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More Flops in Electric Car Industry


Two years after the Solyndra bankruptcy scandal, bad green energy investments are still dogging the Obama administration. The latest is Ecotality, which had manufactured charging stations for electric vehicles. It has just filed for bankruptcy and is preparing to auction off all of its assets. Apparently, the electric car market didn’t take off quite as fast as expected, and like many of its peers, Ecotality wasn’t able to bring in enough revenue to get off the ground.

Ecotality is different from the rest, however, in that it received a $99.8 million grant from the federal government in 2009. It still owes $6.5 million to its largest unsecured creditor, the Energy Department. It looks as though the federal grant was the only thing keeping the company afloat for the past few years: the company cites the cancellation of government payments as the main reason for its bankruptcy. Once again, it seems, the government will be taking a loss on its green “investments.”

This isn’t nearly as big a catastrophe as Solyndra, which involved some egregious shady behavior. But this should serve as yet another reminder that the government is not a VC firm and should not be in the business of picking winners and losers, particularly when the technology involved is so untested. If the government wants to spur innovation, funding for basic R&D is the way to go.

[Image courtesy of Olga Besnard/]

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  • Pete

    Everything Obama has touched has turned to medre

    • bpuharic

      Number of dead troops in wars started by Obama?

      Zero. If that’s failure, I’ll take it.

    • Kavanna

      That’s merde, buddy — doesn’t it just sound AND smell better in French? 🙂

      The initial stupidity was largely due to Bush, in 2002 and 2007. However, the continuation of this stupidity rests with Congress.

      And the enviros also get much of the blame. They pushed hard for this, and now, even they admit it wasn’t such a good idea.

  • Jacksonian_Libertarian

    TARP was a Trillion Dollar heist, by Obama, the Democrats, and their political cronies of the US taxpayer. It is a travesty of justice that most of these thieves will never be brought to justice.

    • bpuharic

      Dontcha love the lies of the right?

      TARP was developed by Hank Paulson, SecTreas under Bush, and was signed by Bush in 2008. Obama became pres in 2009

      Why not blame him for Pearl Harbor, too?

      The right, when it’s not being delusional, is filled with liars.

  • bpuharic

    Last year the GOP House passed a farm bill that contained 188M for tobacco subsidies. Last year almost half a million died from tobacco related illness. That’s about $400 per death. Not including the billions to treat them, lost time, etc.

    Yet WRM complains about subsidies for nascent technologies.

    Yeah let’s keep doing that. Welfare for billionaire farmers. Starve technology.

    Can’t hurt us, right. I mean, China graduates a million engineers a year…all looking for work in China….

    • Loader2000

      Were those subsidies that specifically targeted tobacco companies or were they simply farm subsidies and since tobacco falls under the category of farming, it received the subsidies as well. How come the president didn’t veto the bill? I can’t imagine such a morals driven president as President Obama not vetoing a bill that specifically subsidized tobacco (and not farmers in general). If the subsidies were for farming in general, well, then the question becomes, “Should we subsidize any industries, like farming, that create billions of dollars of export revenue for the US.” This is a very different question from, “Should the government be choosing which specific companies within a given industry to give millions of dollars to.”

    • effinayright

      Yours is a study in illogic.

      * you commit the fallacy of “tu quoque”, which means, “well, you guys did it too”. Green subsidies and farm subsidies are two different critters. They merit different arguments.

      * As loader2000 says, you are not specific about your 188M for tobacco. Where’s that number come from.

      * you blame the GOP. Yet the
      Dem-controlled Senate and Baraka himself went along with the subsidies.

      * Baraka had a Supermajority in Congress for three years, yet the Dems didn’t (a) end farm subsidies, and (b) outlaw the sale of tobacco.

      So…why blame the GOP for the deaths of a half-million a year? Weren’t people dying at such a rate while the Dems controlled the WH and Congress?

      * you confuse WRM with the GOP House. Why?

    • Douglas6

      How much money did the states and the Federal government collect from tobacco sales last year? Between 1998 and 2010, the states collected an aggregate of $244 billion from the tobacco companies (not including income or franchise taxes). In 2009 alone, the Federal Government collected $8.5 billion in excise taxes on cigarettes. (BTW, these numbers dwarf the profits of the cigarette companies over the same periods – the primary beneficiaries of tobacco sales in the US are the state and Federal governments.) And you have the nerve to complain about a subsidy of $0.188 billion for tobacco farmers? If you were complaining generally about agricultural subsidies, I’d be with you, but to pick on tobacco is, well, nervy.

