The first part of this two-part series was posted on February 26, and elicited some strong commentary, as usual. There are certainly EV fans out there, at least some of whom are very satisfied with their EVs and ready to defend them. Good for them. Unfortunately, EVs are still nowhere near ready for prime time for most of the public, and they’re still soaking up taxpayer dollars rather than standing on their own four wheels.
Why would any automaker design, build and market a car upon which it loses money with every vehicle that rolls out of the factory, a factory it has had to repeatedly close due to poor sales. Some vehicles generate considerable prestige for a manufacturer, boosting the overall brand. Others represent a point of institutional pride, demonstrating technological wizardry or serving as a technology demonstrator, but virtually none of these vehicles are ever approved for production. Normally, the only vehicles sent to the assembly line are those with which a manufacturer can make a substantial and sustained profit.
The only alternative explanation for the existence of unprofitable, poorly selling vehicles is—particularly in the era of Obama—gangster government. And despite the spectacular failure of virtually every one of its green/global warming/EV/solar/wind initiatives, the Obama Administration–enlightened beings all–never learns and never stops scheming for ways to force the public to do what they believe the pubilc is too stupid to know is good for them. Fox News has the story:
Despite the looming bankruptcy of electric carmaker Fisker Automotive, and disappointing sales of electric vehicles across the country, the Obama administration has harnessed some of the country’s top scientists, engineers, economists and auto experts to push electric car use deeper into the fabric of American society.
Among the ideas being considered: new and bigger consumer subsidies for electric-car purchases, stiffer gasoline or carbon taxes, more federal subsidies for electric-car research, more subsidies for public-access battery-charging stations, and even broad, publicly-funded ad campaigns extolling the virtues of cars that the public currently seems disinterested in buying.
Those possibilities, and more, have been rolled out in an 80-page interim report of a committee of the National Academy of Sciences which aims to put intellectual heft, as well as vast amounts of data-collection, behind a U.S. Department of Energy goal of producing — and selling –electric cars that are “as affordable and convenient for American families as gasoline powered cars” — by 2022.
In other words, despite the fact that electric cars have so far been largely a flop, the administration is still looking for ways — backed by government funding and tax policy — to produce even more of them, and rewire America. And in some critical ways, as the interim study points out, it still isn’t known whether the electric car idea makes any sense.
Of course. But that won’t stop President Obama from choosing winners and losers, and as Mitt Romney noted, almost always losers.
Nonetheless, the study asserts that ‘The electric vehicle offers many promises — increasing U.S. energy security by reducing petroleum dependence … stimulating long-term economic growth through the development of new technologies and industries, and improving public health by improving local air quality.’ It also helps by ‘contributing to climate-change initiatives by decreasing greenhouse gas (GHG) emissions’ a course that the Obama administration has strongly committed to through the United Nations Framework Convention on Climate Change (UNFCCC).
The 2014 report will cherry-pick the policies referenced in the interim document and come up with the ‘best ways to revise and improve them,’ according to last month’s study. It will also take on additional economic and technological ‘barriers’ to PEVs (plug-in electrical vehicles) deployment,’ as the document drily describes it, presumably describing the ways to overcome them in significantly more detail.
Unsurprisingly, one of the biggest problems is cost:
As the National Academy studies notes, one obvious reason is the impressive price difference between all-electric and hybrid autos and the gasoline-powered cars that the vast majority of Americans continue to buy — despite the $7,500 subsidies offered by the Obama administration.
Using a 2013 Ford model as a basis for comparison, the report notes that the price difference between the plug-in version and the conventional Ford Fusion SE amounts to about $12,000.
Regular readers will recognize other issues:
There are plenty of other reasons why Americans are not wild about electric cars. Among other things, the interim study notes that Americans don’t know much about them, and what they do know they don’t like, starting with their short — less than 100 miles — driving ranges on one electrical charge; lack of widely accessible charging stations, absence of non-specialized repair facilities, lack of standardized plugs, and the frustrating amount of time it can take to fill up on electricity: half an hour even at rare and expensive fast charging stations.
And then there is the time it can take even to buy one, which the report says includes the time it might take for a prospective buyer to inspect his residence to examine the possibility of buying and installing a moderately-fast charger to go with his new auto purchase.
As the report notes, ‘A process that includes inspecting, costing, permitting and installing can take days or even weeks and add time, multiple cost factors, and uncertainty to the car-buying process.
