Can green vehicles really save the Big 3?
The Chinese auto has only just emergedAs Congress and the Obama auto task force contemplate many tens of billions - perhaps even much more - in aid to the US auto industry, is the US auto industry already a dead industry walking?
Kudos to President Obama for playing hardball - even if it is just for show - with the UAW, bondholders and corporate boards. Still, today these concessions are being forced in an effort to compete with Japan and Korea.
Tomorrow, even mighty Toyota might not be able to compete with Chinese automakers, and smart people like Warren Buffett are already making that bet.
Today, many claim that hybrid and electric vehicles are the key to the Big 3's future - vehicles with little profit potential for Big 3 automakers in the next few decades. Yet, Chinese automakers are quickly rushing to fill this segment with their own products. Moreover, China has far better access to lithium than does the US, hordes of engineers and an endless supply of cheap labor.
Can hybrid cars really save the Big 3? Can anything?
Labels: China, Congress, Hybrid Vehicles, lithium battery
posted by Dahcredyns at
8:04 AM
8 Comments:
It's a dead industry walking and we're just throwing good money after bad. I'd like to support the Big 3 but the US isn't going to be able to compete at producing batteries in the US. If we can't compete at manufacturing batteries for cell phones and laptops in the US, why will we be able to compete at car batteries? This assumption flies in the face of reality and I predict this boondoggle will end up costing America hundreds of billions. I guaronteeeeeee it!
Well, I think they could struggle along in some fashion for decades, however, I do think that US battery production could be a stretch, at least in terms of cost-competitiveness. Moreover, the longer we wait to try, the less chance we have of succeeding, so I believe time is of the essence.
Indigo Incarnates
If our government is going to subsidize the auto industry (a murky proposition at best), I wish it would try to lift up some of the next-generation carmakers -- like Tessla, Fisker, and ZAP. GM/Chrysler had a good run, but they didn't evolve. They're like dinosaurs in a world of mammals.
i'm confident that tesla, at least, will obtain low interest government loans to mass produce the white star. i think if zap, etc. produce quality business plans, they will also get funding.
I think the US could compete in battery production. The reason we don't is lack of investment in cutting edge manufacturing R&D by the government.
A perfect history lesson is Intel and silicon chip manufacturing in the US. The US was quickly falling behind in the 80's in the nascent silicon chip industry. The industry, including Intel, petitioned the federal government to start a manufacturing consortium. The consortium engaged in the massive R&D needed to master silicon manufacturing, and led directly to the current dominance of Intel, Texas Instruments, etc.
Battery production is hard. I would argue that success won't be determined by cheap labor costs or cheap Lithium supplies. It will be determined by cutting edge manufacturing and chemical science. So, I figure there is nothing stopping the US from competing in this nascent market, other than the huge R&D investments, likely by a consortium model.
i'm not saying we can't compete, and i think you make a great case.
still, asian companies have far more experience, sadly, largely all spawned from US scientific breakthroughs. and, they've been making investments for years now as the US sat, largely, idle.
sure, we can still lead here, but a lot of ducks are going to have to fall into row. and i, sadly, just don't see it happening.
for instance, i think you'd have to start hybridizing everything within five years, in addition to Obama's million EVs by 2015. it really is like racing the russians to the moon, but that sense of urgency certainly doesn't exist today.
You know, you give a perfect analogy. "Racing the Russians to the moon," the proverbial moonshot, or Apollo program analogy that is used when talking about green energy. Well I think a US battery industry ties in quite nicely with that approach.
You are absolutely right about the sense of urgency needed. But leadership starts from the top, and as the economy worsens NEXT YEAR, I think Obama, and really only a President could help ignite and marshall the sense of urgency needed, will have a decent shot at pushing the Green Energy moonshot. He could even demonize China battery prowess a little in the process.
I think he needs a few things in place first: a reorged Detroit, higher gas prices/supply shock, the first Volt, worsened unemployment, a true understanding that our economic base from the 80's and 90's (the paper prosperity of finance and credit bubbles) is not returning and that we truly need new industries. So by 2010/2011 we will see the definitive move by Obama.
i have no doubt that Obama is going to try do something. i think he will be more of a leader on this issue than any president since carter, minimally.
i worry about congress, especially since obama's program is going to be based in cap and trade. with congress in control of the writing of this law, i see lots of loopholes, kickbacks and footdragging.
i also worry that cap and trade won't affect the auto industry much. instead, CAFE will be used for that purpose, and I don't think CAFE provides the sense of urgency needed for the US to make a quick jump.
i hope i'm wrong and a lot of other things could happen to force obama's hand one way or another, but i think the future of the auto industry is going to be completely dominated by Asia.
we'll still be around, but we'll never be close to what we were.
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