EVs Think! & MyCar Falter
In, Electric car boom in Ind. city goes bust, Sharyl Attkisson of CBS News notes that the Think! City car is once again faltering, and calls the government to task for another bad investment:
With unemployment peaking above 20 percent, Elkhart, Indiana was at the white-hot center of the economic meltdown, and a natural launch point for President Obama’s electric vehicle initiative.
“So that’s why I’m here today,” the president said three years ago. “To announce $2.4 billion in highly competitive grants.”
Republican Gov. Mitch Daniels was also on board in convincing Norwegian company Think Global to open a plant in Elkhart to build Think City electric cars with a sticker price of about $42,000.
As incentive, the federal government offered Think City $17 million in stimulus tax credits. …
But it turns out the company had a checkered track record, including three previous bankruptcies. We recently visited Think City’s Indiana plant, and here’s what we found: a largely empty warehouse.
In the 2004 film, The Aviator, while testifying before Congress, Howard Hughes (Leonardo DiCaprio) was accused of wasting taxpayer money because many of the projects that his firm worked on during WWII were unsuccessful. Hughes responded matter-of-factly that across the industry, a certain percentage of government projects simply didn’t pan out. IOW, you have to explore a lot of ideas, and to some extent, failed projects are a cost of doing business. The trick is not spending too much and not funding the obvious failures. While $17 million would be a lot in your bank account, it pales in comparison with the sums invested in other energy initiatives. But was Think! an obvious loser?
I saw several City cars at the Timonium Solar & Wind Expo this summer:
There were about five more Think City cars inside the building, … EuroStar Auto Gallery, a nearby dealer, was discounting them from the list price of $36,495 to about $22,500, and advertising them as costing $15,000 after the federal rebate—plus tags and title. The Think is a two seater about the same size as a Smart car, and has a skin of recycled plastic. (Later I asked a young man what he thought of the Think. He said it would be odd to own a car that felt like a trash can lid.)
Think claims 50-75 mile range in winter, 75 miles on the highway with AC and 110 miles in the city. The speedometer goes to 120 mph, but the top speed listed is 70 mph. The dealer pointed to the door edge to show off the solid construction. It wasn’t nearly as tinny as the Chinese-made Electrovaya EV I rode in a few years ago, but it wasn’t nearly as solid as a Leaf or Volt, either. I asked him if they were still made in Norway. He seemed surprised and said that the parts were made there, but were assembled in the US. Think! has gone bankrupt several times, and I had thought they were finally defunct, but Autoblog reports that they were bought out by a Russian investor in March 2012.
I didn’t need a second car, but if I had, $15,000 wouldn’t be too much. My problem would be having no garage or private area for recharging. In my opinion, EVs and hybrids are aimed at well-to-do people wanting to hedge against future high fuel costs. I don’t expect that electric cars that feel cheap will find a market.
Think! isn’t the only risky venture, either. In a similar move to stimulate manufacturing, former Gov Haley Barbour helped arrange about $10 million of incentives from his state to help former DNC chairman Terry McAuliffe bring production of Hong Kong’s MyCar, essentially a sturdy golf cart, to Mississippi. According to Plugincars, the MyCar isn’t selling either, and GreenTech is looking for cash in all the wrong places:.
McAuliffe says GreenTech has raised $100 million so far―although the company won’t give any details about where that money is coming from and how much of it is destined for the U.S.-based manufacturing side of the business as opposed to its operations in China. Does a company that sells $18,000 vehicles in the niche NEV market really warrant $100 million in startup capital? …
For part of its funding—GreenTech isn’t saying how much—the firm is counting upon the little-known EB-5 program, which allows prospective immigrants to gain a path to citizenship by investing $500,000 or more into approved projects. At the end of a two-year period, if a project is deemed to have created 10 permanent jobs, the investor and his or her family are issued visas.
As reported in the recent New York Times Magazine article, GreenTech’s “primary investment group” is Gulf Coast Funds Management LLC, a firm specializing in EB-5 fundraising. Both McAuliffe and Gulf Coast CEO Anthony Rodham have travelled to China to speak at investor conferences aimed at attracting wealthy Chinese families to the program.
Unfortunately, the EB-5 program has recently proven susceptible to fraud, leading to a chorus of calls for reform. Prospective immigrants are typically charged a non-refundable fee of $40,000 or more by firms like Gulf Coast, and are sometimes told by agencies in their home countries that their investments are guaranteed. In several instances, families have lost their money and faced deportation due to alleged fraud.