BY DR. HAROLD GOLDMEIER
MANAGING PARTNER, GOLDMEIER INVESTMENTS LLC AND
INSTRUCTOR AT AMERICAN JEWISH UNIVERSITY, TEL AVIV
IN BUSINESS AND SOCIAL POLICY
HAROLD.GOLDMEIER@GMAIL.COM 050-2619116 OR 773-764-4357(U.S.). Dr. Goldmeier was a Research and Teaching Fellow at Harvard U. where he received his doctorate in education and government. He worked in the Illinois civil rights office, for three Governors and the U. S. Surgeon General. He recently sold his business in Chicago employing more than 70, and now writes, teaches, and is a political affairs and business consultant.
The reality is that alternative energies to power our fossil-fuel vehicles are a strategic priority for global security.
Industrialized nations decry their reliance on foreign oil, yet they avoid pragmatic solutions. Dire warnings from economists and national security personnel are ignored. Policies and programs for energy independence are characterized by indifference. Oil prices are linked to international recessions, threaten our core national interests of economic planning, national security, and environmental health, and oil is the mother’s milk of terrorist sponsoring countries.
Cars, trucks, and buses, emit 27% of greenhouse gas emissions, and are responsible for 70% of petroleum consumption in the United States. Governments continue to focus on increasing miles-per-gallon as the solution to reduce oil consumption, when in fact, gallons-per-mile is the problem. Falling gasoline prices will again stymie the move to alternative energy.
In the U. S., gasoline is selling for $3.49 per gallon down from $3.81 a year ago. The price fell in Israel recently by 4.1 percent, and a total of more than 12 percent since last year. In addition, with oil from shale and vast new natural gas deposits to heat homes and produce electricity, proponents of alternative energy are characterized as doomsayers and kooks by the oil cartel, the seven sister petroleum corporations, and beholden political leaders. Oil and gasoline are controlled substances more likened to cocaine with price and availability set by a cartel, rather than the free market.
The electric car is currently the best hope to quickly and significantly wean nations from oil imports. It deserves massive government support, private investment, and realization by the driving public that the electric car is not an option but a national defense strategy. The transportation dynamic can change within the decade, if we get serious.
A University of Indiana research report on plug-in electric vehicles (PEV) identifies four factors to incentivize electric cars: “(1) energy prices; (2) battery characteristics (safety, reliability, and production costs); (3) the availability of convenient and affordable recharging infrastructure; and (4) the pace of progress with PEVs compared to competing technologies….”
There already exist a slew of PEV carmakers Tesla, Renault, Nissan, Phoenix, Fisker (reportedly close to bankruptcy), and Better Place (BP). In particular, BP and its founder Shai Agassi are worth a closer look.
Shai Agassi was born on April 19, 1968, in Ramat Gan, Israel. At age five, Agassi collected IT punch cards, and went on to be named one of Time’s 100 most influential people, CNN’s top 20 businesspeople, Time’s sobriquet “Heroes of the Environment,” and Foreign Policy magazine named Shai among 100 global thinkers.
At the World Economic Forum in Davos of 2005, Agassi became a passionate witness to the chokehold of oil dependence and took up the challenge: How to make the world a better place by 2030. He designed and built electric cars to save the environment and reduce tensions from world reliance on Middle Eastern oil. In 2007, Agassi forged a template founding Project Better Place, an environmentally friendly electric car and infrastructure company, by which others measure their ambitions. One year later, BP linked with Renault and Nissan Motor Company to develop exchangeable batteries becoming the linchpin of their approach. Today, BP is in a joint venture with a Chinese automaker, has a fleet of taxis driving BP vehicles in Japan, and Israel Aerospace Industries Ltd. signed a lease agreement for several dozen BP cars to be delivered beginning in May 2013 to replace gasoline vehicles in IAI’s fleet, reports GLOBES news media. Yaacov Goldstein VP of IAI claims the agreement will reduce air pollution and “will bring the company financial savings.”
Agassi is a big thinker. Nevertheless, under Agassi, BP did not sell enough cars and he stepped down. The company recently announced it needs a $500m infusion of cash to cover debts over the next four years when it is expected to breakeven. The Indiana report concludes that inventors and PEV firms are limited, not being able to capture all the benefits their research produces and turn into reality. Underinvestment in innovative initiatives retards widespread electric car acceptance in the copse and spinney thickets of auto manufacturing and sales.
The BP car experience is comfortable, safe and smooth. The vehicles are reliable, quiet, and modern. The driving range is expanding with improvements to battery sources. Maintenance is minimal and the cost savings add to the economic viability of electric car ownership and the money saved on gas.
The barriers to mass-market penetration strain the finances of electric carmakers, and have yet to achieve popularity among the buying public. Here is what needs to be done in the face of cartel vilification and belittlement by their partners in politics.
- PEV sticker price must be competitive with gasoline and hybrid powered cars of similar size and acceleration. The target is a six passenger to the $20,000-$25,000 price range. The perception that electric cars are far too expensive exacerbated by news reports about the near $100,000 sticker price for certain electric models scare away the prospective buyers. The Israeli government disincentivizes sales taxing BP cars for 27% of car and battery adding almost $10,000 to the purchase price. Washington and Virginia want an annual $100 tax on electric cars to replace the fuel taxes they otherwise collect at the pump. The PEV movement is undermined at a time when encouragement and price competitiveness are required.
