units, a gap of 62 percent. 

Early in the life cycle of any new product or technology, scale is one of the critical 

factors enabling manufacturing success, as well as cost reductions. Electrification of 

vehicle fleets, including government fleets, can be a major contributor toward rapidly achieving scale. 

Combined, the U.S. General Services Administration, Postal Service, and Department of Defense operate approximately 1 million non-tactical vehicles. Many of 

these vehicles, particularly Postal Delivery LLV vans, are excellent candidates from 

an economic standpoint for some level of power train electrification. The average 

Postal Delivery vehicle travels 18 miles a day at very low speeds in stop-start mode 

and averages only 10 mpg. The Postal Service’s Inspector General Office estimates 

that a full electric version of a delivery vehicle will save $1,500 per year in fuel cost 

if gasoline is priced between $3–$4 per gallon. Many other Federal fleet vehicles are 

also good candidates for electrification and would help create demand. 
64 

Beyond the Federal Government, the 50 states collectively operate another 1 million vehicles. Electrification of State and local government fleets would have a significant impact on creating demand. Johnson Controls Building Efficiency business 

operates a service vehicle fleet of 5,548 vehicles. Seventy-seven percent of these vehicles travel less than 60 miles daily and 25 percent travel less than 40 miles per 

day. This represents a tremendous opportunity for us to electrify our own vehicles 

and gain invaluable field experience and help to build demand. We have implemented a pilot program in Milwaukee and will be taking delivery of our first fully 

electric service van within the next month. 

LEVERAGING THE ARRA MANUFACTURING INVESTMENT

In order to stimulate demand through government agency purchases of electrified 

vehicles for their fleets, we will need to leverage our existing ARRA investments. 

This could be done by establishing a preference to purchase electric drive vehicles 

for government fleets that contain batteries and components manufactured in facilities supported by ARRA grants. The risk if we do not leverage our investment is 

that our tax dollars could go to purchase electrified vehicles assembled in the 

United States but with batteries and components made in foreign countries. This 

could have the unintended consequence of stunting the utilization of domestic capacity, ultimately resulting in shuttered facilities and lost jobs. 

ELECTRIFICATION COALITION ECOSYSTEM CITIES

Another approach to stimulating market demand is advocated in the Electrification Coalition’s Roadmap—the creation of Electrification Ecosystems. Investing in a 

series of large-scale demonstration projects will encourage the adoption of electric 

vehicles and prove their market readiness. The establishment of Electrification Ecosystems has three important goals: 

—Prove that wide scale deployment of grid-enabled vehicles is not only possible, 

but desirable; 

—Take advantage of economies of scale; and 

—Support research to answer critical questions about usage and recycling patterns. 

By concentrating investments in a limited number of communities, we can maximize leverage from the opportunity to demonstrate that grid-enabled vehicles can 

meet drivers’ needs. As the Roadmap stated: 

‘‘Electrification ecosystems will demonstrate that a community is capable of putting the infrastructure in place, operating the vehicles over their lifetimes, and disposing of them after their useful life has ended, all in a manner that profits the 

participants in the value chain. In short, electrification ecosystems provide the best 

opportunity to give consumers confidence in the safety, performance, and benefits 

of the vehicles themselves and the reliability of the surrounding infrastructure.’’ 

(Electrification Roadmap, November 2009, Electrification Coalition, page 141.) 

A third and critical element to help spur demand is the continuation of tax incentives for the purchase of electrified vehicles. These incentives are proven demand 

boosters that must be maintained. Failure to continue these important tax policies 

at this time would send exactly the wrong signal to the marketplace and individual 

customers. 

RESEARCH AND DEVELOPMENT—THE FUTURE

As we execute our plan to create an advanced battery manufacturing industry we 

cannot ignore the future. The nature of technology is that there is always something 

better on the horizon. For the United States to achieve global product and manufacturing leadership in this technology is just the first step; we must sustain it with 

continuing and robust Federal R&D funding. In the same manner that lithium-ion 

is now supplanting nickel metal-hydride as the technology of choice for electric drive 

vehicles, the next game-changing chemistry is already being pursued by our global 

competitors in partnership with their governments. Japan has set a national technology goal for a seven times improvement in specific energy coupled with a 94 percent cost reduction for electric drive vehicle batteries by 2030. Commercialization of 

these technologies will depend on not only fundamental chemistry and materials 

breakthroughs, but also substantial innovations in manufacturing processes and 

equipment. 

Technology R&D on this scale is risky and costly, requiring more resources, both 

capital and intellectual, than what is available in the private sector alone. Continuing Federal support through the DOE and its national laboratory network is 

critical to ensuring that the technology of the future is made here at home. The near 
65 

collapse of U.S. financial markets over the last 2 years has made it painfully clear 

that our eroded manufacturing base must be rebuilt and returned to its time-tested 

position as the cornerstone of a healthy economy. 

We need to develop next generation lithium-ion batteries by improving electrochemistries, as well as the battery systems which support and extend cell life. We 

must discover and develop the successor electrochemistry to lithium-ion. There are 

several technologies under consideration as the next transformation in battery technology. Equally important is the rest of the battery system, which includes sensors 

and thermal management components. Federal R&D support must be maintained 

in these areas in order for our domestic industry to remain competitive. We need 

to foster a collaborative relationship with the national labs and private industry to 

enable technology ideas to go from the labs to commercial success in the market 

place. 

ADDITIONAL CONSIDERATION—TAX TREATMENT OF ARRA GRANTS

Currently, recipients of ARRA grants for advanced battery and critical components manufacturing, as well as the recipients of Smart Grid technology grants, 

need clarification on the tax treatment of these funds. Nothing in ARRA indicates 

that these grants are taxable. Legislation gave a clear intent of a 50:50 cost-share 

grant structure. Should the IRS interpret these grants as being taxable income, we 

may find that at a 30 percent taxation rate, many millions of dollars from the 

grants merely will go back to the Government and not be spent on actual manufacturing and jobs. We understand that the IRS may be able to interpret their current 

authority and the intent of the legislation to not tax the ARRA grants. If not, the 

IRS may need a statutory ability to grant an exclusion and not consider these ARRA 

grants as taxable income. 

ARRA was designed to help create jobs and innovation in the United States in 

a tough economy and a hard competitive environment. Every dollar of the grant 

should be spent on hiring workers and developing new technologies that will propel 

American companies forward and enable them to compete with foreign manufacturers. Facilities such as ours can be great successes for the ARRA. We hope that the 

intent of the legislation will be clarified and the entire sum of the grant will go toward our facilities. 

In conclusion, let me thank the subcommittee for this opportunity to testify. We 

are making important investments needed to develop a domestic and sustainable 

manufacturing base for the commercialization of electric drive vehicles. However, 

our progress must be maintained by creating demand for these vehicles by electrifying our fleets, establishing valuable demonstration projects, maintaining tax incentives, and investing in research and development. The success of these initiatives 

is critical to the security, economic vitality, and environmental stability of our country and planet. 

Senator DORGAN. Ms. Wright, thank you very much. I don’t think 

you used the term ‘‘Buy American’’ but your final comments will 

raise the hackles of some in Congress, though it sounds like the 

right kind of music to me. I offered the Buy American provisions 

in the Economic Recovery Act, and, you know, some of my colleagues had an apoplectic seizure about it. But, I noticed, yesterday, that Mr. Pascal, in Europe, indicated that there was nothing 

violative of our WTO obligations with respect to the Buy America 

provisions in the Economic Recovery Act. I also happen to share 

your view, that, If we’re trying to promote economic recovery here, 

why would we not make the investment here? 

You’re on the way to opening a plant in Michigan. We hear a 

chorus of music these days that the Economic Recovery Act was a 

complete, total failure, creates no jobs, and so on. I fully disagree 

with that. But, I assume you’re opening a plant here, in part, because you’ve gotten some funding from the Economic Recovery Act. 

Is that correct? 

Ms. WRIGHT. That’s absolutely correct. After we opened our facility in France and started looking at our global footprint strategy— 

I will be perfectly honest with you, coming to the United States 

wasn’t on the list. We were looking at expansion in Eastern Europe 
66 

and in Asia. And we are in the United States, and we are building 

our entire business model in the United States, as a result of the 

ARRA matching grant. So, yes, that’s correct. 

Senator DORGAN. Nobody knows what ARRA is, in terms of the 

acronym, but it’s the stimulus funds or the economic stimulus 

funds. 

Ms. WRIGHT. Yes. 

Senator DORGAN. How many employees will you have at the 

plant in Michigan? 

Ms. WRIGHT. That’s a great question. And I’ll give you a number, 

but first let me—the number of employees is going to depend upon 

the demand that we can create, because we have to—we’ll have 

employees that will support the production. At full capacity, each 

one of our plants will employ, directly, 550 people. 

Senator DORGAN. Now, let me ask about international issues. 

What’s happening in China, what’s happening in France, and 

Japan, and so on with respect to converting to electric drive? Who 

has some information about that, anybody? 

Mr. LOWENTHAL. I can speak up, because half of our business is 

in Europe now. And it’s just a bit ahead of the United States, I’d 

say, in demand for electric vehicle infrastructure—in part, I have 

to say, driven by the Kyoto Protocol adoption, of some countries. 

Our biggest single customer is the city of Amsterdam, who has already deployed 100 stations and wants 2,500 more, and the city of 

London, who’s talking about ordering 25,000 charging stations. So, 

Europe is moving pretty well. 

I’m proud to say that all of our products are manufactured in the 

United States, so it’s a good balance-of-trade issue for us. We’re 

happy to sell in the international realm. 

We are also anxious about exporting our products to Asia. Asia 

has moved ahead pretty quickly, in part, because they have low 

regulatory standards. 

So, the international field is moving well. I think it can be to the 

benefit of us. 

Senator DORGAN. I thought your anxiety was, because if you send 

it to China, they’ll reengineer it and you’ll lose your intellectual 

property. 

Mr. LOWENTHAL. We have to manage that anxiety. 

Senator DORGAN. Mr. Higginson? 

