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Watching The Wheels Come Off The Green Machine
Forbes, United States Tuesday, November 29, 2011


What is it that green planners don’t understand about the complexities of re-engineering an entire ecosystem? Do they believe they can simply mothball the A123 plant while someone else figures out how to design and build an electric car that customers actually want? Or maybe they believe all these problems can be fixed by forcing consumers to buy electric cars. After all, if we can be forced to buy health insurance, why not electric cars? –asks Bill Frezza in Forbes.

Last week, the electric vehicle maker A123 Systems- poster child for successful clean tech investing- “temporarily” laid off 125 workers and reduced its earnings guidance for 2011 by $45 million.

Could these be the same plants- that Democratic congressional leaders hailed as the birth of a new era in American manufacturing, received a $249 million U.S. Department of Energy grant, and for which Michigan shelled out $125 million in incentives to lure away from Massachusetts?

Planners put all this public money to work to relieve the technology bottleneck they believed held back our transition to electric cars. So they invested taxpayer money into building the largest lithium ion automotive battery plant in North America- to supply a Finnish electric car manufacturer backed by Al Gore’s venture capital fund and which received $529 million in federal loan guarantees. To date, that Finnish manufacturer has only shipped 40 cars into the U.S. Those cars were delivered to a handful of millionaires and billionaires who received tax credits because they bought an electric car.

Forecasts made as recently as three months ago predicted that electric cars would become the leading application for lithium ion batteries by 2015. Who are they kidding? By any rational standard the introduction of the Chevy Volt and Nissan Leaf, with fewer than 2,000 units sold between them last month, can only be described as disasters.

It’s going to get ugly for the investors who piled into the car battery market when the reverse multiplier effect leverages hundreds of millions of public money into billions in private losses.

What is it that green planners don’t understand about the complexities of re-engineering an entire ecosystem? Do they believe they can simply mothball the A123 plant while someone else figures out how to design and build an electric car that customers actually want?

Or maybe they believe all these problems can be fixed by forcing consumers to buy electric cars. After all, if we can be forced to buy health insurance, why not electric cars?

This seems to be EPA Administrator Lisa Jackson’s plan. She recently overruled Congress by issuing regulations calling for America’s fleet of passenger vehicles to meet an average fuel economy of 54.5 miles per gallon by 2025.

The EPA estimates that compliance with the new rules will cost Americans “only” $157 billion. Estimates weren’t provided for the additional highway deaths that would ensue when vehicle weights have to be reduced to meet the standard. But why should lives and money matter when green ideology is at stake?

One of the key tenets of activist government is that the failures of central planning can always be solved with more central planning, just as failed spending programs can be fixed with more spending. All it takes is the will to reallocate resources from the private sector to the state. President Obama has made this approach the centerpiece of his “We Can’t Wait” campaign, issuing a stream of executive orders to demonstrate his leadership abilities.

Leadership, indeed. But to where?

This article was published in the Forbes on Tuesday, November 29, 2011. Please read the original article here.
Tags- Find more articles on - Chevy Volt | Electric vehicles | Lisa Jackson | lithium ion automotive battery | Nissan Leaf

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