Is This A Good Idea? Should the Government Help Finance Electric Car Makers?

October 12, 2009

A conservative friend of mine on Facebook recently sent me a teasing “debunk this!” message linking to this blog from the American Issues Project. In it, blogger Duane Lester attacks the Obama Administration’s providing financing to nascent electric car manufacturers. In particular, he’s irked by a $529 million loan to Irvine, CA-based Fisker Automotive, to help it bring two electric plug-in hybrid models to market in the next few years.

Recently, the government gave over half a billion dollars to a small California-based car company backed by former vice president Al Gore. The company, Fisker Automotive Inc., received $529 million to build a hybrid sports car in Finland. That's right. The United States government, not content with owning General Motors, is now invested in car production in Finland.

So okay, debunk I shall. Before we proceed, I should correct few details. The Department of Energy gave Fisker a loan, not a gift, as part of its $25 billion initiative to help finance electric car development. They eventually have to pay back the money, plus interest. Gore is one of the thirty-odd partners in Kleiner Perkins Caufield & Byers, a venture capital firm that has invested over $10 million in Fisker, but it actually was another partner, former Oracle COO Ray Lane, who was the mover behind the deal. (As the Wall Street Journal reported in 2008, Gore didn’t play a significant role, though he does want to buy one of Fisker’s cars.) Additionally, only a portion of that money—$169 million—is allocated to producing the Karma, a limited-edition $88,000 high-end “sports sedan” that will be assembled by a Finnish subcontractor, but from mostly U.S. made parts. (The lithium-ion batteries, for example, will be made by EnerDel, an Indiana company that’s traded on Nasdaq.) The bulk of the loan, $360 million, will help develop Fisker’s Project NINA, a less-expensive ($39,500,once federal tax credits are factored in) mass-market vehicle which the company plans to manufacture entirely in the U.S.

Lester’s larger point, though is that electric cars are a wasted government investment, as far as limiting carbon emissions are concerned. He argues that even if at some point in the future, half of cars on U.S. roads were electric or hybrid vehicles:

According to the Government Accounting Office, there isn't enough electricity produced in America to support those numbers. More power plants would have to be built and unless they are all nuclear, more hybrid cars on the road won't change the level of carbon dioxide produced in America.

His source on this is a CNS.com article, but I would encourage you to look at the actual June 2009 Government Accountability Office report upon which it is somewhat loosely based. What GAO concludes that for plug-in vehicles to achieve their “full potential” in reducing emissions, they would need to use electricity from non-carbon generating sources, such as nuclear plants or renewables (solar, wind, etc.). GAO did reference a Duke University study that found that an increase in plug-in hybrids might lead to more coal-fired plants, unless a carbon tax was imposed. But GAO also cited 2006 research by the government’s own Pacific Northwest National Laboratory which came to the opposite conclusion, finding that as long as people charged their plug-ins during off hours, we could replace 84 percent of our cars with plug-ins and not have to build any new plants.

As for Lester’s other argument, that powering cars with electricity from coal-fired plants rather than gasoline doesn’t reduce carbon emissions, government scientists disagree. As a 2007 PNL publication notes that

The extra electricity needed to power PHEVs (plug-in hybrid electric vehicles) would come from coal-fired and natural gas-fired plants. Even though these power plants emit greenhouse gases, overall levels would be reduced because it is more efficient to move a car one mile using electricity than producing gasoline and burning it in the car’s engine.

Instead of federal loans for electric car development, Lester argues that “perhaps we should simply get out of the way of progress,” and advocates the building of more nuclear power plants. Now, as I wrote in this blog a while back, I’m not necessarily against building more nukes, as part of a broad strategy to combat climate change. But if your big issue is government intervention in the marketplace, you couldn’t find a worse cause to champion than nuclear power, which was developed by government scientists and has been heavily subsidized since the get-go. Doug Koplow, a Boston-based energy consultant quoted in this Christian Science Monitor article estimates that between 1947 and 1999, the industry received $178 billion in public subsidies. Sen. Lamar Alexander, R-TN’s proposal to build 100 new nuclear power plants would require the federal government to guarantee Wall Street’s loans to utility companies for “the first dozen or so” reactors. By my back-of-the-envelope calculations, that would make taxpayers liable to pay up to $56 billion if the utilities fall behind on construction and default.

Okay, so here’s my point. In a perfect world, maybe Adam Smith’s Invisible Hand theory would lead to companies acting out of self interest to solve the problem of climate change. But we don’t live in that world. We live in one where the government often has intervened in the marketplace and acted as an impetus to transformational technologies, when private enterprise can’t or won’t. And climate change is too big of a menace to the planet for the government not to step in and do something. Plug-in electric cars would help reduce carbon emissions, and in the process help reduce our expensive and dangerous dependence upon foreign oil. And it makes sense for the government to spread that $25 billion in chips around and put a few on small, agile players such as Fisker, in hopes that they’ll develop innovations that ultimately will benefit everybody.

So what do you think? Express your opinion below.

The Toyota I-REAL?

April 09, 2009

    This concept is a little, ah…tricky to explain, so bear with me.

