CBO: Electric Cars Are A Waste Of Money
Bruce Krasting, My Take On Financial Events     | Sep. 24, 2012, 8:13 AM | 21,328 | 73

The Congressional Budget Office (CBO) did a good job of shredding the electric car industry and the government’s role in its evolution with this report (Link).

I’m not knocking electric cars, I’m knocking DC’s role in this industry. Washington has provided the loot necessary for research on battery design, it has committed to up to $25Bn of soft loans to the auto industry and it is subsidizing every electric car that is sold. Without the massive support from our “rich” Uncle Sam there would be no electric car industry in the USA. The question is, “Is this money well spent?”

The government’s role with electric cars goes back to the 2009 emergency spending program ARRA (American Recovery and Reinvestment Act):

ARRA provided $2 billion in funding to the Department of Energy (DOE) for grants under that program. Of that amount, $1.5 billion was awarded to battery producers, intermediate suppliers for those producers, and recyclers of vehicle batteries; the other $500 million was awarded to manufacturers of components for electric vehicles and intermediate suppliers of that manufacturing.

DOE’s Transportation Electrification Initiative has made commitments for $400 million in grants for demonstration, deployment, and education projects involving electric vehicles. (Party Time!)

I think it’s important to note that the original objective of supporting electric car production was that it was a plain old economic stimulus. This was dropping money from a helicopter in the hope that it (and all the other money) would stabilize a rapidly declining economy. Another motivation for the federal investment/subsidy was that it created a back-door support package for the auto industry that was falling off a cliff back then.

Washington also agreed to provide $25Bn in cheap loans to the companies who make electric cars. So far, $8.4Bn has been committed. The rest of the money will be doled out before 2019. The money is being lent by the Federal Financing Bank (FFB). Because the loans are guaranteed by DOE, there is no risk of repayment to FFB. As a result, the loans are excluded from the calculation of the debt limit. The 25 ‘large’ is all “off balance sheet”. A very neat trick indeed!

Who is getting the billions of soft loans? What are the terms for these advances? From the FFB (Link):

Read more: http://brucekrasting.com/cbo-on-electric-cars-dont-buy-them/#ixzz27PMuvfd1

Removing Batteries from GE-100 Electric Vehicle, 1978

An engineer removes the battery carriage for General Electric's GE-100 prototype electric car. The car contained 18 electric batteries that powered the car for a 75-mile highway range or 45-mile city range.

Used with permission from the GE Photographic Collection, at Schenectady Museum and Suits-Bueche Planetarium.

there ain't nuthin' new under the sun

Inventor of First Electric Car



First Electric Car

Oh that William Morrison! Hybrid car enthusiasts should remember the name William Morrison. A native of Scotland, William Morrison built America’s first electric automobile in his secret basement lab in Des Moines in 1892. His 4 horsepower front-wheel-drive vehicle required 24 battery cells, had a top speed of 20 mph and needed recharging every 50 miles. It was the talk of 1893’s Chicago World’s Fair.

Juicedhybrid.com Blog (http://s.tt/12JKX)