New York Times writer Tom Friedman visited a battery factory in China and then took a test ride in a Coda Automotive Sedan listening to an electric car CEO all the while. Now he’s so excited, he wants you to give more money to the United States electric car industry.
Basically, Tom thinks we need to have the government spend money to keep up with the Euros and the Reds, just like back in the 1960’s when we paid Boeing to waste money building supersonic aircraft, because it was The Future, because the Euros had the Concorde and because the Russians had the TU-144, because Everybody Else Was Doing It.
Should we trust the CEO from this company when he asks us for more money?
Now, here’s a bit of the reaction to Tom’s op-ed so far, and here’s my reaction, bit by bit. Let’s let Tom go first:
“China is doing moon shots. Yes, that’s plural. When I say “moon shots” I mean big, multibillion-dollar, 25-year-horizon, game-changing investments. China has at least four going now: one is building a network of ultramodern airports…
Not exactly sure how building airports is a “moonshot” but oh well. Anyway, he goes on about high speed rail and stem cells and then gets to electric cars:
Beijing just announced that it was providing $15 billion in seed money for the country’s leading auto and battery companies to create an electric car industry, starting in 20 pilot cities.
This is industrial policy, this is government picking winners and losers. This is automatically, necessarily a good thing? Really?
In essence, China Inc. just named its dream team of 16-state-owned enterprises to move China off oil and into the next industrial growth engine: electric cars.
That’s a big assumption, right – Tom knows what the “next industrial growth engine” is going to be? 100% sure about that?
Not to worry. America today also has its own multibillion-dollar, 25-year-horizon, game-changing moon shot: fixing Afghanistan.
America plus about four dozen other countries, right?
The electric car industry is pivotal for three reasons, argues Shai Agassi, the C.E.O. of Better Place.
Shai “Music Man” Agassi is a nut. He’s another rich guy wants to change the world. It’s not a foregone conclusion that his battery-exchanging scheme will function as planned, right? I mean, A Better Place might not work out even with all that government money he’s getting.
First, the auto industry was the foundation for America’s manufacturing middle class.
So what. What’s so magical about building cars as opposed to refrigerators and whatnot? Was there ever a time when the average middle class worker worked in the auto industry or anything associated with the auto industry? Nope.
Second, the country that replaces gasoline-powered vehicles with electric-powered vehicles — in an age of steadily rising oil prices and steadily falling battery prices — will have a huge cost advantage and independence from imported oil.
Petroleum produces the electricity that powers the cars, right? Oh, what’s that, we’ll need some more moonshots to get solar and wind power going? Yes we will.
Third, electric cars are full of power electronics and software. “Think of the applications industry that will be spun out from electric cars,” says Agassi. It will be the iPhone on steroids.
Spin-offs? Now we’re talking. That’s just like the Apollo program – it’s Whitey on the Moon! The point of Apollo was to make spin-offs, is what some people think. Why not just build iPhones and “power electronics and software” if that’s what you think we need. What’s magical about building electric cars? Weren’t the Apollo missions cancelled when people realized what a big waste of money they were? Wasn’t the entire Space Shuttle Program a c0lossal waste of money as well? Wouldn’t a manned mission to Mars be an even greater waste of money? That might be a good program for Morton Thiokol or whomever, but would it be a good program for America? Shouldn’t moonshots have a raison d’être before we start writing checks?
Europe is using $7-a-gallon gasoline to stimulate the market for electric cars…
Lot’s of luck with that one. First of all, “Europe” had $7 a gallon gasoline long before the electric car companies started to lobby the influential writers of the New York Times. But anyway. And didn’t Hillary Clinton just run for President saying how we needed a cut in gas taxes? Might she do that again? Yep. So, that’s a tough row to hoe, raising gas taxes. I’m with you, Tom. Let’s raise gas taxes if we can. But we should do that independent of what they do in Europe, right? Otherwise we’d get most of our electricity from nuclear power the way they do in France and we’d have a nuclear waste dump in Napa County the way do in their Champagne region.
China is using $5-a-gallon and naming electric cars as one of the industrial pillars for its five-year growth plan.
Boy, that’s what we need, a five-year plan?
Sure, the Moore’s Law of electric cars — “the cost per mile of the electric car battery will be cut in half every 18 months” — will steadily drive the cost down, says Agassi, but only once we get scale production going.