Mr. HIGGINSON. Yes, just to add a little bit to that. One of the 

few known secrets of the world might have been that, back when 

General Motors made the decision to sell the Hummer brand to a 

Chinese firm, a lot of technology was going to China with that. It’s 

no mystery that we were contacted fairly immediately by the Chinese, who had great interest in our technology. They flew to Utah 

and spent a fair amount of time talking with us and talking about 

that technology that we had built for the Hummer going with it to 

China. And the jury’s out on that, at this point. We’re hopeful that 

the technology, including Hummer, will stay in the United States, 

and we’ll see what happens over the coming weeks. 

But, that is one of the things that we witnessed happen. We were 

not only involved, but anxious to be a bidder in that process, and 

we came up short, due to the tremendous strength of the Chinese 
67 

Government supporting their buyers over there. So, there is some 

pressure on the technologies right now. 

Senator DORGAN. Now, we’re talking about automobiles, electric 

drive vehicles and trucks. I’ve been reading now, for 11⁄2, 2 years, 

that the Chinese are gearing up a very significant automobile export effort, and we expect low-cost Chinese automobiles to be sold 

in our market, at some point, soon. Does General Motors understand that that is going to happen, from all that we know and 

read? 

Mr. TAUB. Well, first recognize that the automotive industry is 

becoming consolidated among multinational players. In fact, China 

has recently set a policy in place recognizing that their domestic 

companies need to get economy of scale through consolidation. General Motors has been No. 1 in sales in China, with our JVs there. 

To date, the Chinese market is expanding so quickly, the domestic 

production is ramping up to meet their consumption there. 

At the same time, there’s no question that the Chinese Government has set automobile industry as a priority. Their university infrastructures, their national lab infrastructures—remember their 

domestic companies are state-owned. We’ve been in a joint venture 

that’s been very successful for over 10 years as part of that. 

Senator DORGAN. What percent of the joint venture do you own? 

Mr. TAUB. Up until very recently, it’s been a 50–50 joint venture. 

And, by the way, there are Chinese regulations requiring that level 

of ownership, maximum. We just did a renegotiation, because we’re 

working with our partner to enter India, so it’s now 51 percent 

SAIC, a very successful partnership. We’re both doing technology 

advance, we’re both making money in the fastest-growing market 

in the world right now. 

Senator DORGAN. Let me just ask—and I’m taking more time 

than I should—what is SAIC? 

Mr. TAUB. SAIC is the name of our joint-venture partner in 

China, Shanghai Automotive. 

Senator DORGAN. So, General Motors is 49 percent now. 

Mr. TAUB. We just changed to a 51–49; it was part of our financing to expand the operation into other parts of Asia. 

Senator DORGAN. What part of that is General Motors, 49 or 51? 

Mr. TAUB. Forty-nine. By regulation, these joint ventures had to 

be no more than 50 percent U.S.-owned. 

Senator DORGAN. My understanding is, the Chinese would prohibit majority ownership by an American company building cars in 

China. 

Mr. TAUB. Correct. 

Senator DORGAN. But, let me ask you the more important question. Are you aware that, in the Bilateral Trade Agreement that we 

did with China, with whom we have a $260 billion merchandise 

trade deficit, after a phase-in, the Chinese automobiles, when exported to the United States—and they are coming—will have a 21⁄2

percent tariff attached to them, and any U.S. automobiles that 

would be sold in China, would have a 25-percent tariff attached to 

them? So, our own negotiation with China, in a bilateral agreement, gave the Chinese a 10-to-1 advantage, even if the Chinese 

would allow our cars in. They don’t want our cars; they want you 

to manufacture cars in China, with minority ownership. That’s 
68 

what China wants. But, my point is, as we gear up in this country 

to think through: how do we have a vibrant automotive sector? 

How do we build new cars? How do we move toward electric drive? 

We are confronting very serious trade problems that suggest you, 

in General Motors, may not be able to compete, on American 

streets, with the Chinese automobile that comes in here with a 21⁄2

percent tariff—I’m just telling you. 

Mr. TAUB. Well, you know, clearly, we’re subject to those regulations. We try to influence how they go. And I think we could go offline on policy discussions around that. I think the real focus of this 

hearing, and the way I’ve approached putting our testimony in is 

this breakthrough technology. We are reinventing the automobile, 

as we’ve known it for the second century. 

Take batteries, in the 1990s, the United States, which, prior to 

that, had led in battery technology, basically abandoned that charter. It was maintained by Meady in Japan, and the breakthroughs 

came there. I think it’s time for a public/private partnership so that 

the United States will be not only the place to develop the technology, but the place to implement it and commercialize it. We 

have the will, I think we have the team, and it’s going to take a 

partnership to get there, coupled with the right trade policies, so 

we make sure we’re not taken advantage of. 

Mr. LOWENTHAL. If I may, Senator, chime in—— 

Senator DORGAN. My time has long since expired. 

Mr. LOWENTHAL. Oh, sorry. 

Senator DORGAN. That’s all right. Yes, sir, go ahead, Mr. 

Lowenthal. 

Mr. LOWENTHAL. Oh, thank you. Well, I just want to say, we’re 

not intimidated by foreign competition. We need a level playing 

field, but then we can win. And in Europe now, we get a 70-percent 

market share. Seventy-percent market share. So, we can build 

great products. 

Senator DORGAN. Yes. Mr. Taub, I understand, you can’t come to 

Congress—in fact, you can’t say anywhere publicly, ‘‘We’re really 

concerned about this imbalance with the Chinese. Fix it, Congress. 

You owe it to us, as an automobile manufacturer, to fix it.’’ Because 

if you did that, the Chinese would say to you, ‘‘You know what? We 

don’t really want you in joint ventures over here.’’ So, that’s why 

we never hear a word from the major automobile manufacturers in 

our country about this unbelievable imbalance and the avalanche 

that is coming, that is, in my judgment, going to be very hard to 

compete with, because we don’t have fair trade rules. You’re not in 

a situation to be able to be a chorus of noise here on it. But, somebody needs to be, because otherwise we can do all these things, and 

we can have all the innovations, and we can electrify our fleet, and 

ultimately, the fleet is going to be made elsewhere. 

Mr. TAUB. That’s not our objective. 

Senator DORGAN. I understand that, and I appreciate your being 

here to talk about what you did talk about. Senator Bennett, 

thanks for indulging me, and the same to you, Senator Cochran. 

Senator BENNETT. Thank you, Mr. Chairman. I enjoyed the exchange and enjoyed the information that you got. 

Looking at the chart you have there, U.S. auto sales, you have 

cars and you have light trucks. And the sales—sometimes light 
69 

trucks are higher than cars, and sometimes the cars are higher 

than light trucks. I don’t know, but my impression is that that’s 

not true in other countries, that the sales in other countries are 

more cars than they are light trucks. Is that true? 

Mr. TAUB. Yes. 

Senator BENNETT. Okay. 

Mr. TAUB. But, also, if you look around the world, you’ll find the 

personal use of what would be defined as a car and a truck, versus 

the work use, tends to scale with how fuel is priced. 

Senator BENNETT. Yes. 

Mr. TAUB. And what we saw in the United States was that markets shifted from 60–40, truck to car, to 40–60, truck to car, when 

gasoline crossed $3.75. So—— 

Senator BENNETT. Shifted the other way. 

Mr. TAUB. It shift—it was 60-percent truck—— 

Senator BENNETT. Right. 

Mr. TAUB [continuing]. And it went to 40-percent truck. So, clearly the consumers look at the price of energy, the price to fuel 

the—— 

Senator BENNETT. Sure. 

Mr. TAUB [continuing]. Vehicle, in making that decision. 

Senator BENNETT. Well, since the truck seems to be more of an 

American love affair than it is European, and certainly, from my 

experience, not Japanese, because the roads in Japan—of course, 

maybe since the Lost Decade, when they keep repaving the roads 

in an attempt to get their economy kick-started, they’re wider and 

so on, but—I’ve driven the roads in Japan. I used to own a business 

in Japan, and go there fairly regularly. They can’t accommodate 

the American car, let alone the American truck. You see an American car on the streets in Tokyo, and it looks huge compared to the 

other vehicles that are running around. 

So, talking the strategy here, it would seem to me that focusing 

on getting this technology into trucks as fast as possible—that 

being an American vehicle of choice—when fuel is a problem, is a 

way to kick-start this whole circumstance. 

Mr. TAUB. And, just so you know, when we introduced our twomode technology, which is not our plug-in, but our base-strong hybrid, we concentrated it on our SUVs and large vehicles, for exactly 

that problem, that the—that’s the largest source of fuel consumption, and where we could make the biggest impact. So, your conclusion is correct for hybridization. 

Senator BENNETT. Yes. 

Ms. WRIGHT. So, as you look at the markets and how we’re trying 

to create demand, there is this natural sweet spot in our Federal 

fleets, State and local fleets. The commercial market is, for sure, 

a very good candidate, given short-haul stop-starts. And I used the 

Postal Service as an example. We’re so—we believe that so profoundly that Johnson Controls, which operates about 6,000 vehicles 

internally, we’re going to have to walk the talk and we’re going to 

transition our own fleet, as well. And—but, we’re going to do it because, not only do we have the technology and we know it’s the 

right thing to do, but, when you look at the operating costs, the 

greenhouse gas emission reduction, it’s the right thing to do for us, 

as a business, as well. 
70 

Senator BENNETT. Mr. Higginson, you—— 

Mr. HIGGINSON. Yes, I think, just to put an emphasis on what 

both Alan and Mary Ann have said, that the driver of getting these 

vehicles to the marketplace right now is clearly going to be getting 

quantities up, and the best place to do that is going to be through 

fleet operations. We have approximately 11,000 soft orders that 

we’re looking at right now, from fleets that come from municipalities, county governments, utility fleets, et cetera, who are ready, 

willing, anxious to participate in this process. 

So, I think we’re going to see it happen, and that’s where it will 

happen. We think the Federal Government really should lead the 

way. It should be—Federal fleets should be moving that way faster 

than anyone. 

