[Senate Hearing 114-370]
[From the U.S. Government Publishing Office]




                                                        S. Hrg. 114-370
 
  THE STATUS OF INNOVATIVE TECHNOLOGIES WITHIN THE AUTOMOTIVE INDUSTRY

=======================================================================

                                HEARING

                               BEFORE THE

                              COMMITTEE ON
                      ENERGY AND NATURAL RESOURCES
                          UNITED STATES SENATE

                    ONE HUNDRED FOURTEENTH CONGRESS

                             FIRST SESSION


                               __________

                            JANUARY 21, 2016

                               __________
                               
                               
                               
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               COMMITTEE ON ENERGY AND NATURAL RESOURCES

                    LISA MURKOWSKI, Alaska, Chairman
JOHN BARRASSO, Wyoming               MARIA CANTWELL, Washington
JAMES E. RISCH, Idaho                RON WYDEN, Oregon
MIKE LEE, Utah                       BERNARD SANDERS, Vermont
JEFF FLAKE, Arizona                  DEBBIE STABENOW, Michigan
STEVE DAINES, Montana                AL FRANKEN, Minnesota
BILL CASSIDY, Louisiana              JOE MANCHIN III, West Virginia
CORY GARDNER, Colorado               MARTIN HEINRICH, New Mexico
ROB PORTMAN, Ohio                    MAZIE K. HIRONO, Hawaii
JOHN HOEVEN, North Dakota            ANGUS S. KING, JR., Maine
LAMAR ALEXANDER, Tennessee           ELIZABETH WARREN, Massachusetts
SHELLY MOORE CAPITO, West Virginia

                      COLIN HAYES, Staff Director
                PATRICK J. McCORMICK III, Chief Counsel
               CHESTER CARSON, Professional Staff Member
           ANGELA BECKER-DIPPMANN, Democratic Staff Director
                SAM E. FOWLER, Democratic Chief Counsel
           NICK SUTTER, Democratic Professional Staff Member
           
           
           
                            C O N T E N T S

                              ----------                              

                           OPENING STATEMENTS

                                                                   Page
Murkowski, Hon. Lisa, Chairman, and a U.S. Senator of Alaska.....     1
Cantwell, Hon. Maria, Ranking Member, and a U.S. Senator from 
  Washington.....................................................     2

                                WITNESS

Friedman, David, Principal Deputy Assistant Secretary, Office of 
  Energy Efficiency and Renewable Energy, U.S. Department of 
  Energy.........................................................     5
Bainwol, Mitch, President and CEO, The Alliance of Automobile 
  Manufacturers..................................................    17
Cullen, Genevieve, President, Electric Drive Transportation 
  Association....................................................    35
Gearhart, Dr. Chris, Director, Transportation and Hydrogen 
  Systems Center, National Renewable Energy Laboratory...........    41
Mosquet, Xavier, Senior Partner and Managing Director, The Boston 
  Consulting Group...............................................    51

          ALPHABETICAL LISTING AND APPENDIX MATERIAL SUBMITTED

American Chemistry Council
    Statement for the Record.....................................    91
Association of Global Automakers, Inc
    Statement for the Record.....................................    94
Bainwol, Mitch
    Opening Statement............................................    17
    Slide Presentation...........................................    18
    Written Testimony............................................    29
Cantwell, Hon. Maria
    Opening Statement............................................     2
Cullen, Genevieve
    Opening Statement............................................    35
    Written Testimony............................................    37
    Responses to Questions for the Record........................    86
Friedman, David
    Opening Statement............................................     5
    Written Testimony............................................     7
    Responses to Questions for the Record........................    80
Fuel Cell & Hydrogen Energy Association
    Statement for the Record.....................................    98
Gearhart, Dr. Chris
    Opening Statement............................................    41
    Written Testimony............................................    43
    Responses to Questions for the Record........................    89
Mosquet, Xavier
    Opening Statement............................................    51
    Written Testimony............................................    53
Murkowski, Hon. Lisa
    Opening Statement............................................     1


  THE STATUS OF INNOVATIVE TECHNOLOGIES WITHIN THE AUTOMOTIVE INDUSTRY

                              ----------                              


                       THURSDAY, JANUARY 21, 2016

       U.S. Senate Committee on Energy and Natural 
                                          Resources
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 9:49 a.m. in Room 
SD-366, Dirksen Senate Office Building, Hon. Lisa Murkowski, 
Chairman of the Committee, presiding.

  OPENING STATEMENT OF HON. LISA MURKOWSKI, U.S. SENATOR FROM 
                             ALASKA

    The Chairman. Good morning. We will call to order the 
Senate Energy and Natural Resources Committee.
    This morning we have a hearing on the status of innovative 
technologies within the automotive industry. The good news for 
me is I do not have to drive a lot here in Washington, DC, but 
I know there were a lot of people out on the roads yesterday. 
They were wondering what the new advances are in automotive 
technology and industry and how they were going to handle the 
snow.
    We timed this hearing deliberately not just to occur with 
when we are starting with our bipartisan energy bill, which we 
are looking to take up at the first of next week on the Senate 
floor, but we are also here this morning because the Washington 
Auto Show is commencing. That show kicks off tomorrow. While 
there is no substitute for going in person, we do have the CEO 
of the Alliance of Automobile Manufacturers here, Mr. Bainwol. 
He is here to share his thoughts. So welcome to the Committee 
this morning.
    It is not just the auto show that makes this hearing 
timely. Auto sales in the U.S. hit an all-time high in 2015 
with 17.5 million cars and trucks sold. This banner year was 
spurred in part by low gas prices. As we heard earlier this 
week, those prices are projected to remain low throughout the 
year. Vehicle sales have also been boosted by the tremendous 
innovation taking place in the auto industry right now, and I 
think that is a story that deserves more attention.
    We have seen dozens of alternative fuel models emerge from 
electric vehicles like the Tesla Model S to the fuel cell-
powered Toyota Mirai to a Ford F-150 that can run on compressed 
natural gas and propane. At the same time, we have seen 
exciting developments in everything from safety technology to 
self-driving cars which may offer their own energy and 
environmental benefits.
    I see today's hearing as an opportunity for us to learn 
more about significant innovation taking place within the auto 
industry, particularly as it relates to alternative fuels and 
lightweight materials which are at the heart of the Department 
of Energy's research activities and of this Committee's 
jurisdiction.
    This is a look down the road, if you will. It is a chance 
for us to hear about the technologies that are emerging, to 
gauge how they might affect our energy and mineral needs and to 
understand the challenges that need to be overcome.
    This hearing is also a chance for us to recognize that the 
auto industry is facing heavy regulations right now, 
particularly when it comes to fuel efficiency. While those 
particular regulations are not within this Committee's 
jurisdiction, they do have an impact on our nation's fuel 
consumption and are worth monitoring as we modernize our energy 
policies.
    Another goal for this hearing is to examine whether Federal 
programs meant to support innovation are working as intended 
and whether they are properly oriented to help our auto 
industry innovate, compete and thrive.
    That brings us to the work that the DOE is doing through 
its Vehicle Technologies Office and at the national labs. I 
have consistently advocated technology neutral policies for the 
automotive sector instead of picking one favorite technology 
and plowing most or all of our limited Federal research dollars 
into it. I am convinced that the better path is to support 
research in a wider range of possible winners and to let the 
markets and the consumers determine which is best.
    Here in this Committee I think we are on a good track. As a 
result of our commitment to work together, our bipartisan 
energy bill includes several provisions to boost innovation 
within the automotive industry, including a modified version of 
the Vehicle Innovation Act which was sponsored by Senators 
Peters, Alexander, and Stabenow. It will provide the Department 
of Energy with a structured authority and clear direction for 
its research mission.
    Our energy bill is bipartisan. We worked hard to make sure 
of that, and I think we can make sure that our vehicle 
innovation policies are bipartisan too.
    I am looking forward to what the witnesses will have to 
offer this morning.
    We will turn to Senator Cantwell.
    We do have a vote scheduled at 10:30 this morning and I 
know that the panel needs to leave by 11:30, so we will be 
expeditious here this morning.
    Senator Cantwell?

