Batteries

The Washington Post:

The administration's $2.4 billion investment in the development of batteries and other electric-car technology in the United States is an enormous bet on a product that has yet to gain broad commercial success. Major manufacturers have yet to sell electric cars in the United States. Hybrids, though they have been around for a decade, represent less than 1 percent of the nation's roughly 250 million-vehicle fleet.

"The battery story is highly questionable," said Menahem Anderman, the founder and chief executive of Total Battery Consulting. "Basically, there's really no proven market, neither electric vehicle nor plug-in hybrid electric vehicle -- and there's really no battery company in the United States that has a verified product."

Although U.S. battery makers could export their products, the global market is glutted, according to analysts. Anderman said global capacity to build car batteries in 2014 will be three times greater than demand that year.

Even some of the U.S. companies that have received the federal grants express concerns that their capacity to build parts for electric cars is far outstripping consumers' demand.

The largest single recipient is Johnson Controls, which won $299 million to build U.S. plants and help develop the industry. By company estimates that were presented to Congress earlier this year, in 2015, the domestic capacity to build batteries will be more than twice the demand.

The arrogance here is breathtaking. Our leaders in government, few of whom have any experience leading companies, implicitly believe they are smarter or more knowledgable than the private sector regarding future energy sources and transportation methods.

My guess is that some people in government read a few Thomas Friedman columns, thought it made sense, and decided to spend invest $2.4 billion in other people's money. There have certainly been decisions made based on stranger thinking.