And just to draw a little bit of a distinction, I think it was Chairman Dorgan who had the chart up earlier that talked about the 

difference between what a plug-in hybrid—a series hybrid does 

versus what a dual-mode hybrid does, for example, and literally 

more than doubled the fuel economy out of a plug-in series—— 

Senator BENNETT. Right. 

Mr. HIGGINSON [continuing]. Versus a dual-mode hybrid. And I 

think—not—that’s not to criticize General Motors’ product, because 

I think it’s a great one. In fact, one of the top engineers that designed the dual-mode worked, works for me now at Raser. So, we’re 

proponents and fans of that technology. 

But, I think that the key right now is, if we can get the critical 

mass that Mary Ann talked about, relative to the battery manufacturing, fill the facilities up that we have now invested in here in 

the United States, doing that through fleet purchases is going to 

be a real kick-start. Then we’re going to see happen what happened 

in the LCD world and, hopefully, without the end result of that 

world. That technology was developed here in the United States. 

Great technology displaced the picture tube itself. And, in fact, that 

technology developed here is now, 90 percent of it, being manufactured in Korea. 

And I think, in the world of the vehicle and plug-in series hybrid 

vehicles and the electrification of transportation, our country sits 

in the leadership position today, and it really is ours to lose. It’s 

not something we’ve got to chase; it’s in our hands, and it’s ours 

to lose. 

Senator BENNETT. Well, it occurs to me that, if we go in the direction you’re talking about, one of the advantages of putting the 

Federal fleet into this technology, or large corporate fleets, they all 

overnight at a corporate headquarters. They don’t drive them 

home. And consequently, the whole charging question becomes very 

easy to deal with, because you simply—you’re now dealing with a 

scale that can give you the kind of circumstance that you wanted. 

So that you put in a charging system at the local Post Office, and 

all those trucks get charged overnight, just—that’s the way it’s 

done, and there’s no big hassle. 

Whereas, if you’re going to the individual market, homes maybe 

have to be retrofitted, you’ve got to get the 240 in some places 

where they don’t have it, so somebody will avoid it for this, that, 

and the other. 
71 

But, moving in the fleet direction strikes me as making a whole 

lot of sense, and it’s a product that the rest of the world doesn’t 

necessarily want. 

Mr. HIGGINSON. And, Senator, it’s—— 

Senator BENNETT. So, there—you’re not going to get competition 

from the Chinese building those kinds of trucks. 

Mr. HIGGINSON. And it’s precisely that scale that you talk about 

that allows the cost to come down on the battery systems quickly. 

We heard, from Fred Smith earlier, that the real challenge, one of 

the real hurdles here, is the cost of the battery system in these vehicles right now. It’s strictly a scale question. To the extent we can 

utilize fleets to launch this project and get the battery plants operating at or near capacity, and growing from capacity, we’ll see the 

price of this stuff tumble quickly. It’s just a—it’s a pure fact of economic life. And—— 

Senator BENNETT. Yes. 

Mr. HIGGINSON [continuing]. That’s what we need to do. To the 

extent we don’t do that, someone else out there will be doing it. 

Senator BENNETT. Okay. 

Thank you, Mr. Chairman. 

Senator DORGAN. Thank you. 

Senator Cochran. 

Senator COCHRAN. I couldn’t help but think about the fact that 

if you use the tax code as an incentive, you’re bound to make 

progress, if it’s targeted in the right way and priced so that the 

public will accept it, as a political matter. But, that’s outside the 

jurisdiction of this subcommittee, so you hadn’t had a lot of questions about the investment tax credit or other benefits that might 

flow through the utilization of our tax code as an incentive. 

Are there tax provisions in place now that encourage investment 

or reward the investments that you’re making in bringing this to 

reality? 

Mr. HIGGINSON. Senator, we do have one piece of legislation that 

we were involved in fairly heavily early on with a—it’s called the 

Clear Act, and we’ve heard mention of that here today. It allows 

for up-to-$7,500 tax credit for battery systems that go into hybrid 

electric vehicles. Interestingly, that was sponsored by a couple of 

people that were well known is—one, Senator Orrin Hatch from 

Utah; and secondly, a junior Senator at the time, Barack Obama. 

And so, I think you see something happening, as we heard talked 

about here earlier today. This isn’t an issue of one side or the other 

of the aisle. This is an American issue that I believe we see good 

consensus on both sides to solve these problems. It is the problem 

of the day, and I think we’re seeing good consensus, and we’ll, 

hopefully, stand by for some more things that can come in the tax 

code that will help support this effort. 

Mr. TAUB. And the—that present offset of a tax credit for individuals that will be buying the Volt is the right example of 

incentivizing the Gen1 commercialization that I talked about. 

I think the key element, as you think through this, is we do need 

incentives to get through the first two learning curves. We should 

only do that on technologies and solutions that are then sustainable, where we have the confidence we can do the cost walk, we 

have the confidence we can do robust, durable products, and the 
72 

confidence that the consumer is going to value it. And I think this 

technology falls in that realm. 

Mr. LOWENTHAL. I wanted to weigh in a bit on tax credits. There 

is a tax credit on infrastructure, as well. There’s a 50-percent tax 

credit. It’s part of the energy bill. It expires at the end of this year, 

which is not great timing, given that the vehicles just start coming 

out then. So, we would like to see that extended. 

It has a flaw in it, in that it’s an income tax credit, and many 

of the fleets now are county fleets and city fleets, none of whom 

pay any taxes. So, it actually isn’t working very well. Most cases 

where we try to use that income tax credit, it isn’t working. It’s a 

wonderful idea, and so there’s the idea. In fact, Senator Hatch has 

an idea of converting that to a payroll tax, which will work a lot 

better, as opposed to an income tax credit. 

We do see, for example, sort of a mixture of these ideas. The 

county of Sonoma, in California, wants to create one of these ecosystems, where the county of Sonoma’s known for EVs and attract 

EV players; they’ve attracted Nissan, they’re attracting others to 

the county, as an EV Center of Excellence. In their case, they have 

an innovative idea, which is that the city and county fleets have 

charging stations and are being electrified, and then the—and they 

use those at night; in the daytime, they open them up to the public. 

So, they’ve—this is a way of getting two-for-one on this investment. 

But, still, the tax credit doesn’t work, because it’s the county of 

Sonoma. 

Senator COCHRAN. Thank you very much. I think your presentations have added to our understanding of the challenges we face 

and the direction that we ought to consider, in terms of legislation 

from the Congress and the use of the tax code as incentives. 

Thank you very much for being here today. 

Senator DORGAN. Senator Cochran, thank you very much. 

I think it’s clear from this discussion, that we all know we are 

unbelievably dependent on foreign sources of oil, and that we have 

challenges with respect to the planet and wanting to have a lowercarbon future. We understand that there are ways to begin to light 

a fuse and start a change. With respect to the automobile, I think, 

from the early 1900s, when it was decided that we wouldn’t use alcohol and we really would discard electricity, we’d just do an internal combustion engine and use gasoline, from that moment on, we 

have just been unbelievably addicted to that source of energy. 

So, 70 percent of that which we need to run our economy is used 

in the vehicle fleet, and much of it comes from outside of our country. The question is whether we let things happen and perhaps do 

nothing to address these questions, or whether we decide, as a matter of public policy, to make things happen. The one thing that’s 

important to understand, is that we can’t make consumers buy 

something. Consumers are an unbelievable source of power here. 

But, as Senator Bennett just mentioned to me, if you can get 60- 

cent-a-gallon fuel for a Hummer, the consumers will very quickly 

beat a path to that source of energy for their vehicle. 

I think that based on the discussion we’ve had today, if the Federal Government could decide it is going to move toward an electric 

drive fleet it would have a profound impact. 
73 

If we can find a way to use tax credits that bring the cost down 

for conversion, we will incentivize those that are hauling our garbage, FedEx, and all of those kinds of trucks running around this 

country, to convert very quickly. That mass moving, from the Federal Government to its fleet to the other truck fleets and so on, 

would have a profound impact on moving this country in a completely different direction, toward an electric drive future. 

I also think the consumers would very, very quickly follow, because all of the advances that will come from that—and there’ll be 

a lot of advances in technology and capability—will, I think, show 

up in the marketplace very quickly for the kinds of vehicles that 

consumers want to drive. 

ADDITIONAL COMMITTEE QUESTIONS

So, I really appreciate your willingness to come and talk about 

this. At this time I would ask that the subcommittee members submit any questions they have for the record. 

[The following questions were not asked at the hearing, but were 

submitted to the witnesses for response subsequent to the hearing:] 

QUESTIONS SUBMITTED TO DR. HENRY KELLY

QUESTIONS SUBMITTED BY SENATOR ROBERT F. BENNETT

Question. How do you rate the potential for a ‘‘true breakthrough(s)’’ in battery 

technology and any thoughts on when and where that might occur? 

Answer. The Department of Energy (DOE) views the potential for a breakthrough 

in battery technology for advanced electric drive vehicles as being high. Multiple 

universities, national laboratories, and commercial companies are investigating and 

developing breakthrough technologies. A small sample include advanced anodes (Silicon and other alloys), cathodes (high voltage, high capacity cathodes a), and electrolytes (such as composite electrolytes for use with lithium metal anodes). It is believed timescale for some of these technologies is 3–5 years in PHEVs, and perhaps 

10 years before commercial application in BEVs. In addition, the Advanced Research 

Projects Agency—Energy’s (ARPA–E) work on transformational energy storage concepts is accelerating the development of these and other technologies such as lithium/sulfur and lithium/air which promise to triple or quadruple the energy density 

of today’s lithium ion batteries. The timescale for these technologies is highly speculative, although some have estimated an additional 15–20 years of development will 

be needed. 

Question. Where should DOE and industry focus their efforts in R&D to get the 

biggest return on their investments? 

