Revving Up Electric Cars With Government Cash

We'll never know if the electric car industry would have been viable without subsidies.

Indianapolis, Indiana—Last year, President Barack Obama set the goal of putting 1 million plug-in electric hybrid (PHEV) automobiles on American roads by 2015. A PHEV has both a gasoline and an electric motor and its batteries are rechargeable using a plug to an external electric power source. As part of his $787 billion stimulus package, a tax credit up to $7,500 is available to consumers as a way to encourage them to buy such cars. The tax credit is needed because PHEVs cost up to $10,000 more than comparable conventional vehicles. In addition, the president pledged $2.4 billion of his stimulus package to jumpstart the electric car industry, including $1.5 billion to battery manufacturers, $500 million to other PHEV component makers, and $400 million to build infrastructure for charging the cars.

Intrigued by all the hoopla, I persuaded the folks at the lithium ion battery company Ener1 in Indianapolis to let me tour their factories. The Hoosier State aims to be “the capital of the electric vehicle industry.” At least that’s what Gov. Mitch Daniels (R) asserted recently. Becoming the capital of the electric vehicle industry doesn’t come cheap to taxpayers. In January, the Department of Energy awarded a $118.5 million matching grant to Ener1 to build a gigantic battery factory near Indianapolis. In addition, Ener1 was awarded a state incentive package of $21.3 million and a Hancock County package valued at $48.6 million. Ener1 has also applied for a $300 million low interest loan from the Department of Energy’s Advanced Technology Vehicles Manufacturing Loan Program to build out additional manufacturing capacity.

In the meantime, Michigan’s Gov. Jennifer Granholm (D) is also scheming to make her “state the advanced battery capital of the world.” Ener1 rival, A123 Systems located in the Wolverine State pulled down a $249 million DOE grant, plus $125 million in incentives from the state of Michigan to build their new battery plant near Detroit.

“The age of the electric car is here,” gushes the cover of the latest issue of Wired. As evidence, Wired features Tesla Motors which so far makes a two-seater all-electric sports car, the latest version of which sells for only $159,195, before taking the tax credit. In January, the DOE loaned Tesla $465 million to build its all-electric sedan which reportedly will sell for $57,400 before the tax credit. (By the way, I tried getting into a Tesla roadster at the company’s Manhattan showroom last summer, and as an under-exercised 6 feet 5 inches in height I am simply not flexible enough to fit.)

Ener1 claims to be the first and only domestic manufacturer of commercial-scale automotive-grade lithium-ion battery systems. Up until last week, the battery manufacturing division was named EnerDel, but that has now become the brand name of the batteries the company produces.

The scale of ambition on the part of the company is impressive. David Hahn, senior director of manufacturing gave me a tour of the smaller facility in Fishers, Indiana, where the company is setting up their first domestic manufacturing lines for the battery cells. Just an interesting historical sidebar, a lot of the research for General Motors’ legendary first electric car, the EV1, was done in the Ener1 building.

Battery cells are thin plastic-covered wafers that are stacked together to form massive battery packs that provide the power to drive a vehicle. Right now the battery cells are made at the Ener1 Korean facility, which the company acquired in 2008. The Korean company is the third largest producer of lithium ion batteries in that country.

While on the tour, we encountered a team from the Japanese capital equipment vendors who were busy installing the first battery cell manufacturing lines. Hahn explained that Ener1 purchased Asian equipment because there are currently no American manufacturers of machinery that can produce lithium ion batteries. While lithium ion technology was invented in the U.S., Asian countries in the 1990s perfected manufacturing the batteries for consumer electronics. However, he did note that some American companies are beginning to develop the capability of producing such equipment. Right now, the Ener1 facility has the hushed feel of a well-run laboratory. Clean, well-lit, and populated by a lot of people wearing smocks. The facility is scheduled to produce its first cells by November 1 of this year.

Next, I was taken over to see the vast 140,000 square foot facility in Mt. Comfort which is being tooled up to become Ener1’s chief factory for assembling the battery cells into battery packs capable of powering all electric vehicles. Ener1 plans to produce 11,000 battery packs in the first quarter of 2011. Eventually the factory will produce enough battery packs to power 60,000 all-electric or 600,000 hybrid vehicles. John Corbett, manager of quality, showed me how the delicate cells are assembled into 66-pound subpacks. It takes eight subpacks to create the battery pack that powers a THINK City all-electric vehicle. One subpack would be enough to supply electricity to run the equivalent of a Prius hybrid today.

