Although fuel economy and emissions characteristics are closely related in actual vehicle
operation, R&D programs at EPA and DOE have not been well coordinated.
Many other examples might be cited. During the past 20 years, finding for R&D programs
such as DOE’s Electric and Hybrid Vehicle Program has fluctuated wildly, making it impossible to
sustain a coherent effort to develop hybrid vehicles. And, although Congress outlined clear goals
for bringing alternatively fueled vehicles into the fleet in the Energy Policy Act of 1992, federal
tax policies favor some fuels at the expense of others, without regard for the fuels’ relative energy
content or desirability from an environmental point of view.
PNGV is clearly an attempt to address some of these issues, by coordinating government and
industry R&D efforts toward achieving commonly accepted goals; principally, the development
of an 80 mpg prototype vehicle by 2004. Nevertheless, the 80 mpg target appears to have been
chosen more for the technological innovations that will be required than for any direct relationship
to national goals for reduced oil imports or reduced greenhouse gas emissions. Although a
superefficient vehicle would clearly contribute greatly to these goals, little thought has apparently
been given about whether the 80 mpg target is the most cost-effective approach. For example, the
same amount of imported oil might be displaced more cheaply through a combination of a 50 mpg
target with a more aggressive alternative fuels program.
The point here is not that a high fuel economy target is wrong, but that appropriate planning
and analysis are lacking that would enable an evaluation of the entire federal R&D program in the
context of broader national goals for air quality, energy security, and reduced potential for global
climate change. This analysis becomes especially important in a tight budget environment in which
PNGV-inspired R&D programs may be competing with other continuing programs (e.g.,
alternative fuels heavy-duty vehicle research) for the same resources.
Issue 3: Is the federal R&D relationship with industry structured to encourage maximum
innovation?
There is an ongoing debate about how federal R&D funding can best catalyze the emergence of
advanced vehicle technologies. On the one hand, there are advantages to supporting work by the
major automakers and their suppliers, since the automakers are in a position to commercialize
rapidly a successful innovation in mass-market vehicles. On the other hand, many observers are
concerned that federal efforts to develop leapfrog vehicle technologies rely too heavily on the
existing industry, which they argue has a considerable stake in maintaining the status quo. In their
view, more agile small and medium sized- companies are best able to commercialize novel
technologies, particularly in niche markets that initially maybe too small to attract the attention of
the major automakers.
OTA’s investigations for this study suggest that many small and medium-size U.S. companies
have developed innovative advanced vehicle technologies not currently being displayed by the
automakers.
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Most of these companies recognize that successful commercialization of these
innovations will require working in concert with a large company in the industry. The automakers45E-]~ incIu& ~~or regendve *g ‘d ‘i-] ‘-gement systems to enhsmx EV battery capacity in cold climates.