Answer. The Department of Energy (DOE) works closely with industry, academic 

leaders, and our national laboratories to design a research portfolio that balances 

long-term investments in basic science and engineering, investments in using this 

science to develop transformational energy storage concepts, and work to help industry convert breakthrough ideas into practical products. EERE battery programs 

work closely with the Office of Science and their Energy Frontier Research Centers, 

and worked with ARPA–E to help craft their recent solicitation for new energy storage concepts. Together we are exploring the widest possible landscape looking for 

promising new ideas as we move the current generation of concepts into the market. 

For example, early DOE support led directly to a generation of new lithium ion batters that is now entering the marketplace with high-leveraged DOE support—with 

considerable new funding from the American Recovery and Reinvestment Act of 

2009. At the same time, we’re supporting higher risk research on lithium/air and 

lithium/sulfur batteries. And we worked with ARPA–E to help craft their new call 

for breakthrough energy storage technologies and hope this will attract some spectacular new concepts. R&D is a top priority for the Department, and we will continue to work closely with our partners to harness science and ideas to address energy challenges. 

Question. Do you expect to meet the DOE goals for battery cost and performance? 

If not by DOE’s dates, when would you expect to? 
74 

Answer. With sustained future R&D investment, there is a very high likelihood 

of meeting the Department of Energy (DOE) performance goals. The battery life 

goals, both the 15-year calendar life and the charge/discharge cycle life, are also 

likely to be met. The cost goals may be the most challenging, but battery development efforts are on track to meet the 2015 cost targets. The path to achieving the 

necessary cost reduction is through a combination of technology advancements, 

learning-curve improvements, and manufacturing economies-of-scale. The path to 

achieving the necessary cost reduction is through a combination of technology advancements, learning-curve improvements, and manufacturing economies-of-scale. 

Question. How do you see the applicability of electric vehicles to different geographic regions (different climatic conditions) of the country, such as Minnesota vs. 

California? 

Answer. The initial introduction of electric-drive vehicles to different geographic 

regions of the country will be driven by the manufacturers producing the vehicles. 

Work at the Department of Energy and elsewhere indicates that electric drive vehicles face performance problems in extreme climates. Extreme climates also add to 

the heating or air conditioning loads that can limit the range that can be provided 

by the batteries. The Department is working with industry and academic experts 

to further quantify these problems and address them. We expect that manufacturers 

are likely to introduce electric-drive vehicles first in locations which do not have extreme hot or cold temperatures. We are confident that improved designs will encourage manufacturers to offer these vehicles in all geographic regions. Over the long 

term, we believe that electric vehicles will be deployed across the country. 

Question. How important is it that PHEVs are charged at night? 

Answer. Charging at night enables greater cost savings and system benefits of 

grid-connected vehicles to be realized. Vehicle charging during off-peak night-time 

hours will allow electric utilities to plan for more stable load profiles, while enabling 

intermittent generation resources such as wind—which is typically most prevalent 

at night—to be more fully utilized. Consumers will realize economic benefits from 

lower electricity rates during off-peak hours. We anticipate the majority of electricdrive vehicles will be charged during off-peak, overnight hours. 

Initially, there will be few PHEV vehicles in use, minimizing the importance of 

when they are charged. However, the importance of night-time, off-peak charging 

will rise with increased market penetration of grid-connected vehicles. Through the 

Transportation Electrification projects awarded under the American Recovery and 

Reinvestment Act, the Department of Energy is working with electric utilities and 

vehicle charging infrastructure providers to prepare for properly managed smartcharging systems so off-peak electricity capacity is utilized, maximizing the benefits 

of widespread utilization of electric-drive vehicles while minimizing their impacts on 

the U.S. electric grid. 

Question. Will public or other charging stations that are used during peak hours 

be a problem? 

Answer. Unmanaged charging of large numbers of electric-drive vehicles during 

peak grid operation, especially charging at higher rates such as those utilized in 

faster charging Level II and Level III public stations could result in load management problems for electric utilities. The Department of Energy is working with utility and industry partners to ensure Level II and Level III chargers will be equipped 

with communications and control capabilities that will allow utilities to track utilization of each charger and be able to coordinate charging as needed to reduce load 

during peak demand conditions, while still meeting customer needs. 

It is anticipated the vast majority of electric-drive vehicles will likely be charged 

at home during off-peak hours. Publicly available charging sites will predominantly 

be utilized for opportunity charging (partially charging a battery whenever power 

is available instead of when battery is completely discharged) to provide incremental 

increases in range of electric-drive vehicles. These public stations will help overcome 

consumers’ range anxiety with electric vehicles. The Department will study various 

use scenarios as part of eight American Recovery and Reinvestment Act Transportation Electrification Electric-Drive Vehicle Demonstrations, including how best to 

encourage off-peak charging. These scenarios, which will include the use of several 

different time-of-use utility rates, will be evaluated to determine how best to minimize the impact of electric-drive vehicles on the electric grid. 

Question. At what point will additional capacity (generation, transmission, or distribution) be required because of the extra demand from PHEVs? 

Answer. Based on the results of a Pacific Northwest National Laboratory study 

conducted for the Department of Energy, we estimate currently available off-peak 

electric generation and transmission capacity is sufficient to support the conversion 

of over 70 percent of the existing U.S. light-duty vehicle fleet to PHEVs. Additionally, a 2007 joint-study by the Electric Power Research Institute (EPRI) and the 
75 

Natural Resources Defense Council (NRDC) concluded there is an abundant supply 

of electricity for transportation—a 60 percent U.S. market share for PHEVs would 

use 7 percent to 8 percent of grid-supplied electricity in 2050. This study can be 

found at http://energytech.pnl.gov/publications/pdf/ 

PHEVlEconomiclAnalysislPart2lFinal.pdf. 

It is possible local distribution networks may experience some adverse effects in 

a scenario involving a sudden increase in unmanaged vehicle charging. However, we 

anticipate these effects will be minor due to the gradual adoption of electric-drive 

vehicles by consumers, and they will be mitigated by planned infrastructure upgrades by local utilities. 

To evaluate and anticipate the potential impacts of electric-drive vehicles on the 

U.S. electric grid, DOE is partnering with electric utilities through demonstration 

projects as part of the Transportation Electrification projects awarded as part of the 

American Recovery and Reinvestment Act. These demonstration activities will allow 

the Department and the utility industry to assess the true impact on the electric 

grid of large numbers of electric-drive vehicles in concentrated locations. This will 

in turn facilitate the development of plans to incorporate intelligently managed vehicle charging systems into the U.S. electric grid with minimal impact. 

Question. How will the proposed Batteries and Energy Storage hub contribute to 

advancing electric vehicles? Are we just continually throwing money at this problem? 

Answer. Today’s electrical energy storage technologies suffer from limited energy 

and power capacities, lower-than-desired rates of charge and discharge, calendar 

and cycle life limitations, low abuse tolerance, high cost, and poor performance at 

high or low temperatures. The current state of technology for electric energy storage 

has significant limitations not only for electric vehicles, but also for storing electricity from broad classes of power generation technologies ranging from nuclear 

power to intermittent sources like solar and wind. 

Many of the fundamental performance limitations for energy storage are rooted 

in the constituent materials making up the storage system and in the fundamental 

physics and chemistry that govern the transport and storage of energy in the material. The potential for scientific advances are great and the needs for technology applications are many. The Department of Energy believes that establishing a focused 

energy storage research and development effort the size, scope, and duration of an 

Energy Innovation Hub will garner long-term commitment from many of our most 

innovative researchers, and the Hub will act as a beacon for attracting our Nation’s 

most enthusiastic science and engineering students. 

The Batteries and Energy Storage Hub will target science knowledge gaps that 

are preventing breakthroughs for both mobile and grid applications. Specifically, the 

Hub will address key research areas identified in the Basic Energy Sciences workshop report Basic Research Needs for Electrical Energy Storage: expanding our scientific base for synthesis of novel nanoscale materials with architectures tailored for 

specific electrochemical performance, developing new methodologies to characterize 

materials and dynamic chemical processes at the atomic and molecular level, and 

expanding our competencies in simulation and prediction of structural and functional relationships using leading computational tools. These research challenges 

are inherently multi-disciplinary. The Hub would bring together multi-disciplinary, 

collaborative teams of scientists and engineers, in a way that hasn’t been done before, to focus on specific milestones or research opportunities for energy storage 

where highly integrated basic and applied research can accelerate the innovation 

process. 

The Hub’s ultimate technological goals include the development of radically new 

concepts for producing storage devices from materials that are abundant and have 

low manufacturing cost, high energy densities, long cycle lifetimes, and high safety 

and abuse tolerance for a broad range of energy storage applications. Each of these 

issues is important to further the commercialization of all electric or plug-in hybrid 

vehicles. 

Question. Could you detail some of the specific milestones or research that the 

Hub could accomplish that were not possible through the significant amounts of 

Federal investment in prior year appropriations or the stimulus package? 

Answer. The Batteries and Energy Storage Hub’s purpose is to accelerate the 

feedback loop between fundamental science and engineering to scalable, cost-effective energy storage solutions. The Hub would draw upon the scientific and technical 

knowledge being generated across the Department’s existing energy storage research efforts, which span fundamental research, development of specific technologies, and demonstration projects. The investments made in prior years have 

been especially critical to targeting specific areas of fundamental research, as well 

as to incremental improvements to existing technologies, including funding for bat-
76 

tery and component manufacturing supported via the American Recovery and Reinvestment Act of 2009, which feed directly into the marketplace. The Hub is different 

than prior technology development activities in that the selection of the specific 

milestones for applied research and development opportunities in energy storage 

will be based on down selecting the most promising scientific discoveries, which will 

be done within the Hub’s highly integrated basic and applied research teams; accelerating the innovation process. 

By addressing both the scientific and engineering challenges to cost-effective manufacturing and deployment, the Hub would go beyond existing technologies to develop radically different energy storage designs, concepts, and architecture. The 

scale of the Hub effort is important to ensure that the technology and manufacturing/production needs will be linked to the fundamental science. The longer-term 

Hub investment provides motivation to top scientists and engineers to redirect their 

careers toward the sole focus of the Hub mission. Collectively, these aspects define 

the Hub and delineate it from other funding models in the Department. 

