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EDITION: 9.41 | 05 Oct 2009 |

In This Edition:
Funding Rich Boys Toys?
When I interject what some readers consider politics into this commentary, a few will fume and demand that I stop or that I take them off the mailing list. I usually comply with the latter, but never the former. I have every right to use this forum as I choose, but I try to do so with as much circumspection as passion.
So when Fox News decided to depict U.S. Energy Department loans to Fisker and Tesla for $529 million and $465 million respectively, they certainly are in their right to do so, but only if they do so honestly and accurately. That's not what Fox and other critics of the loans chose to do recently. Instead, Fox News programs America's Newsroom and Your World chose to spread misinformation about the loans, according to the non-partisan media watchdog group, Media Matters for America, which recently reported...
The false or misleading claims include: that the loans will be used to build cars that cost $89,000 and $109,000; that the loans will finance foreign manufacturing; and that Fisker and Tesla are European companies.One of the insinuations is that former Vice President Al Gore, who is a partner in the venture capital firm Kleiner Perkins, used his political influence to steer the loans to Fisker, in which the VC firm has a financial position. They also contend that the nearly $1 Billion will be spent overseas, where the Karma and Roadster are currently built, or will soon. That money, contends Fox News contributor Stephen Moore (no relation), could employ 20,000 American jobs, which really leaves me confused. How much money did the previous administration hand over -- with little if any oversight -- to Wall Street and the Banks to bail them out, with a lot of it ending up in foreign banks, it turns out. Did the Moores and Cavutos over at Fox raise even half the stink?
Fisker Automotive felt compelled to issue a press release to counter the criticism and explain how their loan will be utilized. It points out to its detractors...
Fisker Automotive is an American car company based in Irvine, California.It adds that while the low volume Karma luxury plug-in hybrid will be assembled in Finland, the next generation Karma follow-on, code-named Project Nina after one of Columbus's ships, will be built in the United States. In explaining the terms of the loan, it states...
The company’s goals are to help restore the U.S. as a leader in the global auto industry and to eliminate America’s dependence on foreign oil.
As reported by the DOE, $169.3 million of the loan will be used by Fisker Automotive as the company works with primarily U.S. suppliers to complete engineering work on the Karma. This work will be conducted in Pontiac, Michigan and Irvine, California.
The remaining $359.36 million will support Project NINA and its manufacture of 75,000-100,000 plug-in hybrids per year at a retooled U.S. assembly plant, beginning in 2012.
The DOE loan is conditional. In order to receive the funds Fisker Automotive must meet very specific milestones. Money is disbursed in small amounts only if the company successfully reaches these milestones.The funds will be repaid, with interest, to the American taxpayer.
Coming to the two carmaker's defense, Jay Yarow notes that, "pouring money into the smaller electric startups makes sense because they will attack the problem with single minded devotion that GM just won't. As much as GM likes to talk about the Volt, the car is not a make-or-break product. For Fisker and Tesla, their electric cars are all they have. They have to get it right or else."
Besides, he asks, "The experienced automakers ran their businesses into a ditch, only to get bailed out with billions of dollars from the US. Why advocate for them to get even more money?"
PHEV '09 Debrief
First I was nervous, then embarrassed, and finally relieved. I made it through my opening keynote speech in Montreal last Tuesday without making a major faux pas. You can find the text and slides from my Are We Ready for 2012 talk on EV World. From comments afterward, those who came up to talk or ran into me in the hallways expressed their appreciation for what I said. The embarrassed part came in two pieces. I had assumed I'd sit near the front of the hall and be called to get up and speak, but that's not what happen. They lined the four of us up at the back of the room and marched us in to everyone's applause. Of course, in the confusion, I forgot to actually turn my video camera to "record." So there isn't a video record of my presentation, which is probably a good thing anyway.
The event itself was held in the conference/shopping center of which the Hyatt Regency in Montreal is a part. It's a really nice venue for an event of this size, which drew at least several hundred people from across Canada, the US and even Europe.
For me personally, one of the highlights of the event was meeting Steve Dallas, the Toronto businessman who created the TE Option 1 electric concept car pictured above. It took two years and unmentioned amounts of money to bring the car to fruition and it shows it. He hired noted race car designer Paul Deutschman to style it and a local NASCAR builder to fabricate it. The digital functions of the car were done by a firm that does similar work for a large OEM that also shall go unmentioned, at the developer's request.
