SemaConnect Blog


March 22, 2011

Incentives hold key to future of electric cars

ANNAPOLIS — In a small office tucked away in the Chesapeake Innovation Center, SemaConnect engineers hand assemble prototypes of electric vehicle charging stations.

The future of the roughly 3-year-old Maryland startup is tied directly to an anticipated boom in the electric vehicle market. And to some degree, the company’s success relies on what happens about five miles away from its headquarters —- at the State House.
“For Maryland to look at this issue and set the right incentives and policies is critical,” said Mahi Reddy, SemaConnect’s CEO.
As the first generation of electric cars produced by major automakers trickles into the market, Maryland lawmakers are considering a trio of proposals intended to spur sales and lay the foundation for the high-tech autos.
Electric vehicles aren’t expected to zoom around in mass for years, analysts say. But the planning starts now because Maryland and Washington, D.C., are projected to be among the top areas for electric vehicle adoption.
“I think a lot of people in this area are progressive minded and willing to take the steps to move forward with this type of technology,” said Ivan Haggins, one of the first Marylanders to invest in an electric vehicle made by General Motors.
Haggins slapped his name on a waiting list in July for GM’s plug-in electric hybrid vehicle, the Chevrolet Volt. He drove the car off a dealer lot in Silver Spring on Christmas Eve, making him one of the so-called early adopters of the technology.
“The thought of an electric car is not just that I want to have the first one,” he said. “But it’s one of those things we need to move into the future on, and I wanted to make sure I’m a part of that.”
The electric vehicle package is part of Gov. Martin O’Malley’s legislative agenda, which is rife with renewable energy proposals. So far, the electric vehicle bills are part of a small cluster of the governor’s legislative priorities that have advanced to the full House or Senate.
The Senate on Friday approved a measure to create a policy and planning body to guide statewide decisions on infrastructure for electric vehicles. The House did the same with a similar bill last week.
Last month, the Senate voted unanimously to pass a proposal that requires the Public Service Commission to start a pilot program to create incentives for consumers to plug in their vehicles at night when the energy grid has excess capacity.
The third, and possibly most critical component, is a tax credit of up to 20 percent for electric charging stations. Supporters have called this part of the legislative package, which would award up to $1.5 million in tax credits over three years, “the backbone of a robust electric vehicle infrastructure.”
The tax credit bills are still in House and Senate committees.
Government is playing a growing role in helping nudge forward the electric vehicle market.
President Barack Obama pumped billions of stimulus dollars into rebate programs for first-generation electric vehicle owners. That includes a tax credit up to $7,500 toward the purchase of an electric auto.
O’Malley and the General Assembly sweetened the pot last year when Maryland approved a $2,000 tax credit of its own and granted drivers of the futuristic autos use of HOV commuter lanes regardless of their passenger count.
“This is going to be the wave of the future,” said Sen. Rob Garagiola, a Montgomery Democrat and a co-sponsor of the electric-vehicle package. “We need to be agile and move quickly to position ourselves so we can develop the roadmap for the future of electric vehicles.”
GM lobbyists, along with representatives from other big companies with a stake in the future of electric autos, have been making the rounds for weeks at committee hearings, pressing lawmakers to pass the package.
In those hearings, GM hasn’t been shy to remind lawmakers about the company’s recent commitments to the state. Those include a nearly $250 million investment to build electric motors at a manufacturing plant in Baltimore County, and the decision to tap Maryland along with the District as early roll-out markets for the Volt.
The Volt, which can run for about 40 miles on a full charge before a gas engine kicks in, is the first of the autos produced by major manufacturers to arrive in Maryland. Nissan’s all-electric Leaf will hit dealer showrooms across the state this spring. Ford’s initial electric offering is slated to become available in the District later this year.
About 2,000 electric autos will commute on Maryland roads by the end of 2012, according to a report from the Ann Arbor, Mich.-based Center for Automotive Research. By 2015, more than 11,600 electric vehicles are projected to be registered in the state, ranking Maryland among the top 15 states for electric auto registrations.
That same year, the number of plug-ins and electric autos on roads across the country is expected to reach more than 469,000, according to the report.
Ultimately, consumer demand will be influenced by incentives offered by state and local governments, ranging from grants, rebates, tax credits and fee exemptions.
The cars, rebates and the legislative package debated at the State House are all signs of the first wave of vehicle electrification in Maryland. Lawmakers are hopeful electric vehicles will play a part in reinvigorating the state’s post-recession economy.
O’Malley’s administration estimates that GM’s decision to build electric motors in Maryland will attract 800 direct and spinoff jobs by 2018.
At SemaConnect, the Annapolis-based startup that specializes in building commercial charging stations, the company is readying for expansion as production of electric vehicles ramps up.
The six-man firm is busy building 55 charging stations as part of a roughly $367,000 state contract, the company’s first major deal. The charging stations are expected to be up and running by this summer at 15 locations across Maryland, including select metro stations, municipal buildings and the Baltimore-Washington International Thurgood Marshall Airport.
By the end of June, SemaConnect’s Reddy estimates about100 public charging stations will populate the state. In the future, they’ll be commonly installed in apartment buildings, parking lots, hotels and shopping centers, he said.
Each charging station, Reddy said, will have a ripple effect for employment — from the engineers and programmers that design the stations to laborers who dig trenches for installation.
“Across the spectrum, from one end of the blue collar to the other end of the white collar, you got job creation,” Reddy said.
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This story was originally posted here.
POSTED: 5:31 PM MON, MARCH 21, 2011
BY CAPITAL NEWS SERVICE
DAVID SALEH RAUF
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