Why Electric Cars Have Stalled

It's not just tax breaks, but outright giveways. These grants from Crown Corps are straight giveaways, not tax breaks.

The auto industry is among the more important industrial sectors in Canada. However, if they cannot provide effective management, they - management - deserve to pay a price.

As far as the issue of if a magic bailout/loan/grant will turn around the Big Three, what good does it do to throw money at them when we are entering a crippling global recession? So we keep the factories open, they keep cranking out vehicles, that sit in giant lots, not being sold.

Somewhat overshadowed by this dramaqueen act, was Toyota having the official opening of their new Rav4 plant in Woodstock, Ontario.

Along with industrial support, I have seen scant mention or support from Liberal Premier Dalton McGuinty of Ontario regarding the forestry sector in Ontario. Of course, since Ontario falls off the face off the earth once you're north of Sault, nobody in the GTA gives one s*** about all the forestry jobs lost in the Northwestern region of Ontario

The Liberals in Ontario did - however - pledge to protect the boreal forest in Northwest Ontario. Not protect the jobs, but protect the forest. Okey-dokey, so why support protecting an antiquated industrial sector in the GTA?

Oh, right, jobs and votes

A lot of those forestry jobs were lost due to illegal American tarifs levied on Canadian softwood products exported to the United States. In the United States, the forestry sector has powerful lobbyists in DC that ensure preferential treatment for American producers

 

On the subject of giveaways to the automotive sector in Ontario

Premier of Ontario - News Releases - New Woodstock Toyota Plant Starts Production

So, straight from the horses mouth, the Ontario government has provided almost $8 billion since 2004. Including almost $100 million for the new Toyota plant in Woodstock, Ontario

Here is who benefited from the Ontario money

Ontario's Auto Strategy

Premier of Ontario - News Releases - Investing In Innovation For A Strong And Prosperous Ontario

So, my question is this:

With no legacy health care costs to speak of, courtesy of the taxpayer funded OHIP, and despite generous taxpayer initiatives over the past four years, why are the Big Three in Canada now in such dire straits?

I always hear on the news that the Big Three in the US are in deep s*** due to all those stranded legacy health/benefit costs. So what excuse does the Big Three use in Canada?

If you listen to the president of the CAW, you'd think Canada alone was responsible for the global recession. They certainly are unwilling to offer concessions, as this article documents

CAW OFFERS NO BREAKS FOR AUTO BAILOUT

Comments?

 

You're no understanding what the horse is saying from its mouth.

Ontario didn't spend $7.8 billion on the auto industry since 2004, they have attracted $7.8 Billion in investments.

The Ontario Automotive Investment Strategy (OAIS) is a project started in 2004. They have been budget $500 million to attract automotive jobs to Ontario. In order to be eligible for funds a project must bring at least 300 jobs or $300 million in investment to the providence.

According to their website the OAIS has funded 12 projects since it was founded.

Year ------ Company -------- Government Spending --------- Corp Spending
2004 -------- Ford --------------- $100 Million -------------------- $1 Billion +
2005 -------- GM ----------------- $235 Million ------------------- $2.5 Billion
2005 -------- International ------ $32 Million --------------------- $270 Million
2005 -------- Chrysler ---------- $78.6 Million ------------------- $786 Million
2005 -------- Toyota ------------ $70 Million --------------------- $800 Million
2006 -------- Limamar ---------- $46 Million --------------------- $1.1 Billion
2006 -------- Honda ------------- $15.4 Million ------------------- $154 Million
2006 -------- Valiant ------------ $7.1 Million --------------------- $93 Million
2006 -------- Nemak ------------ $6 Million ----------------------- $100 Million
2007 -------- AGS --------------- $6 Million ----------------------- $62 Million
2007 -------- DENSO ------------ $4.5 million -------------------- $73.8 Million
2008 -------- Ford --------------- $17 Million --------------------- $170 Million
------------------------------------ $617.6 Million ------------------$7.11 Billion

So Ontario is on average putting up ~ 9% of the start-up cost for a company to locate in their Providence. Or to look at it another way, for every $1 they spend in incentives they get $11.5 in company investment. I would say Ontario is getting a pretty good return on the taxpayer's dollar.