Despite all of those very practical impediments, however, the interim study comes up with plenty of potential solutions — mostly in the form of additional government programs of one kind or another.
To overcome continuing public ignorance of electric cars, the authors suggest ‘public service announcements that showcase current PEV owners’ and ‘describe the benefits of PEV ownership.’ At the same time, the document declares that ‘few data on customer perceptions, attitudes and behavior regarding PEVs are available,’ though the collective authorship believes that ‘further research could help to determine how to structure effective programs and policies.
What would any Obama program be without a healthy dose of extortion and coercion and the wasting of taxpayer dollars to little or no ethical, legitimate purpose?
To deal with those still-intimidating higher prices, the study authors suggest that the federal government ‘continue to provide incentives’ such as purchase subsidies as well as slap on further disincentives to conventional auto sales, such as ‘increasing taxes on motor fuels or by instituting a broad-based carbon tax.”
Another thing that consumers don’t seem to like about electrical vehicles — their short driving range — could also be a plus, the study indicates, since 70 percent of Americans average less than 40 miles of travel per day in their cars, and more than 90 percent travel less than 90 miles.
But, in fact, whether Americans are willing to accept those limitations — on their non-average travel is something the study authors don’t know. As they put it, “few data on customer perceptions, attitudes, and behavior regarding PEVs are publicly available, although some studies have examined those topics, further research could help to determine how to structure effective programs and policies.
Indeed, the document adds, “Little research has been conducted to determine which government policies concerning PEVs are the most successful and why.”
The remainder of the article points out that installing home fast chargers—and “fast” is a relative term where EVs are concerned—is not only expensive; it’s easily as much as $2000—and often very time-consuming because permits, inspections, etc. are involved. In addition, there is little or no charging infrastructure anywhere, and the fastest chargers are still many times slower than filling a car with gas while offering vastly inferior range.
And then, how fast is fast? The latest state-of-the-art stations take about a half-hour to put the equivalent of 100 to 150 miles of charge in an electric car. An ordinary gasoline pump might take, say, three to five minutes to put the equivalent of 450 miles range in a conventional auto, making it about 18 times as efficient.
‘Electrical ‘gas stations’ would have to be as big as Walmart parking lots to handling all the cars waiting their turn to juice up,’ says Dan Kish, senior vice president for policy at the Institute for Energy Research, a Washington think tank that is sympathetic to the benefits of more traditional U.S. energy sources.
Technology To The Rescue! What about the dramatic advances in technology Mr. Obama is always talking about? Won’t they make EVs suddenly viable? Not so much. A GM executive claims GM is working on an EV that retails for about $30,000 (only $30,000?) and gets 200 miles per charge. Great—or not…
Vice President of Global Product Development Doug Parks wouldn’t say when or if such a car will be built, however. [skip]
“The 200-mile car would cost about the same as the current Volt, and it would match the range and be far cheaper than Tesla Motors’ $71,000, all-electric Model S. The Model S can go up to 265 miles on a single charge.
A moderately priced electric car with a 200-mile range would make electric cars more appealing to Americans, solving the two chief complaints about such cars: Anxiety over running out of power and high price, said Tom Libby, lead North American analyst for the Polk automotive research firm.
‘That would be a huge step forward, no question,’ he said.
Indeed it would. So how is GM doing in that noble quest?
The 200-mile car won’t be the next-generation Volt. Speaking at a Monday event to show off GM’s expanded battery laboratory at its technical center in Warren, a suburb north of Detroit, Parks said that GM engineers are now working on a new Volt, which will go a little farther on electricity than the current model and cost a little less. He wouldn’t say when it will arrive in showrooms or how much it will cost.
And therein, gentle readers, is the problem. Lithium-ion battery technology is such that there are no stunning leaps in capacity and range on the horizon. And notice that GM’s new, technologically advanced project will merely “go a little farther on electricity than the current model and cost a little less.” Until EVs are very close to conventional vehicles in every respect—particularly price–and have comparable range, they will never be economically viable. And by price, I mean GM won’t have to rely on a $7500 taxpayer subsidy and a $5000 price cut that puts GM even more deeply in the hole for each vehicle sold. Even with those subsidies, the Chevy Volt is still far more expensive than most of it’s conventional competitors.
