Former Governor Granholm: Let's Get Past the Platitudes on EVs
Former Michigan Governor Jennifer Granholm, a Democrat, wasn’t likely to go home and take up knitting after her second term ended in early 2011. Before going to Harvard Law and becoming a politician, she competed in beauty pageants, appeared on the Dating Game, and sought a Hollywood career. Now she’s teaching at Berkeley and on Current TV, where she’s in your face about EV subsidies. Here’s the video:
Where's the Beef?
Granholm is smart and good on TV, but she really needs to get more specific about what kind of electric car subsidies she favors, and how they’d actually put more wheels on the road. Instead, she’s fairly vague and sticks to the crowd-pleasers. We won, she told her news audience. Get over it, Rush Limbaugh and Neil Cavuto. Electric cars put us “on a glide path to energy independence, to jobs, to national security, to reducing climate change.”
The governor was a huge champion of electric cars while in office (2003-2011). In 2009, she presided over the awarding of 12 federal battery manufacturing grants to her state worth $1.35 billion. In fact, the state was so blessed that others—especially California—cried favoritism. The full program was $2.4 billion, so companies with operations in Michigan (including the ill-fated A123) got more than half of the money.
I think the battery awards were more political than strategic—Michigan was struggling economically, having lost 244,000 manufacturing jobs since 2005—and could have been better targeted. Actually, battery research might be more valuable than manufacturing plants, but the threat of losing lithium-ion business to Asia played well in Congress.
The A123 bankruptcy happened just before the election, during the debates actually. I’ve gone into why Mitt Romney didn’t seize on the issue, but he could have. His best argument would have been that the $2.4 billion federal program got ahead of the actual EV deployment—there is big battery capacity, but not yet many cars on the road. Some of that federally supported Michigan infrastructure is idle, and the big names like Dow Kokam and LG Chem aren’t doing much yet.
Too Many Batteries, Too Few Cars
According to industry veteran Menahem Anderman of the consulting firm Advanced Automotive Batteries, the industry will be capable of delivering 3,900 megawatts of EV batteries next year, but the actual demand will be for 17,000 cars and only 330 megawatts.
“The problem is simple,” reports Technology Review. “People aren’t buying enough electric cars, and most of those that are being sold contain batteries made by established battery makers in Asia. It’s still early days for electric vehicles, but the idle factories point to the difficulty of starting a new high-tech industry from scratch.”
Granholm, who drives a Volt, doesn’t want to hear that. Here's some more video:
The debate about EVs is over, Granholm said. Did you hear that we won the election? She cites the 18 companies that were attracted to the state, and the “potential,” not the actual existence, of 63,000 jobs (she said 40,000 jobs by 2020 back then). And she’s asking for the feds to up the ante with new subsidies for electric vehicles. “It’s not a permanent commitment—don’t get your pants in a wad,” Granholm said.
A Carbon Tax Makes Sense
The former governor doesn’t actually specify what kind of commitment she’s looking for, but it may be ramping up the $7,500 federal income tax credit to $10,000, and making it applicable to the consumer at the time of purchase. That provision was included in President Obama’s 2012 budget proposal, but it’s not likely to go anywhere in these cost-cutting times.
I like that idea well enough, but in common with Elon Musk I’d actually prefer to see a carbon tax, which would really jump-start the EV industry. But anything with the word “tax” in it is politically difficult, and would require a big prestige-risking commitment from President Obama, not to mention bully-pulpit holders like Jennifer Granholm.
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