Or to quote from your source:

"ONTARIO AUTOMOTIVE INDUSTRY INVESTMENTS: Creating Jobs and Prosperity for Ontario Families

The McGuinty government supports Ontario families who rely on a strong and vibrant auto sector by working to strengthen the competitiveness of our industry. Through Ontario's targeted strategies, including the Ontario Automotive Investment Strategy, the government invests in key areas such as innovation, high-value skills training, infrastructure, environmental technologies and energy efficiency. Ontario's strategies have leveraged lmost $7 billion in automotive investments and anchored thousands of long-term, high-value jobs.

Ford - Ontario invested $100 million in Ford's $1-billion Oakville project to create its first Canadian flexible manufacturing facility and for a new research and development centre focusing on fuel cell technology.

General Motors - Ontario provided $235 million to support GM's $2.5-billion Beacon Project, a multi-faceted investment that supports GM's vehicle design and manufacturing capabilities at plants in Oshawa, St. Catharines and at CAMI in Ingersoll.

Navistar - A $270-million International Truck and Engine Corporation (Navistar) investment in Chatham and Windsor received Ontario investments of $32 million to support a new R&D Centre in cooperation with the University of Windsor and skills training for workers at the Chatham truck assembly plant.

Toyota - Toyota's $1.1-billion investment at Woodstock includes $70 million in provincial support for skills training and infrastructure. The new Toyota plant will bring at least 2,000 new high-value, well-paying jobs to Woodstock.

DaimlerChrysler - Ontario is investing $76.8 million to help increase flexibility and put in place new technologies at the Windsor Assembly Plant, and invest in its Brampton facility through the company's $768 million commitment. Ontario?s investment secures the operations at the Windsor and Brampton plants for the next decade.

Nemak - Ontario's automotive industry plans include support to the auto parts sector. The government's $6-million investment supports Nemak's $100 million Windsor project to bring new technology to the engine production sector and expand its service to more engine families and companies.

Linamar - Ontario's $44.5-million investment supports Linamar Corporation's $1.1-billion Ontario growth plan. The company will create 3,000 new high-value jobs and establish a Technology Centre in Guelph that will spur innovations across Linamar's operations here and abroad.

Honda - Ontario is investing up to ten per cent of the total project cost of the new engine facility for public infrastructure to accommodate a new fully integrated engine facility Honda is building in Alliston. The $154 million Honda investment creates 340 new high value jobs and expands the company's presence in Ontario."

 

That was quickly typed and poorly worded on my part. Yes, the Province leveraged the investment. One would think an average investment of under 10% wouldn't amount to anything. You will note that many of these taxpayer investments require no payback, or very long term payment eg 50 years

As far as "bang for the buck" there is little risk on the part of the car makers to beg for and receive the public funds. There are many non-performing industrial loans from Export Development Corp and Industry Canada, where the particular corp just shrugs and tells the government "oh well, TFB you're SOL"

You will also note that Ontario already has one of the most generous taxpayer-funded incentives in the world, yet the Big Three in Ontario are apparently in the same mess as they are in Michigan

Why?

When these programs were instituted, the Big Three pulled in lavish profits from the sale of full size pickups and SUV's. What did they do with the money?

There are many tax advantages for large corporations to operate in Canada, especially Ontario. Are you aware that R&D expenses can be carried forward INDEFINITELY? Despite all these advantages, why the big mess now?

Documents - Ontario's New Auto Investment Strategy

The auditing and accounting of Provincial incentives is quite a bit different than Federal incentives, such as those from the Business Development Bank of Canada, Export Development Corp or Industry Canada. The reporting is far stricter, and more open, for Provincial corporations

One thing I find very suspicious is that the numbers keep changing. For example

globeandmail.com: Detroit 3 seeking $6-billion from Canada

Where the line really blurs between Federal Crown corps and locally is through Economic Development Corporations and Community Futures Development Corporations. These regional entities hold out their hands for - collectively - billions.