You know that comfy La-Z-Boy you have in your living room?  Imagine if it had three wheels, joysticks in both armrests that allowed you to steer right or left, a plug-in electric motor that would propel you on the sidewalks at walking-jogging speed and then gear up to speeds of up to 20 miles per hour on the streets, perimeter monitoring sensors that would alert you to other vehicles or pedestrians who might stray into your path, a wireless Internet connection, and an LED screen on the back of the chair that can both serve as a set of turn signals/brake lights and display the message of your choice to the rest of the world.

    What I’m describing is a Toyota i-REAL, a concept that the automaker describes as a “personal mobility vehicle,” a single-person conveyance designed for trips that are just a little too far for walking, but close enough that driving there in your conventional car seems excessive.

Keep reading...there's more!

Solar-powered Cars?

July 18, 2008

Based on the response to last week’s blog, I have to say that I’m impressed by the enduring popularity of early-1980s lite metal rockers. Lately, however, whenever I’m faced with the painful prospect of refilling the gas tank of the old Saturn sedan, I find myself thinking of “A Gallon of Gas," a bluesy late-1970s ditty by the Kinks:   

It's got power-assisted overdrive and carpets on the floor,
but it's parked out front just like a dead dinosaur.
And I'll be paying off the bank for 45 years or more.
It should go 100 miles an hour,
but it's never moved away from my door.

Ever-escalating gas prices, of course, are only one part of the pain. As I’ve confessed before, according to this carbon footprint calculator, my Saturn is pumping 2.1 metric tons of C02 emissions into the atmosphere annually, making me at least somewhat responsible for the shrinking of the northern polar ice cap and other nasty impacts of global warming.

So how do we solve my — or should I say, our — problem? In a previous blog, I raised the possibility of reducing both our fuel costs and carbon emissions by switching from gasoline to cellulosic ethanol to power our vehicles. However, as a skeptical reader estimated, to meet our present fuel consumption needs, the U.S. would have to grow 584 million acres of switchgrass, which is about 150 million acres more than the total amount of cultivatable land in the nation. Oh well. Switching to gasoline-electric hybrid cars or, better yet, plug-in electric vehicles is another idea. But even that solution has a big potential pitfall. How do we generate the electricity to power the cars? According to the U.S. Energy Information Administration, more than half our national supply comes from coal-burning plants, which have become the nation’s  biggest source of greenhouse gases.

So here’s a better idea. How about switching to solar-powered automobiles?

Driverless Cars?

January 18, 2008

When you get out on the freeway these days, it’s a bit unsettling to notice the number of drivers who are talking on their cell phones, eating, fixing their hair — and sometimes doing all of those things simultaneously. It’s almost as if actually driving the car is an unwanted distraction from the other stuff they’re doing, rather than the other way around. Such multitasking by drivers, of course, is extremely dangerous. One federally funded study found that the risk of a crash increases three-fold when a driver is dialing a cellphone, and that reaching for a moving object — such as a coffee mug or sandwich sliding across the dashboard — increases the likelihood of an accident by a factor of nine.

But the New York Times reports that U.S. automaker General Motors has come up with an interesting solution for the problem of distracted drivers: a car that drives itself.  GM is unveiling a prototype of a self-driving Chevy Tahoe SUV, developed with the help of Carnegie Mellon University robotics researchers.

Here are some pictures of  “Boss,” as the vehicle has been dubbed, winning the $2 million first prize in the Urban Challenge competition for robot cars sponsored by the U.S. Defense Advanced Research Projects Agency (DARPA). The military is interested in autonomous unmanned ground vehicles that could someday venture into urban battlefields and maneuver around amid hostile fire. But GM spokesman Scott Fosgard told the Times that the company envisions Boss’ future production progeny, which could be in showrooms within a decade, as a civilian road warrior  that would “know where all the vehicles are around it, dramatically reduce accidents and even reduce congestion.”

As a story on All Headline News explains, most of the technology needed to create a functional driverless car — such as radar-based cruise control, motor sensors, lane change warnings, electronic stability control and satellite-based digital mapping — already is on the market. The trick, apparently, is getting them to work together without a human at the controls. As an Associated Press story on Newsvine notes, GM envisions linking driverless vehicles in a wireless network, which presumably would allow them to pass along data about road and traffic conditions to one another.  (The military is trying to build a similar network capacity for robotic attack vehicles that will roam the battlefields of the future.)

Car owners wouldn’t have to cede control unless they wanted to — one option would be to choose driverless mode on the Interstates, and then take the wheel themselves on local streets. But it’s not hard to imagine a lot of drivers turning the responsibilities totally over to the robot. That way, you can concentrate on texting, firing up that in-car espresso maker, or playing a little Mario Kart DS. Cool, huh?

Of course, that’s assuming you’re willing to trust your safety to a robotic chauffeur, one that operates totally without fear of crumpled bumpers, speeding tickets or getting his insurance canceled.  As this video clip demonstrates, some robots apparently have driving skills that are, well, roughly equivalent to those of teenagers.

So what do you think? Are driverless vehicles the way to ride in future style? Or should we leave the driving to humans? Express your opinion below.