Energy Secretary Steven Chu hailed the increased adoption of electric vehicles during a policy summit at the Washington Auto Show Thursday, arguing that more hybrids and plug-in electric vehicles could help wean America from its dependence on foreign oil.

The United States imports roughly $1 billion of foreign oil every day—dominated by the transportation sector, Chu said—and reducing that demand would have far-reaching impacts for national security and could save American families and businesses money.

Electric vehicles currently make up only a small portion of the U.S. passenger vehicle fleet, but that could change as the cost of EVs declines and more charging stations are established across the country, he said.

"We need an infrastructure for charging," Chu said, challenging America's companies to start installing charging stations on their campuses. "We want a diverse choice for transportation other than just oil-based."

The Obama administration has been confident in the progress and adoption of EV technology, projecting 1 million would be in use by 2015. Chu conceded that recent sales of EVs were off that mark, but remained optimistic given the shifting market forces at play including consumers who are increasingly conscious of fuel efficiency.

Thanks to cost reduction in batteries and wider consumer awareness of EVs, Chu said the federal government soon might not need to continue tax incentives for EV purchases.

"We can get to $20,000 with no subsidies," he said of the cost for EVs. "When you get close to that, the market will speak for itself."

But as much as consumers are focused on their fuel costs, they can't ignore the sticker shock that often comes with shopping for EVs. Chu also challenged the nation's automakers to produce a plug-in electric vehicle that favorably compares with an internal combustion vehicle that gets 45 miles to the gallon.

"It's great that internal combustion vehicles are getting better and that reduces our dependence on foreign oil, [but we need to get to where] you can have a choice and cost doesn't become a factor," Chu said.