This is one documented program from Industry Canada

Minister Jim Prentice Announces Investment in Auto Sector Jobs -- Partnership with Ford Expected to Create or Sustain up to 757 Canadian Jobs and Make Canada a Leader in Green, Fuel-Efficient Auto Technologies

The Export development Corp generally won't share any information without a signed Access To Information Act request. Most of the announced partnerships and funding for the Canadian automotive sector have been through Provincial sources. Most of the Federal sources have not been required to announce the funding

As far as whatever plan is put into place, it does now appear to be a done deal. Due to parliamentary wrangling from a week ago, the minority Conservative government is in no position to deny a lucrative bailout. If they do, they face a Non Confidence vote towards the end of January

This article is also interesting. Oakville is home to a few car plants

http://www.oakvilletoday.ca/news/article/222051

So despite the protests of a few Canadians, a very lucrative bailout is almost certain to proceed

 

The Province got paid up front, with a plant, that brings jobs, that bring tax dollars. Take the Toyota deal. The province puts up $70 million in worker training and infrastructure for the site. Than Toyota spends $1.1 billion to build a plant. That is local investment on several fronts. You have hundreds of construction workers getting paid and spending money in the local economy. Even if they aren't local, they are staying in hotels and eating at local restaurants. Once the construction phase is done, 2,000 locals go to work. Where is the downside for the province?

It is good that Ontario has very generous tax funded initiatives. As shown by the OAIS program those taxpayer funded initiatives brought $11 for each $1 invested by the province up front and then thousands of jobs long term.

Yes, the Big 3 made SUV's and trucks and the money rolled in. They spent some of that money building plants in Canada to make those trucks and paying Canadians to build them. Now due to a huge drop in sales of those trucks and a global recession the Big 3 are in trouble and those Canadian jobs are just as much at risk as the American and Mexican ones. Now the Big 3 have come to the Canadian government and said, "10% of our workers are in Canada. If you want to keep those jobs you need to pony up 10% of what we need to stay in business."

 

Public sector investment in what should be private sector concerns has been investigated by various groups in Canada, such as the Canadian Taxpayers Federation, Probe International, and the Underground Royal Commission.

One thing with the automotive sector projects I have quoted so far: all of them required the CTF or URC to submit Canadian Access To Information requests, which took an average of FOUR YEARS to clear. The reports only went back to early 2003, were a fraction of the information requested, and were heavily censored.

So, what are the various Crown Corporations, and the Big Three, trying to hide? If public sector investment is such a hot return, then why not have the taxpayer invest far more than a meager 10% in a project? Why not 50%? Hell, why not 95%?

The concern of these public sector investments is that it's highly unlikely a major project hinges on a 10% buy-in: if the project is that iffy, it will probably fail anyway. It's also highly unlikely that one can suggest these investments create winning economic performance

In other words: did the public investment alone create the jobs/economic growth, or was it coincidental? That is, would the private sector investment have gone ahead, created the jobs, without one penny of public sector buy-in?

According to investigations by the Underground Royal Commission, Probe International, and Canadian Taxpayer Federation, private business ventures that are successful, would have been successful without the public sector involvement. The funds are then nothing more than a perk, a giveaway

The track record - in Canada - of these various Crown Corp public sector investments, is dismal. The vast majority of these investments are considered sunk costs

Another example of outright corruption is the investigation by Probe International of Export Development Corporation. Again, ATI requests take about four years to clear (If even approved, most are not), are heavily censored, and lead to far more questions

Probe International's Export Development Corporation Campaign

Not exactly a stellar record, is it? As the various investigations of Crown Corps like EDC, IC, and CIDA have uncovered, less than 10% of the funds can even be accounted for. At the very least, 95% of the funds put out by these Crown Corps are non-performing

I have to leave tomorrow on another business trip. I have no doubt by the time I return - in about a week - the proposed bailout in the US will proceed, and the Canadians will also fork over money for the Ontario car makers to continue obsolete business practices with incompetent management.

I also have no doubt this bailout will work about as well as the Wall Street bailout. It's like a Mafia protection racket: the "bailout" will be only a downpayment. In 2-3 months, they will be begging for more

 

Ok, timing is everything. This was just released today by The Fraser Institute.

Canadian tab for corporate welfare exceeds $180 billion; no evidence that subsidies provide net benefits

They patiently waited for all the Access To Information requests to clear, and looked back as far as 1994. The tab to the generous Canadian taxpayer for all this Corporate Welfare?