 STATEMENT OF HON. MARIA CANTWELL, U.S. SENATOR FROM WASHINGTON

    Senator Cantwell. Thank you, Madam Chairman, for holding 
this important hearing.
    Vehicles affect almost all Americans. Today's hearing is a 
way to talk about new vehicle technologies, so I am interested 
in hearing from our panelists about the changes that we are 
seeing in the transportation sector.
    The U.S. auto industry has come back during the last seven 
years and it sold a record number of vehicles last year, but 
there is still a lot of work to be done.
    American vehicles are still very dependent on oil. In fact, 
transportation is responsible for 70 percent of U.S. petroleum 
usage and nearly 30 percent of greenhouse gas emissions. So 
while we have significantly reduced the use of oil in our 
electricity generation and home heating, we now need to sharpen 
our focus on the transportation sector.
    This is why the Department of Energy has had a long 
standing relationship with the automotive industry to develop 
and deploy new and next generation research. The Vehicle 
Technologies Office works with light duty automobiles as well 
as commercial trucks to conduct research to improve fuel 
efficiency standards and on light weight composites, batteries, 
and materials. I should just say, as a side note, light weight 
composites have definitely driven great transformation in the 
aerospace industry and provided great benefits.
    The bipartisan energy legislation we passed out of 
Committee last year builds on the success in part of work done 
by members of this Committee. Senators Stabenow, Alexander, and 
Peters (not on this Committee) authored legislation that 
reauthorizes the Vehicle Technology Office at the Department of 
Energy and directs focus on new vehicle technologies. I am 
looking forward to working with the Department on these key 
programs and exploring the ways in which these partnerships 
will help make additional modes of transportation more 
efficient.
    As the price of gas continues to drop, in some areas even 
below $2, consumers are looking and returning to larger 
vehicles and SUVs. According to the University of Michigan's 
Transportation Research Institute, the average fuel economy of 
all vehicles sold in the U.S. in 2015 were less fuel efficient 
compared to the vehicles sold in 2014. This is the first time 
since 2008 that the average fuel economy of cars sold has 
dropped.
    But the oil market can be volatile, and we need to remember 
this. As we heard from our panel on Tuesday, there will be a 
correction. So increasing the fuel efficiency of U.S. vehicles 
is one of the biggest steps we can take to save families more 
money by reducing the cost and helping to reduce emissions. In 
addition, there are promising new technologies today in 
alternative fuels, advanced safety features, and light weight 
composites. Making the right investments can help bring these 
to larger scale in the market.
    In the State of Washington, the Pacific Northwest National 
Laboratories (PNNL) has partnered with the industry for decades 
on technologies for cleaner and more fuel efficient vehicles. 
Researchers have focused on incorporating more aluminum into 
auto manufacturing to make lighter vehicles. Again, just to go 
back to aviation, there is huge fuel efficiency savings in 
aviation. The customers are very happy with those lighter 
weight planes and the savings that they get.
    So the technology from PNNL is being used in vehicles on 
the road today including the Cadillac STS and the Chevy Malibu 
Maxx. In addition, the Pacific Northwest National Lab is 
working on game changing technology using catalysts to produce 
fuels from plant matter that could change the future of our 
nation's energy economy. This is important work to help us 
diversify our sources of fuel and hedge against volatile energy 
markets for the future, but improving efficiency is also 
brought about by focusing on our freight network. Each year 
three billion gallons of fuel is wasted due to congestion and 
businesses across the country pay the price which is estimated 
at $27 billion a year in added transportation costs. So as our 
export economy continues to grow and as we produce great 
products, we have to get them to market so that is why, 
particularly, the super truck program is very important. I know 
my colleague from Michigan is here, and she has been a leader 
on helping on this in order to achieve more fuel efficiency.
    Meanwhile electrification of our transportation sector 
provides important benefits, and an electric vehicle can save a 
consumer up to $1,200 a year in fuel prices and it could reduce 
emissions by 48 percent compared to a gasoline-fueled car. The 
Department of Energy has partnered with industry to help drive 
down the cost of electric car batteries and improve 
performance. In 2008 the average battery pack was more than 
$1,000 per kilowatt. Today it is estimated to be less than 
$300. This means vehicles can travel further and with better 
performance.
    But we need to continue to ensure that we are focusing on 
these next generation technologies. There are currently only 
900 public fast charging stations and 14 hydrogen refueling 
stations compared to almost 170,000 gas stations across the 
United States of America.
    I look forward to hearing from the witnesses today. How we 
can continue to answer that part of this equation? And of 
course, self-driving cars are an important aspect of the 
discussion of the future of automobiles, and I look forward to 
what our witnesses have to say on that.
    Secretary Moniz and others have made a fine point to 
continue the discussion on the public/private partnerships that 
drive successful innovation efforts. I know this recent mission 
innovation that the Secretary and others in the private sector, 
like Bill Gates, are pioneering are an important aspect for us 
doing our job here in making sure that we continue to have the 
next generation of technology so the United States can continue 
to be a leader in manufacturing cars.
    Thank you.
    The Chairman. Thank you, Senator Cantwell.
    We will now turn to our panel. I would advise that each of 
you will have five minutes for your oral testimony and your 
full statements will be included as part of the record, but we 
would ask you to try to observe that five-minute timeline so 
that we can get to our questions of you.
    We have a very distinguished panel this morning led off by 
Mr. David Friedman, who is the Principal Deputy Assistant 
Secretary for the Office of Energy Efficiency and Renewable 
Energy at the Department of Energy. Thank you for joining us.
    We have Mr. Mitch Bainwol, who I just mentioned, who is the 
President and CEO of the Alliance of Automobile Manufacturers. 
You are busy this time of year.
    Ms. Genevieve Cullen is the President of Electric Drive 
Transportation Association. Welcome to the Committee.
    Dr. Chris Gearhart is the Director of Transportation and 
Hydrogen Systems Center at the National Renewable Energy Lab. 
Welcome.
    The final member of the panel this morning is Mr. Xavier 
Mosquet, who is the Senior Partner and Managing Director for 
the Boston Consulting Group.
    So welcome to each of you.
    Mr. Friedman, if you would like to lead off, please?

    STATEMENT OF DAVID FRIEDMAN, PRINCIPAL DEPUTY ASSISTANT 
 SECRETARY, OFFICE OF ENERGY EFFICIENCY AND RENEWABLE ENERGY, 
                   U.S. DEPARTMENT OF ENERGY

    Mr. Friedman. Well thank you, Chairman Murkowski, Ranking 
Member Cantwell and all the members of the Committee, for the 
opportunity to be able to testify today on behalf of the 
Department of Energy's Office of Energy Efficiency and 
Renewable Energy.
    If we look at the world today our national imperative is 
clear. We must win the clean energy race. And when we do that 
we will capture a significant share of the multi trillion-
dollar global clean energy market and the jobs, the energy 
security and the other opportunities that will be created along 
the way.
    As Principal Deputy Assistant Secretary at the Department 
of Energy's EERE, I help manage a broad portfolio of solutions 
comprised of high impact applied research, development and 
demonstration activities to deliver on our mission through 
renewable power, energy efficiency and of course, our focus 
today, sustainable transportation.
    As we heard earlier transportation accounts for more than 
70 percent of U.S. petroleum usage, about one-fifth of 
household expenditures and nearly one third of U.S. energy-
related carbon emissions. It also remains a significant source 
of other air pollutants that are harming our children and their 
grandparents.
    Our transportation program focuses on two key solutions to 
these challenges. First, using less energy to move people and 
freight. Second, fueling vehicles with cost competitive, 
domestically produced, alternative fuels with lower greenhouse 
gas emissions.
    Through our work at the National Renewable Energy Lab and 
with our other national lab partners, private sector partners 
and other key stakeholders, we've helped deliver significant 
results through technologies that are on the market today. In 
fact, each dollar we've invested in heavy duty vehicle 
combustion technology has delivered about $70 in net benefits 
for taxpayers, a 70 to 1 ratio.
    Our super truck program has shown the potential to cut the 
fuel use of low haul trucks by one third to one half and some 
of the air dynamic and tire technologies from that program are 
already making their way into the market.
    Then the batteries from the Chevy Bolt, Volt, Spark, the 
Cadillac ELR and the Ford Focus plug in electric vehicles all 
tap into industry licensed technology developed at Argonne 
National Labs.
    EERE backed research has also helped increase fuel cell 
durability four fold while cutting projected high volume costs 
in half since 2006.
    And thanks, in part to research and memory electrode 
assembly technology developed at Los Alamos National Labs, two 
companies today are selling or leasing fuel cell vehicles with 
another one to enter the market this year and others soon to 
follow.
    Now while we're proud of how far we've come, there's a lot 
more to do. As President Obama and other world leaders affirmed 
at the launch of the Mission Innovation Initiative in November, 
solving our energy and climate challenges will require 
significantly accelerated development and innovation of new 
technologies. And while we continue to lead the world on 
innovation and entrepreneurship, we've historically 
underinvested in clean energy. In fact, compared to the size of 
our economies, we invest about one third as much on clean 
energy research and development as competitors like China and 
Japan.
    As we try to reverse this trend we will continue our 
electric and heavy duty vehicle work. We will also invest in 
other important areas like the co-optimization of new fuels and 
engines to boost efficiency and renewable fuel use through work 
at NREL and other national labs through cross cutting R and D 
efforts to develop advanced high strength materials to reduce 
cost, improve performance and enhance manufacturing processes 
for automotive use, such as the ongoing work mentioned before 
at Pacific Northwest National Labs, as well as composites work 
there and at Oak Ridge National Labs and across the country 
through our Institute for Advanced Composites Manufacturing 
Innovation.
    Grid modernization is also important to fully integrate 
plug in electric vehicles and fuel cells into the national grid 
in a safe, secure, reliable and cost effective manner including 
critical cyber security work at Idaho National and other 
laboratories. And research and transportation mobility is also 
critical in order to identify untapped, system level, energy 
savings through connected and automated vehicles like those at 
the Ann Arbor Connected Vehicle Test Program.
    With programs like these and support from you and the 
technologies you'll hear about from NREL and Dr. Gearhart, the 
Department of Energy will continue to strive innovation within 
the auto industry and into the vehicles on showroom floors and 
highways across the United States.
    I look forward to working with Congress and very much with 
this Committee to further advance transportation technologies 
to create new jobs in industries while saving consumers and 
businesses money and helping to address our nation's energy and 
climate challenges.
    Thank you very much.
    [The prepared statement of Mr. Friedman follows:]
    
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    The Chairman. Thank you, Mr. Friedman.
    Mr. Bainwol, welcome.

STATEMENT OF MITCH BAINWOL, PRESIDENT AND CEO, THE ALLIANCE OF 
                    AUTOMOBILE MANUFACTURERS

    Mr. Bainwol. Thank you, Chairman Murkowski and members of 
the Committee. I appreciate the chance to be here today on 
behalf of 12 OEMs, the D3 and nine others from Europe and from 
Japan.
    Our guys and other OEMs are investing massively in R and D, 
$109 billion last year, and that is 16 percent of the global R 
and D spent. That's roughly four times our economic waste, so 
we're prospering right now with sales and we're investing back 
into R and D and that's paying real dividends.
    As I got up this morning I looked at the weather and 
realized I had to travel in 20 miles and tried to figure out 
the best way to go. I turned on my NAV, and I took a path that 
was different than any other I'd ever taken over the last 20 
years of commuting from Fairfax. NAV directed me to Washington 
in a fashion that was quicker, so I saved time, was more 
productive, was cleaner and was more fuel efficient. That 
struck me as kind of a metaphor for today. Technology is 
bringing about a convergence of these social objectives. We 
want mobility to be cleaner, we want it to be safer, we want it 
to be more efficient, and that's exactly what we're doing here 
today.
    I thought I'd go through some slides rather than read a 
statement, and if I can I'd do it fairly quickly and ask that 
you be patient as I try to get through them.
    [The information referred to follows:]
    
