Cars, Candidates, Loans, and Bailouts - Page 17

TEG · 01-24-2009, 01:45 AM

Not exactly news, but
DSiry makes some predictions:

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So here are some of my predictions for the EV industry in 2009:

1) The first Tranche of ATVM loans will be heavily weighted toward legacy manufacturers and building domestic battery capacity - perhaps the most important decisions that will impact the EV industry are being made now in the halls of the DOE. 70 applicants await decisions on whether their projects will receive direct, low interest loans from the government. While there is a bit of a "pigs at the trough" mentality going on, at the end of the day I think that the incoming administration will be looking at this program in the larger context of the economic stimulus and will therefore show a bias toward preserving established jobs and manufacturing capacity when it comes to vehicle programs. As for batteries, the lack of any domestic capacity is both a concern and a great opportunity to build a new industry. The big winners (but certainly not the only ones) will be GM, Ford and A123 in the first round of loans.

2) Recession and government involvement in funding advanced vehicle technology will accelerate the convergence of Silicon Valley and Detroit - for similar reasons outlined above, the DOE will attach conditions to loans that will either explicitly or implicitly encourage new companies to leverage old manufacturing capacity and job bases. Imagine, for example, that the DOE approves the application that Tesla has submitted for battery Model S assembly, but conditioned on them using an existing plant with excess capacity or a plant that is planned to be closed by one of the Big 3. The example is hypothetical, but you can bet the government is going to be very hands on in not just the "who" but the "how" these loans are implemented, and it will be done with an emphasis on protecting existing jobs and stopping the bleeding. The other force driving convergence will be the economy. Lack of capital will drive startups to get out of the manufacturing business and into the patents/components business, turning to the incumbents as their customers.

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So would that mean Tesla wouldn't build Model S in San Jose after all?

dpeilow · 01-26-2009, 06:39 AM

Metro20090126

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Should the US car industry be allowed to fail?

Yes. Anybody who fails should be allowed to fail. Capitalism without bankruptcy is like Christianity without Hell. It doesn't work otherwise.

Lord Mandelson loans to jump-start car sales - Times Online

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LORD MANDELSON, the business secretary, will this week offer government loans to help stimulate car sales as part of a multi-billion-pound rescue package for the struggling motor trade.

The “bailout” to be unveiled at a car summit on Wednesday is also expected to include government cash to subsidise car workers’ training, help for the suppliers of car parts and grants for “green” research and development...

dpeilow · 01-27-2009, 10:16 AM

BBC NEWS | Politics | Car firms get £2.3bn loan package

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He said regional development agencies and the Technology Strategy Board would be invited to bring forward a "step change" in research and development programmes into cleaner engines, lighter cars and "plug-in hybrids".

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The car industry had to change to succeed in the "new world" and had to be cleaner and greener, Lord Mandelson said.

"This industry is not a lame duck and this is no bail out," he added.

On the loan guarantees he said there would be "no blank cheque" and anything backed by the government would have to offer value for money, help "green Britain's economic recovery", deliver "significant innovation in processes or technologies for the long term" and support jobs.

Hopefully Tesla (and Lotus) can gain access to this.

dpeilow · 01-27-2009, 04:36 PM

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Originally Posted by TEG

Not exactly news, but
DSiry makes some predictions:

This one almost flew under the radar:

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5) All major players will seek equity tie ups in battery makers to ensure supply - in the future world of EV production, guaranteed access to cell supply is absolutely vital. The current projections for demand for automotive lithium ion batteries vastly outstrips current capacity. What is shaping up is the possibility of a battery squeeze play, with some being left wanting for supply. The situation was made worse by Panasonic's acquisition of Sanyo. Toyota has already made it clear they will develop batteries in-house (in addition to their JV with Panasonic). Daimler has already announced their tie up with Evonik. Nissan has a JV with NEC. GM will be looking to strengthen their ties to LG Chem (possibly through a US based JV) and Ford will be looking for a partner. With so few players in the cell manufacturing business, smaller players or those late to the game risk being squeezed out.