$182 billion dollars

Among other tidbits, the tab for corporate welfare in 2006 was $19.3 billion, almost twice as much as the $10.3 billion spent in 1995. As other studies done by URC, CTF, and Probe have uncovered, there is no clear correlation between such generous public spending, and specific performance of an industry

Indeed, most of the money doled out is considered a sunk cost

 

Lots of good ideas on this thread:

-Designing your lifestyle around sustainable transportation options.

-Loans to Aptera, Tesla (and many others) as part of "Saving the US Auto Industry.

-How Detroit has trouble competing against Canada with healthcare.

-Families having an EV and a PHEV to cover all transportation options.

-Owning an EV but renting an ICE for long trips.


and I would like to add my 2 cents:


-Transportation Option: Own an EV for daily commute and join a CarShare program for other needs (SUV for weekend ski trip)
(pickup truck for spring cleanup) (big sedan for family road trip) etc etc

-Electric cars have not stalled, battery development has stalled. Part of Bailout money should go to battery development and a government battery guarentee program so early adopters of EV are not at risk for low performance battery packs.

-What happened to the battery packs in the EV1 and the RAVEV??? Are these still being held hostage by some big corporation that does not want to see EVs?

 

That's what I sometimes say about my Xebra: "It's the safest motorcycle on the road." But I don't really believe that. The law regards it as a motorcycle because the law is an idiot. Zap used a loophole in the law to sidestep safety testing so they could market it without having to spend several hundred million dollars that they didn't have. And I accept that because it was the only electric car that met my needs at the time.

A real motorcycle is by its nature a dangerous vehicle. If you are hit by another car you will be launched through the air and you will inevitably collide with a solid object (quite likely the ground) and mangled. It's obvious. Everyone knows it. "You pays your money and you takes your chances."

But when you drive a car (including a 3-wheel car that the law allows to be registered as a motorcycle) there is an assumption that you have some protection in a crash. Detroit has demonstrated over and over again that it does not give a rat's nice person if its customers get mangled, killed, or burned to death due to poor design of their cars. So we have laws requiring them to design safety features into their cars, and then to test those features to make sure they work. There is nothing you can do to make a motorcycle safe, so there's no assumption of safety.

But now these small companies are getting in by leaving one wheel off their car and using the motorcycle loophole to sidestep the crash testing.

From everything I've read, the Aptera is a well-designed vehicle that has taken safety considerations into account. But without the crash testing, there's really no way to know if that design will work in an actual crash.

Note that Tango has also side-stepped safety testing. It is an extremely under-funded company. The owner claims that a solid roll cage and racing harness make it safe, but without a crumple zone your body will go from freeway speed to zero virtually instantly in the event of a crash. Tango uses a different loophole: they sell the car as a "kit" though in fact you can assemble it in less than a day. So it's not really a kit. They just leave some minor part(s) off.

Tesla Motors, on the other hand, backed by big bucks from Silicon Valley, did crash test the Roadster, making it a much safer car.

Battery development has not stalled. It progresses. However, an Apollo-style or Manhattan-project-style research program would be a tremendous boost to EV development.

And yes, the NiMH battery is still subject to patent restrictions by a subsidiary of the oil industry that owns the patent and neither makes the batteries nor allows them to be made over a certain size.

It is proof of the utter and complete criminal corruption of our legislature that they allow a national security technology to be kept off the market by patent rights. An honest legislature would say that you have a right to profit by a patent, but not the right to use a patent to deny a national security technology to the nation. Fortunately, lithium technology is starting to come on line to replace NiMH. The Tesla uses lithium batteries. (Though, curiously, the after-market lithium battery in my Xebra is a more advanced chemistry than is used in the Tesla. )

 

daniel i believe you are right. the economic climate right now will make it nearly impossible to get an EV on the market with mainstream mass appeal. no company is going to spend the hundreds of millions to develop the product PLUS another couple Billion or so to ramp up manufacturing facilities for any kind of volume.

i bought my Zenn to put the word out. its not the answer in any way whatsoever. i know its bleeding edge technology that works very very few of us in any real capacity. i am lucky that i could swing it financially (at the time...) and also live a life that allows me to ultilize its capacity effectively.

but Zenn in the past nearly 3 years has sold LESS THAN 500 vehicles. they are simply a very small company who is trying to take on Goliath. granted, they are a canadian company so i dont suggest the US necessarily help them directly, but there are tons of EV manufacturers right here... also, a healthy REBATE (of which mine was ZERO) to encourage the purchase for those would could use it but cannot justify the expense.

i am not talking about a token amount. lets do something like 25-50% of purchase price of an LSV. this WILL NOT Be money wasted... obviously different guidelines must be instituted to prevent a spate of $100,000 high perfomance EV's rushing to market.