Key scientific questions that could be addressed by the Hub include: 

How Can We Approach Theoretical Energy Densities?—To answer this question 

the Hub could explore the efficacy of structure in energy storage by pursuing new 

approaches combining theory and synthesis for the design and optimization of materials architectures including self-healing, self-regulation, failure-tolerance, and impurity-sequestration; seek a molecular-level understanding of the full range of interfaces in order to design tailored interfaces/interphases; and extensively study the 

chemistry occurring at solid/electrolyte interfaces and within the cathode, anode, 

and electrolyte. 

How Do We Increase Safe Storage Capacity, Power Density and Optimize the 

Charge and Discharge Rate?—To answer this question the Hub could investigate the 

science of charge transfer and transport, seeking a molecular scale understanding 

of interfacial electron transfer, and electrolyte-electrolyte interfaces with strong 

ionic solvation, weak ion-ion interactions, high fluidity, and controlled reactivity; 

which could increase rates of energy utilization. The Hub could pursue materials 

discovery focused on systems with more than two electrons per redox center, such 

as bimetallic, amorphous nanoporous or porous nanostructures. 

Can We Approach Full Reversibility to Achieve Maximum Cycle Life?—To achieve 

this goal, the Hub could develop new probes and of energy storage chemistry and 

physics at all time and length scales, including analytical tools capable of monitoring changes in structure and composition at interfaces and in bulk phases with 

spatial resolution from atomic to mesoscopic levels and temporal resolution down to 

femtoseconds. The Hub could pursue advances in multi-scale modeling; developing 

computational tools with improved integration of length and time scales to understand the complex physical and chemical processes that occur in electrical energy 

storage from the molecular to system scales. 

Examples of potential outcomes include the discovery of novel nanoscale materials 

that offer possibilities for the development of revolutionary three-dimensional architectures that simultaneously optimize ion and electron transport and capacity; new 

in situ photon- and particle-based microscopic, spectroscopic, and scattering capabilities and techniques that allow observation of the dynamic composition and structure 

at an electrode surface in real time during charge transport and transfer processes; 

and new integration of experiments with novel multi-scale theory with different 

time and length scales appropriate to energy storage to enable the identification of 

new mechanisms and predictive trends, as well as the discovery of new materials 

for advanced energy storage solutions. Once awarded, the Hub will be assessed 

against the goals and benchmarks outlined in the approved research and management plan. 

QUESTIONS SUBMITTED TO RICHARD LOWENTHAL

QUESTIONS SUBMITTED BY SENATOR ROBERT F. BENNETT

INTEGRATION INTO THE ELECTRIC GRID

Question. There is general agreement that the existing power grid could accommodate a large number of electric vehicles. Utilities would only need to proceed with 

planned updates to the grid, which are not specific to the vehicles. Additional demand by electric vehicles could help to stabilize the peak-and-valley cycles that utilities face. This assumes, however, that electric vehicles are charged at night and not 

when demand for electricity peaks. 

How important is it that PHEVs are charged at night? 
77 

Answer. First, I want to stress the general importance of plugging in grid-enabled 

vehicles, both EVs and PHEVs. The first plug-in hybrid electric vehicles to reach 

U.S. markets will have an all-electric driving range of approximately 40 miles. 

When the battery’s energy is depleted, these vehicles will essentially function as traditional hybrid vehicles, relying on an internal combustion engine to charge the battery. The first mass-produced fully-electric vehicles (EVs) to reach U.S. markets will 

have an all-electric driving range of approximately 100 miles. When the battery is 

depleted, it must be recharged before the vehicle can be operated. 

In the case of the fully electric vehicle, the need for reliable access to both public 

and private charging equipment should be obvious. The vast majority of consumers 

simply will not purchase a vehicle unless they have complete confidence that it can 

be conveniently refueled, day or night. For PHEVs, the equation is somewhat different, because the vehicle can continue to operate even after the battery has 

reached its minimum state of charge. There are, however, two important caveats to 

this. First, the operating costs for PHEVs are significantly higher when they are relying on gasoline as opposed to electricity. (The same is true for the emissions profile.) To the extent that a PHEV driver charges the battery infrequently, the fuel 

savings—and thus the cost savings—of owning a PHEV are significantly diminished. 

In any area where the grid is limited by generation or distribution, it is important 

that grid-enabled vehicles be charged off-peak. (Roughly speaking, peak load is from 

noon until 7:00 p.m.) In California, where we do approach the capacity of the grid 

in summer afternoons, it is more than desirable to charge off peak—in fact, it is 

an issue of reliability for the grid. The good news is that the average American 

drives less than 30 miles a day. In that context, it will take about 7 kWh of electricity to recharge the average drivers’ vehicle battery. At 110 Volts, such a charge 

would take about 7 hours. At 220 Volts, 16 Amps, it would take about 3.5 hours. 

Either way, with 17 off-peak hours each day, grid-enabled vehicles can be charged 

at night or in the morning. Typically, then, the average Chevy Volt driver will 

charge their vehicle at home for 3.5 hours after peak times, and then at work in 

the morning before noon. 

Question. Will public or other charging stations that are used during peak hours 

be a problem? 

Answer. The answer is no, and the reason is simply that it won’t happen enough 

to matter. First, the vast majority of shared and other charging stations will be 

Level II (charging at 220 Volts). The power draw from these stations will be manageable for the generation and distribution assets in most of the Nation. More importantly, however, most people will charge their vehicles at night and when they 

first get to work. 

From a systems standpoint, it is also important to note that smart charging stations will have mechanisms that limit charging to off-peak hours. If utilities are able 

to offer pricing incentives to charge off-peak, very little charging will take place onpeak form shared or private Level II chargers. 

DC Charging (formerly called Level III charging) is another matter. DC charging 

will be used to refuel electric vehicles during longer trips when vehicle batteries are 

fully discharged. DC charging will allow a driver to fully charge the battery in a 

Nissan Leaf in 30 minutes. With DC charging, there are three issues. One is that 

the power rates are high, up to 50 kW. To put that in perspective, homes use an 

average of 1.2 kW. So DC charging is like providing power for 40 homes. The second 

issue is that typical drivers will only use DC charging when they have a fully discharged battery, so they need a lot of energy. Finally, and somewhat related, is the 

fact that DC charging will typically take place when drivers are in a hurry, so they 

will not wait for off-peak times. 

It’s my view that to compensate for these challenges, DC chargers should come 

with storage batteries that can be charged off-peak at modest rates. The batteries 

could then assist in charging vehicles during peak hours to minimize the grid impact. 

Question. At what point will additional capacity (generation, transmission, or distribution) be required because of the extra demand from PHEVs? 

Answer. The only problem in the short term will be localized loads. The power 

available to the average home is about 30 kW. A Tesla roadster can charge at up 

to 15 kW. So adding a Tesla Roadster to a home will frequently require additional 

distribution to the home. Adding a few of these vehicles on a block can require more 

transformers and more local distribution lines. 

From a broader perspective, the need to add generation and transmission will be 

so slow that we will never notice. Automotive technology adoption is very slow. After 

having hybrid technology for about 10 years, it still amounts to less than 4 percent 

of the automotive inventory of the United States. People keep their cars for about 

7 years and even then most don’t pick new technology vehicles. In general, the util-
78 

ity industry will have adequate time to plan to stay ahead of the demand for electricity from grid-enabled vehicles. 

Another way of looking at this is that the average home uses about 1 MWh of 

energy a month. A vehicle will use about 250 kWh of energy a month. So when 

every home in America has an electric vehicle, home energy use will go up by 25 

percent—a manageable increase at an aggregate level. This transition will take decades. 

QUESTIONS SUBMITTED TO ALAN TAUB

QUESTIONS SUBMITTED BY SENATOR ROBERT F. BENNETT

Question. How much investment have you committed to producing electric vehicles? 

Answer. To date, we have invested more than $1 billion on electric vehicle development, including $700 million to develop and manufacture the Chevrolet Volt extended-range EV. 

Question. What will be the resulting rate of production? 

Answer. The start of production for the Volt is scheduled for late 2010. Production 

rates will be managed to ensure a quality launch experience. We expect to be able 

to produce tens of thousands of vehicles as we ramp up production. These products 

will be produced at our Detroit-Hamtramck, MI high-volume production facility, 

with battery packs being manufactured in Brownstown Township, MI. In addition, 

our Volt supply base includes 196 suppliers in 24 States. 

Question. How fast do you expect the costs of the battery cells and packs to drop? 

Answer. It normally takes three generations of development to meaningfully reduce the cost of a new technology. The speed with which we transition from one generation to the next is largely dependent on parallel advances in R&D and engineering development, associated advances in manufacturing processes, and, finally, the 

commercial incentives that are in place to accelerate these efforts. GM has analyzed 

the potential cost reductions through the three generations; these internal analyses 

show potential cost reductions at least as good as those set forth by the U.S. Advanced Battery Consortium (USABC). Policies and initiatives that support the production of cells, packs, and vehicles in the United States will facilitate further reductions. 

Question. How will your plans change if they don’t drop that fast? 

Answer. The future of sustainable personal mobility involves many technology alternatives, including batteries, motors, power electronics, hydrogen fuel cells, ethanol, and other biofuels. GM is committed to accelerating all alternative technologies and we will work to ensure that durability, cost, and timing stays the 

course. 

Question. How do you expect to measure and guarantee battery performance, 

since battery capacity will deteriorate over time? 

Answer. Our long-term goal is to design the system to minimize battery life deterioration. It is important to note that, because of known battery usage and calendar 

life degration, GM designed the Volt to meet specifications based on projected battery performance of 10 years/150,000 miles. We continue testing of batteries at our 

state-of-the-art battery lab and on the road in support of our current highly competitive warranty program. We are also looking to secondary markets for battery re-use 

after initial vehicle life. Programs that support battery residual value and help mitigate the risk of aggressive development are important to the expansion of the vehicle electrification market. 