Ener1’s main customer is the Norwegian electric car company THINK Global. In 2008, THINK went bankrupt and the Ener1 Group assisted the company through that process and acquired a little over 30 percent of THINK Global’s stock. A complete battery pack weighs a bit over 600 pounds, comprising about a quarter of the THINK City’s 2,400 pounds. The THINK City commuter vehicle has a range of 100 miles and a top speed of 70 miles per hour. The company is developing a 220 volt quick charge system that will enable drivers to charge the car's batteries from completely depleted to 80 percent in just 15 minutes. Or the car can be recharged at home overnight using 110 volt system in about 8 hours. THINK Global has announced that it is taking over a former RV factory in Elkhart, Indiana, where it plans to produce 20,000 electric cars by 2013. Like the rest of the nascent electric vehicle industry, THINK is seeking taxpayer support, in this case, a loan from the DOE’s Advanced Technology Vehicles Manufacturing Loan Program. Ener1 is also slated to provide batteries for Volvo’s all electric version of its C30 coupe.

After the tour at the Mt. Comfort facility, I went back again to chat with Richard Stanley, who is now the chief operating officer of Ener1. “Cost is still a challenge for the technology,” notes Stanley. He adds, “Many people don’t realize that battery manufacturing doesn’t progress like Moore’s law in electronics.” In 1965, microchip pioneer Gordon Moore predicted [PDF] that the number of transistors on a microchip would double every year. Figuring out how to jigger the chemistry of batteries so that they can store ever more electricity turns out to be a whole lot harder than cramming more transistors onto a silicon chip.

Car batteries now cost somewhere around $1,000 per kilowatt hour. Stanley thinks the price could fall to $500 per kilowatt hour in two years. The U.S. Advanced Battery Consortium has set the goal getting the costs down to $300 per kilowatt hour to become cost competitive with standard internal combustion engine automobiles. To get some idea of the cost that batteries add to an automobile, keep in mind that the capacity of a THINK car’s batteries totals about 24 kilowatt hours.

A recent study by the Boston Consulting Group argues that without a technological breakthrough in battery chemistries, it is unlikely that battery costs will fall to $300 per kilowatt hour by 2020. Nevertheless, the report projects that 26 percent of the new cars sold in 2020 (1.5 million will be fully electric, 1.5 million will be range extenders, and 11 million will be a mix of hybrids) will have electric or hybrid power trains. In 2020, the market for electric-car batteries will reach $25 billion. So what about President Obama’s goal of putting 1 million plug-in hybrids on America’s roads by 2015? Stanley thinks that that goal is a bit “aggressive.” 

Stanley believes that one of the electric battery industry’s biggest opportunities will be to supply electric batteries to all-electric fleet vehicles such as UPS and FedEx delivery vans and city buses. While the electric vehicles would initially cost more, they could save such companies a bundle on fuel costs. Delivery vehicles and buses, for instance, don’t travel great distances and return to centralized facilities where they can be easily charged up overnight.

Ener1 is also looking to use lithium ion batteries as a way to supply back-up power to the electric power grid. Gigantic banks of batteries could store power from intermittent renewable sources like wind and solar, making it unnecessary to build back-up fossil fuel facilities. Ener1 is working on a research and development project involving 1 to 5 megawatt hours of battery storage with Chilean electric company AES. In addition, Stanley suggested that used lithium ion car batteries might have a second life by being recycled into grid storage applications. Stanley also looks abroad to China. Ener1 has just teamed up with Wanxiang, China’s largest auto parts supplier to produce batteries for the Chinese market.

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  • ||

    Lithium ion batteries are a product of research funded by Exxon.

  • Max||

    Reason Science Correspondent Ronald Bailey, who doesn't have a fucking science degree, follows the money into a federally subsidized lithium ion battery factory in Indiana, but can't take his fingers out of his ass long enough to take notes, so this stupid article has been ghost written by Nick Gillespie, who is really good at taking his fingers out of his ass but not much else.

  • ||

    How are you privy to this information? And is all of his fingers? Why don't you then just say "hand"? At that point, it's the whole hand, amirite?

  • Max||

    Actually, I was being euphemistic. It's his head that's up his ass.

  • Shoeless Chris||

    Tiresome Troll is tiresome.

  • Everything Troll||

    This never gets old. Thanks, Episiarch!

  • Ron L||

    Ya know max, the Mikey D's in SF recently stopped serving the 'dollar menu' because of asshats like you.

  • Well...||

    Max|9.28.10 @ 4:40PM|#
    "Reason Science Correspondent Ronald Bailey, who doesn't have a fucking science degree"

    Well, no one here has a blogging degree either, but that doesn't stop him from posting his crackpot, narcissistic opinions. I'd call it a draw.

  • Wegie||

    So you liked the article?

