George Orwell’s warning, that “the first victim of war is the truth,” apparently applies equally to trade wars. On Friday, Senators Carl Levin and Debbie Stabenow (both D-MI) wrote the United States Trade Representative to express their concern over “reported draft regulations” of China’s New Energy Vehicle plan, noting

We are concerned that these draft regulations continue China’s long history of breaking international trade rules.

Given that the ongoing low-level trade war between the US and China, this was a predictable bit of saber-rattling. But if Levin and Stabenow’s political motivations are easy to understand, the logic that leads them to believe China’s New Energy Vehicle plan is a violation of international trade rules is not. Meanwhile, neither the Senators nor the USTR appear not to have heard about another, more serious possible trade issue arising from China’s headlong dash towards electric vehicles. Sounds like a job for The Truth About Cars…

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It’s long form Saturday! Most of you probably thought you would never see the day Bertel writes a fiery manifesto for the Electric Car. Today is your day.

Yesterday, we were first to run with the story that Beijing most likely will become EV capital of the world. Not because Beijing scientists have developed the miracle battery. Not because Chinese EVs suddenly go 400 miles on a single charge. Physics did not change. Beijing changes. Months ago, new car buyers in Beijing stopped dreaming about buying a new car.That dream was shattered. Now suddenly, an EV has become the only car a new car buyer can buy and drive tomorrow. Or on Monday. If one would be on sale. Here is what happened: Read More >

When Better Place launched their Visitor Center in Tel Aviv, the attending journalists’ fingers couldn’t keep up with all the numbers and the promises flogged by the company chiefs: tens of battery switch stations to be built, hundreds of charging stations to be deployed and a thousand cars to be sold to Israeli customers each month.

Just over a year has passed since these statements made air, and in typical Israeli fashion – most of the goals were not met. Despite promising to begin delivery of cars in the beginning of 2011, Better Place has not sold a single car over the four months that passed since New Year’s Eve. And the number of battery switch stations built in Israel was – you guessed it – exactly zero. Until now.

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Alberta is a province in Canada. A lot is agricultural, but what is much more important are the treasures beneath the soil. Alberta sits on more than 1.7 trillion barrels of bitumen, better known as oil sand. That’s about equal to the world’s total proven reserves of conventional petroleum. Canadians are troubled that EVs might ruin these riches. Read More >

GM and its Korean battery partner LG Chem have signed licensing agreements with the Department of Energy’s Argonne National Laboratory, giving the two firms access to Argonne’s proprietary lithium and manganese-rich metal oxide mix for use in lithium battery cell cathodes. The material will need “several years of testing” according to The General, but could extend battery life, increase charging voltages and storage, and make Li-ion cells safer. Energy Secretary Stephen Chu says GM’s agreement with the publicly-funded lab

gives General Motors the ability to use cutting-edge battery technology throughout its supply chain. The licensing of this technology will also spur the renewal of the American battery industry, creating hundreds of new jobs where they are needed most.

But that’s not quite the whole story. According to press releases, GM’s deal with Argonne allows the automaker to

to use Argonne’s patented composite cathode material to make advanced lithium-ion batteries

But LG Chem’s agreement allows the Korean firm

to make and use Argonne’s patented cathode material technology in lithium-ion battery cells

In short, a publicly-funded lab has licensed technology in a way that appears to deepen the (partially) government-owned automaker’s dependence on a foreign firm. Confused? So is the mainstream media. And so, to some extent, are we.

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According to Cardinal Giovanni Lajolo, the Warlord of Vatican City, His Holiness “would certainly prefer an electric popemobile to a traditional, petroleum-powered one.” I suggest the 1976 Sebring-Vanguard Citicar! Read More >

Just in time for today’s tour of Michigan’s “battery belt,” the Obama Administration has released a study [full PDF here] of its electric vehicle stimulus efforts which concludes that the money was all well spent. Though the report covers a number of programs, from the ATVM “retooling loan” program which is backing companies like Nissan, Tesla and Fisker, to charging station subsidies, the major accomplishment of these billions of dollars is encapsulated in a single claim:

By 2012, thanks in part to the Recovery Act, 30 factories will be online and the U.S. will have the capacity to produce 20 percent of the world’s advanced vehicle batteries. By 2015, this share will be 40 percent.

