Friday, April 26, 2013

Is the Government Screwing Up the Electric Car?

The Fisker Karma - very cool but bankrupt

There is nothing stranger and sadder than thinking you can manufacture demand. Sure you can spend millions marketing the “Leaf” with every conceivable cultural bribe you have in your bag, environment, style, design, and sex (electric sex is certainly better than gasoline sex, don’t you think?). You can offer federal grants, tax rebates, and even push for higher gas taxes. All to push the consumer into something they still fear – and I mean fear. I’ve written at least five blogs on the problems and blessings of the electric vehicle:
The Urban Umbilical Cord – Part 2 – September 3, 2010      
and others that looked at batteries and bribes.

My favorite economist Ludwig von Mises famously said in his great book on economic systems Human Action, A Treatise on Economics, “The market is supreme.” And right now the market is saying an emphatic, “NO!” There is too much confusion, an accumulation of never ending poor news, and the overriding sense of an industry that is failing. Battery makers (with government guarantees) going out of business, car companies failing (the Fisker Karma bankruptcy is the most dramatic due in great part to poor construction, software, and price – against its very cool design), and the confusion about hybrids and electrics in general.

This is not an argument against the product, it will be the primary type of urban vehicle at some point in the future but it has to get past this welfare image that tells a buyer that the only way they can come to market is through some sort of government gift or outright grant. They will tell you in marketing perception is everything and right now the electric car is very, very questionable. Visions of an out of work Depression worker with his hand out comes to mind when I think of the industry.

Will I run out of power before I can get home? Will it be safe? Will it explode if the battery overheats? What happens if the battery goes to zero – can it be recharged or will I have to pay $30,000 to fix it? Is this only a product for the rich and ostentatious? Is Tesla really telling us the truth about its mileage or do I have to buy one to find out?

Like everything there is a classic bell curve of acceptance, a long slow climb then acceleration to the level of almost a fad – it happened with everything including the radio, television, computer, even the mobile phone. The time frames were long or compressed but the curve is still there. The electric automobile still has a way to go. And the competition is increasing; look for more cars powered by natural gas (which we have a lot of now and it’s cheaper) and the technology for those vehicles is a lot closer to the gasoline and diesel powered machines.

I have maintained that a vehicle with a replaceable (think refuelable) battery is the future – the extension cord at work and home is all so very DIY, but the electric vehicle’s use as a replacement for the gas-guzzler must meet a different standard. They are two different technologies – car building versus battery making, ask Boeing about that. Build the car with a slot that accepts a battery with a range of options: range (storage amount), price (to essentially rent the unit), and source (nuclear, wind, solar, natural gas). The last is for the touchy-feelies out there.

The government (feds and state) keep trying to pick a winner by throwing cash around like drunks at a strip club. For what was wasted at Solyndra ($535M loan) and Fisker ($529M loan) we could keep the airport towers operating for two years (FAA cut due to sequestration is $600M). That is why the electric car is in trouble – government diddling.

Stay Tuned . . . . . . . . . .

1 comment:

  1. Electric cars are much better than gasoline cars because it doesn't affect the environment more. There is no need to screwing up on electronic cars.

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