McCain Wants Prize Money For Efficient Battery Operated Autos--And Why Not?

McCain calls for $300 million auto battery prize
David Shepardson / Detroit News Washington Bureau

WASHINGTON -- Sen. John McCain, the presumptive Republican presidential nominee, is calling for a government-funded $300 million prize to build an advanced battery to power plug-in hybrids, while sharply criticizing luxury carmakers who don't meet fuel economy requirements.

McCain also said he would back a $5,000 dollar tax credit for zero-emission vehicles.

"We will encourage heroic efforts in engineering, and we will reward the greatest success," McCain said, according to an advance copy of prepared remarks. "I further propose we inspire the ingenuity and resolve of the American people by offering a $300 million prize for the development of a battery package that has the size, capacity, cost and power to leapfrog the commercially available plug-in hybrids or electric cars."

McCain noted the figure was " one dollar for every man, woman and child in the United States -- a small price to pay for helping to break the back of the nation's dependency on oil -- and should deliver a power source at 30 percent of the current costs."

McCain noted that America's cars and trucks use 60 percent of the oil and raised questions about whether the current system of fines for not complying with fuel economy requirements was sufficient.

"Yet the CAFE standards we apply to automakers -- to increase the fuel efficiency of their cars -- are lightly enforced by a small fine," McCain was expected to say at a speech at Fresno State University at California, according to excerpts provided by the campaign. "The result is that some companies don't even bother to observe CAFE standards. Instead they just write a check to the government and pass the cost along to you. Higher-end auto companies like BMW, Porsche, and Mercedes employ some of the best engineering talent in the world. But that talent isn't put to the job of fuel efficiency, when the penalties are too small to encourage innovation."

The energy bill passed last December doubled fuel economy fines. The National Highway Traffic Safety Administration announced late last year that it had issued more than $40 million in fines for six manufacturers, with then DaimlerChrysler AG paying $30.3 million.

McCain criticized automakers for not ramping up production of vehicles than run on flex-fuel vehicles, while also criticizing government subsidies for ethanol.

"Innovation in the use of alternative fuels in transportation presents the greatest opportunity for energy independence," McCain said. "Some, such as ethanol, are on the market now, and new sources of ethanol are on the horizon that will not require the use of so much cropland. Corn-based ethanol, thanks to the money and influence of lobbyists, has been a case study in the law of unintended consequences. Our government pays to subsidize corn-based ethanol even as it collects tariffs that prevent consumers from benefiting from other kinds of ethanol, such as sugarcane-based ethanol from Brazil."

He said taxpayers -- which gave ethanol $3 billion in subsidies last year -- were paying too much. "The result is that Americans take the financial hit coming and going. As taxpayers, we foot the bill for the enormous subsides paid to corn producers. And as consumers, we pay extra at the pump because of government barriers to cheaper products from abroad."

McCain said automakers should ramp up production of vehicles that can run on E85, a vehicle that runs on 85 percent ethanol.

"This can be done with a simple federal standard to hasten the conversion of all new vehicles in America to flex-fuel technology -- allowing drivers to use alcohol fuels instead of gas in their cars," McCain said. "Automakers that helped Brazil make the change say it will take them longer to reach the goal of 50 percent new flex-fuel vehicles for America. But I am confident they can do more, and do it faster, in the interest of our energy security. And if I am elected president, they will. Whether it takes a meeting with automakers during my first month in office, or my signature on an act of Congress, we will meet the goal of a swift conversion of American vehicles away from oil."