Aardvark Daily

New Zealand's longest-running online daily news and commentary publication, now in its 25th year. The opinion pieces presented here are not purported to be fact but reasonable effort is made to ensure accuracy.

Please visit the sponsor!

China set to usurp the US auto industry?

22 December 2008

Over the weekend it was announced that the US government will be bailing out the automakers to the tune of some US$17 billion.

Now on the face of it, this might seem like a good idea; after all, there are many millions of workers who rely on the big "big three" car manufacturers for their weekly pay cheques and the whole economic downturn could enter a very nasty spiral if those jobs were lost.

But surely the people throwing taxpayers' money around like water should be looking further than the end of their noses.

What do I mean?

Well we've just come through one of the most astonishing oil-price peaks in history.

Just a few short months ago we were all bitching and moaning about how expensive petrol and diesel were, and how this was pushing the price of everything through the roof.

As a result of this, companies all over the world pulled out the stops in their attempts to come up with new technologies that could free us from the tyranny of the oil companies and a reliance on the product they pedal.

So stop and think about this for a moment...

There's nothing surer than the fact that once the world's economies start picking up steam again and demand increases, the price of oil will resume its meteoric rise.

So why oh why don't we take this chance to say "enough!" to the automakers.

Why will some US17 billion dollars be poured into an industry that is so reliant on oil?

Why not simply say "now is the time to break free from this dependence and spend that $17 billion producing vehicles that don't need fossil fuels"?

What on earth is the point in propping up an industry that has proven (by its demise) to be poorly managed, inefficient and producing a product that the market no longer demands?

Ford, Chrysler and GM all have huge inventories of gas-guzzling SUVs and other vehicles that they couldn't shift when oil prices were high and still can't shift even now that prices have fallen dramatically. So why is the US government giving these retards huge lumps of taxpayer money to perpetuate this idiocy?

This is especially true now that other countries appear to be on the cusp of making the US auto-makers look even more inefficient and outdated.

Over in China they've got a new mass-produced electric vehicle almost ready to roll out to the masses.

Unlike the Tesla Roadster and other vehicles planned by US manufacturers, this car isn't a Ferrari-killer and boasts a mere 100Km per charge -- but it is set to be the first mass-produced EV and is aimed smack-dab at the huge market that is "the average motorist/commuter".

The Chinese product looks so practical and promising that ultra-savvy US investor Warren Buffet has taken a 10% share in the Chinese company -- and that's a good indicator that the business model as well as the technology is sound.

Could it be that China may do to the EV market what Toyota did to the compact-car market in the 1970s/80s?

Let's face it, the Chinese already produce the vast majority of the world's lithium-based batteries and the availability of cheap labour means they will be hard to beat on a price basis. What's more, this Chinese EV uses LiFePO4 technology, a significant leap forwards from the lithium-ion or lithium-polymer batteries sued by other manufacturers. LiFePO4 offers up to 2,000 charge cycles and almost no risk of unexpected explosions.

So what should the USA do with its auto-makers and that $17 billion the government appears happy to throw away?

Is spending that money to provide some short-term job-protection for the nation's auto-workers a good move? Or is that simply delaying the inevitable?

EVs like the Tesla Roadster may not yet be practical (due to the economics of all those lithium-ion batteries) but have we now reached the point where China is about to leapfrog the West into the EV market with a practical, affordable, mass-produced vehicle that will help free us from the tyranny of fossil fuels?

And what are the Indians up to?

Imagine if they could roll out an electric Tata Nano for under US$10K. Would that be a winner?

Time to give an aging dinosaur a hip-transplant or time to take a giant leap forwards?

And while on the subject of the Tesla Roadster... here's a couple of YouTube videos you might want to watch:

Robert Llewellyn's rant about EVs

My response

Please visit the sponsor!