  • Old Mexican||

    President Obama is devoting $2.4 billion in stimulus funding to jumpstart the electric car industry. The president also wants to see 1 million plug-in hybrid vehicles on the road by 2015.

    The President loves us and wants what's good for all of us. He is our Father and our Mother, and we love Him even more.

  • Wegie||

    It doesn't matter how much money dumb ass puts into development of the electric car. Batteries are not able to store the energy density necessary for a practical electric car.

  • Vermont Gun Owner||

    You're just not hoping hard enough!

  • Old Mexican||

    In the meantime, Michigan’s Gov. Jennifer Granholm (D) is also scheming to make her “state the advanced battery capital of the world.”

    Scheming is the right word, you got that right.

  • ||

    You know what I want? Fusion power, and lots of it. I also want autonomous flying cars, virtual immortality, a post-scarcity society, a space elevator, and robot slaves by the thousand.

    Did I forget anything?

  • ||

    You realize that the technology for all these things exists today, but an evil, all-powerful conspiracy of oil companies has kept us from being able to have it?

    All we need is some legislation, and all these things will be ours to buy for next to nothing at the nearest big box store.

  • ||

    Big box store ?! You meant mom and pop store on main street.

  • Barely Suppressed Rage||

    How about that George Jetson car that folds up into a briefcase when you push a button?

  • ||

    Well, yes, that's a good point. A mere flying car that can't be so compressed is aiming low.

    Oh, I did leave out replicator technology and the energy-efficient Dyson sphere.

  • Everything Troll||

    "Did I forget anything?"

    More than 12,000 people at the Trop, and a World Series ring?

  • Sam Grove||

    Hoors, tousands and tousand of hoors.
    I marry 'em all I betcha.

  • ||

    Moon maidens.

  • ||

    Pleasure droids? Oh wait, no you said that already.

  • Old Mexican||

    Stanley believes that one of the electric battery industry’s biggest opportunities will be to supply electric batteries to all-electric fleet vehicles such as UPS and FedEx delivery vans and city buses. While the electric vehicles would initially cost more, they could save such companies a bundle on fuel costs. Delivery vehicles and buses, for instance, don’t travel great distances and return to centralized facilities where they can be easily charged up overnight.

    "Under my Cap and Trade plan, electrical energy prices would necessarily skyrocket." - Presidential candidate Barrack Obama.

    Yep, they will certainly save a bundle - that is, until they STOP saving a bundle once we're made to get our electricity from windmills . . .

    http://www.faqs.org/photo-dict.....ndmill.jpg

  • ||

    Has anyone crunched the numbers to find out how much gas would cost here if all subsidies were removed? I'm wondering if at that point the electric or hybrid car would be on par cost-wise.

  • ||

    Sorry, sage, it's subsidies all the way down.

  • Old Mexican||

    Re: Sage,

    Has anyone crunched the numbers to find out how much gas would cost here if all subsidies were removed?

    What subsidies, sage? 25% of the cost of gas is taxes.

  • ||

    Sorry, Old Mexican, it's also taxes all the way down.

  • iamtheeviltwin||

    The estimates of total subsidies to Oil companies in the US range from $15B-$35B (according to Greenpeace) a year.

    The US (in 2008) consumed ~307B gallons of gasoline a year.

    If you (falsely) assume that all of those subsidies are wrapped up solely into production/distribution/etc of gasoline, then the subsidy per gallon would be somewhere between $0.05 - $0.11

    Now if you consider that the tax per gallon of gasoline is somewhere around $0.47...it seems it is taxed more than subsidized.

    (note this information was gleaned from a quick Internet search and ignored obviously kooky data like the website that claimed oil subsidies were in the multiple Trillion dollar per year range)

  • Old Mexican||

    Gigantic banks of batteries could store power from intermittent renewable sources like wind and solar, making it unnecessary to build back-up fossil fuel facilities.

    He's such a jester! His humor is so delicious and sophisticated and . . .

    . . . Oh, my, God - he's being serious, isn't he???

  • ||

    How BTW is solar power "renewable"?

    Grass is renewable. Forests are renewable, though it takes longer.

    The sun is, well, just there.

    What if a meaningful written language is a non-renewable resource? If not, the greenie-weenies have fucked us all!

  • Old Mexican||

    Re: Barry D,

    The sun is, well, just there.

    Solar energy is "renewable" in the sense that you can renew the energy stored in your batteries any time the sun shines on your expensive (and incredibly inefficient) photovoltaic panels.