Question. Based on your understanding of customer preferences, how big is the 

market for electric vehicles given the higher cost and changes in driver behavior 

they will require? 

Answer. We believe the Volt, with its extended-range capability, provides the 

functionality needed to allow an electric vehicle to appeal to the broadest possible 

market. The size of this market will depend largely on vehicle cost and consumer 

preferences; therefore, incentives are important to attract consumers and accelerate 

the expansion of this new market. 
79 

QUESTIONS SUBMITTED TO MARY ANN WRIGHT

QUESTIONS SUBMITTED BY SENATOR ROBERT F. BENNETT

MEETING DOE GOALS FOR COST AND PERFORMANCE OF BATTERIES

Question. The Department of Energy (through the EERE office) has established 

cost and performance goals for both 10-mile and 40-mile batteries to be achieved in 

2012 and 2014, respectively. The current technology is behind the curve in meeting 

these goals. The goals for the 10-mile battery are as follows: 

2012 Goal Current Status 

Cost ...................................................................................................................................... $1,700 ............. $3,400 

Cycle Life ............................................................................................................................. 5,000 ............... 1,700–2,000 

Life ....................................................................................................................................... 10∂ years ...... 3∂ years 

Weight .................................................................................................................................. 60 kg ............... 80–120 kg 

Do you expect to meet the DOE goals for battery cost and performance? If not 

by DOE’s dates, when would you expect to? 

Answer. By the year 2015 we expect the cost of our PHEV battery systems to be 

at $500/kWh. The EERE goal is based on a battery system with 3.4 kWh of available energy. Battery systems are designed with an energy content buffer to provide 

satisfactory vehicle performance and ensure reliability and warranted life. This 

means that a battery with 3.4 kWh of useable energy will be designed to have a 

total energy content of 5.2 kWh. The corresponding battery system cost at $500/kWh 

is $2,600. By 2015 we expect to meet or exceed the following goals: 

—Calendar life of 10 years (our 8∂ years of real-time testing provides a high confidence factor). 

—Cycle life of 4,500 cycles. 

—Battery system mass of 60 kg. 

By the year 2020 we expect to be at a system cost level of $1,250 or less, have 

a cycle life of 5,200 cycles and a battery system mass of less than 60 kg. 

WARRANTING BATTERIES

Question. According to the National Research Council’s report on electric vehicles, 

replacing the battery pack when it is depleted could cost more than $3,300 for 

PHEV–10s and $14,000 for PHEV–40s. Although there is some uncertainty about 

the exact cost, without doubt it will be significant. Given this cost, the warranty 

that a company decides to offer on the battery will be a key factor in the marketability of these vehicles. 

Although DOE has set a goal of 10∂ years for the calendar life of PHEV batteries, I understand that current technology is only capable of approximately 3–5 

years. 

What warranty do you expect to provide on your batteries sold for 2015 installation? 

Answer. Ten years for HEV batteries. The duty cycle for PHEV batteries places 

much greater stress on the battery than the HEV application. This combined with 

the emergent nature of PHEV battery technology will require us to offer a range 

of warranty terms based on the vehicle application requirements and specific battery chemistry. A full 5 year/50,000 mile with a 6–10 year pro-rata warranty is a 

possibility. 

Question. Are you confident that the great majority of these batteries will meet 

the warranty? 

Answer. This will be very much dependent on the manufacturer. We are confident 

that Johnson Controls battery products will satisfy our warranty specifications, but 

we cannot speak for our competitors. Also, the small start-up vehicle OEMs that will 

produce relatively small volumes annually may not feel compelled to offer the same 

vehicle system warranties as the larger established OEMs. 

UNCERTAINTIES AND TRADE-OFFS WITH DURABILITY, SAFETY, AND COST

Question. The batteries envisioned for electric cars have not been deployed on this 

scale before, and are therefore untested in the commercial field. Accordingly, battery 

manufacturers will have to rely on assumptions and demonstration-scale information about the durability, safety, and cost of these batteries. Although most observers believe that the durability and safety questions can be resolved in the shortterm (< 5 years), this is a big assumption that is often simply overlooked. 
80 

To offset the significant cost of the battery, it may be tempting to provide less 

durability or safety. We saw a similar problem in 2008 when certain lithium laptop 

batteries overheated (with some actually causing fires and property damage) because of the tradeoffs associated with reducing cost and size. 

How do you expect to handle issues of durability for the first few years before the 

manufacturers gain actual in-field commercial experience? 

Answer. First, lithium batteries for consumer electronic devices and lithium batteries for electric drive vehicles are two very different products and should not be 

compared on the basis of name similarity alone. Li-ion cells and batteries for vehicle 

motive power are designed to the exacting and rigorous standards of global automobile original equipment manufacturers which include very rigorous requirements 

for performance, cost, and safety. 

Durability, defined as long life without deterioration in performance, is a nonissue for batteries for electrified powertrain vehicles. Specifically, in the case of 

PHEV batteries, the key performance metric is electric equivalent range which corresponds to battery energy capacity. All electrochemical systems will demonstrate 

a predictable reduction in capacity and/or power as the battery accumulates cycles. 

The battery performance requirements formulated by the United States Advanced 

Battery Consortium (USABC) and/or other vehicle manufacturers are end-of-life requirements that allow for a performance buffer to be designed into the battery pack. 

The performance buffer is simply additional energy capacity that compensates for 

the energy gradually lost during the accumulation of driving cycles and calendar 

time. The other vehicle systems dependent upon battery energy, most notably the 

powertrain, are managed based on the battery end-of-life characteristics. This ensures that even as the battery ages, the vehicle owner/operator will experience no 

discernable changes in vehicle performance, fuel economy, or emissions. 

Reliability, or dependability, is related to manufacturing consistency of the raw 

materials as well as the finished cells and assembled battery systems. The reliability of new technologies can be ascertained in the laboratory with a high degree 

of confidence. Follow-on field testing is performed to validate these findings. A common example is the use of internal combustion engine test stands by the automotive 

OEMs. Credible battery manufacturers routinely put cells and complete battery systems on accelerated testing not only to maximize the data available, but to accelerate the battery cycling process (discharging and charging) so that 10 year life capability can be established in a much shorter timeframe, e.g., 15 months. 

Product reliability is a function of the entire supply chain, materials and equipment included. The critical importance of a dependable supply chain is the reason 

why Johnson Controls successful proposal for Recovery Act funding emphasized not 

only building advanced battery manufacturing facilities, but standing up an advanced battery industry including the domestic supply chain for materials, equipment, and recycling. 

Ultimately, battery system ratings for life, cycle life, power, energy, and safety are 

data driven; nothing is assumed. 

Question. Batteries face issues related to durability, safety, and cost; how do you 

see the relation among these three and the trade-offs that exist? For example if you 

aggressively reduce cost, is it likely that you will give up durability or reduce safety? 

Answer. The safety of our products is non-negotiable. We will not introduce any 

product into the marketplace that does not satisfy our Johnson Controls internal criteria for safety as well as our customer’s safety and abuse tolerance requirements. 

We will continue to aggressively reduce costs while ensuring compliance with all 

automotive standards. 

However, there are legitimate opportunities to optimize cost versus design life. 

From a design and manufacturing perspective we are pursuing dual paths to cost 

reduction: 

—Improved utilization of key materials; enhancing the energy and power output 

of existing materials without adding mass or volume. This will be accomplished 

via improved process capability in both our manufacturing plant and our suppliers’ facilities. Domestic supply chain development and maturation is a key 

facet of this approach. 

—Lowering the unit cost of key materials. This is a function of scale, but also requires a mature and capable domestic supply chain to ensure that we have access to materials and components which represent the most current product and 

manufacturing technologies. 

It would be possible to take cost out of a battery system if it did not have to be 

warranted for 10 years/150,000 miles as part of advanced technology vehicle warranties dictated by California laws for emissions control devices or for the 8 year/ 

80,000 miles Federal standard. Having said that, it is important to emphasize that 
81 

cost versus life optimization is not the same as cost versus reliability. Poor reliability means poor quality. 

STANDARDIZATION OF TECHNOLOGY

Question. To successfully integrate a significant number of electric vehicles into 

the fleet, there must be a certain amount of standardization of the technology. 

Standards in some of these areas are being developed, such as the type and size 

of the plug to charge the car. 

Which components of PHEVs and electric vehicles will need to be standardized, 

such as the type of plug needed to charge the car? 

Answer. For purposes of cost, reliability, serviceability, and safety, standards 

would be appropriately applied to the interfaces between the battery system and the 

vehicle and the operator and the vehicle. For example: 

—High power connector from the vehicle to the battery 

—Battery to powertrain controller communications bus 

—Charging plug from external alternating current power source to vehicle 

—Terminology and nomenclature relating to vehicle owner/operator understanding of battery state-of-charge and charging procedure(s) 

An area equal to and perhaps more critical to the sustainability of our fledgling 

industry is transportation standards for domestic and international shipments of 

cells and batteries. We responded to the DOT’s recent rulemaking proposal for shipments of lithium-ion cells and batteries. In summary, we felt that these proposed 

regulations, if approved, would place unnecessary burdens on battery companies 

doing business in the United States, thus thwarting the goal of both the Congress 

and the administration for America to become a leader in green transportation technologies. Although their rulemaking proposal contains numerous detailed discussion 

points, we identified two high level areas where the DOT language represents 

missed opportunities to help enable the development of a sustainable transportation 

industry in the United States: 

—In many instances the DOT proposed rules differ from those recently promulgated by the U.N. concerning international shipping of batteries. This lack of 

harmonization is frustrating from two critical perspectives: 

—It runs contrary to DOT’s stated position that harmonization of international 

shipping regulations is a desired goal; and 

—It will impose cost penalties on commerce done in the United States, thus 

putting American producers at a competitive disadvantage. 

—The proposed regulations for air shipments are particularly onerous and would 

result not only in increased costs, but the likelihood of a shortage of qualified 

battery cargo space on aircraft. 

Question. Who is involved in the standardization discussions? What is the status? 

