Impact of GM Destroying the EV1

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 |  Includes: F, GM, HMC, TM
by: Michael Fitzsimmons

The documentary Who Killed the Electric Car comes to a number of conclusions. On the encouraging side, the EV1 proved an electric car could be reliable fun to drive, and very well liked (one might say loved) by its owners. The car was clean, performed admirably, and a tune-up consisted of rotating the tires and topping up the windshield fluid compartment..

On the disturbing side, the documentary points out the complete failure of government at both the state and federal level to support the car - not merely by financial incentives, but by policy. The California Air Resources Board [CARB], the same bureaucracy that initiated the zero-emission policy in the first place, abandoned the EV1 at the very point in time the car proved it could meet the board's requirements. Bush and Cheney then pulled the bait-n-switch to hydrogen fuel-cells, a technology they both know will never be cost-efficient. The EV1's were then recalled by GM (NYSE:GM) (the cars could only be leased - no leasers were allowed to keep them), and they were sent to the car crusher so all evidence of its success could be destroyed forever.

What are the economic, environmental, and political repercussions due to the demise of the EV1? The repercussions are gigantic.

Economically, the US is even more addicted to foreign oil and sends $700 billion a year to Russia, Saudi Arabia, Venezuela, and Iran. The resulting trade deficit and economic reverberations have played a major role in the US dollar's 50% devaluation under the Bush administration. America's current economic stagnation due to its addiction to high-priced foreign oil is even harder to digest given the oil-induced inflationary environment its citizens are currently learning to live with. The economic implications of the resulting stock market sell-off will be felt by retirees, working people's 401k plans, and investors for years to come.

Meanwhile, some analyst are predicting bankruptcy for GM, who switched from making EV1's to Hummers. Meanwhile, thousands of GM employees and entire communities will feel the negative effects of GM's consistent reporting of billion dollar losses. It's interesting to note that GM, facing bankruptcy, losing market share to the hybrids and fuel-efficient vehicles Toyota (NYSE:TM) and Honda (NYSE:HMC) developed because of the CARB mandate, and seeing its stock price sink to decade lows, still doesn't mention reviving the EV1.

Environmentally, the lack of an electric car in the US has been disastrous. Some have estimated the US would be using 50% less gasoline today if the California mandate and EV1 had been allowed to take its natural course. Considering that each gallon of gasoline burned in an automobile's internal combustion engine can emit 15 lbs of CO2 into the atmosphere, well, you do the math.

Politically, it's just one more nail in the coffin of the American "democratic" system of government. The US at this point is more fascist than democratic. The industrial powers call the all the shots. If the EV1 is any indication, these industrial powers (like GM) seem hell-bent on destroying even themselves. Recent Bush administration-supported efforts by Bernanke and Paulsen show the government is in the process of nationalizing the country's mortgage market and will soon do the same to the banking industry - including the investment banks. This will be yet another mechanism of federal control (along with the wars on terror and drugs) in order to take US taxpayer money and give it to the small number of well connected in power. US capitalism is on its last legs.

All this is very interesting to me because I interviewed with the GM engineering group during the mid 1980s in Kokomo, Indiana. They were looking to hire someone to work on the electric car project, and wanted to hire me to work on the braking system. The idea was to reverse the electric fields during braking thereby re-charging the batteries. Interesting job, but Kokomo seemed a strange place to me, and the GM environment even stranger. The real estate agent showing me around asked what kind of car I had, and when I replied that I had a Toyota truck he said, and I quote, "that might work in San Diego, but you had damn well better get rid of that truck before you move here!" He was right too. Not long after returning to San Diego, I saw on TV Toyota trucks getting smashed in the parking lot of the mall right there in, you guessed it, Kokomo, Indiana. What a different world we might live in today had those workers been focused on making quality EV1 automobiles rather than destroying Japanese imports.

Bottom line: Hydrogen fuel cell technology isn't gonna happen. It's a distraction to keep us from realizing that electric cars are possible and WORK. We should be focusing our transportation effort on electric and hybrid plug-in automobiles and electrified high speed rail systems. We should build out the electrical infrastructure to support new energy supplies to fuel these transportation systems from wind, solar, and nuclear energy sources. Just as important, the 50 states should band together and call for a constitutional convention to dismantle the current United States government. We should start over with just the US Constitution and Bill of Rights to guide us. We need to take back our country's government from the fascist powers who are at this very minute plotting to take total control of it. The same powers that killed the electric car.

To put this all into perspective: Seeking Alpha commenter 'lminsky' just pointed out, in a comment he posted to my article on T. Boone Pickens' approach, for all the money the US has wasted in Iraq, it could have instead bought 100,000,000 hybrid vehicles to replace US citizens' gas-guzzling SUVs. Obviously this would have not only been a much wiser use of US taxpayer money, but would have cut foreign oil dependency, helped to clean up the Earth's atmosphere, saved many lives, and perhaps have rescued the faltering US economy and currency from its current oil-dependent death spiral.

Disclosure: The author does NOT own GM, but still drives a Toyota truck and will stay long energy stocks until the US adopts a comprehensive long-term energy policy.