In The Wake Of A123, Should The Government Still Pick Energy Technology Winners?
- Jul 7, 2018 12:39 am GMT
The battery technology firm A123 burned cash faster than it was coming in the door in a market for PHEV that is not as hot as many would like. But unlike other green energy companies to flame out the A123 bankruptcy saw one an industry giant, Johnson Controls, ride in to make a bid for its assets.
Not even the $7500 Federal tax credit has been enough to get car buyers to buy a Chevy Volt. Toyota Prius is turning from the name of one car into a franchise of several model types in an effort by its corporate parent to leverage its investment and brand eminence in the category and capture the higher mileage ratings to satisfy its CAFÉ obligations. Honda, meanwhile, signaled its intent to essentially offer a hybrid option for each of its mainline vehicles.
So is the love affair with the PHEV over before it really began?
Yes and no—and that’s a good thing.
The government’s approach to picking energy technology winners has turned into a colossal loser. Buying a car is still a very personal statement about our self-image, status, and persona. Some cars make a statement we see as consistent with who we think we are. And some do not. Prius has been successful commercially because it oozed ‘tech savvy, environmentally responsible, fun to drive, and just hip enough to be well regarded in any company of friends.’ Chevy Volt screamed ‘the government made me do it.’ It is Yugo-like, bloated, plastic remnant from GM’s past with a big battery with a very limited range so I still have to put gas in it probably sense of uncertainty about it. Prius owners rarely have buyers’ remorse. Chevy Volt owners seem to worry about whether it will keep working until the hugely expensive beast is paid off.’
The commercial success of hybrid technology tells us the market is ready for well designed, reasonably priced, good performing electric vehicles. But pushed beyond hybrids to PHEV involves more cost and more risk than most car buyers think prudent given the evolving state of battery technology. The result of the government push for PHEV is to make the perfect the enemy of the good.
Johnson Control is buying the assets of A123 because it wants the patents and other intellectual property for future use. That is a prudent business decision by a firm with deep enough pockets to keep investing in battery technology advances. So let’s hope they make the most of it. We need better battery technology not just for vehicles but for energy storage and time shifting of energy use. But it is going to take a lot more than a Chevy Volt to change the game in vehicle efficiency or energy transformation.
Image: Electric Car Storage via Shutterstock
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