There is no “Moore’s Law of electric cars.” Sorry. Shai Agassi sold you a bill of goods, Tom. He feels it’s his job. That means that he’s the last person in the world people should listen to to learn the truth about electric cars. People have said the same thing about Telsa and its use of 7000-whatever AA-sized (or whatever, close enough) industrial batteries but we’re not seeing anything like this kind of improvement in this part of the battery market.
U.S. companies can do that on their own or in collaboration with Chinese ones. But God save us if we don’t do it at all.
“God” save us? Thanks NYT, I learned something new about you today. GM can build an electric car is it wants to. Nissan is doing so right now. Why do electric cars need to be from U.S. companies? Why do we need more corporate welfare for building cars in America?
Two weeks ago, I visited the Coda Automotive battery facility in Tianjin, China — a joint venture between U.S. innovators and investors, China’s Lishen battery company and China National Offshore Oil Company.
No, Tom. You visited a Tianjin Lishen Battery facility in Tianjin, China
Kevin Czinger, Coda’s C.E.O., who drove me around Manhattan in his company’s soon-to-be-in-production electric car last week, laid out what is going on.
KC is yet another smart guy on a ego trip running a crap electric company, so let’s immediately buy into everything he has to say, shall we?
The backbone of the modern U.S. economy was locally made cars powered by locally produced oil.
Tell me in which era this mythical time was and I’ll tell you how you’re wrong.
It started us on a huge growth spurt. In recent decades, though, that industry was supplanted by foreign-made cars run on foreign oil, so “now every time we buy a car we’re exporting $15,000 of capital, paying for it with borrowed money and running it on foreign energy sources,” says Czinger.
So Kev, you don’t like foreign things, huh? Let’s make a note of this. Oh and BTY, the top two suppliers of foreign oil are, can you guess, Canada and Mexico. That’s not all that foreign, is it?
“We’ve gone from autos being a middle-class-making-machine to a middle-class-destroying-machine.”
Autos are not a “middle-class-destroying machine.” Sorry.
A U.S. electric car/battery industry would reverse that.
Ooh, I’m an millionaire NFL football team owner. Now, build me a stadium and pay for it and then all sorts of wonderful things will happen. No no, even better, I’m a bored former Goldman Sachs partner and now I’m a millionaire Chinese electric car company CEO. Now, build me a battery factory and pay for it and then all sorts of wonderful things will happen. Promise.
The Coda, 14,000 of which will be on the road in California over the next year and can travel 100 miles on one overnight charge, is a combination of Chinese-made batteries and complex American-system electronics — all final-assembled in Oakland (price: $37,000).
Whoa, slow down Tom. 1) 14,000 of might be on the road in California over the next year. Never ever trust what the CEO of an electric car company says, right? Maybe Coda will unload 7000 units to the govmint as promised (the state of CA has changed its mind about buying electric cars before, right?) and 7000 units to consumers of the next 12 months or maybe they won’t. 2) Final assembly will take place in Oakland? First I’ve heard of this. First it was L.A. County, then it was going to be in Benicia and now you say it’ll be Oakland? Is this a scoop, Tom? But does anybody know about this in Oakland yet? Nope. Oakland is either a scoop or an error – Only Time Will Tell. 3) The price, she is $44,900.
It is a win-win start-up for both countries.
Again, Only Time Will Tell.
If we both now create the market incentives for consumers to buy electric cars, and the plug-in infrastructure for people to drive them everywhere, it will be a win-win moon shot for both countries. The electric car industry will flourish in the U.S. and China, and together we’ll tackle the next challenge: using auto battery innovations to build big storage batteries for wind and solar. However, if only China puts the gasoline prices and infrastructure in place, the industry will gravitate there. It will be a moon shot for them, a hobby for us, and you’ll import your new electric car from China just like you’re now importing your oil from Saudi Arabia.
Now, correct me if I’m wrong here, but aren’t we importing new electric cars from China right now? I think so. The Coda Automotive company is doing it, right? Helloooo, Tom? Lot’s of luck putting gasoline prices “in place” (or, in other words, raising federal gas taxes sky high), Tom. I don’t think that’s going to happen anytime soon. And haven’t we thrown too much money at American auto companies the past few years? Making cars is nothing special, despite what CEOs tell you when they’re driving you around Manhattan, Tom.
What’s next? Maybe a CEO from Big Corn could drive Tom around on a John Deere somewhere in the Midwest and then he could write about how we need to throw more money at corn ethanol?
What do you think, Tom?