As you can see from one of the report’s graphs (above) the US will achieve this 40 percent share of the world’s EV battery production just as two-thirds of the cost is beaten out of the things. And because batteries don’t follow Moore’s Law, it’s all diminishing returns from there. So what happens come 2015?

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It’s no fun knocking Tesla. Having spent my most formative years growing up just South of the Silicon Valley, and as a lifelong resident of the West Coast of the United States, Tesla’s the closest thing I’ve got to a home team in the auto industry. In fact, as I write this,  a Tesla-branded coffee mug, sits due East of my keyboard, a thoughtful housewarming gift from a kind family friend. This unexpected gift, and the frisson around Tesla’s newly-public stock price prove that there’s a lot of excitement around the California upstart. Unfortunately, Tesla is but a small, inexperienced fish swimming in the global shark tank of the auto industry. Now, one of the big sharks, Volkswagen, is beginning to circle for the kill.
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Actually, he’s been broke for since last October.

“About four months ago, I ran out of cash,” Musk wrote in a court filing with the Superior Court of Los Angeles on Feb. 23. “I had to obtain emergency loans from personal friends. These loans are the exclusive source of cash I have. If I did not take these loans, I would have no liquid assets left.” Tough when you make only 8 grand a month and have two high maintenance women. Read More >

Throughout the bailout bonanza, we were told that the car industry means million of jobs. True enough, before the money was doled out, we learned that auto-related industries employ 3.1 million people around the country. Now, the government is paying big bucks for electric car development.  From Tesla all the way to Nissan, the industry is getting $ 25 billions of DOE loans, conditional  on the development of advanced vehicle technologies. Which usually means electric cars.  What’s wrong with that picture? If successful, it could cost a big chunk of those 3.1 million jobs. Read More >

A couple of weeks ago, TTAC reported how Dieter Zetsche was re-elected as CEO of Daimler for another 3 years. In that article we mentioned the many challenges that face him. Mainly, how to make Daimler sustainably profitable. Size matters in the auto business. An unattached Daimler has a hard time achieving the economies of scale someone like say Audi or Lexus can. So unless Daimler fancies being taken over (and we all know Daimler likes to be on top in any tie-up) it’ll have to form partnerships and joint ventures to get those cost savings Daimler needs. The big arranged wedding between BMW and Daimler isn’t going anywhere. Instead, Daimler announced that it had formed a partnership with Renault to produce the new generation Smart car. Then, Daimler announced it had formed a partnership with BYD to develop an electric car for the Chinese market. Now Daimler is trying to form a new partnership to achieve massive cost savings: A partnership with the tax payer. Read More >

Geography aside, Eugene, Oregon, is about as far away from Detroit as you can get. The biggest industry in that sleepy town on the banks of the Willamette is education, not auto manufacturing. You’re more likely to see dreadlocks at a typical Eugene business than a hard hat. In fact, perhaps the only thing Eugene and Detroit have in common is a decaying urban core, although in Eugene that core is spanned by about six city blocks. With today’s launch of the Arcimoto Pulse, however, Eugene took what local politicians describe as a first step towards challenging to Detroit’s automaking dominance. And if they are to be believed, and Arcimoto’s three-wheeled Pulse EV is the future of the American mobility, suffice it to say that nobody saw it coming.

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A few weeks of vacation from the blogosphere’s non-stop news cycle can leave a blogger feeling a bit behind the times. Two weeks is an eternity in internet time, but stepping away from the barrage of news, spin, hype and hysteria is good for the sense of perspective. Especially if the down time is spent exploring countries on the local typical family vehicle, complete with two wheels, four speeds and about 100ccs of thundering power. Beyond the sheer novelty of seeing entire families commuting on a moped (“Daddy, Nguyen isn’t staying on his side of the pillion seat”), travel in the developing world shows how insulated America is from the transportation realities of the rest of the world. If the $1,000 entry to the world of moped ownership is a major (if attainable) hurdle for workaday Vietnamese, even sub-$10K vehicles face what a GM sales release might call “a challenging sales environment.” Try to explain the “green premium” for hybrids and plug-in vehicles to an auto-aspirational third-worlder, and watch as the idea of paying more for less room and power draws only puzzled bemusement. Hair shirts, it appears, are strictly a fad for the western and wealthy. Case in point: the world’s first plug-in hybrid, the Chinese BYD F3DM.