 

Current battery technology is like the original IBM PC with 64k. Until it becomes lighter, smaller, faster charging and provides long range driving like a Prius, with all the safety features and reasonable price, I wouldn't buy one yet. I am sure there is a better storage solution than Ni-mh or Li-ion that's in the works that will satisfy the above. I look forward to that day when I will gladly trade in my dinosaur Prius. I also wouldn't be surprised if the backing comes from OPEC countries as they are investing heavily into technology that connects to the future as witnessed by their recent heavy presence in Japan.

 

I'm not sure that rebates would make a significant difference. What we need is education, and leadership. A civic-minded populace ("... ask what you can do for your country...") is willing to make compromises for the good of the nation. But ever since Ronald Reagan went on record publicly, disavowing altruism and advocating greed, public altruism has been dead in America. The general attitude now is, "If oil is limited, I'd better use as much as I can while I can."

What Zenn and Zap and other EV makers need is not a loan or a rebate on their cars, it's a $15 per gallon tax on gasoline, dedicated to research developing better battery technology, with the patents on that technology put into the public domain.

In America today, most families have two cars (or more) and most of those families do not need all of their cars to be long-range. Today, most one-car households need a gas car. Most two-car households need only one gas car. The other can be electric.

Size is not really a big issue. And LiFePO4 batteries can be charged as fast as the charger can provide. The issues are weight and cost per unit of energy stored.

We could solve those issues in 5 or 10 years with a research program funded by a $15/gallon tax on gasoline. Maybe even less.

The only problems are political corruption and public greed. Americans pay less tax, but complain about it more, than any other country in the world. And our politicians are in the pockets of big business, and will do nothing that jeopardizes the interest of big business.

 

i talk to people daily about EV's and most say

1) range too short for the price
2) car too slow for the price

so we can get much greater range with more expensive batteries
or
we can get much lower price with current cheaper batteries because i talk to a ton of people who say they can use it a lot (who does not have short distance errands to run? which btw, is the biggest mileage killer in a car) but hard to justify $20,000 for a car that CANNOT replace one of their cars now.

its like the Hymotion... its $10,000... people bought it... how many would do it for $5,000...well me for one. and i bet ya, Hymotion would be backlogged for several years if they could do it at that price.

as far as helping to pay for this?? well, the health benefit alone is well worth the price, but hey, tax the gas!! why not? its cheap. give a department the power to do this and change it in response to market conditions like price spikes we had last summer...

there is no reason why we should not be paying a 50 cent PER GALLON TAX RIGHT NOW. gas is now cheaper than it was on day #1 of Prius ownership for me 4½ years ago.

make it simply too attractive to not purchase an EV for in town needs even if already a 2 or 3 vehicle family. make it a costly option to take the big car even if the EV can do the trick. we have the options to make that choice, but we are not. so, make it EASY to make that choice

 

Is there a decimal place missing?

With that kind of taxation, the government would not have to devote a cent to initiate intense research for non-gas based transportation.

 

No. Of course, another person might wish to move the decimal point. But my my proposal is fifteen dollars per gallon tax.

Note, that I hate gasoline.

All the better!

 

Most here would only ask that question rhetorically. Yes, the rights to make the giant Panasonic batteries specifically designed to go over 120 miles in both the EV1 as well as the Rav4-EV were sold by GM.

Lo & behold who should buy that patent? chevron. So now, when folks try to get replacement batteries for their rav4 ev's (or the nickel cels in the S-10 ev's) they can't. A law suit put a halt to production, when manufacturing was attempted. Gee, now why wouldn't the oilies want EV quality / proven batteries made?

How's that for a reason why EV's were stalled.