    
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    The first one will take a bit of time. It is titled,``What 
Type of Engine Will Your Next Vehicle Be?'' We do extensive 
polling. We do about 5,000 samples of consumers a month, 
literally every day 167 folks, and we ask them what kind of 
power train their next vehicle will be. So this is 
aspirational.
    The good news here is, as you can see in May of '12 when we 
started this, roughly 20 percent say they wanted to go to a 
hybrid. A hybrid becomes a proxy for alternative power trains 
for most folks. Roughly 60 percent said they wanted a gas 
engine.
    If you look at the line over the last three and a half 
years, you see the hybrid number falling, drifting down and you 
see the gas number rising. That's a little counterintuitive in 
a world in which we're offering more models, more hybrid and 
electric models, in showrooms.
    What's going on is we've made progress with the ICE, with 
the internal combustion engine, that is so profound that when a 
consumer goes into a showroom they discover that there are new 
cars getting roughly 25 percent more fuel efficiency than their 
old car. The success of the conventional engine is it's making 
it harder to justify the delta to the electric, and that's a 
challenge for us where going electric is a worthy goal but 
there is a market challenge there.
    The next slide just speaks to the number of alternative 
power train models there are for sale. You can see that in 2008 
there were roughly 21, 22 models. That is now up close to 80, 
and that's a combination of electric hybrid and plug ins.
    The next slide shows the number of models achieving 30 plus 
MPG and 40 plus MPG, and what you see there is really profound 
success. This is part of the value of the investment. It's a 
seven times increase in number of models. So the models are in 
the showrooms. The opportunity to buy the more fuel efficient 
vehicles are there. And on the conventional side, that is 
making the choice to go to alternative power trains a little 
bit more complicated.
    Then you look at the sale of alternative power trains and 
you can see that there's been a dip by 2015. It slowed down. 
Part of that is gas prices and part of that is the success of 
the conventional engine.
    The next slide shows retail market share of hybrid and gas 
prices, and it looks like synchronized swimming. What you have 
is a direct linear relationship between gas prices and the sale 
of hybrids.
    A similar pattern with the sale of cars and trucks is the 
next slide. And I'm moving quickly because I'm running out of 
time. I want to spend a second on safety.
    The slide titled,``Total 2014 Vehicle Related Fatalities'' 
shows that we lost 33,000 Americans on the road in 2014 which 
is obviously an awful number that we're all working to drive 
down. But I think it's worthwhile to point out that 97 percent 
of those had nothing to do with the vehicle. It was human 
error, and that's why technology is so important. Technology 
can mitigate human error.
    The next slide puts the fatality number into context. 
That's a 65-year trend line. The vertical bars are the absolute 
number of folks we've lost. And you can see in 2013-2014 it's 
roughly where we were in 1949 but the vehicle miles traveled is 
dramatically higher and the number of drivers is dramatically 
higher. So the yellow line shows the progress we've achieved 
which is a function both of less drunk driving, more folks 
using belts and improved crash worthiness technology.
    The next chapter of progress on fatalities will come from 
the technology we're talking about here today, I would make 
that point that I started with in terms of the NAV. All these 
technologies are not about safety, they're not about green. 
It's about maximizing all these social objectives.
    There's a convergence. When you avoid a crash it is both 
very green because there have been injection implications and 
there's also very safe and it's very productive. So crash win 
technologies, whether it's the advanced driver assist or 
whether it's a fully autonomous vehicle, have a profound, 
almost magical implication for the economy and for life. And so 
we appreciate the focus on innovation today, and we just focus 
on the convergence of these benefits.
    I'd make one last point, if I could, and that is this last 
slide shows the fundamental dilemma that we've got. This shows 
a 25-year pattern. The blue line is year over year change in 
household income, fundamentally flat. The salmon, I guess 
that's a salmon-colored line, that rises is the price of the 
auto which in part is being driven up by compliance 
responsibilities. And the yellow line is interest rates, year 
over year change in interest rates.
    So in effect what we've done is we have financed the 
ability to comply with more expensive vehicles based on 
compliance by lower interest rates and with longer terms. And 
as interest rates begin to rise we've got to be mindful of this 
equation because it produces a challenge that may have jobs 
implications in terms of the manufacture of vehicles but also 
adoption implications in terms of turning over the fleet to 
vehicles that are much more efficient.
    And with that, I'd say, thank you.
    [The prepared statement of Mr. Bainwol follows:]
    
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    The Chairman. Thank you, Mr. Bainwol, very interesting.
    Ms. Cullen, welcome.

   STATEMENT OF GENEVIEVE CULLEN, PRESIDENT, ELECTRIC DRIVE 
                   TRANSPORTATION ASSOCIATION

    Ms. Cullen. Good morning, Chairman Murkowski, members of 
the Committee. I'm Genevieve Cullen, President of the Electric 
Drive Transportation Association, and I'm very pleased to be 
here today to speak to you about the advances being made in 
electric drive.
    The Electric Drive Transportation Association is a cross 
industry trade association. Our members include the entire 
electric drive value chain that is developing, manufacturing 
and deploying vehicles and infrastructure of an electric drive 
fleet. Today electric drive is performing in light duty cars, 
trucks, buses and mobile equipment offering clean, high 
performing, affordable and efficient alternatives to oil.
    Innovation throughout the industry value chain is providing 
consumers with even wider vehicle options with enhanced 
performance and at reduced costs. These advances are also 
accelerating transformational changes in mobility overall by 
connecting the power, transportation and communication sectors.
    Since the commercial scale introduction of plug in vehicles 
in late 2010, this segment has grown exponentially from two 
vehicles to almost 40 battery and plug in hybrid vehicles for 
sale today are planned for roll out in the next model year. 
These vehicles include offerings across a range of price 
points, performance profiles and vehicle categories from 
economy to luxury with all electric ranges from 11 to 280 
miles.
    Total U.S. sales of plug in vehicles surpassed $400,000 in 
2015, and global sales are expected to triple to $179 billion 
in 2024.
    The diversity of the electric drive market is set to grow 
further with the addition of fuel cell electric vehicles which 
can offer approximately 300 miles of range and refueling in 
three to five minutes.
    Over the past few weeks at auto and consumer electronic 
shows auto makers have showcased a large array of electric 
drive vehicles including a mid-priced battery electric vehicle 
with a 200-mile range and fast charge capability, a luxury plug 
in hybrid, a fuel cell electric crossover, a battery electric 
microbus and a plug in hybrid minivan. This is just a sampling 
of the headline catching vehicles but it illustrates the 
diversity of electric drive offerings and the diversity of 
customer needs they are designed to meet.
    Behind the vehicles are innovations and investments 
throughout the supply chain that are enhancing performance and 
reducing the cost of batteries, fuel cells, components and 
materials.
    A notable example is the reduction in the cost of lithium 
ion batteries which Senator Cantwell mentioned and as well as 
the reduction in automotive fuel cell costs in part from the 
private sector collaboration with the Department of Energy 
which has brought down those costs by more than 35 percent 
since 2008.
    Innovation in electric drive extends beyond vehicles. 
Collaborations are occurring across the industry to drive down 
ecosystem costs and build out infrastructure.
    Utilities are creating new business models with smarter 
demand management mechanisms to serve this mobile load and 
maximize the benefit of energy storage to the grid and to their 
customers.
    Vehicle battery and energy companies are partnering to 
scale battery production and diversity energy storage options 
at the home and commercial scale.
    Use of new and post automotive batteries for stationary 
storage gives energy consumers greater control of their energy 
choices, enhances grid stability and efficiency and in sports, 
the increased use of renewable and distributed energy.
    At the same time vehicle charging facilities have also 
expanded greatly. There are a reported 12,000 public charging 
stations in the United States with 30,000 charging outlets. 
These numbers do not include private, residential and the fast 
growing number of workplace charging options available. Just as 
quickly business models are emerging to leverage hardware and 
software capabilities for diverse charging needs and locations.
    Vehicle and phone-based applications as well as increased 
operability between charging facilities are making it easier 
for drivers to evaluate charging options and increase their 
electric miles traveled.
    Hydrogen infrastructure is emerging along with last market 
fuel cell electric vehicles. In California nearly 70 stations 
are scheduled to open in the next few years. Public/private 
collaborations are moving forward to expand that number in 
California and other states.
    Electric drive transportation is also reinforcing the 
autonomy of the in vehicles. While the continuum of the 
autonomous technologies being built into vehicles today, it's 
not exclusive to electric drive. Electric drives, in many ways, 
is the optimal partner as high visibility prototypes on the 
road today demonstrate.
    Watching my clock, so I will wrap this up.
    To summarize I will say that we are making great strides, 
but we are still an emerging market and we're pushing to 
deliver enhanced performance at reduced cost. Public/private 
partnerships throughout the value chain from technology to 
infrastructure build out are critical to speeding those 
innovations.
    And we very much appreciate this Committee's recognition of 
that important work in S. 2012 supporting research, development 
and deployment work in cars and trucks at the Department of 
Energy.
    Again, I thank you for the opportunity to speak with you 
today, and I look forward to your questions.
    [The prepared statement of Ms. Cullen follows:]
   
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    The Chairman. Thank you, Ms. Cullen.
    Dr. Gearhart, welcome.

 STATEMENT OF DR. CHRIS GEARHART, DIRECTOR, TRANSPORTATION AND 
 HYDROGEN SYSTEMS CENTER, NATIONAL RENEWABLE ENERGY LABORATORY

    Dr. Gearhart. Chairman Murkowski and members of the 
Committee, thank you for the opportunity to speak today. I'm 
Chris Gearhart, Director of Transportation and Hydrogen Systems 
Research at the National Renewable Energy lab. Prior to coming 
to NREL I worked at Ford Motor Company for 16 years on, among 
other things, hydrogen fuel cell vehicles.
    Innovation has always been an important part of the 
automotive industry, but today the rate of change is faster 
than ever. There are technologies on the horizon that promise a 
future with cars that don't crash, that don't damage the 
environment and they create new business opportunities we 
couldn't have imagined just a few years ago.
    The Department of Energy and the national labs are working 
on technologies to help make this future a reality. And today 
I'd like to talk to you about just a few of the many ways the 
national labs are helping the automotive industry meet these 
goals while continuing to be the engine of our economy.
    Connected and autonomated vehicles are all over the news. 
They're generally presented in the context of safety and 
convenience but they're also going to have a very big impact on 
energy and emissions. A group of researchers at NREL and at 
other national labs are starting to quantify these impacts.
    One example of such research in this area is NREL's 
connected traveler project. This is an ARPA-E funded project 
with the goal to develop algorithms to understand a traveler's 
preference so that tailored recommendations and incentives can 
be provided to the individual traveler using real time data so 
they can make better transportation decisions. From this and 
other projects it's clear that big data and cyber security are 
going to be increasingly important in the automotive industry 
and the national labs have significant expertise and 
capabilities in these areas.
    The labs are also doing lots of work to accelerate the 
development and deployment of electrified vehicles. We're using 
our expertise in lithium ion batteries, high performance 
computing and simulation to help the automotive industry 
shorten design time and improve the performance of automotive 
batteries. One great example of this is our CAEBAT project 
which is a project to develop new computer-aided engineering 
tools which the automotive industry can use to shorten design 
time for battery development.
    Wide band gap semiconductor materials. These will make 
power electronic devices smaller, more efficient and able to 
operate at higher temperatures. For electric vehicles what this 
means is that we'll have more efficient vehicles and more 
efficient charging stations. Power America, sponsored by the 
DOE, is a partnership bringing together industry, universities 
and national labs to accelerate the development and 
commercialization of these devices.
    Electric vehicles are also becoming part of the ever 
expanding Internet of everything. And at NREL we're examining 
these interactions, the interactions between building energy 
systems, the utility grid, renewable energy sources and 
electric vehicles and we have world class facilities including 
the energy systems integration facility and the vehicle 
technology integration facility to study these interactions.
    As has been mentioned a few times, fuel cell electric 
vehicles are now commercially available. This has been made 
possible, in no small part, but more than a decade of 
innovation supported by the Fuel Cell Technologies Office 
resulting in more than a 50 percent decrease in the cost of 
fuel cell systems. This is fantastic, but there are still 
significant challenges to be met including the cost effective 
generation of renewable hydrogen and the development of a 
robust hydrogen fueling infrastructure.
    NREL is a world leader in renewable hydrogen production. 
We're also partners in H2 First, a collaboration with Sandia 
National Labs, that is working with industry partners to find 
innovative solutions to hydrogen infrastructure problems.
    The internal combustion engine is going to continue to be 
an essential part of the transportation system, particularly 
for heavy duty transportation. Ground breaking research over 
the past 10 years has identified new combustion engine 
strategies that particularly when optimized to run on renewable 
fuels, will offer significantly higher efficiency and lower 
emissions. The DOE has launched an initiative coordinating the 
efforts of researchers across the lab system to work on this 
co-optimization of biofuels and engines.
    Replacing heavy steel components with components made of 
lighter metals, plastics or composites can reduce vehicle mass 
by up to 20 percent which results in a 12 to 16 percent 
reduction in fuel consumption and greenhouse gas emissions. The 
Institute for Advanced Composites Manufacturing and Innovation, 
supported by DOE's Advanced Manufacturing Office, is working to 
develop new, low cost, high speed, efficient manufacturing and 
recycling process technologies for advanced polymer composites.
    So in conclusion there's a wide range of research underway 
that will achieve many benefits for the nation's transportation 
system including improving energy efficiency, reducing 
environmental impact and driving U.S. competitiveness. These 
are very exciting times.
    Thank you and I would be happy to address any questions.
    [The prepared statement of Dr. Gearhart follows:]
    