    Same with wind - the "renewable" part is the energy stored in batteries, as wind doesn't blow constantly, plus the amount of energy extracted from wind varies with the cube of the speed of the wind (since we're talking about volume here, or flow.)

    http://guidedtour.windpower.org/en/tour/wres/enrspeed.htm

  • ||

    That mixes up language. Batteries are not an energy source, any more than a box is a source of sugar or a can is a source of oil.

    "Renewable" means that something can be used up, then built back up somehow, like the water behind a dam or a fuel that can be burned and then grown again, e.g. cellulosic ethanol.

    "Intermittent" means that something isn't on all the time.

    Solar and wind are energy sources that are not consumed, at any point. They're tapped into. Not sure what word to use, but "renewable" is not it.

    And the most important point: rechargeable batteries are not an energy source. Non-rechargeable batteries are a chemical energy source, where something is consumed.

  • Old Mexican||

    Hey, I was just trying to explain the rationale, not necessarily agreeing with it. Solar energy is not "renewable," as you indicated it - it is simply extremely abundant. So is wind - it is not a renewable, it is simply abundant: you cannot renew the wind as much as you can renew the sun.

    They are also intermitent.

  • Wegie||

    "Oh, my, God - he's being serious, isn't he???" Sad, but I am afraid so.

  • johnl||

    Ron is there an argument for this statement or is it a paraphrasing of Stanley? Cause it's not obvious.
    """
    While the electric vehicles would initially cost more, they could save such companies a bundle on fuel costs.
    """

  • ||

    johnl: It is a paraphrased claim by Stanley, but there is this study of gas-electric hybrid vans by the National Renewable Energy Laboratory which found, "Even with the extra cost of the hybrid vehicles, the overall cost per mile was cut by 15 percent."

  • johnl||

    UPS and FedEx trucks do seem like good applications for hybrids (lots of stop and start, professional drivers, ...). But their hybrids are ICEs that use electric motors in situations where that's economical (start and stop) or required (up hill). (Assuming those vans work like a Prius and not an Amtrak). There is no reason to assume that the fuel savings would still be there if we took the ICE away.

  • ||

    ICE ?

  • Ron L||

    Internal Combustion Engine

  • Ron L||

    Internal Combustion Engine

  • Wegie||

    In the first place are you talking about electric cars or hybrid cars?
    And second the National Renewable Energy Laboratory doesn't sound like a disinterested group!

  • Old Mexican||

    Like the rest of the nascent electric vehicle industry, THINK is seeking taxpayer support, in this case, a loan from the DOE’s Advanced Technology Vehicles Manufacturing Loan Program.

    Yes, because those greedy and self-interested investors do not want to part with their money, forever, through such ventures [read: money pits.]

  • Old Mexican||

    The company is developing a 220 volt quick charge system that will enable drivers to charge the car's batteries from completely depleted to 80 percent in just 15 minutes.

    The next step will be to achieve this without making the batteries explode... especially under a nice and toasty southern U.S.A. sun...

  • ||

    My 220 volt circuit runs my hot tub. Hell if I'm going to waste it on blowing up my car.

  • johnl||

    This is pretty fanciful. Stanley thinks heat stressed worn out parts from used cars are going to get sold to electrical utilities to use as new equipment?
    """
    Stanley suggested that used lithium ion car batteries might have a second life by being recycled into grid storage applications.
    """

  • ||

    "Stanley thinks heat stressed worn out parts from used cars are going to get sold to electrical utilities to use as new equipment?"

    Just make a law declaring them to be new again, and send the engineers who have been lying to us all about this "heat stress" and "wear" to re-education camps!

  • Tony||

    Libertarians hate innovation when it means upsetting Cato's corporate daddies.

  • Old Mexican||

    Re: Tony,

    Libertarians hate innovation when it means upsetting Cato's corporate daddies.

    There's no innovation
    Like sham innovation!
    There's no scam like it
    I know!

    It gets all the taxpayer money!
    It gets all the press it wants!
    It gets all the politico photo ops, but
    violates physics all the way!

  • Tony||

    Hahaha... because it's sound physics when you believe that dumping heat-trapping gases into the atmosphere for a century won't cause any heat to be trapped.

  • Old Mexican||

    Re: Tony,

    Hahaha... because it's sound physics when you believe that dumping heat-trapping gases into the atmosphere for a century won't cause any heat to be trapped.

    Hahaha... right. What does this have to do with the economics of batteries vs gas, Tony?

  • Tony||

    Your complete lack of credibility on any subject, which includes this one?

  • Old Mexican||

    Re: Tony,

    Your complete lack of credibility on any subject, which includes this one?

    The pot calling the kettle "black"?

  • calebthegnome||

    I call ad hominem!

  • Mr. Chartreuse||

    This coming from the guy who thought the atmosphere of Venus had burned off?