Answer. From the product side, the key standards organizations are: 

ANSI: American National Standards Institute 

BCI: Battery Council International 

CENELEC: European Committee for Electrotechnical standards 

DOE: U.S. Department of Energy 

EN: European Norm 

IEEE: Institute of Electrical and Electronics Engineers 

JIS: Japanese Industrial Standards 

PRBA: Rechargeable Battery Association 

SAE: Society of Automotive Engineers 

UL: Underwriters Laboratories 

In the United States SAE, ANSI, UL, and IEEE are already engaged in the standards process and many SAE standards already exist or have been proposed. However, much work remains to be done, particularly in terms of international harmonization of standards. 

We appreciate the opportunity to discuss the broad issue of standards. In fact, 

there is specific language for Electric Drive Transportation standards in S. 1462— 

American Clean Energy leadership Act in section 153. The legislation states: 

‘‘IN GENERAL.—Not later than 180 days after the date of enactment of this act, 

the Secretary, in consultation with the National Institute of Standards and Technology, the National Laboratories, utilities, vehicle manufacturers, battery manufacturers, industry trade associations, and such entities as the Secretary determines 

to be appropriate, shall submit to Congress a report containing recommendations for 

establishing and adopting consensus on industry standards for electric drive transportation.’’ 
82 

We support the Senate directive that DOE assumes a strong role in this process, 

but we believe it is in the best interest of the vehicle manufacturers, battery manufacturers and consumers for the ultimate decisionmaking authority on final consensus standards language to be maintained by the traditional governing bodies, in 

particular SAE, IEEE, and the battery industry trade associations BCI, and PRBA. 

The legislation lists a number of areas in which standards should be developed. 

Specifically, we would recommend strengthening section 9(a)(2)(vi) on battery safety, 

by changing the line to read: 

‘‘(vi) battery safety including test methods and metrics; and’’ 

In conclusion, the broader answer to your question of reliability and feasibility of 

this technology is that for the first time in the United States serious investment has 

been made by a great variety of companies including large manufacturers and suppliers. This is the moment to drive the industry forward. Warranty, cost and standards are key elements to be worked out. However, the issue of cost for warranty 

and batteries is primarily based on demand; thoughtful Government investment into 

spurring demand via fleet electrification, purchase incentives, and standardization 

policies will make a great difference in the future of this technology and our collective success. 

Senator DORGAN. Ms. Wright, you talked about building a plant 

and at this point, you only see the capacity for 50 percent of your 

potential production. So, you’re betting on a future. I guess all of 

you are betting on a future that many of us hope will exist, and 

it probably will only exist if we understand the need to change public policy to try to lead in that direction, as opposed to sitting 

around and waiting for something good to happen. 

CONCLUSION OF HEARING

So, let me thank all of you for your being here today and your 

testimony and your contribution to this hearing. 

This hearing’s recessed. 

[Whereupon, at 12:10 p.m., Tuesday, February 23, the hearing 

was concluded, and the subcommittee was recessed, to reconvene 

subject to the call of the Chair.] 
(83) 

MATERIAL SUBMITTED SUBSEQUENT TO THE 

HEARING 

[CLERK’S NOTE.—The following testimonies were received by the 

Subcommittee on Energy and Water Development subsequent to 

the hearing for inclusion in the record.] 

PREPARED STATEMENT OF PG&E CORPORATION

PG&E Corporation is an energy holding company headquartered in San Francisco, 

California and the parent company of Pacific Gas and Electric Company (PG&E). 

Pacific Gas and Electric Company is California’s largest utility, providing electricity 

and natural gas to more than 15 million people throughout northern and central 

California. PG&E is a recognized leader in energy efficiency and has among the 

cleanest mixes of electric power of any utility in the country. 

PG&E is committed to improving California’s air quality and addressing the challenges associated with climate change, and reducing greenhouse gas emissions from 

the transportation sector is a key step in meeting both of these objectives. For nearly two decades, PG&E has actively worked to advance cleaner, more efficient transportation technologies for our customers and our own operations. This is a key pillar 

of PG&E’s overall emissions reduction and environmental stewardship strategy —no 

less important than procuring clean sources of energy or protecting wildlife habitats. 

No one fuel or technology is the answer to our fuel dependency and climate challenges, however, PG&E views electric vehicles (EV), including battery electric (BEV) 

and plug-in hybrid electric vehicles (PHEV) and trucks as practical and dynamic solutions. Parts of PG&E’s territory are expected to be early adoption hubs for electric 

vehicles, therefore our readiness to safely and reliably integrate these vehicles into 

our electric grid will be a critical success factor in the California electric vehicle 

market. 

In addition to extensively modeling electric vehicle adoption scenarios and the potential impacts to the electric grid down to the local neighborhood level, PG&E is 

actively involved in real-world testing and research aimed at providing a clear roadmap for our electric transportation readiness. 

Currently, PG&E is using its fleet to test the usefulness, effectiveness, cost, durability, reliability, infrastructure support requirements, and safety of newly commercialized electric drive vehicle and truck technologies. For example, in 2008, we 

added four passenger electric drive vehicles to our fleet—a Ford Escape PHEV, 

Scion e-box BEV, Mitsubishi i-Miev BEV and our second Toyota Prius PHEV. PG&E 

has also partnered with General Motors and will take delivery of 10 Chevy Volts 

later this year. 

PG&E is one of 14 fleets in the Nation to assess a hybrid diesel-electric bucket 

truck developed by International Truck and Eaton Companies, which eliminates the 

need to idle and burn diesel while operating the bucket used to hoist servicemen 

to perform repairs. Field test results show the hybrid diesel-electric bucket truck reduces fuel consumption between 30–60 percent, reduces emissions 50–90 percent, 

improves operational and scheduling flexibility, and reduces maintenance costs. 

PG&E has also partnered with Smith Electric Vehicles for 12 medium duty battery electric trucks in 3 configurations to support our field work, including boom, 

flat bed, and service trucks. In addition, with pick-up trucks being the most common 

vehicle in PG&E’s fleet, PG&E has partnered with General Motors to take delivery 

of more than 100 of their hybrid units. PG&E has also partnered with Raser Technologies for six plug-in hybrid pick-up trucks. 

Through field tests of these vehicles, we are helping to demonstrate the increased 

efficiency of electric vehicles. We are also helping to understand the impact on the 

grid of charging electric vehicles—and the need for a robust ‘‘smart charging’’ infrastructure to enable vehicles to recharge batteries automatically when ample electric 

supply is available. PG&E’s current deployment of nearly 10 million smart meters, 

the largest roll-out in the country, provides a critical foundational technology that 
84 

will help ensure as more electric vehicles are commercially introduced, PG&E can 

ensure they are safely and reliably integrated with the grid. 

To support the development of a smart charging infrastructure, PG&E is actively 

engaged with the Electric Power Research Institute (EPRI) and the Society of Automotive Engineers to develop and revise the important codes and standards related 

to charging of EVs and the protocols needed to allow EVs to communicate with the 

grid. 

Beginning in Q2 of 2010, PG&E will embark on a large pilot project with EPRI 

to test various electrical chargers and load management systems to minimize the 

effects of EVs on the electrical grid while maximizing customer convenience at various EV rates. This project will enable PG&E to develop critical knowledge and expertise to safely and reliably begin supporting electric vehicle customers as the 

broad rollout of EVs begins in late 2010. 

In addition to the important testing and deployment work that PG&E is conducting in CA, the company actively supports Federal policy aimed at expediting the 

successful market development of electric vehicles. PG&E has long been an active 

member with board representation at the Electric Drive Transportation Association. 

In 2009, PG&E joined the Electrification Coalition which is committed to promoting policies that expedite the deployment of grid-enabled vehicles and infrastructure on a mass scale, moving electrification beyond a niche concept into a compelling 

and widely available alternative to the current transportation system. In November 

2009, the Electrification Coalition released its Electrification Roadmap, a sweeping 

report outlining a vision for the deployment of a fully integrated electric drive network. The Electrification Roadmap outlines critical policy recommendations, such as 

promoting the inclusion of electric vehicle related investments in utility rate base 

and adjusting utility rate structures to facilitate EV deployment, both necessary to 

successfully establish Electrification Ecosystems around the country and drive the 

economies of scale needed to sustain and grow the electric vehicle market. 

As global demand for oil increases from the emergence of economies such as 

China and India, along with our Nation’s increased dependence on foreign supplies 

of oil, we face an uncertain energy future. The time is now to establish bold policy 

commitments that will chart a different future for our Nation’s energy supply and 

transportation infrastructure. PG&E recognizes the strong commitment of the Congress to adopt Federal policies aimed at creating a market for electric transportation, such as those in the American Recovery and Reinvestment Act and the 

House passed Advanced Vehicle Technology Act of 2009. Our hope is that Congress 

will recognize and act to implement the bold and necessary policies outlined in the 

Electrification Roadmap. 

PREPARED STATEMENT OF LINDSAY LEVEEN, TIBURON, CA 

AN ESSAY ON THE THERMODYNAMICS AND ECONOMICS OF LITHIUM BATTERIES

My name is Lindsay Leveen. I am a chemical engineer and my interest is to apply 

my scientific knowledge to alternate energy sources. My graduate work involved the 

study of thermodynamics. Over the last 35 years my work has been in cryogenics, 

microelectronic device fabrication, nanotechnology development, fuel cell fabrication, 

and most recently biotechnology. 

Purpose.—The purpose of this essay is to provide the subcommittee with reasoning based on thermodynamics why lithium batteries will likely not lower in cost 

and therefore why plug in passenger vehicles (cars and trucks) will probably not 

make any significant dent in the consumption of gasoline and diesel. I wish to prevent the waste of precious resources on a technology that I believe is headed toward 

a dead end. 

I have no commercial interest in any energy or battery technology and am writing 

this essay as a concerned citizen to inform the Senate Subcommittee on Energy and 

Water Development of the severe thermodynamic limitations of Lithium Secondary 

Batteries and of the probable long term unaffordable economics associated with 

plug-in passenger vehicles that will rely on them. Much of this report is taken from 

my presentations, reports, publications and blogs www.greenexplored.com I have 

produced in recent years. 