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    The Chairman. Thank you, Dr. Gearhart.
    Mr. Mosquet, welcome.

   STATEMENT OF XAVIER MOSQUET, SENIOR PARTNER AND MANAGING 
             DIRECTOR, THE BOSTON CONSULTING GROUP

    Mr. Mosquet. Thank you, Chairman Murkowski and the members 
of the Committee for the opportunity to testify today.
    Innovation is clearly increasing in the automotive 
industry. OEM R and D spending has increased by eight percent 
per annum since 2009, and the supplier spending has increased 
by five percent. And interestingly our consumer surveys show 
that customers want to buy cars from car manufacturers who 
bring new technologies to market.
    We see today five areas of spending and patent filing for 
car manufacturers and suppliers today. It's power trains, 
including electrification; it's light weighting; it's 
connectivity; it's active safety; and then, autonomous driving. 
These innovations are fueled by regulation, by customer demand, 
but also by technological advancements.
    If I look at the power train evolutions there's three 
areas. One is internal combustion engines. The other one is 
hybrids and battery electric vehicles, and the next one is fuel 
cells.
    In internal combustion engines, we've seen many 
improvements. Right now, all the evolutions seeing you a low 
friction, advanced injection, advanced new cooling and others 
have bringing you efficiency improvements from 2009 to 2020 by 
35 percent to 50 percent reduction of fuel efficiency and 
emission roughly at a cost of $2,000 to $2,500 per car. And 
this is why we see today a landscape and that will continue for 
the foreseeable future where naturally these technologies will 
present the vast majority of the market.
    Meanwhile, the market for hybrids and battery electric 
vehicles is being challenged. Right now this market has been 
growing for ten years and peaked in 2013 at 3.8 percent 
penetration of the U.S. market and the penetration declined to 
2.9 percent last year.
    The challenge is only six percent of the U.S. drivers are 
ready to pay more for a greener and more efficient car. And 
what they want to spend, on average, is $4,600. So that creates 
an unstable market for hybrids and is well below the cost of 
either battery electric vehicles and fuel cells.
    What this means is the support from the legislator in the 
form of incentives will have to remain potentially below the 
current cap of 200,000 vehicles per OEM and then support for 
charging and refueling infrastructure will be needed for this 
market in the next few years.
    On light weighting, it's commonly agreed that about ten 
percent of weight reduction would help gain six to eight 
percent fuel efficiency on each car at a cost of $2 to $5 per 
pound saved. The materials are aluminum, magnesium, advanced 
steel, carbon composite, of course. And there's two challenges 
there for innovation.
    One is the availability of some of this materials. It's 
particularly true for advanced steel and maybe for the cost of 
carbon fiber which I know the Committee has been very active 
on.
    The other thing is now OEMs and you will all agree that 
they're picking the right material for each different parts of 
the car is what needs to happen and then bonding technologies 
will be a main source of innovation.
    Connectivity includes two areas. One is 4G LTE. I would say 
this is happening with natural market development. But the 
other one is vehicle-to-vehicle, vehicle-to-pedestrian, 
vehicle-to-infrastructure, which we're required a minimum 
adaption to give the benefits both in terms of safety and in 
terms of traffic regulation. And there they will be a need for 
further regulation for this market to develop naturally.
    Active safety features today that are available with 
existing technology have the potential to reduce by 30 percent 
the number of accidents on U.S. roads and the number of 
fatalities. We think the benefit is about $250 billion every 
year to the U.S. economy. The challenge is today those features 
cost about twice more than customers are naturally willing to 
pay; therefore, penetration is low, single digits and only 
going at a few percent per annum.
    Whereas, with more support, with a 50 percent penetration, 
the cost would decrease by two and there would be a naturally 
sustainable market. There will be need there for further 
innovation and also for more support to increase the 
penetration through customer education, potential incentives 
and more regulation.
    Autonomous vehicle, which is the next step after active 
safety, has the promise to reduce the number of accidents by 90 
percent and therefore, to reduce congestion and to improve the 
fluidity of the traffic.
    Furthermore, we think that in dense urban environments we 
could replace, with a share of automated cars, we could replace 
roughly 900,000 private cars in New York, for instance by 
19,000 shale vehicles which reduces the number of cars on the 
road, improves traffic and has significant impact not only on 
safety but also on fuel efficiency. And therefore there's a 
major challenge now to get to these as soon as possible.
    Overall these technologies truly deserve the attention of 
the legislator--there is an important balancing act to think 
about where to spend, not only for the legislator, but also for 
the consumers as many of these technologies today still cost 
more than the consumer would be naturally willing to pay.
    [The prepared statement of Mr. Mosquet follows:]
    
