Similar problems are afoot at A123, which got a $249 million DOE grant. The company’s stock price is down by about 75 percent since January. It slashed its Michigan work force after a big reduction in orders from one of its main customers, Fisker Automotive, the company that’s now producing a $97,000 high-performance plug-in luxury car — in Finland.
The amazing thing about the meltdowns at Ener1 and A123 — and the almost-certain failure of other battery makers — is that none of this is surprising. In July 2010, Menahem Anderman, the founder and chief executive of California-based Total Battery Consulting, told the Washington Post that, by 2014, global capacity for EV batteries would be three times greater than demand.
Sure, GM may be able to resolve the problems with the Volt. But the big hurdle, as Anderman pointed out last year, remains lackluster demand. Why would a car buyer choose a Volt, which gets 40 miles per gallon on the highway and costs $41,000, when he could get a Chevy Cruze, which is nearly identical in size, gets better mileage, and costs less than half as much?
Back in 2009, Johan de Nysschen, the president of Audi of America, cannily predicted the Volt’s future: “No one is going to pay a $15,000 premium for a car that competes with a Corolla. . . . There are not enough idiots who will buy it.”
On Monday, GM began offering loaner vehicles to those very same Volt owners while the NHTSA investigation continues.
— Robert Bryce, a senior fellow at the Manhattan Institute, is the author, most recently, of Power Hungry: The Myths of “Green” Energy and the Real Fuels of the Future.