Thermodynamics—Definition.—The science concerned with the relations between 

heat and mechanical energy or work, and the conversion of one into the other: modern thermodynamics deals with the properties of systems for the description of 

which temperature is a necessary coordinate. (dictionary.com). 

Moore’s Law and Learning Rates for Technologies.—Gordon Moore one of the 

founders of Intel Corporation, postulated that semiconductor integrated circuits 
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would enjoy a doubling in performance in a period of every 18 months. This rate 

of learning allows performance to be improved exponentially with time for the same 

original cost. 

Many technologies that engineers and scientists develop need a ‘‘Moore’s Law’’ in 

order to improve their performance and correspondingly their economics to capture 

vast markets. Most efforts around the improvement of alternate energy technologies 

vis a vis competing with fossil fuels have not yielded these ‘‘Moore’s Law’’ rates of 

learning. In particular for the past decade as much as $6 billion has been spent 

without any real success toward the ‘‘learning curve’’ of PEM fuel cells. Much of 

these $6 billion was appropriated by the Federal Government. The learning curve 

for PEM fuel cells over the past decade yielded a yearly learning rate of less than 

2 percent. By comparison the Moore’s Law yearly learning rate for integrated circuits has averaged over 40 percent for more than three decades. 

My Experience With Moore’s Law.—For almost 20 years I directed teams of engineers that designed state of the art Integrated Circuit (IC) fabrication facilities that 

helped drive this rapid rate of learning and therefore cost improvement in computers and other electronic devices. A simple explanation for the high learning rates 

in IC fabrication is that the technology was neither constrained by thermodynamics 

nor reaction kinetics but simply by the line width of the circuits within the ICs. To 

drive Moore’s law in IC fabrication improvements in lithography, higher purity 

gases for deposition, implantation, and etch, as well as the occasional increase in 

the size of wafer being fabricated were needed. 

Moore’s Law, Thermodynamics and Lithium Batteries.—To drive the learning rate 

in PEM fuel cells and similarly lithium secondary batteries both thermodynamic 

and reaction kinetic constraints have to be overcome. The reason why thermodynamics places such constraints is that the functioning of these systems depends 

on chemical reactions. Thermodynamics determines how much useful energy can be 

derived from a chemical reaction. But we know that the thermodynamic constraints 

cannot be overcome as the laws of thermodynamics are inviolable. ICs do not undergo chemical reactions to function, but all batteries and fuel cells do involve chemical 

reactions to deliver energy. It is these chemical reactions that are limiting the possible learning rate. 

The Resulting Economic Problem.—Significant effort and much money is now 

being spent on advanced batteries for plug-in full electric or plug-in hybrid vehicles. 

Such vehicles will require between 10 kilowatt hours and 50 kilowatt hours of 

stored electricity if the range of the vehicle purely propelled on stored electricity is 

to be between 40 and 200 miles. Lithium chemistry based secondary (chargeable) 

batteries presently offer the best performance on a weight and volume basis and 

therefore represent the best ‘‘hope’’ for a ‘‘Moore’s law’’ to solve the world’s addiction 

to fossil oil. Sadly ‘‘hope’’ is not a winning strategy. Present costs of such battery 

packs at the retail level range from $800 per kilowatt hour of storage to over $2,000 

per kilowatt hour of storage. One can purchase a 48 volt 20 amp hour Ping Battery 

for an electric bicycle directly from this Chinese ‘‘manufacturer’’ for less than $800 

delivered by UPS to any address in the USA. A123 offers a battery system that will 

modify a standard Prius to a 5 kilowatt hour plug-in Prius for $11,000 or around 

$2,200 per kilowatt hour fully installed by a service station in San Francisco. The 

Ping battery delivers much less instantaneous power (watts) and that is the reason 

their batteries are less expensive on a stored energy basis (watt hours) than are the 

A123 batteries. Both the Ping and the A123 batteries claim safety and claim to be 

manufactured with phosphate technology that will neither short circuit nor burn. 

Economic Case Study the Example the Standard Prius vs Plug-in Prius.—The following is an economic analysis of a standard Prius versus a plug-in Prius using 

A123’s lithium battery pack: The standard Prius will get 50 MPG and let’s assume 

that the driver drives 12,000 miles a year. The standard Prius driver will need to 

purchase 240 gallons a year of gasoline at an estimated cost of $720 per year with 

gasoline at selling for $3 per gallon. If the driver purchased the A123 plug-in system 

and can recharge the system at home and at work such that half the mileage driven 

in a year is on batteries and half is on gasoline the driver will save $360 a year 

on gasoline. The driver will need to buy some 2,000 kilowatt hours a year of electricity from the grid in order to save this gasoline. At 10 cents per kilowatt hour 

the driver will spend $200 a year for electric power and will therefore only enjoy 

$160 a year in net operating savings. The $11,000 set of batteries have a maximum 

expected life of 8 years and the owner must set aside $1,375 a year for battery replacement without accounting for the time value of money. The battery replacement 

cost is simply too expensive to justify the savings in gasoline. How high do gasoline 

costs have to rise and how little do batteries have to cost to make the plug in viable? 

Let’s assume gas prices reach $6 per gallon and electricity remains at 10 cents a 
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kilowatt hours we have a yearly operating savings of $520. These savings will still 

be far short of the money needed for battery replacement. 

The A123 batteries will need to drop to 15 percent of their present cost to make 

the proposition of converting a Prius to a plug-n ‘‘worthwhile’’. To reach this cost 

target in a decade one needs a yearly learning rate of approximately 26 percent. 

With 35 years of work experience, I have concluded that in the best case of battery 

costs (no inflation in raw materials) a 4 or 5 percent yearly learning rate could be 

achieved over the next decade. But if we believe that gasoline will double then we 

also have to assume that plastics, copper, cobalt, nickel, graphite, etc. will also double in unit cost. As raw materials account for three-quarters of the manufacturing 

cost of lithium batteries the inflation adjusted cost will increase at a higher yearly 

rate than the learning rate will lower costs. My prediction is therefore that lithium 

secondary batteries will likely cost more per unit of energy stored in 2020 than they 

do today. 

Toyota is a company well known for its cars with improved fuel economy and 

therefore is a master of thermodynamics and must have ‘‘optimized’’ the cost and 

performance of its batteries in the standard Prius deploying a relatively small battery pack and with the choice of Nickel Metal Hydride chemistry rather than lithium chemistry. While Toyota may be experiencing safety problems no one can fault 

this company on fuel efficiency. Other car companies such as Ford have also chosen 

Nickel Metal Hydride as their hybrid car battery platform. Fisker and GM are touting plug in hybrids with lithium batteries and are much more aggressive in their 

claims of cost improvement and their ability to drive ‘‘Moore’s Law’’ in their battery 

systems. My educated guess on all of this is that Toyota, Ford and the car manufacturers that stick with smaller nickel metal hydride battery systems and the traditional non plug-in hybrid will sell tens of millions of such vehicles over the next decade. Renault, GM, Fisker, Tesla, and others who go for plug-in hybrids or full electric vehicles will only sell a few tens of thousands of vehicles in the next decade. 

I simply believe we will not have ‘‘Moore’s Law’’ at play here but have a very fractional Moore’s Law that holds. 

Argonne National Labs published an exhaustive review of the materials and associated costs of lithium batteries back in May 2000, http:// 

www.transportation.anl.gov/pdfs/TA/149.pdf. The total material cost for the cell was 

estimated at $1.28 and the total manufacturing cost of the cell including overhead 

and labor was estimated at $1.70. This Argonne report is perhaps the best report 

written on the economics associated with lithium battery fabrication. Actually had 

folks read this report back in 2000 they would have realized that the learning curve 

for lithium batteries would be painfully slow. Materials just make up far too much 

of the battery cost and the quantity of materials is fixed by the chemistry. Therefore 

economies of scale could not drive a Moore’s Law type rate of learning and a very 

fractional Moore’s Law resulted. In the early years of lithium cell development from 

approximately 1990 to 2000, the improvements in chemistry and in economies of 

scale did allow the technology to enjoy a Moore’s Law type learning rate and it has 

been reported that costs of an 18650 cell reduced from $18 to $2 per cell in that 

decade. Unfortunately the technology has now hit an asymptote in their cost reduction curve. 

By doing a Google search on an 18650 lithium ion battery I came across this link 

http://www.batteryjunction.com/li18322mahre.html. This site lists a selling price of 

$5.29 each for 200 or more cells. The cells are 3.7 volts with 2.2 amp hours so they 

are capable of holding 8.1 watt hours of energy from full charge to discharge. Expressed in cost per kilowatt hour of nominal capacity these loose cells cost around 

$650. My guess is that if you applied today’s costs of cobalt, nickel, lithium, lithium 

salts, plastics, copper, graphite, and other constituent materials that make up a cell, 

the material cost in November 2009 compared with May 2000 have increased by 

more than 150 percent and a current estimate of the materials used in the Argonne 

labs report will show cost of about $3 per cell versus $1.28 back in May 2000. Hence 

this company sells the cells for $5.29 each. From my previous analysis of the probable learning rate I would not be surprised if in 2020 the selling price per 18650 

lithium cell is as high as $6 rather than as low as $3. 

Conclusion.—Lithium batteries are and will remain best suited for items as small 

as a cell phone and as large as a bicycle. The cost relative to performance or these 

batteries will likely not improve by much in the coming decade. Although some 

standard hybrid vehicles may use lithium batteries with low capacity, their cost will 

remain high. Also plug-in vehicles that have a range longer than 10 miles using battery power will likely not penetrate the market significantly. Given the likely scenario that plug-in passenger cars and trucks based on lithium battery technology 

will not reduce U.S. consumption of gasoline and diesel fuel in large measure, I am 
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asking the subcommittee to limit the funds that the U.S. Government will appropriate for research and development of this technology. 

Thank you 

Æ