    
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    The Chairman. Thank you, Mr. Mosquet.
    We appreciate the testimony from each of you. It is always 
interesting to hear where the exciting developments are.
    Mr. Bainwol, I am going to start with you.
    I mentioned in my opening statement that I am in that group 
of lawmakers that is really reluctant for us in the government 
to be picking winners and losers whether it is as it relates to 
type of automobile or energy sources. Mr. Mosquet just led me 
right into this in acknowledging that some of the incentives 
and supports that we currently have are going to, in his 
opinion, need to be around for a while longer.
    In looking at the charts that you have provided us, it is 
clear that what has happened with the lower price of gasoline 
at the pump has influenced consumers' decisions as to whether 
or not they are going with electric or hybrid.
    Can you speak to this issue of, again, where we try to pick 
a winner and loser in an emerging area from your members' 
perspective and preferences, how should the Federal Government 
handle, or should they at all, promoting fuel and efficiency-
related innovation that, inadvertently or not, may push in a 
direction that perhaps does put us in a situation where we are 
picking winners and losers?
    Mr. Bainwol. So the short answer is our members prefer an 
approach that is technology neutral. And so that's the short 
answer.
    The longer answer is more complicated. We identify with the 
goal of reducing carbon. We identify with the goal of reducing 
fuel dependency, so all those things are noble, societal 
objectives.
    The complications come from the nature of the regulatory 
regime, and what we have is an approach in CAFE that NHTSA 
measures by MPG. EPA measures by greenhouse gas. And then 
there's an overlapping state program from California, the ZEBB 
program, which is executed in a bunch of other states 
representing about 30 percent of the market. The ZEBB program 
is effectively not technology neutral. It's either, basically, 
to comply to their electrification or fuel cell, in today's 
world mostly electrification.
    We're complying with different regulatory regimes which 
creates friction and added costs, and we get caught in the 
middle between a mandate on consumption. It's not a mandate on 
production. It's a mandate on what consumers buy. In a low gas 
tax environment, low gas price environment, consumers are 
moving away from the stated social objectives of 
electrification and moving folks into smaller cars rather than 
trucks. So it's a challenge.
    Technology neutral is ideal. We have to recognize that 
consumers are going to respond in a fashion that's rational for 
them, and they're not into optimizing policy. They're into 
maximizing their pocketbook.
    The Chairman. I appreciate that.
    Ms. Cullen had mentioned in her testimony that contained 
within this bipartisan energy bill that we have moved out of 
Committee and that we are going to have on the floor next week, 
that there are some R and D provisions in there that are good 
for the industry. I appreciate you pointing that out.
    Mr. Bainwol, is there anything else in that energy bill 
that the auto makers are looking at and saying this is helpful 
for industry?
    Mr. Bainwol. Yes. Well, first of all, a bill that's a major 
bill that has bipartisan support is a wonderful gesture around 
the country. It's a great symbol of the Congress working.
    The Chairman. We want it to be more than a symbol. We want 
it----
    Mr. Bainwol. Well----
    The Chairman. We want to update some policy.
    Mr. Bainwol. So it's good from the standpoint of consumer 
confidence, and consumer confidence is vital to purchasing big 
cost items, like cars. But more specifically there are 
provisions in the bill that are helpful.
    The critical minerals piece matters. I showed the chart 
that has increasing price of cars mostly flowing from 
compliance. To the extent we can rustle challenges down like 
the critical minerals, we're stabilizing supply and reducing 
costs. That allows people to buy new cars, and that's terrific. 
So that's very helpful.
    The VIA component that Senator Stabenow brought to the 
table is also very helpful. And we love the focus on V to V 
because at the end of the day V to V, NHTSA, you're no longer 
at NHTSA, but NHTSA has estimated that V to V can address 80 
percent of all non-impaired accidents. So the fuel implications 
of that and the safety implications are substantial. So the 
assistance there is very helpful.
    The Chairman. I appreciate you bringing up the critical 
minerals bill. Mr. Mosquet, you mentioned that as well in the 
context of material availability and what that means for the 
industry recognizing that we do not want to go in the same 
direction with our critical minerals that we were headed when 
it came to vulnerability and relying on foreign sources for our 
oils. That is something I think we are all paying attention to.
    The 10:30 vote has started. I am going to excuse myself 
from the Committee and Senator Cantwell will ask her questions, 
and I would just ask her to go back and forth here. I think you 
will see members popping in and out. Do not take that as a lack 
of interest, but I will be back to ask another round of 
questions.
    With that, Senator Cantwell?
    Senator Cantwell. [presiding]: Okay, thank you.
    Thank you, Madam Chair, and I am going to defer to my 
colleague from Michigan so she can----
    Senator Stabenow. Thank you very much, Senator Cantwell.
    Senator Cantwell. Yes.
    Senator Stabenow. And Madam Chair.
    First, I have to say that I could spend hours talking about 
this, obviously, representing Michigan and so many of the 
technologies are being developed through our industries in 
Michigan and our great universities that are collaborating with 
the Department of Energy and the Federal labs and so on. So 
vehicle-to-vehicle technology, autonomous technology, all the 
safety things that you are talking about that are so critical, 
as well as addressing energy savings and emissions and what is 
happening on a range of things, certainly, around battery 
development, fuel cells, I mean, all of it.
    I do want to say though, Mr. Bainwol, and I am sorry that 
the Chair left because I will be talking to her more about 
this, that one piece that did not get into the energy bill that 
were looking forward to doing on the floor is the provision 
that Senator Cassidy and I put forward on the advanced 
technology vehicles program, to be able to expand the 
flexibility of that to larger vehicles which are so important 
and to auto suppliers.
    We know right now that the latest Department of Energy 
advanced technology manufacturing loan actually went to Alcoa 
in Tennessee to be able to help them continue the very exciting 
opportunities around aluminum. We know the F-150, I sound like 
ads for automobiles whenever I am talking about all of this, 
but the F-150 has been able to take 700 pounds out of their 
truck by using aluminum instead of steel, so composites and all 
of this.
    Mr. Bainwol, I wonder if you might just expand on what I 
know is in your written testimony as well about the importance 
of taking an existing program and just giving it a broader 
portfolio so that we can address what needs to be done around 
larger vehicles and trucks.
    Mr. Bainwol. Well we certainly are supportive of your 
effort to broaden the eligibility to trucks and suppliers, so 
we think that makes sense and we Are delighted to be supportive 
of it.
    Senator Stabenow. Great.
    Mr. Friedman, from your perspective as well, how do you see 
that helping us as are moving forward to tackle energy savings 
and so on?
    Mr. Friedman. Well it's clear that heavier vehicles are an 
incredibly important area that we have to tackle when it comes 
to fuel efficiency.
    I think our super truck program has shown that there's a 
lot of progress that can be had. That progress needs to be 
backed up with investments, especially when you consider that 
long haul trucks account for about four percent of 
registrations but around ten percent of oil use. So clearly 
having more resources, having more opportunities to invest in 
proving those technologies is an important part of a balanced 
portfolio.
    Senator Stabenow. Thank you.
    In listening to all of you and in watching, and in going to 
the North American Auto Show and having a chance to sit in a 
lot of these vehicles, it is very exciting to see what is 
happening.
    One of the things that I keep coming back to and, even Mr. 
Bainwol, even in your chart looking at what consumers are 
choosing, and certainly gas prices work against, sort of, as we 
look at new technologies and so on, but when we look at this 
what I hear all the time from people is a concern about lack of 
infrastructure.
    Now at the auto show we were seeing hybrids, electric 
vehicles with 120 watt and you can plug it into a regular plug. 
But when I look at things like hydrogen fuel cells that have 
huge potential that our Department of Defense is doing work, of 
course, in all of these areas, but it seems to me that we have 
got to be focused much more aggressively at making sure the gas 
station is actually a service station and that you have the 
options there and that it is consumer friendly.
    So I wonder, Dr. Gearhart, if you would want to respond to 
that and then Ms. Cullen and anyone else that would want to 
respond to the question of how do we really get there where we 
get over the huge barrier of lack of choice at the service 
station?
    Dr. Gearhart. So I agree, particularly with hydrogen. It's 
a tie by, I understand.
    So I agree with you, particularly with hydrogen fuel cell 
vehicles, that the lack of infrastructure is the big problem. I 
think that that's one of the big roles that the Federal 
Government can play is to make sure that the technology for the 
infrastructure is as ready as the technology for the vehicles 
are. The auto companies have done a fantastic job.
    If you get a chance to drive the Mirai and any of the new 
vehicles, they'll knock your socks off. They're really great, 
but drivers are going to want reliable fueling stations that 
are online every time they go there. And if they don't, we're 
going to have a false start.
    So that's why at NREL we've built a research station 
specifically for the purpose of looking at the reliability of 
the hydrogen infrastructure to make sure that the components 
are ready to identify mistakes. We're working with H2USA which 
is a public/private partnership of people in the industries to 
try to identify what are the critical items for them to make 
sure that the hydrogen infrastructure can get ready.
    Senator Stabenow. Thank you.
    I know I am out of time but, Ms. Cullen, if you could just 
briefly respond to that?
    Ms. Cullen. Well quickly I would say that I agree 
completely on the hydrogen infrastructure. It is premised, the 
fuel cell vehicle is premised, on a gas station model of 
centralized, say once a week, fueling.
    For plug-in vehicles it's more of a cell phone model, work, 
home and opportunistic charging. And so responding to the needs 
of the work, home and public are slightly different. I would 
say that we are working, the industry is working, with the 
Department of Energy and state and local partners to actually 
build out those infrastructures on all of those levels.
    Senator Stabenow. Thank you.
    Senator Cantwell. Senator Gardner?
    Senator Gardner. Thank you very much to the Ranking Member, 
and thank you to the witnesses for your time today, 
particularly Dr. Gearhart, welcome.
    Dr. Gearhart, welcome to the Senate Energy Committee.
    I enjoyed driving for the first time a hydrogen fuel 
vehicle at the Golden headquarters of the National Renewable 
Energy Laboratory last year, so it was a great opportunity to 
see the work that you are doing there.
    Also for the interest of members, Senator Gary Peters and I 
have created a smart transportation caucus. Our focus is going 
to be on vehicle-to-vehicle communication and the kind of work 
that you are doing and talking about today. So if anybody is 
interested in those efforts, I would love to see you in the 
caucus and talk to Senator Peters and I for that. We have a 
range of issues that we can talk about. It is kind of fun to 
hear what everybody is working on.
    In Colorado, of course, if you have driven to the mountains 
from Denver to Vail or to Beaver Creek at any time in the last 
several years, you have probably spent a couple of hours in 
traffic jams. The odds are we are not going to be drilling or 
adding an additional tunnel to the Eisenhower/Johnson tunnels 
any time soon, so the solutions that we have to look for are 
being talked about on this panel, the vehicle-to-vehicle 
communications and alternative transportation methods and 
modes.
    I just have a couple of questions I think that go beyond 
this Committee. I mean, because we have questions of spectrum. 
How our cars are going to communicate with each other? Do we 
have enough spectrum to make sure that cars can communicate 
with each other?
    We have issues of moral authority that are going to have to 
be determined. When a car is going to make a decision if it is 
driving by itself to take the ditch, to hit wildlife, the baby 
crossing the road because there is another car coming. These 
are all questions that over time are going to have to be worked 
out for moral choices that a driverless or autonomous car is 
going to have to make to the kind of communications that an 
older vehicle makes.
    It is interesting in agriculture, of course, that we have 
been using driverless tractors, self-guided, auto-steering 
tractors for over a decade now. You can retrofit a 30- or 40-
year-old tractor with a self-steering mechanism, and we have 
seen it bring increases in productivity to agriculture. Now, of 
course, what it could mean to solve transportation, you know, 
clogging the arteries of our transportation system is using 
this to solve that problem.
