Some spectacular failures notwithstanding, green tech shows signs of hope. So said Chris Berry in his May 26 presentation at Vancouver's World Resource Investment Conference 2013. Although his talk focused on uranium, the House Mountain Partners founder, Morning Notes co-editor and energy metals expert contrasted one green success story with some more widely publicized failures.
A U.S. Bankruptcy Court completed its post-mortem into lithium-ion battery disaster A123 Systems on May 20. Following a $256.6-million sale to China's Wanxiang Group, creditors will get 65 cents on the dollar, the Wall Street Journal reported. Shareholders were wiped out. Nor will taxpayers see a dime of their $132-million subsidy. The sale had "more than two dozen lawmakers and retired military officials voicing concerns that A123's military contracts and taxpayer-funded technology could wind up in the hands of a foreign buyer," the WSJ stated. The paper added that the bankruptcy ruling "closes an embarrassing chapter in the Obama administration's efforts to nurture the market for electric vehicles and develop a ready supply of advanced batteries. The U.S. government, in an effort to jump-start the electric-car battery industry, has provided more than $1.2 billion to battery makers in the past three years."
Fisker Automotive spent $192 million of a $529-million U.S. government loan before shutting down operations and laying off its staff. The company's expected to file for bankruptcy after selling only 2,000 cars. American taxpayers got just $21 million back last month.
Solar panel fiasco Solyndra declared bankruptcy in 2011 after wiping out another government loan. "That's $535 million that the U.S. taxpayers are never going to see again," Berry said.
Those examples show the "dark side of green tech," he pointed out. Nevertheless Berry maintains there's "a reasonably compelling case for green technology and clean energy and what you don't hear about is what's happening in universities like Simon Fraser or the University of Western Ontario or any research lab in the United States or Canada, or China for that matter. There's hundreds of billions of dollars going into next-generation battery storage technology, clean technology, etc. In my opinion you can't have so much money and so much intellectual capital and firepower going into figuring out these sustainable technologies without the dam eventually breaking and a scalable battery storage technology, for example, coming to the fore."
While some other e-v ventures failed, Tesla Motors paid off the last of a 2010 loan on May 22, when it wired $451.8 million to the U.S. government. The company posted an $11.2-million Q1 profit and increased the year's sales forecast by 5% to 21,000 cars.
The loan repayment came nine years early. "This is a profitable electric car company," Berry said. "Obviously that has been an oxymoron thus far and we'll see if it remains. But I'm actually watching Tesla as sort of a bellwether or benchmark for green technology and by extension energy metals…. despite the rough time we have now."
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.