The cleantech industry as a whole, and the electric vehicle industry in particular, have been in the news nearly every day since Solyndra went bust, and not in a good way. The media and blogosphere are repeatedly asking the question, Which company will be the next recipient of money from the Department of Energy to crash and burn?
While this is a natural follow-up story for journalists (I confess, I was a card-carrying member of the Fourth Estate for nearly two decades) to pursue, the circumstances around the electric vehicle (EV) industry are very different. While some of the companies who have received DOE loans or grants will inevitably falter, it is way too early to cast aspersions on companies like Fisker and Tesla, or on the industry as a whole.
Rightly or wrongly, the Obama industry has made nurturing an industry for manufacturing plug-in vehicles and batteries a top priority of its stimulus program. If you don’t believe that the government should be involved in supporting the R&D efforts of new technologies (especially those that will reduce carbon emissions), than read no further. But if you believe that having an EV industry in the U.S. is worthy of taxpayer investment, you’ll have to be patient to reach a verdict.
Simply put, there would be not be much of an EV or battery industry to speak of in the U.S. without the help of the DOE, and Japan, Korea, and the European Union would be left to run grow the industry. It’s fair to say that that road would be much more challenging without U.S. automakers involved, and thousands of jobs would not have been created.
The focus post-Solyndra has been on Fisker and Tesla, and with both companies more than a year away from shipping their first vehicles targeted at less than the ultra-rich, you’d have to score the impact of those loans as incomplete. For a full picture, we should also be looking at all of the auto manufacturers and battery makers who have received grants and loans since the loan program and bailouts were started by the Bush Administration in 2008. These include:
– Nissan: Received a $1.4 billion loan to retrofit plants for EVs in Tennessee . They are selling the Leaf (made in Japan today) and will shift production in 2012-13.
– Ford: Received a $5.9 billion loan for retrofit factories in several states for more fuel efficient technology. They have announced several new plug-in vehicles (C-Max Energi, Focus Electric) that will be made here. As shown below, Ford is expected to have the largest share of the PEV market beginning in 2013. – General Motors: Earlier this year, the company withdrew a $14.4 billion loan application for retooling because the company had turned around its finances sufficiently using the previously allocated bailout loan of $50 billion. In addition to the Volt, GM recently announced the production of the Chevrolet Spark EV and Cadillac Converj.
– Chrysler: Received $7.6 in bailout loans in 2008-9. The company applied for an AVTM loan, but has been waiting for a decision from the DOE for well more than a year. Chrysler’s commitment to vehicle electrification under the Fiat regime has been underwhelming by comparison, so perhaps the DOE is looking for stronger action before pledging funds.
The 2009 ARRA program awarded grants of $1.5 billion to 19 companies that produce or assemble vehicle batteries or their components. Manufacturing has recently started or will do so shortly at many of those plants, including facilities owned by Johnson Controls, A123 Systems, Compact Power , Dow Kokam and Exide, which has brought jobs to Michigan, Tennessee, Indiana, Oregon, Florida, Pennsylvania, and Georgia.
Among the battery companies that received grants, EnerDel has had the most troubles. The company’s battery manufacturing was linked to a deal to provide equipment to EV company Think, which has been through several bankruptcies and recently received yet another life-saving loan, this time from Russia.
We are in beginning of a 500-lap race to determine if EVs will be successful in the United States and globally, so it’s extremely premature to judge how successful or not the federal government’s investments will be. Just because a company or two blew a tire in the first lap doesn’t mean the entire race is a failure.
Article by John Gartner, appearing courtesy the Matter Network.