    I know it was recently announced that the National 
Renewable Energy Laboratory had entered into a MOU with the 
Department of Transportation in Colorado for research on the I-
70 and I-25 corridor when it comes to vehicle-to-vehicle 
communication.
    Dr. Gearhart, can you talk a little bit about the work you 
are doing there?
    Dr. Gearhart. Yes.
    CDOT has announced their, what they're calling, the Road X 
program which is to look at the potential for using these 
automated and connected technologies in really all aspects. And 
they joined with the National Renewable Energy Lab, in 
particular, to bring in the fuel economy and the emissions 
aspect of it.
    So we're in discussions with them. We're looking at a 
number of possible projects where we can help CDOT by 
collecting data and providing analysis for the data for them 
and confirming that these technologies do make the difference 
that we really hope that they make. So we're very excited about 
it.
    In particular, we haven't quite found the I-70 corridor 
project but I'm really looking forward to the day that we, the 
car, drives me up I-70 rather than me sitting there in traffic. 
It's a very, very exciting partnership.
    Senator Gardner. What has NREL's research shown when it 
comes to potential congestion relief with connected vehicles? 
Are you able to model that yet? Have we gotten that far?
    Dr. Gearhart. Senator, we're working on modeling it. Right 
now what we've seen if we look at the energy impact there can 
be dominated by several effects. If the dominant effect of 
introducing these new technologies is to make the traffic flow 
much, much smoother, we will reduce the energy per mile driven 
significantly.
    The problem is now if we make it so convenient will people 
drive more miles? And so that's the big research question that 
we're looking at now is, you know, what is the bounce back 
effect of having removed the barriers? If no one no longer 
cares that they're sitting in their car or they just drive more 
miles and does that then drive the emissions up even though 
that there are fewer emissions per mile?
    That's a tough-to crack. It's as much about how consumers 
think and make decisions based on the information that they're 
receiving as it is on the technology, so I can't give you an 
answer right now. It could be anywhere from half of the energy 
consumed to twice as much energy consumed. But it's going to be 
a big effect, and I think we need to understand that what it is 
going to be as soon as possible.
    Senator Gardner. Well I think it would be a perfect 
solution to the victory the Broncos will have over Senator 
Warren's team, the New England Patriots, later this weekend. 
[Laughter.]
    Senator Gardner. So thank you very much for the opportunity 
to be here with all of you today.
    Senator Cantwell. Uh oh.
    Senator Warren. Dream on, Senator Gardner. [Laughter.]
    Senator Warren. Dream on. Your dreams will last a few more 
days.
    Senator Cantwell. The throw down. Who expected that?
    Okay, Senator Warren?
    Senator Warren. Thank you, Madam Chairman.
    You know, there are two ways to repeal a rule. You can 
repeal it outright to strike it from the books or you can paper 
over the rule with enough exceptions and alternatives that the 
rule becomes fairly meaningless.
    Now the auto industry complains about ambitious fuel 
economy standards because it costs money to make cars more 
efficient and to reduce their pollution. The industry knows it 
can't win a head on fight to roll back fuel standards so it 
looks like the industry is trying the paper over it approach.
    Here is how it works. Recently House Republicans introduced 
a bill to improve auto safety that includes a loophole to let 
the auto makers break from fuel economy standards. The bill 
lists nine specific safety technologies. It sounds good. Car 
companies have already agreed to install several of them, so 
this is obviously not a big stretch. But the bill says that if 
any auto maker installs three technologies from the list, they 
will be eligible for a credit equal to at least three grams of 
carbon dioxide per mile toward their greenhouse gas emissions 
requirements. In other words, this gift to the auto industry 
says you do what you have already agreed to do and you can 
slide by with lower EPA standards. It sounds like a pretty 
slick operation. Now what I cannot figure out is the 
calculation that three safety features should be worth exactly 
three grams of carbon dioxide per mile, not one gram or ten 
grams.
    Mr. Bainwol, you represent the auto industry, and you have 
been a vocal supporter of this provision. Can you tell me 
whether your industry suggested this number to the House of 
Representatives or did the House Republicans give you the 
number?
    Mr. Bainwol. I think some context, if I could.
    Senator Warren. I just want to know who came up with the 
number.
    Mr. Bainwol. We did not originate the number. But let me--
--
    Senator Warren. So the House Republicans gave you the 
number and put three grams on any of those safety features?
    Mr. Bainwol. This was a draft provision that was shown to 
us. We did not ask for the grams per mile that were provided. 
But I mean you can contextualize it.
    Senator Warren. So you would be okay if they did not do it?
    Mr. Bainwol. Right. If I could contextualize it. The Tesla 
gets about 600 grams of credit. That's a car that cost roughly 
$135,000 to buy, and we're providing 600 grams of credit.
    These safety technologies which, as we've discussed today, 
have a value for the environment, have a value for congestion, 
have a value for safety, have a value for fuel efficiency.
    Senator Warren. So Mr. Bainwol, let me----
    Mr. Bainwol.--Are 15, 140.
    Senator Warren. Stop you there. The question is not whether 
or not reducing congestion may or may not reduce pollution 
ultimately. I think this is actually a quite debatable point. 
There has been a lot of evidence on both sides of this that, as 
I understand it, economist Joe Cartwright puts it when it comes 
to pollution the evidence there suggests that if you reduce 
congestion people actually drive further and that more than 
offsets the effects of idling. I think this was related to the 
point that Dr. Gearhart was just making.
    But that is not my question. I had just one question, and 
that is who calculated the number that it was three grams? If 
you are telling me the auto industry did not do it, then I just 
want to know who did it. You are out here lobbying for it. You 
say it is supported by scientific evidence. Where did the 
number come from?
    Mr. Bainwol. This was a draft document. I don't know where 
the number came from but it was an extraordinarily modest 
number in the context of what's regarded to Tesla and in the 
context of the overall CAFE target.
    Listen----
    Senator Warren. Well, I appreciate that you think it is a 
small number but, you know----
    Mr. Bainwol. Well it's one theory as to what Tesla was 
recorded.
    Senator Warren. But we are not talking about Teslas. What 
we are talking about are gasoline powered engines here.
    Mr. Bainwol. So----
    Senator Warren. And we are talking about not meeting 
established EPA standards.
    But I think that what is clear, and I asked you whether you 
have got any evidence on this and you said, no, even though you 
are supporting this and saying it is backed up by evidence.
    Neither the idea nor the number is based on any concrete 
research. I think this is just trying to roll back part of the 
EPA rules without having to tell the American people about it.
    In 2014 more than 32,000 people were killed in motor 
vehicle crashes, as you rightly pointed out. That is 32,000 
reasons right there to encourage the adoption of promising 
safety technologies like automatic emergency braking.
    Car companies should make cars safer and they should also 
meet their fuel economy obligations, period. If they do not 
want to do that then they should face the American people and 
explain how they want softer pollution standards and then let's 
see what the American people have to say.
    Mr. Bainwol. But we----
    Senator Warren. Thank you, Madam Chair.
    Mr. Bainwol. May I respond, Senator?
    Chairman Murkowski, may I have an opportunity to respond a 
bit?
    So we signed up for the CAFE program. And as I noted, the 
CAFE program is a consumption mandate not a production mandate. 
I showed you the number of models, both electric hybrid, and 
high MPG models that we've generated and put in the showroom. 
So we are doing our part.
    If it were a production mandate the issue would be over, 
but it's not a production mandate. It's a mandate on what 
consumers buy, and consumers are not buying the products that 
you want them to buy.
    Senator Warren. But----
    Mr. Bainwol. There's a challenge.
    Senator Warren. I asked for the scientific evidence for how 
it is that we have a build this proposed to say a few----
    Mr. Bainwol. But let's talk scientific evidence.
    Senator Warren. You do what you are already doing.
    Mr. Bainwol. Let's----
    Senator Warren. You are going to get credit, and so far all 
you have said is you are not the one who hasn't.
    Thank you.
    Mr. Bainwol. Let's talk scientific evidence for just a 
second.
    The Chairman. [presiding]: We are out of time, and Senator 
Warren does have to vote.
    Mr. Bainwol. Okay.
    The Chairman. So maybe you can do that in response to 
another member.
    Mr. Bainwol. Perfect, thank you.
    The Chairman. Thank you, Mr. Bainwol.
    Senator Daines?
    Senator Daines. Chair Murkowski, Ranking Member Cantwell, 
thank you for holding this hearing on this very important and 
timely topic.
    My home state of Montana is a big state. It is the fourth 
largest state. It is not as big as Alaska, Madam Chair, but we 
are the fourth largest.
    We have a very dispersed population, over 75,000 miles of 
roads. We have the second highest rate of car ownership in the 
country, so it brings about unique challenges and extraordinary 
dependence on our transportation infrastructure.
    Montana's extensive transportation system is a pillar of 
our economy. It allows visitors, residents and freight to 
traverse the state. It goes without saying, it is imperative 
that we keep people and freight moving as efficiently and 
safely as possible.
    Today we have touched on the role of regulations and 
standards in driving auto industry innovation. My concern with 
mandates in this domain, like so many others, is that they 
typically do more harm than they do good. Based on cases we 
have seen under this Administration, they are often 
unattainable. They pinch the wallets of hardworking Americans, 
hardworking Montanans, and they waste hard earned taxpayer 
dollars.
    For example, as Mr. Bainwol points out, of the 17 and a 
half million vehicles sold last year only approximately 400,000 
of them were plug in hybrids and battery electric and fuel cell 
vehicles, not even reaching half of President Obama's goal to 
have a million on U.S. roads by 2015.
    Another case in point, in 2008 Congress mandated the 
installation of passive train control on freight rail tracks 
that carry passengers of certain hazardous materials by the end 
of 2015 despite the rail's best efforts. The complexity and 
sheer scale of this implementation make full development and 
deployment of PTC by the end of this year impossible.
    Additionally, President Obama's Fiscal Year 2017 budget 
will request $4 billion for the development of autonomous 
vehicles. Meanwhile automakers are going to invest $800 billion 
a year globally on R and D to produce reliable and safe 
mobility solutions. Ninety-nine percent of this investment in 
America is from private, non-governmental sources according to 
the Alliance of Automobile Manufacturers.
    We should continue innovating technology to make our 
vehicles safer and make them more efficient, but we should let 
consumers determine the market for vehicles not a bunch of 
Washington bureaucrats.
    My question is for Mr. Bainwol. As you note, public 
policies and regulations do not always align with the 
preferences of consumers. Could you expand upon your vision for 
a more productive relationship and emphasize a productive 
relationship between industry and government, and how do you 
see reducing the Federal role in vehicle technology innovation 
may actually benefit the industry and benefit the consumer?
    Mr. Bainwol. That's a tough one, but easier than Senator 
Warren's question, so thank you.
    The goal of fuel efficiency and electrification, those were 
social goals. And to get there requires an investment on the 
part of OEMs and that's the $100 million that you've 
referenced. It requires consumers playing ball because it is a 
consumption mandate not a production mandate, and it requires 
government being supportive either in the form of research help 
but again where it's 99 percent private or in the form of 
infrastructure to induce the purchase of electric and hydrogen 
vehicles. So it's a complicated matrix.
    But once we've established that we're shooting for a 
target, we've got to find a way to get there. In a low gas 
priced environment that's a challenge, and it's exacerbated by 
the success of the conventional engine.
    So we're kind of caught. We're engaged in the research. 
We're producing magnificent product. We want these programs to 
succeed, electrification, fuel cell and other alternative power 
trains, because we have to both because it's good for the 
environment but also because we have mandates to make that 
happen. But it's a trick because consumers do want to do what 
consumers want to do. They are rational in their behavior. And 
as I indicated earlier, policymakers seek to optimize that 
outcome and consumers are motivated by a different standard 
which is enough is enough.
    If they can save $5,000 and apply that to a college 
education or to food on the table and not buy a hybrid, they 
may choose to do that. And then we're caught in the middle. 
It's a challenge.