  • Jorj X. McKie||

    Burned off what? His skin?

  • Sam Grove||

    Heat "trapping"?

    Maybe "energy transfer retarding", but not "trapping"

  • ||

    CO2 doesn't really trap heat..

  • ||

    No. I just hate green rent-seeking and the retarded hippies like you who enable it.

  • ||

    Libertarians LOVE technology and innovation. We also want to see that technology prove itself.

  • Tony||

    Against massively subsidized industries with the resources and motivation to suppress any technology that might undermine them? Free market!

  • Mr. Chartreuse||

    Yes, yes, all those guys who supposedly made something that could run an engine for days without gasoline, but Exxon or some other corporation bought them out or had them killed.

  • Jorj X. McKie||

    I think you found an answer Tony. End all massive subsidies. Good goin'!

  • Matrix||

    That's precisely what the government does. By subsidizing one thing, you leave the rest out that could potentially be much better. Besides, there's no proof that all of these initiatives are better than the current system. Often, more energy (and carbon) is expended in pursuit of supposedly "clean energy" (hydrogen cells and ethenol anyone?).

    Oh, but when something that actually does work and is very efficient and clean (nuclear), the evironMENTALists scream and holler to shut it down... then they moan and groan about how the "Conservatives" are blocking clean energy initiatives.

  • Barely Suppressed Rage||

    The irony is ironic. The Obama administration and all the lefties are pushing the bullshittedly-named "zero emission" plug-in electric cars because they will save the environment.

    Slight issue here: where does all that electricity come from? The majority of electricity in the U.S. comes from burning coal.

    Obama's EPA and the environmental groups, are doing just about everything they can do right now to not only prevent any new coal-fired power plants from being built in the U.S., but also making life increasingly difficult for the existing ones.

    So if we're not going to burn coal, and we can't build new nuke plants, where are we going to get all that nice electricity to plug in our battery-powered cars?

    All that aside, I would love me a Tesla Roadster and would happily drive that back and forth to work every day.

  • Tony||

    How about a WPA for energy? Directed resources toward clean energy production however we can get it (including nuclear, if necessary).

    Nahhh... Government can't do anything right, so we must continue letting the industry status quo destroy the planet.

  • ||

    Tony, can you really imagine the government directing resources towards clean energy "however we can get it, including nuclear"?

    That's not how politics works, anywhere. That's what we mean by "government doesn't work". Political systems are not capable of turning loose whatever it takes and finding solutions wherever they may happen to be. That's not what they do, and it's not what they're for.

    Note that undirected free-market military action would also be a very bad idea. That IS what political systems are for, imperfect thought they may be.

  • Tony||

    It really only takes money and lots of it. Politics can surely accomplish that. It gives enough away to coal and oil, I don't see why it can't shift the subsidies to sources that aren't destroying the planet.

    You're right in that the problem is almost all political, not technological, though.

  • ||

    Politics replaced tribal warfare. Factions can fight over who gets power over what, and people don't get speared any more, thanks to politics.

    That's the only problem politics is meant to solve: preventing massive internal violence within a country.

    You know as well as I do that power struggles don't find solutions. Every large business interest will seek rent, environmental groups will fight to be sure that only their ideas of "correct" possible solutions will get any money, and coalitions will form to do both at once, see cap-n-trade. The only people left out of the equation will be you and me, who want to live modern, technologically-advanced lives without having to spend all we have on energy. (Ultimately, "clean" energy is a given, since in theory, anyway, free energy from the sun or the atom should be cheaper than digging up coal and burning it to make steam, anyway.)

  • Old Mexican||

    Re: Tony,

    It really only takes money and lots of it.

    It takes resources, not money (and NO, they are NOT the same thing.)

    Politics can surely accomplish that.

    Depends on what you want to call "accomplishment."

    It gives enough away to coal and oil, I don't see why it can't shift the subsidies to sources that aren't destroying the planet.

    First, coal or oil are not destroying the planet - the planet ain't going anywhere. Second, there's no reason to subsidize anything, the call to end all subsidies being sound.

  • ||

    One little thing to add...

    Because of politics and its rent-seeking power struggles, subsidies actually serve to BLOCK resources from going wherever they are needed to solve a problem. This either slows down or kills the solution.

  • ******||

    Agreed!

  • Ron L||

    Barry D|9.28.10 @ 6:10PM|#
    "..subsidies actually serve to BLOCK resources from going wherever they are needed to solve a problem."

    Careful there. Tony's brain won't take a lot of complexity before it explodes.
    Concepts like 'trade-offs' are entirely too difficult; keep it simple.

  • Old Mexican||

    Re: Tony,

    How about a WPA for energy?

