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Electrification of transportation — whether elevators, electric bikes, electric rail, or electric vehicles (HEVs, PHEVs, EVs) for the road (cars, trucks, busses) — represent a key transformational tool toward a clean-energy economy. And, they offer serious economic benefits from reduced oil consumption to potential export opportunities.

The Obama Administration’s use of stimulus funds in the electric vehicle space, to create an infrastructure for the manufacturing of critical components and vehicles and the infrastructure for using them, is an excellent example of how investing in infrastructure can pay off in economic, energy, and environmental terms.

The Administration just released a DOE report: Recovery Act Investments: Transforming America’s Transportation Sector: Batteries and Electric Vehicles (pdf). From that report:

• Pre-Recovery Act, the U.S. produced just 2 percent of the world’s batteries for advanced vehicles, but due to Recovery Act investments, the U.S. will have the capacity to produce 20 percent of these batteries by 2012 and up to 40 percent by 2015.

E.g., due to Stimulus Act funding, the US will move from a (far) trailing position to a (near) dominant market position in one of the critical manufacturing arenas in the fastest growing transportation segment: electric vehicles.

• Before the Recovery Act, high battery costs meant a car with a 100 mile range would need batteries that would cost about $33,000.  With higher-volume domestic manufacturing, the cost of such a battery could be less than half that by the end of 2013 (in the range of $16k) and less than 1/3rd that by 2015 (in the range of $10k). This will dramatically drive down electric vehicle costs.

Considering that electric vehicles operate at the equivalent of less than $1 per gallon in terms of electricity costs and that electric cars have (far) lower maintenance costs, that $10k becomes an affordable type price. Relative to this, a critical level for PHEVs is seen to be about 40 miles of battery range.  A $4000 battery that enables (some) Americans to drive 80-90% of their miles on electricity from the grid, with the ancillary benefits of V2G storage (with a cash payment value to the car owner), the payback period on the battery cost becomes acceptable to a far greater percentage of Americans.

The investment in electric vehicle infrastructure using stimulus package funds, investing in batteries and in car plants and in charging stations, is hastening making electric vehicles a meaningful part of the American car market — and it is creating a path for increasing America’s share of the auto industry — and, therefore, increasing America’s economic prospects in the near, mid, and long terms while setting a path for lowering our oil imports and reducing our carbon emissions.