    Senator Daines. It may seem counterintuitive to some, but 
how do you see reducing the Federal role in vehicle technology 
and innovation actually benefiting the industry and benefiting 
the consumer?
    Mr. Bainwol. So I think where government could be most 
helpful would be to get rid of regulatory friction. We have the 
ZEBB mandate for a quarter of the marketplace. It's not a 
Federal rule, but it's a rule that effects 25 to 30 percent of 
the country.
    We have the NHTSA MPG requirement and we have the EPA 
greenhouse gas requirement, and they're not harmonized. If we 
had one national program, in truth, then it would be much more 
efficient to comply. We could reduce the cost of the vehicles. 
That would speed up adoption. That'd be a great thing.
    So there's a way to square this, but we've got to get rid 
of regulatory burdens. We've got to provide the infrastructure 
support, and then there's a chance for it to succeed.
    Senator Daines. Thank you, Mr. Bainwol.
    The Chairman. Senator King?
    Senator King. Thank you, Madam Chair. Sorry to be late. I 
was at an Armed Services hearing.
    First I should say I am excited that I just bought an 
electric car and am looking forward to using it.
    I apologize if I am repeating because I have not heard your 
testimony, but one of the most interesting aspects of electric 
vehicles, it seems to me, is the potential for a more efficient 
utilization of the grid because of the fact that most people 
will charge their cars at night which is the time when we have 
excess, both excess capacity and excess capability on the 
wires.
    Is that something that you have discussed and if you have 
not, do you, anyone of you, wish to address it? Yes, sir?
    Mr. Friedman. Thank you, Senator.
    Let me say a few words about that because at the Department 
of Energy we just recently released the core of our plan for a 
grid modernization effort. And as part of that effort there's 
going to be over 220 projects looking at improving the 
reliability, resiliency of the grid and increasing its ability 
to integrate variable sources of energy such as wind power and 
solar power.
    A couple of key parts of that are studying the ability to 
integrate electric vehicles, fuel cell vehicles, into the grid 
so that at night when you have more wind blowing you can use 
cost effective wind power. During the day when demand is up, 
maybe the batteries or fuel cell vehicles can provide 
electricity to the grid to help balance those loads.
    I think that's a great example of why government has such a 
critical role in bringing these technologies to the marketplace 
and giving consumers more choices.
    If you look back over my lifetime we've seen six major oil 
price spikes that have either dramatically slowed or reversed 
economic growth in the United States. And so we have to look at 
the long term as we invest in electric vehicles and in more 
fuel efficient vehicles because if all we do is look at the gas 
prices today, just like in 2007, we're going to drive the auto 
industry into a ditch.
    Instead we need to focus on investing on technologies that 
double fuel economy, that provide electrification and improve 
the resiliency of the grid to save people thousands of dollars, 
to tap into cleaner, lower carbon fuel sources and to give 
consumers a lot more choice in the marketplace.
    Gas prices are going to spike again, and we've got to be 
ready.
    Senator King. Yes, ma'am?
    Ms. Cullen. Senator, in addition to the benefits of the 
mobile load that David mentioned, the rise of electrification 
is also building out the battery segment. It's scaling up 
options in both residential and utility and distributed energy 
storage. Both new and post automotive use batteries are being 
used too, as a grid resource.
    Senator King. Like the Tesla house battery that came out of 
the automobile technology
    Ms. Cullen. Correct.
    The Tesla's partnership with Panasonic on their giga 
factory which is building markets for energy storage while 
building out, building scale in the battery segment.
    Senator King. But what I think a lot of people do not 
realize is that the grid is like a church built for Christmas 
day. It has enough room for all the parishioners, but on a slow 
Sunday in March there are a lot of empty seats. The wires are 
built for the heaviest day of the year and at night, 
particularly in the winter because they are more conductive in 
cold weather, at least in my region of the country, there is a 
tremendous excess capacity.
    You could increase the load dramatically at night which 
presumably electric vehicles would without a dime of additional 
infrastructure investment. I think that is one of the 
attractive features of electric cars beyond just the fact of 
freeing yourself from dependence on the volatile fossil fuel 
price.
    Ms. Cullen. In fact one of the earliest studies of this 
from one of the labs estimated that if 73 percent of the 
vehicle fleet were electrified you could fill its need with 
existing grid capacity without adding any new generation.
    Senator King. Yes, I think that is an important point in 
this discussion other than the vehicles themselves.
    I missed your testimony. In just the few seconds left are 
there new technologies on the horizon? The big issue is range, 
I suppose. And where are we on battery technology and getting 
to the place where we are going to have a 200- and 300-mile 
range on a change?
    I remember a fellow who was going to have batteries that 
were removable so you could drive into the station and take out 
the old one. It is like trading in your propane tank. What 
happened to that idea?
    Mr. Friedman. Well a couple of words on that.
    First, I'm holding here a lithium ion cell that uses nickel 
manganese/cobalt technology that was developed at our national 
labs. This kind of technology is now being licensed to the auto 
industry. It's helping to drive electric vehicles like the 
Chevy Bolt to 200 miles range.
    We're continuing to invest. And in fact, under mission 
innovation we need to look at dramatically increasing our 
investments in technologies like these so that consumers can 
have those 200-, 300-, 400-mile battery electric and fuel cell 
electric vehicles to give the exact benefits you're talking 
about.
    Senator King. Developments in battery technology have huge 
implications for rooftop solar, for example and also again, for 
grid stability. I think there is a national security interest 
here in decentralizing the grid so that it is not subject to a 
catastrophic centralized attack and could be more self-healing 
if you have distributed generation and distributed storage.
    You are nodding. Can somebody say yes?
    Ms. Cullen. Yes.
    Mr. Friedman. Yes.
    Senator King. Yes, nodding does not go.
    Mr. Friedman. Yes, it doesn't.
    The Chairman. For the record.
    Senator King. Yes, exactly.
    Mr. Mosquet. The one thing I would add is I think as we go 
to extended range batteries for 200 miles or more, which is 
actually the trend, I think we will probably need more 220 
volts installation. And so there will be actually a need for 
some upgrade of the last mile of the grid, potentially also 
some support to the consumer who today is paying the bill of 
that increased span. And it was at some point, some support at 
this and local states for that and that's probably something 
we'll have to think about if we want people to access more with 
new cars like the Chevrolet Bolt which is offering much more 
mileage.
    Senator King. Madam Chair, may I ask one followup question?
    Oh, I am sorry. Senator?
    Senator Franken. I object.
    Senator King. Yes.
    Senator Franken. No, go ahead.
    Senator King. You are objectionable anyway, sorry.
    Senator Franken. Now I do object. [Laughter.]
    Senator King. Are there any estimates of the number of, or 
I guess you told me 70. We could go to 73 percent of the 
vehicles without changing the grid. Do we have estimates of 
what would be required to go to 220, for example? Does that 
require something new to the house or isn't 220 what a clothes 
dryer uses? So the house is just a matter of rewiring your 
house to have a 220 in the carport.
    Ms. Cullen. So just quickly. So a level one charging it's 
your standard.
    Senator King. Right.
    Ms. Cullen. Standard 120 outlet. Level two is 240 and 
that's what your dryer plugs into.
    Senator King. Right.
    Ms. Cullen. And that will charge your car.
    Senator King. And then there are the super chargers that 
will charge it----
    Ms. Cullen. DC fast charge and that's 480 volts, and that's 
more of a commercial and public installation not something 
you'd likely have in your garage.
    Senator King. How many people could have electric cars with 
short ranges? In other words, how many people only use their 
cars for short trips? Do we have data on that?
    Ms. Cullen. We do. In fact, the vast majority, more than 80 
percent, of commuters travel less than 40 miles a day. And I 
think the charging patterns have shown that the fact is 80 
percent of charging happens at work and at home, and the last 
20 percent is public charging and opportunistic charging.
    And not that that's unimportant because that's the part 
that adds to long distance travel, increases electric miles 
traveled overall. But in fact, the existing infrastructure is 
supported by workplace and home charging.
    And the cost of installing T40 level charging, although 
they vary based on how old your house is, whether you have to 
upgrade the panel, in fact have come down materially.
    Mr. Friedman. I think that's a really important point. I 
mean, we have a program called the workplace charging challenge 
which is focused on getting more and more companies, more and 
more partners, to install workplace charging even at the level 
one, 120-volt range. We're up to about 250 partners. We're 
looking to work toward doubling that.
    And you know, I own a plug in vehicle. If I could plug in 
at work that could easily effectively double the range that I 
could use on a battery, so it's an incredibly effective option.
    Senator King. There are charging stations in the Senate 
garage. They charge an arm and a leg besides the car, but other 
than that, we do have them.
    Thank you, Madam Chair.
    The Chairman. Senator Franken?
    Senator Franken. I noticed that no one answered Senator 
King's question on the what happened to the battery that you 
pop in and pop out, and I was very intrigued by that because 
Israel was doing that.
    The answer that I got, and I do not mean to do your job, 
but I think it was that Israel is a very small country, so 
electric cars make more sense and also they do not have many 
brands of car. The idea that the battery would be like a high 
percentage of Israelis would have the same car with the same 
battery. So I love the idea of it, but it does not seem to work 
for the United States.
    Is that kind of accurate?
    Ms. Cullen. That is accurate.
    There are the additional challenges that the business model 
not only requires a standardized vehicle and battery 
configuration that it can be swapped out, it also contemplates 
that you would have an inventory of very expensive batteries 
waiting for people to come in and get them swapped out.
    Senator Franken. Which makes sense if everybody has sort of 
the same car. What I loved about this was that I could ask 
questions about if it had a sound effect in it. So that is too 
bad.
    Mr. Mosquet. But so most countries, no longer the U.S., 
have abandoned the project and notably because of the logistic 
challenge of basically rebalancing the loads of batteries that 
may not be in the right places and would be shipping batteries 
from one station to the other to rebalance the load. And so it 
seems not to be, actually, a great solution.
    But fast charging actually at service stations is a 
solution that within 15, 20 minutes you could get, I don't 
know, 50 to 90 miles extra for your car. And then you'll do the 
last part of your travel. That's probably the solution that 
will be the most effective.
    Dr. Gearhart. And that's the analysis I'd seen as well is 
that the opportunity cost of having that much space tied up in 
racks of batteries that the owners of service stations have 
much higher value uses for those spaces, so.
    Senator Franken. Glad that in addition to giving Senator 
King three extra minutes, I have spent my two minutes and 15 
seconds on answering his question.
    The Chairman. You are just here to help.
    Senator Franken. Yes, so I am just here to serve my other 
colleagues. That is why I'm so popular.
    I was fascinated with all the testimony, and Mr. Friedman, 
your testimony laying out all the incredible advances that we 
are making.
    When cleaner, reducing the cost of high energy, high power 
batteries by more than 45 percent in three years. This is very, 
very exciting, I think.
    The one thing we had a few years ago, I know the Chairman 
remembers when we had members of the American Energy Innovation 
Council. Remember it was Norman Augustine of Lockheed and there 
was a guy from Cisco and General Jones, I believe. They were 
basically saying that we used to spend a higher percentage of 
our GDP on energy research.
    At a time where, in the paper today 2015 was the hottest 
year on record by a significant margin over the previous 
hottest year which I think was, well I know was, the previous 
year, and we have a real problem here.
    My question is, and it can be to anyone but especially Mr. 
Friedman, shouldn't we be spending more on basic research on 
this exact kind of research as a percentage of our GDP?
    Mr. Friedman. Well in short the answer is yes, absolutely. 
In fact that's why President Obama joined with 19 other world 
leaders in November in kicking off an effort called Mission 
Innovation which is about trying to get, not only the United 
States, but the globe to potentially as much as double spending 
on clean energy research and development, and putting that 
investment toward technologies that can be investable by 
