This testimony is presented on behalf of the Electric Vehicle Association of the Americas (EVAA), a national non-profit organization of electric and other energy providers, vehicle manufacturers and suppliers, state and local governments and other entities that have joined together to advocate greater use of electricity as a transportation fuel. A complete membership list is attached. A principal activity of the association is to advocate the adoption of incentive-based policies and programs to facilitate the development and use of electric modes of transportation.

The Association believes that use of electricity as a fuel offers significant advantages in transportation applications. Electricity is inexpensive, stable and generated from a variety of domestic fuels. Electric transportation technologies present our nation with an important means for reducing our dependency on foreign petroleum and increasing the diversity of fuels relied upon in the transportation sector. During the last energy crisis in 1973, only 36 percent of oil used in the U.S. was imported. Today, the U.S. imports 19.1 million barrels of foreign oil per day and the U.S. Department of Energy reports that net imports of petroleum in the year 2001 will account for 54 percent of total U.S. petroleum demand – an increase of 18 percentage points from 1973. And in the next twenty years, the Energy Information Administration (EIA) predicts that this nation’s demand for oil will increase by an additional 33 percent. EIA also predicts that gasoline prices -- already at $2.00 per gallon in some regions of the country -- could spike even higher during the summer peak-driving season.

It is clear that the need for this country to transition to the use of alternative fuels is more critical than ever. A wide variety of transportation modes -- individual passenger and light-duty vehicles -- and heavy-duty vehicles, like buses and trolleys -- can and should be powered by electricity -- an abundant, clean, and domestically produced energy resource. All of the technologies mentioned above will reduce pollution, reduce our dependency on imported oil, and improve the quality of life in many of our cities and towns, while maintaining our high degree of mobility.

In addition to diversifying sources of transportation "fuels," air quality considerations also are requiring municipal transit operators to consider the use of alternative fuel technologies as a means to reduce emissions and achieve air quality goals. Nearly 100 cities in the United States do not meet federally established air quality standards. For many urban areas, electric transportation may be a particularly important means to substantially reduce emissions of mobile source pollutants, including volatile organic compounds and oxides of nitrogen that are the precursors of smog. Electric cars and buses are truly "zero emission" transportation modes. They produce no tailpipe emissions and generate insignificant, ancillary emissions during operations. They also have the added benefit of mitigating noise pollution and improving efficiency.

While each major automobile manufacturer, domestic and foreign, now has offered battery-electric vehicles (BEVs) for sale and/or lease on a limited basis, these products entered the market later than anticipated, and subsequently, the market has not developed as quickly as envisioned by industry and government. Since 1996, a total of 4,017 BEVs have been leased and/or sold in the United States. Additionally, there are approximately 200 battery electric buses in operation throughout the United States. Some automakers also have begun to develop and market small, neighborhood electric vehicles (NEVs) that have applications in planned communities, college campuses, in station car applications, and other urban settings where space and travel distances are limited. Finally, there is growing use of non-road and industrial EVs, especially at airports located in urban areas.

Hybrid electric vehicles (HEVs) also are making inroads in the marketplace. To date, Honda and Toyota have leased and/or sold over 12,480 HEVs in the United States and other automobile manufacturers have announced plans to introduce hybrids into the marketplace in the next two to three years. There also is an interest among environmentalists, regulators, the electric utility industry and others to pursue development of grid-connected hybrid technologies as a means to improve the environmental performance of such technologies.

Fuel cell electric vehicles (FCEVs), which harness the chemical energy of hydrogen and oxygen to generate electricity, have the potential to change the way we think about energy and transportation. Fuel cells are more efficient than other technologies that rely on direct combustion, and they produce zero, or near zero emissions. All of the major automakers are investing heavily to develop fuel cell technology and each has announced plans to offer fuel cell vehicles to the commercial marketplace by the end of the decade.

Because EVs of all types are radically different from their internal combustion engine (ICE) counterparts, there are several challenges that must be overcome. Today, the challenges to the increased use of electric modes of transportation remain the cost of the vehicles, the limited availability of charging infrastructure, and consumer awareness and acceptance of the technology. For example, in order to achieve the range standard (100 miles per charge) that industry believes is necessary for BEVs to be commercially successful, the vehicles must use advanced batteries, such as nickel metal hydride, that are far more expensive and add to the incremental cost of the vehicle.

Also, as is the case with BEVs and FCEVs, a new infrastructure system – whether it is electric chargers or hydrogen refueling stations -- must be developed to support these technologies. There will be a significant cost associated with building a sufficient number of electric chargers and hydrogen refueling stations.

The Energy Policy Act of 1992 (P.L. 102-486 "EPAct") recognized the benefits that can be gained by using alternative fuels and electric modes of transportation by including modest, targeted tax credits for battery, fuel cell and certain hybrid-electric vehicles and supporting infrastructure. However, these tax credits are scheduled to begin phasing-out in 2002 and to expire in 2004. This timing will not provide the necessary incentives to support the introduction of these electric drive technologies.

EVAA believes that targeted tax incentives can be the most effective means by which government could help assure that electric drive technologies are successfully introduced into the marketplace. While the Association believes that incentives should be limited in their scope and duration, they must be available, and sufficient now and in the immediate future, as these new and dramatically different technologies are being introduced to consumers. Without this critical, immediate assistance, it is unlikely that we will reap the full potential of environmental and energy benefits promised by widespread use of electric modes of transportation.

Many Members of Congress -- Republicans as well as Democrats -- have recognized the role that limited and targeted tax incentives can play in overcoming the current market barriers to assure large-scale commercialization of electric drive technologies. EVAA applauds the leadership several members of this Committee -- specifically Representatives Mac Collins (R-GA), John Lewis (D-GA), Dave Camp (R-MI), and Sander Levin (D-MI) -- have provided in years past to pursue legislation that provides the types of modest tax incentives necessary to make these advanced technology vehicles more affordable and acceptable in the marketplace.

To date, three bills that seek to address this country’s energy dilemma have been introduced in the Senate during the 107^th Congress. Senator Frank Murkowski (R-AK), Chairman of the Senate Energy and Natural Resources Committee, has introduced the National Energy Security Act of 2001 (S. 389). Senator Jeff Bingaman (D-NM), Ranking Member of the Senate Energy and Natural Resources Committee, has introduced the Comprehensive and Balanced Energy Policy Act of 2001 (S. 597). And, Senator Orrin Hatch (R-UT) has introduced the Clean Efficient Automobiles Resulting from Advanced Car Technologies Act of 2001 (S. 760, the CLEAR Act). All three proposals include -- in whole or in part – tax incentives to encourage the purchase and use of electric vehicles and other advanced transportation technologies and supporting infrastructure. (See attachment for a summary of the major provisions of these bills.)

Comprehensive energy legislation also is being discussed in the House, and it is clear that policymakers are focusing on the important role that advanced transportation technologies can, and must, play in the development of a sound national energy policy. Just this week, the Democratic Caucus’ Energy Task Force released its blueprint for addressing the nation’s energy dilemma. Also, Representative David Camp (R-MI) introduced the Clean Efficient Automobiles Resulting from Advanced Car Technologies Act of 2001 (H.R. 1864 – the CLEAR Act), companion legislation identical to the bill introduced by Senator Hatch in the Senate.

As gasoline prices continue to rise and Congress moves forward with energy legislation, EVAA urges you to look beyond the benefits gained by increasing supply, to the energy security and environmental benefits gained by supporting modest, consumer-based tax incentives for electric drive technologies.

Attachments

[An additional attachment is being retained in the Committee files.]