    How about NOT?

    Directed resources toward clean energy production however we can get it[...]

    How ominous.

    The dream of tyrants:

    Stalin's Baltic Canal:
    http://upload.wikimedia.org/wi.....lanche.jpg

    Mao's forced industrialization:
    http://www.youtube.com/watch?v=fdpGIqr_HRQ

  • Tony||

    Don't look now, but there's a Hitler under your bed. Boo!

  • Drax the Destroyer||

    So how does "however we can get it" not possibly equal pointing guns at people and whipping them until they do something want? It is a bit open ended there, leaving room for your violent fantasies of the "environmental" revolution to run wild.

  • Tony||

    I mean using whatever technologies we need to.

  • Ron L||

    No, you mean what ever technologies *you* fantasize about.

  • Hooha||

    Well played, Ron! The truth effects liberals like a well-aimed baseball effects a colony of wasps!

    ...oh crap.

  • Matrix||

    Maybe we can take all you liberals, put you in hamster wheels, and make you run all day to generate the "clean" energy you so long for.

  • ||

    Capture all the hot air coming out of Washington, power the world.

  • Goobs||

    Isn't Moore's law that transistors double every TWO years?

  • ||

    I thought it was every 18-24 months. So yeah.

  • ||

    Goob & sage: It was amended later. I linked to the original 1965 paper.

  • Ron L||

    And it's not a "law"; it's an observation.

  • ||

    It really only takes money and lots of it.

    No, it takes money being spent the right way.

    Trust me, I can spend a trillion dollars on R & D and have nothing to show for it at the end. But that would be "money, and lots of it."

    Politics can surely accomplish that.

    Spending, yes. Spending it the right way? Not so much.

  • Oso Politico||

    Why not just skip the battery stage and jump right to the Galt motor solution, pulling static electricity straight from the ether (and for free!).

  • Shoeless Chris||

    Snore... wake me up when we live in cities look like 1960 was supposed to look like at the 1930 World Fair.

  • CBBTOO||

    "So if showering the electric car industry with cash isn’t enough, the feds may one day try to go the European route and rev up the market for electric cars by downshifting the market for conventional automobiles."

    Don't put ideas in their heads.

  • Drax the Destroyer||

    I'm sure that would help out the unemployment numbers.

  • Wegie||

    "We'll never know if the electric car industry would have been viable without subsidies." It's not viable with government subsidies!

  • Hooha||

    Zing!

  • Wegie||

    Has anybody on this thread driven an electric car? Not a hybrid an electric car? Did you try the air conditioner? Did you try the heater? How about the lights....the radio? Probably not because it probably did have any of those things. When you get up in the morning to go to work....you jump in the trusty all electric automobile... crank on the air....you won't get out of the fucking driveway!

  • Chad||

    Umm, we will never know if ANY industry would be "viable without subsidies"...and certainly not any industry related to fossil fuels.

    It is only a question of when electric cars will replace ICUs...and how much damage we will do to the environment while conservatives try to hold back the tide.

  • Existential Realist||

    *Looks out the window. Nope, no sky falling yet...

  • ||

    "we will never know if ANY industry would be 'viable without subsidies'..."

    Especially if we ignore questions like which came first: The market for the product or the state subsidies?

  • El Duderino||

    This whole comment represents the fundamental misunderstanding here.

    Nobody is "holding back" electric cars. If and when they make one that I like, I will buy it, but this decision will be made based on my own personal needs and wants not because of a subsidy or tax credit.

    If an industry is not viable without subsidies, it is because the industry is not providing a product people WANT or NEED. Adding tax incentives and subsidies does not make people WANT or NEED the product.

    Do iPods need to be subsidized? NO, because people want them. Here is the history of the digital music player and note there is not one SINGLE SUBSIDY in it.

    Before digital music players, CD players cornered the market for portable music. In the mid 90's there was the Diamond Rio player, this player was small and expensive, but it could only hold about 25 to 30 songs. Since people were accumulating library's of music in the thousands, the Rio and others like it would not satisfy many consumers. In the late 90's, Creative Labs created a digital music player that was essentially a 6 gig hard drive shoved into the frame of a portable CD player. Creative Labs did this on their OWN DIME because they knew that the popularity of the MP3 file was creating a demand. I bought this product and I loved it, but it had some serious flaws. First, it took about 10 hours to load about 3000 songs onto it. Next, the thing was not particularly stable, I had to travel around with a bent paperclip so I could hit the reset button buried in a deep hole in the bottom of the device whenever it would freeze. Finally, the buttons got stuck all the time because of the idiotic design. Despite the fact that by todays standards, this thing was a $550 frustration machine, enough people bought it for Creative Labs as well as a bunch of other companies to invest in more effective systems. At this point in history, there arose many new players and they slowly began to compete with CD players, the ultimate evolution of this process ends in the modern day iPod. I only point this out because the CD player had ABSOLUTE market dominance and now you probably cant even find them in Best Buy so it is not impossible for a product to capture market share without a subsidy. Also, I paid $550 for the Creative Labs player because I saw that it had a significant value to ME because I had all this music, but I could only listen to it on my computer or I had to burn CD's. If the Creative Labs player did not have this kind of value, I would not have taken it if they were giving it out for FREE.