After seeing the car late Monday night, prior to the conference opening and speaking with Steve and Paul, I stayed up until midnight to write up my "scoop" on the car. When I saw Steve at a reception the next night, he was as giddy as a school boy. I mentioned that I'd posted a short blog about him and the car and he replied that he knew. His wife had called him, thrilled to be mentioned in the article. He said he kids thought he was really cool for having made it into EV World. His employees at Toronto Electric, consider him a hero. His only problem is now what to do with the car. Does he enjoying having a very expensive, one-of-a-kind EV or does he find a way to see it mass produced. From a subsequent email, it sounds like interest has been expressed in taking over the project and driving it towards production, so this may be just the beginning of the Steve Dallas story.
I also ran into Michael Reed and his lovely wife Rosanne at the reception Tuesday night. Mike, as you might recall, was the president and CEO of bi-polar NiMH battery developer ElectroEnergy, who, when I spoke to him last December at the EDTA conference in Washington, D.C., said his firm was within days of shutting its doors. While it had government orders worth $3 million dollars for 18650-type lithium ion batteries from the old Energizer plant he'd acquired in Gainesville, his key investor had a heart attack and Mike couldn't find another investor to replace him. Reed ran out of money and had to close the plant and shut down ElectroEnergy.
Now he's back in the "game" as an executive with Magna International, the folks -- along with their Russian partners -- bidding on Opel in Germany and developing the electric drive train for Ford's forthcoming electric Focus. Magna has now launched an initiative to develop battery packs for electric cars and Mike is one of the senior executives overseeing the initiative.
As is typical with all these conferences, there is no way to attend all the workshops and breakout panel presentations. I sat in on a couple on Tuesday, one dealing with the effects of cold climates on plug-in hybrids.
And then there was my dinner with Ed Innes from Manitoba Hydro and our discussion about Canada's healthcare system. Boy, if I could tap the heat coming off my article about this conversation, I could warm my home all winter.
Others I had a chance to speak with were Unicell's Roger Martin, CalCar's Felix Kramer, author Pierre Langlois, expat New Yorker Glenn Seale with whom I had an extended conversation about investing and the state of the U.S. economy (it's not good, which is why Glenn moved to Canada in 2004), and my old friend Sankar das Gupta, the founder of Electovaya, and his charming daughter Gitanjali -- whom both Felix and I would pursue in a heartbeat if we weren't both old guys and already happily married.
I have to tell you, I really like the Canadians and could easily find many reasons to move there, except for two things: they're too far north and they measure temperature in Celsius. I mean, when its 32 degrees out, do I wear an overcoat or swimming trunks?
Frankfurt EV Photo Gallery
Here's a statistic that will blow you away. Of the supposed 80+ world premiers of new vehicles at the 63rd International Auto Show in Frankfurt, half of them had some form of electric drive, and half of those were battery electric cars: production, preproduction and concept studies. There were way more than I could personally deal with on EV World, but fortunately, the folks at Drive Solar did it for us all... in German, Spanish, English and French, too boot!
Visit Drive Solar for the most complete photo gallery of the electric drive vehicles of the 2009 Frankfurt Auto Show I've seen anywhere.
Au Revoir Zenn Cars, Bon Jour Zennergy Drive
I arrived in Montreal too late to hear Ian Clifford's presentation in which he announced that ZENN is getting out of electric car conversion business in which he imported French-made Microcar gliders and installed electric drive systems in them, then distributed them for sale, mostly in the United States. Now he is focusing his company's resources on the development of electric car drive systems under the Zennergy brand name, the centerpiece of which [hopefully] will be EEStor's much-anticipated energy storage technology.
Why the abrupt about face? Reports the Toronto Globe and Mail...
Zenn's business model has been built around the idea of the small company being both the manufacturer and distributor of the vehicle.Clifford is banking on his exclusive license agreement with EEStor, that includes a 10% stake in the company, to give his company the necessary charisma it'll need to attract those larger players. EEStor announced last June that it would deliver its first test packs to Zenn sometime late this year, so the clock is ticking.
But something happened in the last year to change his mind - the world's major manufacturers launched a fierce push into the electric space, drastically reducing his company's advantage in the matter of only a few months.
Now, Mr. Clifford believes Zenn has a better chance of prospering if it works with big companies, rather than compete with them - so it now plans to offer its drive trains to anyone who comes calling, and reduce its auto-making ambitions.
Tamminen V. Kramer
What's the deal with Terry Tamminen, a lot of EV World readers are asking after reading his denunciation of battery electric cars in an article entitled, "The Myth of the Battery Electric Car on the New America Foundation web site? He lists five reasons why investing in battery-driven cars is a mistake, favoring instead hydrogen fuel cell-powered EVs. The kernel of his argument is it takes too long to recharge batteries compared to refueling a fuel cell car, using as an example a recent trip he took to Palm Springs.
