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A123 is will be sold to Chinese – A Failure of the American Public and a Tragedy

The failed Lithium battery maker A123 was just given the go ahead by a federal panel to sell the company to the Chinese company Wanxiang.  This is after you and I put $130 million dollars into the company via a  Department of Energy grant.  This is a tragedy, but one most caused by the American people not the battery maker.

A123 went into business to make lithium cells with their primary goal of producing batteries for electric vehicles.  It was cutting edge and the addition of more electric cars to the American roads makes sense in so many ways.  Electric cars are more efficient, they offer high performance, they help cut the need for foreign oil, and are better for the environment.  The problem is that despite rising fuel prices, major oil spills in the Gulf of Mexico, and the longest raging wars in the Middle East ever in US history,  American drivers just don’t get it.  But the Chinese do.

China has long had a phobia about being dependent on other countries or worse beholden to them.  This fear is not without warrant since they have been invaded numerous times.  The Chinese government realizes that for their continued industrial growth they will need more and more energy.  Since oil is a finite resource, the cost to obtain it is going to continue to rise.  More over the oil has been controlled by OPEC and so too its price.  There will always be a need for oil because it is still a very energy rich medium and will be needed for many uses that electric can not replace.  This is especially true in shipping which is a cornerstone of the Chinese economy.  They face another problem, which is a growing middle class that now wants their own cars.  More cars which will use gas.  With all of these issues piling up, the Chinese government understand that they must promote electric cars so that the oil is not being used for personal transportation which could easily be replaced with electric.

So this leads us to the failure of the American public.  There are now a number of very good electric cars out on the market.  There are also a number of companies like High Voltage Hot Rods which can convert gas cars to electric.  Despite this, the American public keeps dragging their heals to embrace the technology and buy an electric car.  Electric car sales have continue to sag.  The biggest complaint is that electric cars are expensive.  This is true, but it is also true that there is a large amount of the population which can afford an electric car and instead choose to put their money into just as expensive gas cars.  Like any product, the cost of electric cars is based a lot on economies of scale.  The early adopters will pay more.  The biggest expense right now is the cost of the battery packs.  They are expensive because they are made in small quantities.  If more people purchased electric cars, the cost to make these batteries would go down.  So the failure of the American public to embrace electric cars in a larger way has kept the prices of the cars high and in the end has caused the failure of American companies like A123.

The Chinese get it though.  In large cities where pollution is also high, incentives as high at $19k are given to buyers of electric cars.  Charging stations are being put in all around the large cities for people to charge their cars.  An now they are going to buy our technology at fire sale prices to provide batteries for those cars.  America, we just missed out.

Electric cars are the future Americans.  Its only a matter of time before our gas prices rise as high as they are in Europe or higher.  The sooner we embrace the technology  the better.  If you are on the fence, go out and test drive an electric car and buy one.  If the big automakers don’t make one that fits your style, give us a call and we will make you one that will.  Unfortunately we will probably all be forced to by the batteries from China.  Lets not miss out again.

Andrew McClary

NPR Story on the sale of A123

Side Note

We are a dealer for the Chinese battery maker CALB.  Though as an American company, working on American cars, we would really like to use American made batteries.  American companies like A123 have refused to sell cells to smaller companies like ours for reasonable prices, often times quoting outrageous prices just so we will go away and they won’t have to support us.  Part of the reason A123 filed for bankruptcy is that they relied almost entirely on large OEM deals that ultimately fell through.  I couldn’t help but think if they had made their cells available for purchase to the large number of small custom conversion shops around the country, they might not have had a business that while being small would continue to grow and provide profit for the company.  I hope that the few American battery makers left out there will take heed and realize that the true innovations usually come out of small companies with a huge passion for what they are doing.

It should also be noted that it has been reported that A123 cells are also used in many of the small drones and other military hardware used by some of our military teams.

 

 

Written by

Andrew is a designer and inventor with experience in many fields. He is also the CEO and Co-host of Car Show Television which airs across the country and on Roku and Amazon FireTV.

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