Over the last few months there have been some significant announcements from EV related companies and governments which have provoked a mixed response from the motoring public and investors.
Over the last few weeks we have seen the demise of Fisker, with a debt of $171 million still owed to the US taxpayer, Better Place go to the wall after burning through $850 million of investor capital and now we hear that Detroit Electric is delaying the start date for manufacture of the Detroit Electric SP:01. Then, to make matters worse, over the last 24 hours we have seen Mitsubishi confirm the recall of the Mitsubishi i-MiEV in Japan due to a “manufacturing glitch” which could cause the lithium ion batteries to melt and catch fire. Against this backdrop, it is no surprise to learn that electric car sceptics are having a field day!
In what many see as a sign of things to come, Elon Musk has stepped into the fray to pull the electric vehicle market from the fire with news that Tesla Motors, his electric vehicle baby, will be releasing an affordable electric vehicle in the range of $30,000-$40,000 by 2017. After his recent spat with the New York Times, Elon Musk is not the darling of the motoring media but despite various setbacks he continues to pull good news from his magic hat.
There have also been other snippets of good news in the electric vehicle market with BMW confirming a tie up with Chinese outfit Brilliance Automotive to create a BMW style electric vehicle for the Chinese market. It is also worth noting that Tesla Motors recently repaid its US government Department of Energy loan which was not due for another nine years!
Under the terms of the deal with the US authorities the loan would become payable immediately if ever Elon Musk ever left the company. There has been talk of a possible takeover in the future, is this the company clearing the decks?
If you read the motoring press you will see lots of doom and gloom surrounding the EV industry despite the fact that technology has improved, charging stations are being installed around the world and influential members of the industry see a future in affordable electric vehicles. Sceptics have been hovering over the industry for some time now and are certainly “making hay while the sun shines” with news of problems at Fisker, Better Place and Mitsubishi.
Growth in China
While the US government continues to dither with regards to future investment in the electric vehicle market, the Chinese authorities have stepped forward and stepped up to the mark. The Chinese government has been behind a number of developments within the Chinese EV market, has made low interest loans available to local companies and offered additional financial incentives to motorists and manufacturers. There is no doubt that the Chinese government believes that the EV market is here to stay, could be potentially enormous in the future and there are significant efficiency and environmental benefits up for grabs.
In many ways the electric vehicle market is its own worst enemy with good news very often followed by a trail of negative comments, rumour and counter rumour. Sceptics continue to focus on the demise of Fisker and problems elsewhere in industry despite the fact that Tesla Motor continues to go from strength to strength. Even though the electric vehicle industry has been around in some shape or form for in excess of 100 years, the industry we see today is still relatively “new” and there is much work to be done.
On the positive side, the ongoing battle for dominance of the EV market between the US and China could lead to a significant jump in taxpayer backed investment which would be good for the industry. The US has traditionally had a very strong foothold in the automotive industry and will be extremely reluctant to give up this power to the Chinese government going forward. Could we be in for a “Battle Royal” between the US authorities and their Chinese counterparts?
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