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The goal of manufacturing an affordable five-passenger electric vehicle that meets the distance range requirements of average American consumers and has a fast-charging ability and payback time of less than five years is at the center of President Obama’s ambitious EV Everywhere program.
By Dave Brown — Exclusive to Lithium Investing News
United States President Barack Obama recently launched EV Everywhere, the second Clean Energy Grand Challenge. The ambitious program is designed to collaboratively engage entrepreneurs, engineers, and scientists in developing more affordable and convenient electric vehicles within the next ten years.
The aggressive aim for this initiative is for the United States’ automotive industry to become a pioneer in the electric vehicle industry by manufacturing an affordable five-passenger electric vehicle by 2022. The electric vehicle is expected to meet the distance range requirements of average American consumers, with fast-charging ability and a payback time of less than five years.
A challenging goal
In terms of infrastructural investments on a per capita basis, the US is not considered a global leader as China and Germany have already set initiatives for electric vehicle adoption.
It is important for lithium investors to note that the US government has committed to spending $5 billion in the electric vehicle sector, of which $2.4 billion has been established for battery projects.
China is currently investing $15 billion in electric vehicles and infrastructure, having launched its electric vehicle adoption initiatives relatively early compared to the US and Germany. It has expanded its original supply plan, and now intends to have 1,000 electric vehicles in 25 major cities instead of just 13.
The German government has committed to expanding its funding to provide $2.83 billion by 2013 as part of plans to increase the number of electric cars on the streets to a million by 2020 and six million by 2030.
A disproportionate level of commitment becomes pronounced when the amount of money invested as a percentage of each individual country’s annual gross domestic product (GDP) is considered. The US has a GDP that is approximately 2.5 times higher than China and 4.4 times that of Germany.
Key initiatives
A critical success factor for the US government in moving the electric vehicle industry forward is driving sustainability by developing an optimized pricing model for smart grid operations, communications, and stability.
Colleen Quinn, Vice President of Government Relations and Public Policy at Coulomb Technologies, indicated the action she sees at the state level in a recent webinar, commenting that “state public utility commissions and state legislatures present challenges to the market in its development and also opportunities for growth.” Quinn believes some of these infrastructural changes need to include “market certainty, maintaining legislative flexibility, and supporting hospitable regulation.”
Relevance for lithium industry
This recent commitment from the US underscores the continued and growing global demand for alternatives to traditional transportation solutions. For lithium investors, the adoption of electric vehicles is a cornerstone in driving the value of lithium in the future.
As the demand for lithium products in general increases, investment interest will expand as current producers may not meet the scale of future requirements. This will mean that the price of lithium will increase, and exploration and development projects could become more attractive.
Securities Disclosure: I, Dave Brown, hold no direct investment interest in any company mentioned in this article.