Unlimited Power—Or Not? The widespread proliferation of EVs would be a boon in every way, right? Not so fast. The MIT Technology Review cautions that EVs aren’t necessarily good for the power grid:
Last year in the United States, only about 50,000 electric cars were sold. And researchers at the U.S. Department of Energy’s Pacific Northwest National Laboratory have calculated that the grid has enough excess capacity to support over 150 million battery-powered cars, or about 75 percent of the cars, pickups, and SUVs on the road in the United States. But there’s a catch. While power plants and transmission lines have excess capacity, things can get tight when it comes to distributing power to individual neighborhoods. And this is especially the case since electric vehicle sales aren’t evenly distributed. In California, for example, they’re taking off in Silicon Valley and places such as Long Beach and Santa Monica.
Electric cars being sold today can draw two to five times more power when they’re charging than electric cars that came on the market just a couple of years ago. But the impact of charging one depends on where it is on the grid and how it is charged. They don’t pose a problem if they’re charged slowly at conventional 110 volt outlets. And public fast-charging stations don’t impact the grid much because they are part of commercial grids that have transformers and other equipment sized to accommodate large loads.
The trouble arises when electric car owners install dedicated electric vehicle charging circuits. In most parts of California, charging an electric car at one of those is the equivalent of adding one house to the grid, which can be a significant additional burden, since a typical neighborhood circuit has only five to 10 houses. In San Francisco, where the weather is cool and air conditioning is rarely used, the peak demand of a house is much lower than in the hotter parts of California. As a result, the local grid is sized for a much smaller load. A house in San Francisco might only draw two kilowatts of power at times of peak demand, according to Pacific Gas & Electric. In comparison, a new electric vehicle on a dedicated circuit could draw 6.6 kilowatts—and up to 20 kilowatts in the case of an optional home fast charger for a Tesla Model S.
In addition, the wiring of individual homes may or may not be sufficiently robust to accommodate even contemporary fast chargers. In that case, substantial—and expensive—rewiring will be required, potentially pushing the cost of fast charger installation beyond $2000 and more.
These issues don’t make EVs impossible, but they do complicate their use and spread, and of course, any upgrades made by power companies are passed on to consumers, not individual EV users. There is no such thing as a free lunch, and an EV can end up costing far more than one might initially calculate. in fact, for many users, an EV may never recoup the premium in purchase price.
Winners and Losers: Those that believe in the free market believe that government should never be involved in picking winners and losers. This belief has been vindicated over and over by Mr. Obama, who has proved particularly adept at picking losers. Fisker is a good case in point.
The bankruptcy of Fisker Automotive could end up costing the U.S. government much more than the $168 million it loaned to the maker of the Karma plug-in hybrid sports car.
According to its bankruptcy filing on Friday, Fisker owns tax breaks worth $320 million.
Fisker’s bankruptcy papers said the Southern California-based company plans to sell its automotive operations to a business affiliated with Hong Kong tycoon Richard Li, but it will hold on to the tax breaks after it emerges from bankruptcy.
Fisker piled up some $800 million in net operating losses in recent years, which have a future cash benefit worth approximately $320 million, according to the bankruptcy filing.
That lost tax revenue would add to taxpayers’ pain from Fisker’s failure.
On Friday, I mentioned that it seems that the odyssey of fail that was the Obama administration’s commitment to ‘investing’ in Fisker Automotive was finally drawing to a merciful close, as the Department of Energy managed to (kind of shadily?) auction off the down-and-out company to some Chinese investors. With the deal, Americans taxpayers would only be taking a net hit of an oh-so-trifling $130 million or so. No big deal, right?
The Department of Energy originally extended Fisker a $529 million line of credit back in the 2009 stimulus effort, but cut off the already ailing Fisker in 2011 after having dished out only about $190 million. Including the recent auction, the DOE has managed to recover only about $53 million of that loan, which is where the number of the $130 million for which taxpayers will be on the hook came from — except that that specific loan guarantee apparently wasn’t the only tax break of which Fisker was one of the Obama administration’s anointed beneficiaries.
In this particular green debacle, Fisker managed to sell a total of 2000 cars, losing at least $35,000 on each vehicle. This should hardly be surprising. Mr. Obama’s green dogma—and his determination to reward donors and supporters–removed any sense of caution or rationality in handing out billions in taxpayer cash. Startup auto companies have an almost perfect record of spectacularly failing; building cars profitably is fiendishly difficult. Building cars with unproven, unreliable technology for a tiny, niche market, particularly when there is an insufficient market of potential buyers, is a perfect recipe for failure. Loaning taxpayer money to such a venture is corruption, lunacy or both.
And so it goes…