Evolution Shift
A Future Look at Today
December 1st, 2008

America’s Automotive Future Goes Beyond the Big Three

The discussion about bailing out the Big Three has been couched in terms that imply that the Big Three represent the complete future of the automotive business in the U.S.  As I have suggested, if they are to be bailed out they should be given money based upon measurable metrics.  I have also suggested that they represent thinking from the 20th century, the century of the internal combustion engine, which is not the future of automotive transportation this century.

I am for providing help for the Big Three assuming they come up with an intelligent plan for spending tax payer money. As stated in a prior column any such plan would include rapid conversion to selling a fleet that has an average 45 mpg and the developing of electric plug-in vehicles. What I would like to suggest is that if there is some $25 billion on the table, that the American taxpayer be given either alternative or additional ways to invest for America’s automotive future.

As I said in a prior column, at the beginning of the 20th century there were dozens of car companies and by the end there were three standing.  That is a good metaphor for what is going in the electric car business today.  There are numerous small companies that manufacturing electric cars, converting internal combustion engine cars to also run on battery power and many other companies working flat out to create new types of batteries that might power our cars in the years ahead.

The most widely known electric car company is  Tesla Motors, who is currently selling 2-3 cars per week at $109,000 each.  These two seat roadsters go 0 -60mph in 3.9 seconds, get over 200 miles per electric charge and are completely quiet.  There is a long list of buyers.  At the other end of the price spectrum is the Aptera , which is selling a three wheeled futuristic looking vehicle at an expected price of $30,000.  You could go to their web site right now and put down a $500 deposit for a vehicle that will be delivered in 2009.

The U.S. and the world will enter the age of the electric car 2010-2015.  This will be the time that many companies will not only sell them but will be quickly ramping up production volume. There will be the electric hybrids and pure electric plug-ins.  There will also be many small companies – the 10,000 garage small scale businesses – that will partially or fully convert existing internal combustion engine vehicles to run on electricity.  As there were dozens of car companies 100 years ago making internal combustion engine vehicles, so there will now be a similar blossoming of entrepreneurship of limited production electric car companies all around the world.

If the federal government is thinking about $25 billion for the Big Three, why not set aside a couple of billion to seed and support innovation and ultimately production for the existing companies such as Tesla and Aptera and a thousand garage scale enterprises that are high in innovation but low on capital?  Fund the future, not just support the past.

Another interesting development that I have written about here is the compressed air car.  Here is a vehicle that is in the early stages of production but runs on compressed air and needs an oil change of vegetable oil every 50,000 miles.  Millions of dollars lent to a company willing to produce these in the U.S. would make a difference.

Another automotive investment that should be part of any large scale tax payer bail-out would be providing funds for  hydrogen internal combustion and hydrogen fuel cell cars. While the electric car will most likely get to scale first, hydrogen will soon follow, particularly if accelerated with federal funds. According to the National Hydrogen Association, it would cost about $9 billion to put 6,500 hydrogen stations into service over the next 10 years.  This is exactly the large scale type of endeavor perfectly suited for federal support as we move toward our new national goal of energy independence in the next 10-15 years.

If we as a nation are going to provide money to the Big Three, who represent our automotive past, why should we not also provide money, at no greater risk to companies and organizations that represent our automotive future?  The Big Three represent the special interests and constituencies of our past.  The companies that want to manufacture the electric car, the compressed air car and the hydrogen fuel cell car represent the national interest that is, and must be our future.

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