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Reviving the Electric Car

But fallout could be national nightmare


The federal government wants to end your dependence on foreign oil and our politicians want you to know that they have goals.

With some luck, and billions in federal subsidies, it's possible that hydrogen-fueled cars "could begin appearing in showrooms by 2020," the Associated Press reported. Or maybe not.

After nearly 30 years of ethanol and biofuel subsidies totaling tens of billions of dollars, the president said in a February speech that he now believes that if we give the government just six more years, and if we dole out billions more in subsidies to politically connected companies like Archer Daniels Midland Corporation, the nation may develop a biofuel that could actually compete with gasoline without massive federal subsidies. (He didn't claim this biofuel would actually replace gasoline in his February speech, just compete with it.)

The whole idea is for the American people to believe that if there is a viable alternative for gasoline-powered cars, it's a distant one that won't be available for decades.

But what the federal government couldn't do in 30 years with tens of billions of research dollars, Silicon Valley appears to have done in three years with a mere $60 million in venture capital furnished by a group of investors that includes the founders of PayPal, eBay and Google.

Last week, Tesla Motors announced that its first fleet of electric-powered cars quickly sold out at around $100,000 each. The sleek, two-seat roadsters are the first to run solely off a larger version of the batteries that power our laptops and cell phones. Tesla Motors says the roadster, which was designed by Lotus, goes from zero to 60 mph in four seconds, has a top speed of 135 mph, recharges in under four hours and can cover a range of 250 miles on a single charge.

Automotive reporters who have ridden in the demo models come back breathless, raving about the speed and a wicked handling feel they've never experienced before.

Tesla's plan is for the sale of the first 100 roadsters to help fund the development of a four-door sedan that is already being designed for mass production. The sedan is heavier, and a more powerful lithium-ion battery would have to be developed for it to get the same mileage the lighter roadster does. Tesla engineers are confident that ongoing rapid advances in battery capacity will lead to a battery that has the juice they need by the time they bring it to market in the next few years.

And while the roadster uses no oil and costs about a cent a mile to run, the buyer must pay an additional $10,000 service fee at purchase that covers maintenance over the life of the car. How that will work when the car goes to mass market is unknown.

But the point is this. Without a single dime from the federal government, Tesla has put a viable electric car on the road that has overcome every problem that doomed the electric cars the big auto makers scrapped a decade ago. General Motors' electric car got just 60 miles per charge and could barely go the speed limit.

If the feds pumped the billions they're spending on their ethanol boondoggle into this, we could be gas-free in a few years. They just don't choose to.

Not that I want the federal government involved in what Tesla and two competing companies making the same kinds of cars are doing. The federal government's own lithium-ion battery initiatives prove that our politicians are committed to slow progress -- and only to progress that involves some use of gasoline.

While Tesla roadster test drivers hit the streets in August in functioning lithium-ion battery powered cars, a government/automotive industry partnership called the United States Advanced Battery Consortium was doling out a two-year research contract to study the development of ... lithium-ion batteries, but only for use in hybrid cars. It hopes to produce test models that use gas and the batteries by the end of the decade.

With the price of oil as high as it is and climbing, spending $35,000-$40,000 for a car begins to look attractive if you don't have to buy gas and thus can save more than $15,000 over the life of the car.

The big obstacle here isn't the technology. It's the political and national will. The success of Tesla's cars or another non-oil based transportation solution like them, particularly if it happens rapidly, could cause real financial pain for millions of Americans. Unlike cars with standard engines, which have hundreds of replaceable parts, the electric cars just have batteries. That would devastate auto manufacturers' auto parts businesses, which make up a hefty chunk of their profits. It could also seriously hurt oil profits. The fallout of all this wouldn't just be confined to corporate boardrooms, either. The impact of plunging oil and auto manufacturer profits on individual companies and the economy as a whole would show up in Americans' 401K statements in a way that could send people diving out the nearest window.

There are no easy solutions to foreign oil dependence, but solutions there definitely are.

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