I refueled in 7 minutes and was ready to return that afternoon. The Tesla or any other battery car available today would still be at the recharging station 30 miles short of Palm Springs, not to mention the problem of getting back in the same day.Well, Felix Kramer wasn't about to take this lying down and up and wrote a point-by-point rebuttal, concluding...
The biggest refutation of Tamminen comes from the growing stampede among national governments and automakers to bring plug-in cars to market. They are starting with substantial tax incentives until costs decline with economies of scale -- but the gap needed to bridge is in the $5-$10,000 range, one-tenth or less the amount needed to subsidize Tamminen's preferred hydrogen cars.I don't have a dog in this fight, myself. As far as I am concerned, both are electric cars and there will be a place for both in the future of transportation. But I should point out to Mr. Tamminen, that in his 7-minute refuel, he didn't come even close to filling his tank. To do that would have required at least 30 minutes or longer, because of the very nature of hydrogen under pressure. The first half is easy, after that it takes longer because of the increasing pressure inside the tank, which has to be carefully controlled, I've been told.
As he himself notes, there is no silver bullet, only buckshot, and one of them is going to be battery electric cars, like it not.
Ontario Gets FIT
The Province of Ontario might be overly conservative when it comes to allowing neighborhood electric vehicles on its public streets: it doesn't; period, full stop. But when it comes to being visionary on renewable energy legislation, it has become the king of the hill on both sides of the 48th parallel, the latitude that separates it from its neighbor to the south.
Its parliament recently passed legislation instituting the most aggressive Feed-In-Tariff in North America and possibly the rest of the planet, especially for solar. If you are a homeowner in the province and you install a PV system under 10kW, you are guaranteed an CAD$0.80 per kilowatt hour payment for the next 20 years, that's equivalent to 75¢ a kilowatt in U.S. dollars. Prices half that in Europe led to a stampede of homeowner and small business installations from Germany to Spain to Italy and Greece.
If you aren't familiar with FITs as its called, the idea is to give citizens incentives to buy PV and other qualifying renewable energy systems that will feed carbon-free electricity into the power grid. The government guarantees a fixed per kilowatt rate, usually over 20-25 years. With that guarantee, homeowners can go to the bank and take out a loan to buy a system. The closest we've come to this is a modest 32¢ rate offered in Gainesville, Florida earlier this Spring. San Antonio, TX has implemented a limited 2 year FIT trial restricted to 500 kW and paying 27¢.
Given how the implementation of FITS in Europe, and specifically in Germany, has led to their leadership in the industry, especially in the manufacture of the equipment needed to make solar cells and panels, Ontario is likely hoping they can become the North American leader in the technology. With this plan, they have a good shot at succeeding.
And speaking of solar, which still remains a costly way to produce electric power, Barclay Capital Research sent around an email this morning with a very interesting chart in it, which I have added below. It shows where Barclay's sees solar silicon costs headed: down from the +$2/module in Q4 of 2009 to $1.40 in 12 months.
And as if to underscore this, Energy Conversion Devices announced today they are opening a thin film solar manufacturing plant in Spain.
21st Century 'Spirit of St. Louis'
As the Frankfurt Auto Show wound down, a long-winged, nearly silent aircraft circled below the gray overcast and landed uneventfully at the airport in Stuttgart, Germany. The plane is a modified Antares 20E sailplane equipped with retractable electric-assist motor and propeller. What sets it apart from its stable mates are the two streamlined pods slung under its wing, one holding a hydrogen storage tank, the other a BASF fuel cell to power the electric motor.
The goal of the program, which is the brainchild of the DLR Institute for Technical Thermodynamics, is to explore the use of fuel cells in aviation, specifically as a future replacement for turbine-powered APUs in commercial jetliners.
But even more intriguing is the Institute's plan to one day cross the Atlantic, Charles Lindbergh-style, in a hydrogen fuel cell-powered aircraft. The Ryan-built 'Spirit' had a cruise speed of a leisurely 112 mph (180km/hr), taking 33 hours and 30 minutes for the non-stop flight from New York to Paris in 1927. Powered by a 44kW (57 hp) electric motor, the Antares might be able to maintain a similar speed, though it's designed a soaring machine whose best lift speed is around 65 mph. The real challenge will be how to get enough hydrogen onboard to steadily power the craft for the 30+ hours.
Still, it's exhilarating to think that someday in the not-too-distant-future, a solo pilot will silently wing his way high above the steel-gray Atlantic in an electric airplane, guided by GPS, listening to his iPod and looking for the Irish Coast line a few hours ahead.
Spot me 40 years and what I wouldn't give to be that pilot.
Until next time, stay plugged into EVWorld...
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