industry.
    The way government works really well is by working on the 
tough problems that industry cannot do on its own and then 
being in a position to hand off those advances to industry, who 
can then provide more choices, more technologies, more options 
for consumers so that we can ultimately develop the low carbon 
diet we need to address global warming pollution.
    Senator Franken. We have done this successfully time and 
time again, including in the oil and gas industry with 
hydraulic or making possible this revolution that we have had 
in getting gas and oil out of shale. That was a partnership in 
many ways and it came out of our national laboratories.
    To me, I just think it is absolutely essential that we 
spend more in healthcare and in the National Institutes of 
Health needs more funding for things like Alzheimer's, but this 
is so important and the benefits, the off shoots. Can you give 
me some data on what the benefits are of the money that we 
spend?
    Mr. Friedman. Well a few examples and you know, you talked 
about public health. In many ways these are public health 
issues. The investments we've made to improve heavy duty diesel 
engines between saving fuel and saving lives by reducing asthma 
and lung disease, have delivered a 70 to 1 benefit to cost 
ratio as a result of Department of Energy investments.
    Overall, if you look over the last 20 or 30 years, we've 
delivered a 24 to 1 benefit to cost ratio. So it's clear that 
when we invest in innovations, when we develop technologies 
that can save lives, save fuel, cut carbon emissions and cut 
oil use, we deliver back to taxpayers. I would argue we're a 
very good investment when it comes to the future of the nation.
    And, you know, you talk about health care and 
pharmaceuticals, they spend about 50 times what we do on a 
sales basis on research and development than we do on clean 
energy. We need to close that gap.
    Senator Franken. Okay, well, thank you.
    I know the Chairwoman at the beginning of this hearing was 
talking about being technology neutral, and I have heard this 
analogy to a race and that you do not know which horse is going 
to win the race. Having every horse on the track at the 
beginning is good and we do not know if hydrogen now is behind 
by some analogies in this race, but you never know at the end 
what is going to be the technology that wins the race. So I 
agree with the Chair.
    The Chairman. Thank you.
    I want to talk about what Alaskans are talking about right 
now, trucks, because we drive a lot of trucks. I was prompted 
on this by Senator Daines as he mentioned, Montana is big. You 
have a lot of open spaces. Alaska is big, and we have a lot of 
open spaces. We haul a lot of gear. We just haul a lot of 
things whether it is the boats or the four wheelers or the snow 
machines or the stuff that you just move around. We haul it in 
worse conditions than Washington, DC is seeing here. We have 
actually got real snow accumulation. There is a lot of interest 
in terms of where the industry is going, when it comes to these 
technologies.
    I noted in my opening statement that Ford is looking at an 
F-150 that can run on compressed natural gas and propane. 
Certainly that is interesting, but when we talk about the 
difference we are making with lighter vehicles to gain fuel 
efficiencies, that is important. You cannot have it too light 
or then you have your trucks sliding all over the place and you 
cannot haul what you need to haul.
    Tell me where we are in meeting that consumer demand, 
because in certain parts of the country I would venture to say 
that there are probably a lot of people here on the Eastern 
seaboard that are really interested in what is going on with 
how we are making our trucks more fuel efficient, but still 
safer and still very, very capable.
    In addition to that, recognizing that in places like Alaska 
or Minnesota, you have some very cold temperatures, so some of 
the things that we're talking about with our fuels----
    Senator King. Or Maine.
    The Chairman. Oh, my gosh. I am looking at you at the other 
end of the table here, of course, Maine.
    Senator King. When you go to Northern Maine all you see are 
trucks.
    The Chairman. My Arctic Caucus co-chair here. [Laughter.]
    The Chairman. But these are some of the issues we face when 
we are dealing with colder temperatures and trying to meet the 
fuel standards and requirements, again, with trucks. Where are 
we with trucks? Somebody talk to me. You all need to talk to me 
about trucks because that is what Alaskans are talking to me 
about when it comes to their vehicles.
    Mr. Bainwol. So I'll start by making I guess, two points. 
The first is that at the end of the day, as I mentioned, this 
is a consumption mandate.
    The Chairman. Right.
    Mr. Bainwol. And we have to respect what consumers want to 
do. The CAFE program tries to do that by establishing a program 
that's footprint-based.
    The Chairman. What?
    Mr. Bainwol. Footprint-based.
    The Chairman. Okay.
    Mr. Bainwol. So the 54-5 is a composite that is, kind of, a 
weighted average of what cars get, of what larger cars get, 
what trucks get. And so it's all blended. And so it does 
provide for some flexibility for trucks.
    Now moving forward in the out years the cliff or the rated 
growth in terms of expectations on fuel efficiency for trucks 
is rising. And so it is a trick, but it's not the same number 
as the 54-5.
    And so, our mission as auto makers is both to strive to 
comply with the obligations of CAFE but also to provide what 
consumers want. I think at this point that part is, in the 
early years, working.
    The Chairman. Some others.
    Where are we on the technologies in advancements?
    Ms. Cullen?
    Ms. Cullen. Senator, the choices in electrification are 
also making their way into those heavier segments of vehicles. 
If you get to the auto show you will see hybrid, plug-in 
hybrid, and fuel cell SUVs and crossover vehicles. The auto 
makers are meeting the demands of their consumers for 
drivetrain capability as well as their drive cycles.
    There are also great advances being made in the next 
segment up, for instance in medium duty. For instance, there 
are plug-in hybrid trouble trucks so that when a utility goes 
out late at night it can work on a site silently using its 
electric power to operate the, activate the bucket. Thus they 
operate cleanly, quietly and safely because the workers on the 
ground can hear what the arm is doing.
    Moving up through the weight scale then the heavy duty 
segment. There are fuel cell buses on the road today. They 
accommodate those heavier loads, and based on their range and 
performance they're optimized for that application.
    The Chairman. But we are still not seeing them in the 
trucks. You know, we are a three truck family and we are still 
looking at the older trucks that are out there.
    Mr. Friedman. Well and the story with trucks.
    The Chairman. Mr. Friedman?
    Mr. Friedman. In many ways it is actually, right now, it's 
a story about innovations that are dramatically boosting the 
efficiency of internal combustion engines.
    I mean, you can buy a truck engine now that's a V6 instead 
of V8. It gives you all the haul and power of that V8. It cuts 
weight. It delivers the same or better safety performance, and 
a lot of those technologies were supported by investments from 
the U.S. Government.
    So I would argue there's been massive progress when it 
comes to pickup trucks and SUVs. It's just not as obvious in 
some ways because it's under the hood or it's in the materials. 
But when you look at the standards that Mitch was talking about 
you can roughly think of it is no matter the size of your 
vehicle you're going to roughly double the fuel efficiency of 
that vehicle.
    For a truck, that's even more valuable than for a car 
because you use so much more fuel. So you can save money on 
fuel, have the same hauling power, the same or even better 
safety with technologies that Ford and GM and others have been, 
I think, helping lead the way on.
    Nissan right now is about to introduce a Cummings Diesel 
into their Titan pickup truck. It's dramatically boosting fuel 
efficiency using a diesel engine. So real, great progress on 
the internal combustion engine and weight reduction side for 
those big vehicles.
    The Chairman. Dr. Gearhart, are we doing anything at NREL?
    Dr. Gearhart. Yes.
    Another thing I'd like to add to this is at NREL, for 
example, we're looking at the various molecules that we can get 
out of biomass and the unique fuel properties that are 
associated with those different molecules that when combined in 
different ways and combined with what we can get from petroleum 
feed stock, that's going to enable, I think, the next 
generation of combustion improvements. And so, we'll be able to 
continue to make improvements on the efficiency of internal 
combustion engines while increasing the renewable feed stock 
that's going into those liquid fuels. I think those two 
together have a potential to give us fuel economy and reduce 
greenhouse gas emissions.
    I think there's a lot of room that hasn't been pursued 
there. If we start to look, not just at engine efficiency but 
also what we can do on the fuel side, to use various bio feed 
stocks.
    The Chairman. Good.
    Senator King, if you want to do wrap up questions, please 
do, and then we are going to let our panel go at 11:30, as 
promised.
    Senator King. Thank you, Madam Chair.
    First, I want to thank you for holding this hearing. I 
think this is an important topic, and I appreciate your 
allowing us to have this discussion.
    Mr. Mosquet, I am interested in the money in the finances 
of this. When will electric vehicles be fully competitive and 
not need a tax credit and particularly with regard to gas 
prices? I heard recently about one state whose tax credit went 
away and the sales plunged.
    The real question for any renewable, it seems to me, is 
when can it stand on its own two feet. I would like your 
thoughts about where this goes. Of course, I realize there is a 
lot of speculation about what are gas prices. It is hard for 
anything to be competitive with gas at the price it is today. 
But your thoughts?
    Mr. Mosquet. So, as you said, Senator, there's nothing sure 
about the future. But I think it may take some time. That would 
be the short answer for a number of reasons.
    First, if we look today at the evolution of the cost of the 
technologies, I mean, they have significantly reduced that 
cost. But if we want to have cars that have a 200 miles or plus 
driving range, we will need 50, 60 kilowatt hours of battery to 
fuel those cars. Then the cost even when the sales are at $100 
per kilowatt hour, multiplied by 50 you see what the cost is 
going to be to the OEMs. So it will remain a significant cost. 
But it depends then on what are the breakthroughs that are 
going to come up to take that. I would say another 50 percent 
down. It's not impossible, but it's probably a few years out. 
It's also highly dependent on the price of, you know, gasoline, 
of course.
    We did our initial calculations with ranges of anywhere 
between $120 and $180 per barrel and we're not there today 
because consumers are looking for paybacks up to typically 
three years to buy more fuel efficient vehicles. We're far from 
this for years.
    Senator King. Well the current plunge in oil prices is 
attributable directly to my having made the decision to buy the 
electric car because it just----[Laughter.]
    Mr. Mosquet. But that's the good thing is I think. The more 
we improve the efficiency of conventional engines and the more 
we develop battery technologies and fuel cells, the more we 
keep the oil prices down. And so I think it's both actually a 
winning proposition for the consumer and for the country but at 
the same time it makes the life of the battery electric vehicle 
tougher in the long term.
    Senator King. It is interesting you should say that. An old 
professor friend of mine, Richard Hill, an engineering 
professor at the University of Maine, made the most profound 
observation about oil prices I have ever heard.
    He said,``Oil prices in the future will always be the 
opposite of what you expect. If you expect them to be high and 
act accordingly by conserving and doing more conservation kind 
of measures, then that will create an excess supply which means 
prices will be low. If you think they're going to be low and 
you buy cars that get eight miles per gallon, then they're 
going to have a contraction of supply and prices will be 
high.''
    I have always thought that was an interesting observation. 
Oil prices in the future will always be the opposite of what 
you expect.
    Mr. Mosquet. Which means, by the way, that I think maybe 
it's not the market that we have to let evolve naturally. I 
think that this is why the legislation is important because 
otherwise you get the opposite effect of what you think you're 
going to get.
    Senator King. Madam Chair.
    The Chairman. Thank you, Senator King.
    Thank you to each of you for the contributions that you 
have provided to the Committee here this morning. I think it 
has been useful. It is always nice to know what is new.
    I guess if we really want to see it, touch it, and feel it, 
we should go to the auto show and see the advancements that 
have been made. But I think it is clear that we are moving 
forward in different spaces. Quite honestly, the driverless 
cars are one that it is going to take me a while to get 
comfortable with.
    But the advances we are making in ensuring that there is a 
level of safety, that there is a level of efficiency, all while 
responding to what the consumers are hoping for in a range that 
is affordable is good news for us.
    So with that, I thank you for your contributions this 
morning, and we stand adjourned.
    [Whereupon, at 11:28 a.m. the hearing was adjourned.]

                      APPENDIX MATERIAL SUBMITTED

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