BYD’s Corolla-aping PHEV raised more than a few eyebrows (many skeptical) when specs and concepts first appeared. Warren Buffet’s hefty investment into the cell phone battery maker quieted the skeptics and gave green-hued futurists a license to thrill. A 60-mile plug-in range, a multiple-mode hybrid system and a price tag under $25K had American hypermilers factoring in local tax credits and greengasming at the fantasy of it all. But in the world’s new largest market for automobiles, even $20K is a huge amount of money. And it turns out that one society’s eco-fantasy is another society’s overpriced, overly-complex answer to a question nobody has asked.

Xinhua reports (yes, nearly a week ago) that BYD’s F3DM has utterly failed to attract Chinese consumers; the firm has sold only 80 models since it went on sale in December. Apparently 20 of those were bought by the city of Shenzhen (think China’s Detroit) with the rest going to the local branch of China Construction Branch. In fact, BYD never even attempted to target private consumers with the model, despite the fact that an F3DM costs 30-40 percent less than a Toyota Prius (which only sold about 3,500 units in China between 2006 and 2008). Even the government isn’t rushing to put its citizens in the alleged volks-hybrid, offering a $7K hybrid subsidy to fleet buyers only.

Even with government help bringing the F3DM’s price under $20K, fleet sales aren’t as strong as BYD had hoped. Shenzen’s plan to buy more for the city’s taxi fleet is on hold as even BYD officials admit that the price needs to come down. BYD’s CEO Wang Chuanfu says that increasing production volume could help bring the F3DM’s price to a more-realistic $15K, but without institutions stepping up to prime the sales pump, the promise of a sub-$10K PHEV (after government subsidies)—and mass market sales—remain out of reach.

And even though the F3DM isn’t dependent on a charging-station infrastructure, price isn’t the only concern keeping buyers away. BYD faces an image challenge having never made anything more car-like than a laptop battery just a few years ago, and even its much-vaunted battery technology seems to struggle to meet on-paper performance numbers. According to Xinhua (hardly bomb-throwers when it comes to Chinese businesses), the 60-mile electric range is only attainable driving at a steady 30 mph. And recharging from a home wall socket takes nine hours.

But these tradeoffs and the correlating plug-in efficiency rewards only have meaning in the context of price, and here the lesson for Chevy’s Volt are plain to see. GM’s $40K profitless wonder defies fiscal logic on a comparable scale, offering only the most image-conscious greenies a value proposition worth even including. Like the F3DM, the Volt’s target audience (if not consumer) is the government, and the same increased volume-decreased price mirage lingers on the horizon. But unlike China (BYD expects its sales to double for the second year in a row, hitting 400,000 units), America’s demand for automobiles is in double-digit decline. And that includes demand for the much cheaper hybrids that are already available in the marketplace.

But we don’t have theorize about private PHEV sales levels for much longer. Shenzhen rolled out hybrid subsidies for private consumers this month which would cut the price of an F3DM in half, to about $10K. This coincides with a BYD plan to launch “a mass marketing excercise to promote the car to private buyers.” But if the car-crazed, yet pragmatic Chinese do start buying the F3DM, it will be at half the original MSRP, a feat that GM can’t hope to pull off with its Volt. Unless they just slap in powertrains from BYD, which is hedging its consumer-market gamble by offering to license technology to Western firms. In any case, BYD’s consumer sales push will give us some idea of private PHEV demand (and its required stimulus) by the time the Volt launches. Sales trends are easier to follow when they start at 80 units per quarter.

