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As Electric Car Sales Struggle, Obama Calls For More Funding

Thursday, 11 Apr 2013 | 8:55 AM ET
The 2014 Chevy Spark EV electric vehicle
Getty Images
The 2014 Chevy Spark EV electric vehicle

Despite lackluster sales of fully electric and extended range electric cars, President Obama is doubling down on his support for developing more energy efficient vehicles.

The President's proposed budget for 2014 calls for $575 Million for the Energy Departments vehicle research budget. If approved that would represent a 75 percent increase. The proposal comes as Fisker Automotive, an electric car company that still owes $193 million to the Energy Department, is teetering on the edge of bankruptcy. Fisker's financial and political problems have become symbolic of how the Obama administration has struggled to jump-start the use of electric vehicles in America.

(Read More: Fisker Fires Most of Its Rank-and-File Employees)

EV Sales Far Short of One Million Goal

Four years ago, shortly after he moved into the White House, President Obama set a very public and bold goal of America having one million electric cars on the road by 2015. At the time, there were plenty of critics who said the electric car would be a small player in the U.S. auto industry.

It turns out those critics were right.

Since 2011, just 50,000 plug-in cars have been sold in the U.S. and even the President's staunchest supporters admit that it's highly unlikely America will come close to having one million EVs by the middle of this decade.

Still the Obama administration is not throwing in the towel when it comes to supporting electric vehicles. For example, the President wants to increase the federal tax credit for those buying electric vehicles to as much as $10,000. That would be a hefty increase from the current tax incentive of $7,500 per vehicle.

How much would a higher incentive increase EV sales? An exact percentage is hard to say, but it would certainly help close the deal for those considering a Tesla Model S or Chevy Volt.

Developing Batteries, Future Technology

The President's 2014 budget outlined funding to help develop new technologies for EV batteries. This gets to the heart of why many believe electric car sales have been slow to ramp up. The range, cost and charging time of electric vehicle batteries must improve.

(Read More: Obama's Budget Plan Pursues These Two Goals)

Supporters of electric cars point out that many would-be buyers are still dealing with range anxiety, or the feeling that they are limited to how far they can drive.

(Read More: Is the Volt Math Fair? Yes and No)

Charging networks and extended range electric cars help ease that concern for some EV buyers, but before the electric car sales truly takeoff, many believe the battery packs in these cars must go farther and cost less.

—By CNBC's Phil LeBeau; Follow him on Twitter @LeBeauCarNews

Questions? Comments? BehindTheWheel@cnbc.com

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  • Phil LeBeau is a CNBC auto and airline industry reporter based in the Chicago bureau and editor of the Behind the Wheel section on CNBC.com.

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