 

Subject: Answer to a battery question Date: Sat, 06 Dec 2008



Can this be true? From Investors Business Daily



Who would have ever guessed..... Sorry, I don't have the original article. My previous articles on General Motors and the EV1 generated quite a bit of reader feedback, and many of you asked the same question:
If GM could build the EV1 to go up to 150 miles on a full charge 10 years ago, why can the Volt only go 40 miles on a full charge today?
Excellent question. Surely, battery technology has advanced in the past 10 years, right?
Yes, but that's not the real problem.
The battery pack powering the EV1 was NiMH (nickel metal hydride)
The Volt will be powered by lithium ion batteries like the ones in laptops and cell phones.
So, yes, battery technology has advanced in the last 10 years, but I think the problem of reduced battery range goes beyond that. I think the "regression" in battery capability is intentional. Here's why:
In 1994 General Motors bought a controlling stake in ECD Ovonics. By doing so, GM gained control over the development and manufacturing of Ovonics large NiMH batteries. This move also provided GM with all the patents on the batteries.
As mentioned, these NiMH batteries were used in the final examples of the EV1 in 1999, and reportedly worked flawlessly.
Fast forward a couple of years to 2001, and a relatively unpublicized transaction took place. GM sold its share of ECD Ovonics (and the patents) to Texaco.
Yep, the oil company.
Six days later, Chevron completed its' purchase of Texaco. So now the battery technology that allowed the EV1 to run for 150 miles without a single drop of gasoline is in the hands of one of the largest oil companies in the world.
In 2003, Texaco Ovonics Battery Systems was renamed Cobasys, a 50/50 joint venture between Chevron and ECD Ovonics. Independently, Chevron owns a 20% stake in ECD Ovonics.
By now, you are probably guessing that an oil company with the patents to a very effective battery technology would never let that technology see the light of day. It could very well put them out of business.
To state that the technology was buried is not entirely true. But what Cobasys did is extensively limit the ability for any one to get their hands on NiMH batteries. And anyone found utilizing the NiMH battery technology that Cobasys had the patents on were sued and sued often, such as Panasonic. In essence, Cobasys controlled the market for NiMH batteries, and they were doing their best to make sure none of the batteries made it into any electronic vehicle.
And that brings us nearly full-circle to the current crop of electronic vehicles, including the Volt. The Volt, as mentioned, will run on costlier lithium ion batteries, which will drive up the cost of the Volt. GM could have used the cheaper and proven NiMH batteries, but alas, they sold the patents to Cobasys (Chevron). Do you think Chevron would allow the Volt to be produced with NiMH batteries, eliminating the need for a gasoline engine to supply power after 40 miles? Not a chance.
Now, to be fair, Cobasys is allowing their NiMH batteries to be used in the Chevy Malibu hybrid, the Sat urn Aura Hybrid, and the Saturn Vue Hybrid. But all of those vehicles are hybrids, so they still rely on gasoline. Not one vehicle is utilizing Cobasys batteries as the sole source of power.
But it gets better. The company chosen to supply the Lithium Ion batteries for the Volt is called 123Systems. Guess who they are partnered with? Cobasys.
Great.
So, to bring this all together, the battery technology from 10 years ago that powered a car 150 miles, is now controlled by an oil company, and any new hybrid vehicle in production now relies on batteries from an oil company.
Is it any wonder that we are 10 years down the road from the EV1, but have yet to see a true mass market electric vehicle? Not when the technology is owned by an oil company. I guess we can only sit and wait until 2014 when the patents expire.


Christian Hill Investors Business Daily

 

The difference is that the EV1 was designed to be a battery powered car. It was a two seat coupe with a huge amount of it's available space dedicated to a battery

The Volt is a series hybrid with plug in capability. It is designed to go a short distance on electric power and uses a smaller battery pack. It is also a 4 seat sedan.


Left: EV1 Battery Box Right: Volt Battery Box


I would love to buy an electric car. My wife has the perfect commute, only 15 miles of stop and go. However most of it is on a two-lane highway with a 45 mph speed limit. That rules out all of the NEV's.

 

The EV1 battery pack would have cost more than $75K 10 years ago. It would cost like the Tesla and it will not sell at over 100K.

Same for now, the 16kWh LI ion pack for the Volt would cost 20K for 40 miles range. More miles means more battery and more cost. At ~40K for the Volt, the volume will be very low at <$2 gas.




Originally Posted by SPEEDEAMON
If GM could build the EV1 to go up to 150 miles on a full charge 10 years ago, why can the Volt only go 40 miles on a full charge today?