    Once you realize that PEOPLE buy things based on their NEEDS and WANTS and not necessarily because of the price of the product, you will begin to understand economic and individual liberty as well as the power of the emergent orders generated by the FREE MARKETPLACE.

    And as far as saving the Earth is concerned, even if the Earth was in trouble, which it is not, buying electric cars will do shit to save it. This is not my opinion, it is the opinion of the "scientists" of the IPCC. I put scientists in quotes because what they do is not science, it is something closer to willful blindness at best and fraud at worst.

  • ||

    I wonder if after being propped up with all these subsidies, the Li-ion battery business will get leapfrogged by super capacitors.

  • ||

    "I tried getting into a Tesla roadster [...]I am simply not flexible enough to fit."

    You'd be pretty uncomfortable in a lotus as well. The point of the roadster (as is obvious from its price tag) wasn't to get an electric car in every garage. It was to show everyone what electric cars are capable of. Getting their cars to major celebrities was a genius move.

  • El Duderino||

    "Getting their cars to major celebrities was a genius move."

    Really???

    Barely cornering the market on such a sliver of the most wealthy people in the country is genius? Celebs can fill garages with Teslas and they wont move the needle one bit in the normal market. The price will remain high as long as these cars being built or sold with the expectation that a subsidy or tax incentive will compensate one or both parties for the difference in cost.

    Plenty of celebrities also drive around in Lambroghinis and it is not as if that market exploded either.

    Also, only a fucking moron buys a car because a celebrity bought one and cornering the moron market isnt going to help electric cars either.

  • Hooha||

    It helped Apple.

  • El Duderino||

    People don't buy things because celebrities buy them, they buy them because they want to fulfill some need or desire. If they are buying shit because their favorite celeb owns one, they are probably a moron.

    I and many more like me bought an iPod because it happens to do exactly what I want it to do and it does it very well. I don't even know which celebs own an ipod and like most Americans I couldn't give a flying fuck through a rolling donut who owns one.

    I am sure there are celebs who endorsed and bought the Zune, but nobody is lining up to get one.

  • ||

    Yeah, I'd have to disagree with you on that. Tons and TONS of people buy stuff because others have it (or want to be one of the first seen with it). See: fashion industry. See: Apple products.
    Many people are that stupid and I put the wrong value on these transactions. Thats why a pair of jeans that couldn't take one snag on a fence would cost you $200. There's not much utility in the good.

  • ||

    *and I put the wrong value* should read *and put the wrong value*
    it's too fucking early.

  • Leonardo D||

    'fucking moron buys a car because a celebrity bought one'

    Hey, I tool around in my Pius Prius when I'm not in my private jet. I hope I inspire the morons to save the planet.

  • El Duderino||

    Birds dont shit on the Prius cause they know it is green.

  • Peter Jensen||

    The irony of all this is that, as the Author points out, European countries have proven that market incentive measures work (i.e. European manufacturers are much better at making fuel efficient cars) but we insist on doing otherwise throwing money at providers.

  • ||

    "market incentive measures work "

    You tellin' me that price signals affect people's behavior ? Then we better the government to work distorting them.

  • Peter Jensen||

    Yes, I say price signals affect people's behavior and create markets that innovative entrepreneurs will try to capture. As for the rest of your comment: me not understand.

  • ||

    Government subsidies distort price signals. Politicians will choose who to subsidize on political, not economic, reasons. That's bad. Understand ?

  • Ron L||

    Peter Jensen|9.29.10 @ 12:24PM|#
    "The irony of all this is that, as the Author points out, European countries have proven that market incentive measures work (i.e. European manufacturers are much better at making fuel efficient cars)"
    So people can be coerced into cramped cars and that's a positive?

  • Peter Jensen||

    A class A Mercedes is in no way cramped and has a better fuel efficiency than American equivalent.

    Twit

  • El Duderino||

    I don't have a problem with electric cars. In fact, I dont care what your car runs on.

