Thursday, August 26, 2010

The Urban Umbilical Cord -

I have always been a proponent of the electric car - especially in urban areas. It provides transportation, moves goods and services and rarely needs to go more than forty miles in a 24 hour period. It is only a car with a different engine – that’s it. In the city there is available power, maintenance systems and support and there is a growing market. In time, I believe it will be the primary vehicle of choice for urban and most suburban dwellers, and can be recharged at home, just like your iPad.

What galls me is the need by the government to get involved in their creation and maintenance. Put aside the GM thing and other “stimulus” excuses; if the product can compete in the market - it will succeed. Ask Steve Jobs if he needed a grant to force the iPad (or iPhone for that matter) down the throats of the consumer. If the product is wanted, and resonates with the consumer – it will succeed.

Recent announcements and news articles:

The feds have allocated over $37 million dollars to build charging stations for electric cars across the country. And about half of the charging stations will be installed free - in your own home - if your buy an electric car (installation guessed to be $2,000 each – taxpayer money). There are also federal tax credits being discussed for both the car and the charger. As the old Tubes song goes: “a herd of Winnebagos we’re giving’em away,” especially if they are electric.

The state of California has approved $1.9 million (your money) for a company to update 600 of the old inductive chargers (some from the 1990s), many of these are in Costco stores and at Best Buy and its Geek Squad of electrics – they and other private businesses will also benefit from this state money (your money).

A battle is well underway between companies that want to supply the service of charging your vehicle and those that sell those companies the electricity. It is being fought at the California Public Utilities Commission. The major power companies in the state want these under the state’s control (and the future control by the utilities themselves!).

From the “Where do they get the money file?” The Bay Area Air Quality Management District has approved $5 million dollars (your money) to “support” the development of an electric vehicle charging infrastructure in the Bay Area.

Barack Obama, in early July, visited a factory in Kansas City that makes electric trucks. The plant’s capacity is to be upgraded with $36 million in “stimulus funds” and a matching $36 million in private funds. They expect to build 500 trucks – based on these numbers their street value is $144,000 each – buy two, there is probably a grant and tax credits in there somewhere.

And for those that want a little more gov’ment help, go to, they are there so your neighbors can help make you feel better about yourself.

Please! If this product is wanted by the consumer, like the iPad, Kindle, the toaster oven, and the Starbucks’ half-caf, skinny, no foam, iced lattes, they will buy it. But if it is padded and subsidized (and all the costs hidden behind grants, “stimulus monies,” sweet deals for manufacturers and suppliers, fed and state rebates, quasi-governmental controls, and the “if you fund it they will come” mentality) - it will fail.

I believe that the urban market wants the electric vehicle to happen. But the electric car is so hidden behind these false costs and “magic” that it is confusing the consumer. A confused consumer is one that will not buy – especially a $40,000 science experiment. The consumer is wary of something that is pushed this hard by the federal and state bureaucracy. They will stand on the sidelines until there is clarity. They want to feel responsible as long as the car is durable, pretty, well designed, easy to understand, modern, has a bit of a status about it, and affordably cool. Like the iPad.

1 comment:

  1. Agree with your conclusion that the Government has no business in the creation of the electric car business. The same electric car challenges that you cite have been around since the first time I rode in one (a GE concept car in 1990) and I haven't seen many market-driven attempts to solve these challenges. Notwithstanding the functional limitations (poor acceleration, limited range, etc.), it doesn't appear to me that carmakers are really serious about making anything more than a token attempt at a cost-effective electric vehicle not to mention the infrastructure required to go with it. In fact, absent Government subsidy or coercion, I'm not sure much of anything would have happened in the last 20 years. The stakeholders that could make it happen are too tied to the old oil infrastructure and it's almost impossible for an existing company to focus on destroying its business in order to participate in a new paradigm.

    Thanks for doing the research and throwing this interesting topic into the mix.