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Progress on Prepayment Plan/Battery Worry Hype

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  • Felix Kramer
    You ll now find plug-in cars included as a matter of course in trends on Cleantech/Greentech, the developing federal EnergyEnvironment/Stimulus agenda, and
    Message 1 of 1 , Dec 17, 2008
      You'll now find plug-in cars included as a matter of course in trends
      on Cleantech/Greentech, the developing federal
      EnergyEnvironment/Stimulus agenda, and plans, conferences and
      statements about climate change. If you haven't done so recently, try
      a news search for plug-in hybrids. Here's our third and final posting
      for today, bringing you up to date on our prepayment proposal and
      exploring the latest problem raised by plug-in naysayers

      (Shortly after it goes out on email, this posting will also be
      viewable at http://www.calcars.org/news-archive.html -- there you can
      add CalCars-News to your RSS feed.)

      AUTO INDUSTRY" has gotten broad coverage. Among the online outlets
      that ran the full text are
      and http://evworld.com/article.cfm?storyid=1589 . Among the stories
      with comments are The Inspired Economist
      * Automotive journalist Jim Motavalli at Mother Nature Network
      says "That's hugely ambitious, of course, but it's certainly a way to
      inject revenue into the failing auto industry. And if fleets
      (including government fleets) jump in that will be a big step
      forward….Plans like this are in synch with the rapid ramp-up
      envisioned by author Thomas Friedman in his book Hot, Flat and
      Crowded…."At this rate, vehicles won't arrive soon enough to save the
      auto industry -- let alone U.S. industrial leadership or the climate,"
      Kramer says. He invokes the fact that Americans bought $17 billion in
      Liberty Bonds during World War I, and $185 billion in World War II War
      Bonds. If they could do it, he says, so can we.
      * Green Car Advisor Scott Dogget at Edmunds
      went over the top in saying "Spend more than a few minutes speaking
      with Felix Kramer about electric cars and very quickly you wonder if
      he might be a genius who's ahead of his time. Like Better Place CEO
      Shai Agassi, Kramer (right) isn't afraid to think big when it comes to
      plug-in hybrid electric vehicles and straight electric vehicles. And
      this week Kramer -- founder of the California Cars Initiative, a
      Silicon Valley-based nonprofit organization that promote 100+
      miles-per-gallon PHEVs -- proferred a really big idea…It's a
      compelling proposal.
      * Author Paul Loeb at Huffington Post wrote a long and thoughtful
      analysis, including, "Here's the dilemma: Detroit needs to sell cars
      to survive, and they need to sell them now. But every fuel-inefficient
      car they produce and put on the road creates an additional lien on our
      common future, by increasing our oil dependence and producing tons of
      greenhouse gases over its ten-to-twenty year lifetime….Felix Kramer,
      who founded the plug-in-hybrid innovation and advocacy organization
      CalCars.org, has just come up with an idea that could solve the
      dilemma…This would give America's car manufacturers a huge pre-sold
      base for these cars, a massive incentive to getting them produced and
      ready for the market. It would also provide a major potential influx
      of capital." Loeb calls the idea "a work-in-progress" an "an
      innovative starting point."

      EVOLVING THE PLAN: We've circulated the idea among policy people,
      Congressional staff -- and enough people around the transition team to
      hope that it's been noticed. At the same time, we've concluded that
      the original idea for $10K prepayments (refunded within months by
      federal tax credits) would limit participants to those who don't
      finance their cars. Talks with financial experts suggest an
      alternative. Buyers would pay $1,000 to reserve a car, and the federal
      government would match each payment with $9,000, all of which would go
      to carmakers under the terms described in the original proposal.
      $1,000 is enough money to show serious intent. Either way, the program
      represents a way to " allow consumers to invest in technologies that
      are essential to any future American economy" (LOEB) and "There's a
      certain parallel to the local food movement, which supports
      community-supported agriculture (CSAs), in which a group of people
      agree to pre-pay for a portion of an organic farmer's crop." (MOTAVALLI)

      Our goal has been to get new ideas into the mix -- especially ones
      that link buyer demand with automaker performance. We'll keep you
      posted on any further progress.


      Many will remember the objections that since 2004 have toppled one by
      one: "No one wants a plug-in hybid…People will forget to plug in….No
      one will pay more up front to save money later….We'll have to build
      more power plants….Who needs the complexity of two propulsion
      systems…You're just moving emissions from tailpipe to smokestack." Now
      after years when we heard "the batteries aren't ready," enough
      automakers are moving forward to undercut that argument. But instead
      of going away, the objection has morphed into the idea that because we
      lack a domestic battery industry, we "risk exchanging oil dependence
      for dependence on imported batteries."(We also hear untrue statements
      that lithium batteries are a recycling problem and that the world
      supply of lithium can't grow rapidly enough. On that topic, see
      http://news.cnet.com/8301-11128_3-10077965-54.html for a CNET story by
      Martin LaMonica with many links to studies on the subject, also at
      Plug In America see

      Former Intel CEO Andy Grove sees a business opportunity here. He
      worked with a Fall 2008 Stanford Business School class to develop a
      plan for a new retrofit industry to modify today's internal combustion
      vehicles. In the short "Electric Plan for Energy Resilience" just
      published by McKinsey at
      , he proposes a U.S. government/corporate/venture capital focus
      opportunity to create a "Moore's Law for batteries." And he suggests
      in the Wall Street Journal that his former company, Intel, might
      diversify strategically to create a new business line supplying

      Here are a few reasons we think concerns about battery dependence are
      overstated and oversimplified:
      * We have different current and potential relationships with the
      petro-authoritarians and state oil companies than with
      China/Korea/Japan. And they are very different kinds of states. Given
      a choice, wouldn't we prefer China as mainly our trade partner rather
      than our banker?
      * Petroleum dependence is unlimited and permanent. Yet once you buy a
      battery you no longer need the supplier.
      * Petroleum is a product with fixed characteristics (though sources of
      lighter crude require less refining) and required volumes. Batteries
      are diverse, improving 5-15%/year in energy density and cost and
      continually evolving in chemistries and design.
      * For those still worried, battery production can be scaled up almost
      anywhere. It takes two years to go from groundbreaking to production.
      It's similar to thin-film solar "fabs" which are being built in
      Silicon Valley, because companies siting locally can benefit from many
      factors besides labor, which for such products can be a small
      proportion of total production costs.

      and http://gristmill.grist.org/story/2008/12/15/11753/589 with
      comments, where he points to the Washington Post, which should know
      better, running a cartoon by Pat Oliphant, the most widely syndicated
      political cartoonist in the world, who misunderstands the Volt as a
      40-mile-range electric car.
      -- -- -- -- -- -- -- -- -- -- -- --
      Felix Kramer fkramer@...
      Founder California Cars Initiative
      -- -- -- -- -- -- -- -- -- -- -- --
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