“When government tries to pick losers and winners, it typically picks losers. Why? Because in a free market, consumers pick winners to leave the losers for government.”
- R. Bradley, Electric Car Verdict: Another Government-Subsidized Bust, September 26, 2012.
In Edison to Enron: Energy Markets and Political Strategies, I discussed some history regarding electric vehicles that has become pertinent given the bankruptcy this week of battery-maker A123 Systems.
The Wall Street Journal reported on this failure with the pull quote: “Obama’s green energy industrial policy turns up in Chapter 11.” Energy physicist Mark Mills wrote in Forbes: “A123 Bites the Dust Because They Forgot Their ABCs.”
Here is some history behind the rise, fall, fall, and fall of electric vehicles from Edison to Enron. Previously at MasterResource, the conversation between Thomas Edison and a young Henry Ford in 1896 was recounted. (Edison told Ford: “Your car is self-contained—carries its own power plant—no fire, no boiler, no smoke and no steam. You have the thing. Keep at it.”)
Here is some more history.
From page 33:
Electricity was not the total energy answer. A decade of toil by Edison to create a battery to make electric vehicles the transportation mode of choice was felled by Henry Ford’s Model T with its self-starting internal combustion engine.
To some, such ‘Darwinian harshness’ was part of a flawed social system. Yet it was simply consumers rewarding good entrepreneurship and penalizing bad. Thomas Edison had himself to blame for his business failures, but overall, the Schumpeterian force that he released advantaged consumers and raised productivity for a rapidly increasing population.
And on p. 488:
In transportation, creative destruction encompassed the gasoline-powered internal-combustion engine knock electricity off its perch. Try as they might, Edison, Insull, and even Henry Ford could not make electric vehicles viable against petroleum-powered cars and trucks.
Batteries were heavy, costly, and slow to recharge compared to the energy from on-board motors. Neither could electricity break into the railroad market, despite the entreaties of Samuel Insull. Wood, then coal, then diesel burned on board was simply too economical for rural locomotion, as opposed to urban street locomotion.
In an Internet appendix to the same book, I describe the failed experiment of Henry Ford and Thomas Edison to produce an economical “Electric Ford.”
Edison got the battery bug later in his career, seeing this field as his way to right the wrongs that others had bestowed on him when General Electric was taken over by others in 1892. The Edison Storage Battery Company, founded in 1900, encountered early setbacks, but Thomas Edison soldiered on and produced a superior nickel-iron-alkaline product by 1909 (Jonnes, 351—52).
But a major hoped-for market, motor vehicles, was using gasoline, not electricity. It was not for want of effort between two titans and dear friends. In 1914, Henry Ford announced a “Ford Electric” that would sell for $900 and have a range of 100 miles (Mom: 255). The brainchild of Thomas Edison himself, the concept described as “Mr. Ford’s personal project” and “experimental” by Ford Motor Company never got off the ground. The alkaline battery that penetrated the truck market was rejected by car makers because of its size and an incremental cost of between $200 and $600 per vehicle.
So it was back to 1896 for Ford and Edison despite the latter’s $1.5 million battery effort.
Are EVs an infant industry? Hardly! Have private and public investments in EVs failed? Yes! Just perhaps some fundamental physics is at play that will postpone any era of electric transportation until a future century if and when the oil-and-gas-fired internal combustion engine is no longer competitive.