November 9, 2017

This has been a big year for emerging vehicle technologies. President Trump praised American automakers on the campaign trail and afterwards, both chambers of Congress are expediting their automated vehicle (AV) legislation, and Transportation Secretary Elaine Chao revised the federal government’s AV policies in September.

But the technological cousins of AVs have not fared as well: the tax reform proposal in the House proposes eliminating a tax credit for consumers purchasing electric vehicles, while the National Highway Traffic Safety Administration (NHTSA) quietly backed away from a proposed mandate for all new cars and light trucks to be equipped with vehicle-to-vehicle (V2V) communication technology.

Although electric vehicle (EV) and connected vehicle (CV) technologies are often lumped in with AVs in utopic visions for the future of transportation, their pathways to widespread deployment differ significantly – and their constituencies even more so.

GOP May Cut the Cord on EVs

The electric vehicle tax credit was established at the tail end of President George W. Bush’s term under the Emergency Economic Stabilization Act of 2008 (P.L. 110-343, Sec. 205). Called the Plug-In Electric Drive Vehicle Credit (IRC 30D), it ranges from $2,500-7,500 depending on the size of the vehicle and its battery capacity. In their search for ways to pay for their tax reform proposal, House Republicans have proposed eliminating the tax credit, as ETW reported last week.

As Car and Driver noted earlier this week, this tax credit has been critical in the auto industry’s efforts to make electric vehicles more affordable for consumers and competitive with prices for gas-powered vehicles – especially as states including California, New York, and Maryland enforce their mandates for a certain percentage of vehicle sales to include cars that are electric, hybrids, or powered by hydrogen fuel cells.

The Alliance of Automobile Manufacturers slammed the proposed elimination in a written statement:

“There is no question that the potential elimination or phase out of the electric vehicle tax credit will impact the choices of prospective buyers and make it more challenging for manufacturers to comply with electric vehicle mandates in 10 states… Eliminating the fuel cell and EV credits will hamper progress towards getting these very clean and energy-efficient vehicles on the road.”

USDOT Backs Away from V2V Mandate

At the tail end of the Obama Administration, NHTSA released a notice of proposed rulemaking that would require all passenger vehicles to be equipped with V2V technology. With a phase-in period beginning in 2021, every car and light duty truck sold in the U.S. would need to be equipped with dedicated short-range communications (DSRC) components that use a band of spectrum adjacent to the frequencies used for Wi-Fi. The Federal Communications Commission (FCC) set the spectrum for DSRC aside in 1999, in anticipation that it would be used for vehicle safety applications.

In short, DSRC allows cars to exchange information about their location, speed, and direction with one another. In turn, infrastructure could be outfitted with communications technology to enable vehicle-to-infrastructure communication (V2I). Stoplights could be equipped to provide drivers with countdowns for when the signal will change, as has already been done on the Las Vegas strip. When the network is sufficiently connected, signal phases can be changed in real-time to optimize the flow of traffic.

But the true benefits of V2V cannot be realized until a significant portion of the vehicle fleet is capable of actually leveraging those communications. Quite simply, if a car is equipped for V2V but does not have other cars to talk to, the safety messages it broadcasts are useless. Even worse: if there is not a uniform standard for these messages and automakers develop their own message protocols, different brands of cars could not exchange information (e.g., an Audi would not be able to speak to a Ford and vice versa).

Now, nearly two decades after the spectrum was set aside, only a few automakers have introduced the technology in their vehicles – the two notable models, the Mercedes-Benz E-Class and GM’s Cadillac CTS, were barely equipped for V2V in the past couple years.

This has resulted in a round robin of finger pointing.

The telecommunications industry would like to use that band of spectrum for its own applications and has argued that it is being left unused by automakers while Wi-Fi frequencies are becoming ever more crowded. Meanwhile, automakers have argued that a federal mandate is needed in order to ensure that their investments in DSRC are not mere shots in the dark.

Yet NHTSA has been waiting on FCC to publish a study on whether it is possible for V2V to share the spectrum with Wi-Fi – and the FCC is dragging out said study on sharing the spectrum, which is still far from completion.

The telecoms industry has since suggested that automakers employ an alternative vehicle communications technology, LTE/5G, which would use cellular networks to facilitate V2V and V2I communication – which could be enhanced by handing the spectrum for DSRC over to wireless companies.

On November 1, AP reported that the Trump Administration no longer intends to proceed with the mandate, citing two auto industry officials who have spoken with officials at USDOT and the White House on the matter. Secretary Chao’s office forwarded AP a statement from NHTSA that indicated the agency is still reviewing public comments on the proposed rule before moving forward.

For now, the OMB Office of Information of Regulatory Affairs website lists the proposed V2V rule as a long-term action, stating that the next action is undetermined.