OK, yes. All you folks who believe that we must free the country from its dependence on foreign oil and stop the planet from over-heating need an electric vehicle (EV). Well, you want one. I mean, it’s not like you’re walking at the moment is it? And if you are, chances are you can’t afford or don’t want a car, whether it sucks oil from the desert or burns coal through a cord. The problem—for me—is the link between “we” and “need.” Whenever people start telling me what I need, I get the sneaking suspicion that I’m about to lose something I’d like to keep. I reckon most people who drive gas-powered cars are just as skeptical of EVs as I am of demagoguery. Question: does that matter?

The chattering classes couldn’t care less. Never mind the environmental effects of amping-up power plants to cater to plug-in nation. EV boosters talk of gas-powered cars and “oil addiction” as if driving a “normal” car makes their drivers sociopaths. At best, they consider Americans who view EVs as glorified golf carts—which, in the main, at the moment, they are—as morally blind. But really, anyone who resists the call of the plug is lazy, selfish and greedy.

Of course, it’s not their fault. They’re hapless victims of a vast conspiracy between the oil companies and Detroit. Big Oil and Big Wheel lured them into gas-guzzling cars and OMG SUVs to satisfy the mega-corporations’ selfish, planet killing greed. (Yup, there’s them words again.) Well guess what? We’re from the federal government and we’re here to help you trade in that gas guzzler for a cheap, clean-running electric vehicle. Whether you like it or not.

Yes you—and by “you” I mean the government—can force drivers to switch from gas to electric propulsion. All the feds have to do: make it financially onerous (i.e., painful) for motorists to drive a “normal” car.

At one end of the spectrum, Uncle Sam could simply outlaw gas-powered automobiles. Federal Corporate Average Fuel Economy (CAFE) regulations already dictate the type of vehicles that automakers must/can build. Tweak the rules here and there, allow for a “transition” period, and we can kiss that pesky gas pump goodbye.

Alternatively, the feds could simply tax the living NSFW out of gas-powered cars. Gas tax hikes, registration fee increases, carbon penalties, road pricing, etc. could create the exodus that simple political correctness will not. Given the U.K.’s experience with cigarette tax (nearly seven bucks a pack), any such “incentive” to leave gas behind would have to be a truly ridiculous tariff. But it would work.

In fact, it is working. Slowly. Which is the only way it can work, politically. If politicians tried to jump from point A to point e in one go, the public would hand them their hats. Instead, we get CAFE’s point B. What’s the bet that EVs and plug-in electric vehicles are given sky-high CAFE-complying mpg ratings? Raise the CAFE standards high enough, and EVs are a dead cert. Lest we forget who created the electric car [hint: the California legislature].

The “cash for clunkers” legislation is point B: XXXL vouchers for plug-in or fully electric hybrid vehicles. If enacted, the bill’s incentives would represent the “pull” side of pulled pork. Anyone remember the Department of Energy’s $25b re-tooling “loans” for American automakers gearing-up fuel efficient vehicles? Same sandwich.

Point Q: the California Clean Air Resource Board’s flirtation with the idea of outlawing black paint, to reduce the energy needed to keep them cool. Still, it’s a question of slope angle, not slipperiness.

OK, so I’m wearing a tin foil hat and yes, I’m anti-EV. Sorry. It’s not because I have a Scott Burgess-like love of a rumbling V8 in the morning. Although God knows I do. Nor is it insensitivity to the planet’s plight. Although I think about the planet in terms of millions of years rather than last week. And I’m not a Bedard-like reactionary who sees changing a toilet paper roll as an affront to common sense. It’s simply this: EVs are a cynical attempt to avoid reality.

EVs defenders tout plug-in automobiles as a bridge to an oil-free future. (To wit: Chevy’s tagline from gas-efficient to gas free.) I call bullshit. EVs are the rolling equivalent of Chrysler and GM’s “viability plan.” It’s a bridge to a place that I don’t believe exists. In the EVs case, we’re talking about a world where America trades-in over 100 years of gasoline-fired prosperity for what? Nuclear power powered vehicles?

Hang on; that works for me. Tell you what. Once the feds build a bunch of nuclear power plants, once they prove that switching to battery power can reduce pollution and oil imports, then I’ll buy an EV. Only how come I don’t feel like I won’t get a say in this?