    I have 2 issues with the situation we have here, which is the heavy hand of government trying to push electric cars on my dime. Even if electric cars were better for the environment, which they are not, I still would not be for government spending my money on electric car subsidies. If you dont understand why I am not for having the government take my money to fund electric cars, then you really ought to take some time on this website to see why this is an issue for me, but I am not interested in this issue because I know some people who really really really believe in electric cars are not going to hear what I have to say, but if you want to know, just ask.

    My point of concern with electric cars is this. Proponents push it as "better" for the environment. Aside from the fact that their concerns about "greenhouse gasses" is largely junk science, the assertion that electric cars release less "greenhouse gasses" is even more preposterous.

    Electric cars, even hybrids, are not perpetual motion machines, they are propelled by chemical energy. Batteries do not generate their own energy, they store energy, this is why they are called batteries and not generators. That energy comes from a power plant via power lines. Most of that power comes from coal, natural gas and nuclear. Nuclear is the only one out of the three that does not emit "greenhouse gasses" unless you count water vapor, which can have a greenhouse effect of its own depending on the concentration (clouds or humidity). In a combustion engine, the energy from the generator (the engine) is transferred to the wheels directly and so the efficiency of this work is directly related to the localized interaction of the parts. Heat bleeding out rather than being used to create motion, gears grinding causing friction and wind resistance all effect the efficiency of a vehicle. The more efficient a vehicle, the better it uses the power generated by its power plant. Since a combustion engine produces its own energy it is limited only by the interaction of its parts as described above. For an electric car, this energy must come from an external power source and therefore, the efficiency of the power plant is a combination of the efficiency of the vehicle and the efficiency of the external power plant.

    There is a practical limit to the efficiency of any vehicle because most of the moving parts bleed energy through friction. As far as external energy is concerned, Nuclear is by far the most efficient, but liberals who like electric cars hate nuclear and so they pass policies that make it impossible to build a nuclear plant anywhere other than deep outer space. Coal, gas and other similar sources of energy are considerably less energy dense than nuclear, but they are essentially the next best thing so they are very popular despite liberal efforts to make them unpopular. For the power from a coal plant to move your car, it must be generated in a large plant whose inefficiencies while different are on par with many of the inefficiencies of a combustion engine. Once the power leaves the plant, it does not live forever, it has to pass through the system to reach your electric car and in the process some energy bleeds off as heat, EM radiation, or is simply converted and modulated through power cleaners and conditioners that are necessary to ensure a consistent power supply. Then the energy gets to your car where it is stored in a chemical battery. Batteries do not retain all of the energy they take in and some of it is lost in the intake process itself. Batteries do not transmit the power perfectly either, that is just the nature of energy. I am not suggesting electric cars are always less efficient than combustion, I am just pointing out that they are not more efficient.

    If you really think electric cars are important and you want more people to buy them, then you have to do two things that most progressives do not like.

    1. Stop subsidizing it. Subsidies do not help electric cars at all because it sets the industry up for failure. If GM is making cars that are 10k more expensive than regular cars just to get the subsidy, or people are only buying them to get the tax break, then there is no motive at all to make these cars cheaper or better, instead, we are just going to get a car that happens to be electric, but you will not get the type of R&D and assembly line reinvestment that you would for a vehicle that can actually turn a profit rather than a fixed subsidy. Profit motive makes them cheaper, not subsidies so if you take away the subsidies and nobody wants a substandard car for the a higher price, then there will not be a profit and manufacturers will find ways to make them cheaper and better or just get rid of them.

    2. If you want electric cars, you have to understand that they will only add to the burden on the national power grid. Just because you are spending less on gasoline doesnt mean you are spending less on ENERGY. This means you need the most effective source of energy available, which is nuclear. If you continue to push wind and solar and you continue down the path of cap and trade like policies, then you are going to escalate the cost of electricity generation in America and that will only further hinder the electric car from being a reality.

    The solution presented here is simple. Let PEOPLE decide if they WANT an electric car and if they WANT it, they will buy them until they are cheap high quality vehicles. If you want to make electric cars a reality, you have to give up on solar and wind and other pipe dream sources of energy and move towards nuclear while making the current coal and gas fired plants less expensive to run.

  • Capt. Obvious||

    We will also never know if the electric car would have been developed much earlier, had our gas prices matched those of Europe. But much of our "nation building" and "peace keeping" has, for decades, been rooted in keeping gas prices in America artificially low. An indirect, but very costly subsidy of the entire car culture here in America.

    So when discussing the viability of electric cars in a free market, please try to compare apples to apples.

  • DTR||

    Europe's gas taxes are on the order of $3 per gallon, compared to an average of $.47 per gallon here. Our prices aren't artificially low, theirs are artificially high.

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