It's a big week for compressed natural gas vehicles, thanks to President Obama's announcement today that his administration wants to increase federal support for CNG vehicles by introducing a tax credit similar to the one in place for plug-in vehicles. Plug-in vehicles, too, could get a big boost – and a double-whammy at that – with the current tax credit exchanged for a point-of-sale rebate and an increase in the maximum value from $7,500 to $10,000. The President made the announcement today at a Daimler Trucks North America plant in North Carolina.

The White House is proposing spending $3.7 billion on the the tax credits and another $1 billion that would go directly to 10 or 15 communities through a "Race to the Top" challenge that
will allow the local governments "to invest in the necessary infrastructure, remove the regulatory barriers, and create the local incentives to support deployment of advanced vehicles at critical mass." This challenge is "fuel neutral" and thus allows "communities to determine if electrification, natural gas, or other alternative fuels would be the best fit."

The White House also announced a new "EV Everywhere" plan, which the White House described as, "a clean energy grand challenge to make electric-powered vehicles as affordable and convenient as gasoline-powered vehicles for the average American family within a decade." The White House says driving electric will save the average driver $100 a month, which will be much more valuable when the upfront cost of an EV drops and more people can afford one. To this end, EV Everywhere "will invest in breakthrough R&D for advanced batteries, electric drivetrain technologies, lightweight vehicle structures, and fast charging technology."

As the President said in North Carolina today:

Here is the truth. If we are going to control our energy future, then we've got to have an all-of-the-above strategy. We've got to develop every source of American energy – not just oil and gas, but wind power and solar power, nuclear power, biofuels. We need to invest in the technology that will help us use less oil in our cars and our trucks, in our buildings, in our factories. That's the only solution to the challenge. Because as we start using less, that lowers the demand, prices come down. It's pretty straightforward. That's the only solution to this challenge.

The details of the plan are available below.
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Fact Sheet: All-of-the-Above Approach to American Energy

The White House

Office of the Press Secretary
For Immediate Release
March 07, 2012

President Obama Announces $1 billion National Community Deployment Challenge to spur deployment of clean, advanced vehicles and expansion of advanced vehicle tax credit

During the State of the Union Address, the President laid out a blueprint for a new era of American energy – an economy fueled by homegrown and alternative energy sources that will be designed in America and produced by American workers. Today, the President will visit Daimler Trucks North America Mt. Holly Truck Manufacturing Plant in Mt. Holly, NC to deliver remarks on American energy. While at the Daimler Plant, the President will tour the assembly line, see several of the alternative fuel models built there, and discuss the importance of taking a sustained, all-of-the-above approach on energy, responsibly expanding domestic production of natural gas and oil, which is currently at an eight year high, improving the efficiency of our cars and trucks, and making the long-term investments in alternatives to oil to provide American families the choices we all deserve. This strategy is a win for the economy, a win for energy security, and a win for national security.

In Mt. Holly, the President will announce a new $1 billion National Community Deployment Challenge to spur deployment of clean, advanced vehicles in communities around the country. The President will also announce a set of incentives to help consumers and businesses purchase new, advanced cars and trucks, including increasing and expanding the current tax credit for advanced vehicles, from the $7,500 credit that currently exists up to $10,000, while allowing the credit to be applied to additional types of technologies, not currently covered. In addition, the President is announcing a new research challenge that invests in breakthrough technologies to make electric vehicles as affordable and convenient to own and operate as gasoline-powered vehicles by the end of the decade.

Today the President will also highlight Daimler's commitment to increasing fuel economy standards and manufacturing vehicles that will increase fuel economy and reduce oil consumption. Taken together, the Obama Administration's standards for cars and light-duty trucks span model years 2011 to 2025 and represent the first meaningful update in over three decades. Under this program, average fuel efficiency will reach a performance equivalent of 54.5 miles per gallon by 2025 and will save consumers $1.7 trillion at the pump overtime – or roughly $8,200 per vehicle and slash oil consumption by 2.2 million barrels a day by 2025. The Administration has also finalized the first-ever national fuel efficiency and greenhouse gas (GHG) emission standards for heavy-duty trucks, vans, and buses spanning model years 2014-2018, which will reduce oil consumption by over 500 million barrels, and save truck owners and operators more than $50 billion in fuel costs.

Daimler Trucks North America is a partner in the Energy Department's SuperTruck initiative, which is focused on increasing the fuel efficiency of long haul trucks, or 18-wheelers, by 50 percent by 2015. While long-haul trucks represent only 4 percent of the on-road vehicles in America, they are responsible for almost 20 percent of the country's on-road fuel consumption, with this class of vehicle currently consuming more than 30 billion gallons of gasoline a year. To achieve this goal, companies like Daimler are developing and improving vehicle technologies in engine efficiency, aerodynamics, waste heat recovery, and hybridization, among other approaches. Through these types of improvements, the Energy Department estimates fuel economy increases could save long-haul truckers more than $15,000 per truck per year in fuel costs.

The President's New Initiatives to Support Advanced Vehicles

Launching a "Race to the Top" challenge for communities to encourage advanced vehicle adoption: The President is announcing a new $1 billion National Community Deployment Challenge to catalyze up to 10 to 15 model communities to invest in the necessary infrastructure, remove the regulatory barriers, and create the local incentives to support deployment of advanced vehicles at critical mass. This proposal embraces a strategy similar to that outlined by Senators Merkley and Alexander in their Promoting Electric Vehicles legislation. This proposal, however, would be 'fuel neutral', allowing communities to determine if electrification, natural gas, or other alternative fuels would be the best fit. Deployment Communities would serve as real-world laboratories, leveraging limited federal resources to develop different models to deploy advanced vehicles at scale. The program would also support the development of up to 5 regional Liquefied Natural Gas (LNG) corridors where alternative fuel trucks can transport goods without using a drop of oil.

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

Accelerating deployment of alternative-fuel trucks: The President is proposing a new tax incentive for commercial trucks that provides a credit for 50% of the incremental cost of a dedicated alternative-fuel truck, including trucks powered by natural gas or electricity, for a five-year period. This incentive – paired with support through programs like the Energy Department's National Clean Fleets Partnership, which provides technical assistance to large company fleets interested in moving toward vehicles that rely on little or no oil – will not only drive down domestic demand for oil, but also drive up demand for the sorts of vehicles built at Freightliner's Mt. Holly Plant and, in turn, spur job creation in the American manufacturing sector.

Launching 'EV Everywhere', a clean energy grand challenge to make electric-powered vehicles as affordable and convenient as gasoline-powered vehicles for the average American family within a decade: This national effort is the second in a series of Clean Energy Grand Challenges designed by the Department of Energy to bring together America's best and brightest scientists, engineers, and businesses to work together to solve the most pressing energy technology challenges of our time. EV Everywhere will enable companies in the U.S. to produce electric vehicles at lower cost, with an improved vehicle range and an increased fast-charging ability, so average American families will be able to own and drive an electric vehicle as affordable and convenient as today's gasoline-powered vehicles. The savings from using lower-cost electricity instead of gasoline, roughly $100 per month for the average driver, combined with the reduction of upfront vehicle cost, will lower energy costs for American consumers and businesses. The President's FY13 Budget includes $650 million to advance vehicle and battery technologies at the Energy Department, including investments that support this new grand challenge. EV Everywhere will invest in breakthrough R&D for advanced batteries, electric drivetrain technologies, lightweight vehicle structures, and fast charging technology.