      • Ziv Bnd

        Ouch! That is going to leave a mark!
        Thanks for the facts, Douglas.

        • bpuharic

          Wasn’t aware there were TWO socialists here

          • Ziv Bnd

            bp, I have voted in every Presidential election since 1980. I have always donated to conservative candidates. I have always thought that the big tent concept was needed to include the Reagan Democrats. But there are too many narrow minded myopic idiots like you in the Republican party that wouldn’t be willing to compromise at all, and in the end you may end up cutting off your own nose to spite your face. And you may drag the rest of us down when you do.

            “Socialist”? For calling for fair play?

          • bpuharic

            Yeah it’s SOCIALIST WELFARE for the rich. Tobacco farming is a free market enterprise. Why should socialists get welfare from the govt to support their business?


          • Ziv Bnd

            bp, when you call other conservatives “socialist” the real socialists win. Leave your crazy in the other room.

      • bpuharic

        So tell me why you’re supporting socialism. If people want to kill themselves, the tobacco companies can do it without my help.

        Your socialist support for big govt welfare for the rich is noted

  • Randy

    Just because a company fails doesn’t mean it isn’t a good idea or good plan… Poor management, for example, can screw things up.

    Think of all the successes: TESLA MOTORS, Nissan Leaf, Chevy Volt… All these car companies are breaking records and expanding EV lines. As much as people will skew the truth, the reality is that plug in cars are being adopted twice as fast as hybrids were.

    One major reason Solyndra failed was because it had to compete with dirt cheap Chinese solar panels. The Chinese government is subsidizing them so that all competitors go bankrupt. Can’t compete. Whether or not the company would have failed otherwise, we will never know.

    The federal government spends BILLIONS a year old oil subsidies alone. These cost the government more in a year than if all the other small loan holders were to default too. The wars in the middle east costs are in the order of 13 figures. Quit whining about electric cars that actually save the economy and government money.

    • effinayright

      Erm…..have you seen the pathetic sales records for the Volt and Leaf? Yeah, they break records—but that’s easy to do when you are starting from zero.

      Cumulative 2013 for each are in the 14,000 range — that’s a drop in the bucket.

      Second, the federal government doesn’t “spend” money on “subsidies” to oil companies — it gives them tax breaks, IOW it allows them to keep more of their.. own….. money. The ROI oil companies make is within the low-to-median range for all industrial sectors . The only reason they make billions is because they invest –and risk—hundreds of billions.

      (A subsidy involves giving Taxpayer A’s money to Taxpayer B, as, say, in the case of subsidies to sugar or tobacco farmers.)

      As for this or that policy “costing” the government or “saving” the government —cry me a fracking river. If the government weren’t so huge, it would not need to take forcibly so much money from its citizens.

      • Randy

        Electric cars are being adopted at twice the rate of hybrids, what more do you expect? That IS impressive, we don’t have to see 3 million sales overnight to call it a success.

        Oil and the trillions we spend to protect the infrastructure is a total waste. Gov could have bought over 200 MILLION electric cars instead of invading two countries for now reason but for oil. Subsidies cost tax payer money whether you want to accept it or not.

        The electric car is the future. You will see… Keep driving gas… We are already on peak oil.

        • Douglas6

          You ought to drop the “peak oil” meme. It’s past its sell-by date.

          • Randy

            We are on peak oil. Why does that not matter to you? You don’t believe we will run out of a finite resource? You don’t know that the Saudi oil field production is dropping fast, require dozens of new wells to keep up the supply levels? Believe it or not, we are on peak oil.

      • Ziv Bnd

        Effy, the first generation of a revolutionary product is going to be expensive and the early adopters that are willing to pay that much are a small segment of the population. Now that the economies of scale are kicking in, the Volt and the Leaf have both seen large price reductions and are setting sales records.
        The Volt sold more cars last year than half of the car models sold in the US, and it is on track to do better this year.

        • effinayright

          Funny, I don’t remember iPods and iPhones and iPads, all revolutionary products needing billions in government subsidies to design, manufacture and distribute, or needing tax subsidies to encourage people to buy. If “the Volt sold more cars last year…” etc. then why did GM close its production line? as for “half the car modles”, that’s a bogus comparison. It’s the OTHER HALF, of which 12 million were sold.

