BOX 5-1: DOE’s Electric and Hybrid Vehicle ProgramDOE funding rose rapidly from startup in 1976 to a peak of $37.5 million in 1980. During this period, several
prototype vehicles were constructed that established the “state of the art.” General Electric developed a hybrid
prototype vehicle with Volkswagen and the Jet Propulsion Laboratory. GE also developed a battery EV prototype
with Chrysler. In the early 1980s, however, government and industry interest in the program began to wane, owing
to three factors-the Reagan Administration’s negative attitude toward what it viewed as government intervention in
private-sector activities; a rapid decline in energy costs; and economic recession.^1 By FY 1995, program funding
reached a low of $8.4 million. After cuts forced the elimination of government loan guarantees, small companies
dropped out of the program, and after testing the GE vehicle, the hybrid development activity was shelved.
Most of the activity during the mid-1980s involved battery and electric drivetrain development (e.g., transistorized
motor controllers, induction motors) with Ford, GE, and Eaton. Cost-sharing in the contracts by industry was
generally from 10 to 20 percent, reflecting the high risk of these technologies as perceived by industry. Following
the passage of the California Low Emission Vehicle program regulations in 1991, however, and the establishment
of the U.S. Advanced Battery Consortium in the same year, government and industry funding turned a corner. The
Big Three, which had made only a modest investment in advanced technologies during the 1980s, were forced to
become more actively involved. A new five-year hybrid development program began in 1992, and fuel cell vehicle
development contracts were negotiated with each of the Big Three. DOE funding for the Electric and Hybrid Vehicle
program rose to about $90 million in FY 1995, with industry cost-sharing as much as 50 percent.
IKm ~, -at of Energy Mice of Transpmtation TecboIog@personal comrnunicatiq May 15, 1995.