Wednesday, October 17, 2012

1 + 2 + 3 - $2,490,000 = ?

High-tech battery maker (and prominent EV motorcycle sport sponsor) A123 Battery Systems of Waltham MA is bankrupt. Over the summer, A123 announced that it would give Wanxiang Group Corp., China’s largest auto-parts maker, a majority stake in exchange for financing. But that deal has fallen through, and now Johnson Controls will pick up most of the pieces for $125 million.

Not surprisingly, the apparent failure of another green energy company has been pounced upon by the Romney campaign, which had earlier accused Barack Obama of "backing losers" when he encouraged government investment in tech like EVs, and solar and wind power generation. 

A123 received a $250 million grant from the Dept. of Energy, and has used about half of it. A123 was given $125 million in refundable tax credits from the state of Michigan that it never collected, although it did collect a $10 million state grant. Before Republicans succumb to too much schadenfreude, however, it should be noted that  A123 received U.S. grants in 2003 and 2007 under Republican President George W. Bush’s administration, before the stimulus grant from the Obama administration. A123 has been supported and endorsed by several Republican legislators over the years.

More than it shows any real lack of oversight, the A123 debacle illustrates an often-overlooked truth: the second mouse gets the cheese. A123 was an early leader in developing EV battery tech. It's undoing came when batteries it supplied to Fisker -- and early player in the EV sports car segment -- had to be recalled. 

It's a bit of a bummer for the small players in the EV-motorcycle racing field, since A123 was an enthusiastic sponsor and technical partner. It remains to be seen whether Johnson Controls -- a $10,000,000,000 company -- will even notice such fledgling efforts, much less support them.

I noticed the news of A123's failure on the same morning that my friend Susanna 'Pinkyracer' Schick posted a six-month old Bloomberg story to the effect that electric cars will save users about $1,200 a year on energy costs.

If you plug that savings into the equation for the electric Ford Focus, it's a little disappointing. The base model Focus EV lists for about $40k -- $32,500 after federal tax credit. That's about double the base-model ICE Focus. It would take ten years or more to recover the additional cost in energy 'savings'. 

I think it's cautiously safe to assume the EV's battery pack will last that long, but a Norwegian university conducted a 'life cycle' study that I noticed on, which suggests that when you take into account the energy used to make and decommission EVs, they'll reduce greenhouse gases by no more than 25%, compared to ICE alternatives.

What does all this mean? It's too early to tell whether electric motors will or even should replace ICE in light vehicles. In the short term, the solution is smaller vehicles that we use less because we have better public transportation alternatives, and increased use of bicycles and walking. I use a motorcycle that gets a real 50 mpg for long/highway trips, and a 70 mpg scooter, bicycle, or walk for in-town trips. If I'm picking up 100 pounds of stuff at Costco, I borrow my wife's nine year-old Focus. There's neither an economic nor environmental case for me to even consider an EV.

1 comment:

  1. That sucks. I plan on building a ttxgp racer in the off season. I saw the mission bike at the AFM July round at Infinion and told them what a awesome track bike that would make. No trans means you can just set entry speed and go. The less you have to do going into a corner the better. Thats the advantage of a ebike. On sport bike I know few peaple who ride more than a 150 miles in a day. So range isn't a issue. It's they cost just to figging much. I think as a track bike /racer there is a future for ebikes If one can be built cheep enough.