          • Ziv Bnd

            The tools you refer to are all derivative not transformative. Sony made cassette players, then walkmen, then tried to keep up with the iPod. There was no maker of electric cars. The $7500 is why Musk was able to sell enough cars to build Tesla to the point where it is today. The $7500 (and a similar credit in Japan) was why GM and Ford and Nissan chose to build electric cars and sell them in the US.

            Now the economies of scale are kicking in and the cars are getting cheaper and the batteries are delivering more kWh for the pound, as well. GM closed the line for 4 weeks to re-tool and then for 4 more weeks because they had enough Volts in stock. The Volt inventory has dropped from 9,000 before the 2014 was released to 4,000 now. Last month was a record for the Volt and this month looks to be a record as well.

    • Douglas6

      What subsidies for oil are you talking about? Please be specific.

      • Randy

        All the oil subsidies. The industry should not have ANY subsidizes.

  • David Wall

    It is immoral to use tax money to invest in any business endeavor. “Successful” or not, “basic” R & D or not.

    When the government starts making these decisions with public funds, more and more money is siphoned out of the economy for “politically approved” endeavors. This is the beginning of cronyism that in the extreme leads to a fascist economy where the government makes all economic decisions.

    You might approve of electric cars and go along with it public funds being used to pay for them, but a principle has been breached. The next wave of politicians may have a different constituency than yours and they may want something funded that you do not approve of. What moral ground do you have then.

    If you want to see environmentally green products, by all means invest your own money in them, but leave other people’s money alone. It is your decision, not mine or anyone elses.

    • Douglas6

      It’s pretty conventional rational expectations economics that the government has a role in paying for public goods. To greatly simplify, public goods are goods and services that no one has the incentive to buy because the benefits go to everyone and as a result are underproduced. National defense is the prime example: Bill Gates could buy a few aircraft carriers and patrol the shores, but he’d be defending you and me, too. Health care, with one exception, is not a public good – whatever you pay for benefits you and not the rest of the country – the exception being communicable diseases. The problem is in figuring out what constitutes a public good that should qualify for public support.

      Basic R+D is a public good. If you discover a new theory of relativity, or a new theory of dark matter, that benefits the whole world. A lot of R+D falls in the middle – there is some potential for exclusive private benefits, e.g., if a patent is available – but a lot of the benefit is for the world at large. At the other extreme, R+D for the purpose of commercializing a new technology is not, generally speaking, a public good. Looking at the electric car case, I think you can make a reasonable argument for public support for the development of a entirely new type of battery or engine, but not for the commercialization of any of them.

    • David Wall

      Response to Douglas6–
      The government has one moral purpose–that is to protect individual rights. That is how a country protects the freedom of each individual and providing money to pay toward those freedoms have never been an problem. Beyond even money, in a free country people are willing to give not only money, but even give their lives to protect those freedoms. The possibility of dying is preferable to the certainty of losing their freedom when those freedoms are truly at risk.

      But to the degree that a government spends money on endeavors that go beyond protecting individual rights is the degree that the government loses its moral justification. You are right–it is now conventional thinking that the government can spend money on all sorts of projects that have nothing to do with protection individual rights–so long as the political power is available to do it. Still, it is a violation of individual rights to force people to pay for projects they don’t approve of, of their own free will. Isn’t that what living in a free country means? What we have now is a central government filled with pressure groups fighting for tax paid projects that have nothing to do with protecting freedom. Each project that does not pay for protection of freedom is morally unjustified. Read Madison, Jefferson and Ayn Rand for more details.

  • teapartydoc

    Another case of progressives purporting to be able to predict the future and bullying everyone into policies based on those predictions only to have the future turn out differently. The vision of the annointed is self-serving cronyism.

  • Ziv Bnd

    Bush was right to push for the Energy Security and Independence and Security Act of 2007. That is the bill that gives the buyer of an electric car with at least a 16 kWh battery a tax credit of $7500. That act alone has put 100,000 electric cars on America’s roads already and both the Volt and the Leaf set sales records last month as their sales are growing quarter to quarter.

    More importantly, most of the cost of developing the cars has been written off and the MSRP’s are dropping fast so more people are looking at them and buying/leasing them.
    All American electricity powers my Volt 90% of the time.

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