- Perspective can change if buyers factor out PEV operating expenses fuel and maintenance. Insurance on electric cars is cheaper and theft protection greater.
- Buyers often suffer range anxiety. Currently, daily driving ranges are up to 110-150km per charge. BP has a battery exchange program that is quick and free. In three to five minutes, without getting exiting the vehicle, a driver pulls into one of the stations throughout Israel and from beneath, the battery is removed and replaced robotically, at no extra cost and no purchase of gasoline saving drivers on average $1,400 per year.
- The lack of awareness about the ease of battery exchanges and recharging diminish interest in purchasing PEVs. Once people see a recharging or exchange station the consensus is they are more likely to hold a favorable view of electric cars. These stations must dramatically expand in number, and will both better serve customers and promote PEV awareness.
- Infrastructure investments are required to improve the effectiveness and efficiency of battery inconvenience. BP offers one quick answer, while Ford and other PEVs require up to three hours charging used batteries. BP has installed, at their own expense, 40 battery-changing stations across Israel and 20 in Denmark. However, their pockets are not deep enough to build the global infrastructure necessary reassure the driving public that charging and battery replacement will be easy and accessible.
- Inventories and model choices must be expanded. Consumers trade their cars every three to five years. Wait time for a new car and methods to attract a wider buyer market must be addressed. Automakers of hybrids regularly offer model changeovers that slow sales suffering from limited production.
- Outspoken support for electric cars by national leaders, auto industry analysts and writers, can sway the buying public to the importance of national security and environmental issues.
- Electric carmakers must simply get more vehicles on the roads for other drivers to see among the 60 million new cars produced each year. Seeing is believing and enticing. BP holds neighborhood meetings with owners and potential buyers for straight talk about the electric car experience. Bigger and better events are needed that rival national auto shows where PEVs are lost in the milieu and will get PEV drivers meeting other drivers.
China is spending $15 billion to make PEVs the car to drive within the country, while the U. S. government buys Jeeps, Hummers, and Suburbans, and keeps the country rolling by selling 400 million gallons of gasoline in the U.S. everyday. According to Agassi, BP “generated approximately half a billion of taxes for the State of Israel, but did not receive a single penny in government assistance in its deployment of a ‘strategic infrastructure to replace oil’. Nothing!”
Here is what can be done quickly in a move to enhance global security through energy independence: FIRST, MAKE YOUR NEXT CAR PURCHASE AN ELECTRIC MODEL. On a larger scale, only governments have the wherewithal to build networks of battery changing stations, plug-in stations, and batteries. In time marked advances in technology will overcome many of the technological barriers. Lawmakers can encourage private investment in R&D and offer similar incentives and legal protections given to the oil and gas industry, solar, and wind developers.
Require ten percent of every lot of vehicles purchased for government use is electric. Government issued vehicles must be electric vehicles. Government agencies large lot purchases will allow manufacturers to lower the sales prices to the driving public. According to ABC News, the Federal government (not including cities and states) buys 19,000 vehicles a year and own more than 650,000. Replacing a good part of the inventory will heavily impact the market for PEVs.
Require non-emergency vehicles purchased by charities like hospitals be all electric.
Offer significant tax incentives to fleet purchasers like car rental companies to buy electric. Enterprise the biggest car rental company owns more than 500,000 vehicles. What an impact it will be if they replace ten percent of their fleet every year with PEVs. Expand this program to small delivery vehicles like newspaper delivery vehicles, handicap transport fleets, taxi companies, and more, but also demand these companies move quickly to switch their fleets. According to Agassi, taxis in urban centers like Chicago with 7,000 vehicles drive 20%-40% of the miles driven in the city on any given day by all vehicles.
Governments at all levels depend on fuel taxes for road maintenance and other budget items. They must find alternative sources of income, since PEVs do not use gas, like raising the tax on fossil fuels and applying a float method resulting in greater tax collection when oil cartels raise their prices. For example, exorbitant taxes on cigarettes are justified to cover greater health care costs to smokers and to discourage them from smoking.
Auto industry reporters and analysts are prolific and trend setters, but generally, are saboteurs of electric car development. Drivers read them and value their analyses. Many belittle the electric car, because they do not get the national security implications. The electric car is not a do-gooder project; it is a weapon in the war on terror. One editorial called government subsidies to an electric car plant in Tennessee a waste. “It had better use some of the money to buy a large parking lot to store all those unsold cars.” The author decries the $5 billion bill to put more PEVs on America’s roads by 2015, but has no comment on the alternative, i.e., that Americans pay nearly $400 billion a year for imported oil, which accounts for nearly half the U. S. trade deficit. If the government did not invest in airplane and space technology, we might all still be using horse and buggy to get from New York to L.A.
Israel imports more than 100 million barrels of oil annually. She faced a blockade in 2006 during the war with Hezbollah, and Israel’s oil stocks ran dangerously low. Arms embargos drove Israel to create one of the world’s leading self-sufficient defense industries, and it needs to realize an electric car industry will significantly free it from reliance on imported fuels. All countries face the same scenario. Western economies are vulnerable to oil embargos, Middle Eastern wars, and hostile unstable governments using oil as a political weapon economically influence or harm advanced countries. The auto industry locked arm-in-arm with the oil cartels wield tyrannous power in resisting alternative energy sources. The PEV represents a long overdue shift to reason and sanity after the internal combustible engine delirium of the past century.