Barry D. Bernsten, the Philadelphia-based steel trader and manufacturing dealmaker who had planned to assemble cheap electric cars (Asian bodies, U.S. batteries and drive trains) in Philadelphia under the brand "BG Automotive Group Ltd., writes to tell me, "I am exhausted and 'throwing in the towel'.
"The [U.S. Department of Energy is supporting] high tech dreamers due to lobbying efforts we cannot afford. The money will be lost, in my opinion, because America cannot afford to spend over $20,000 for a vehicle that travels less than 100 miles per charge. The DOE thinks differently. [So] I'm going back to my day job of selling steel."
Bernsten promoted his BG prototype, which he parked at his Old City home, as an all-electric, battery-powered car "that travels up to 40 mph with an 80-mile range. The automobile cost $13,000 to produce, and was to be sold to the North American consumers for $15,995 (without the $7500 tax credit).
"The cost to operate the vehicle is less than $0.015 cents per mile, but if you include the battery replacement in 5-7 years, the cost could reach $0.02 cent per mile, or an equivalent of $0.40/gallon for a typical 20 mile per gallon vehicle. The car can be charged in a standard outlet in 6-8 hours depending on whether you use 110v or 220v lines (4 hours for a quick charge).
"The car was being introduced as an 'affordable' [electric vehicle] EV solution for the North American consumer, unlike our competitors that are introducing $45,000-$125,000 EV alternatives. Please note that 85% of all American drivers do not drive more than 40 miles per day. This was an EV that America could afford, charge at home, and use as an alternative vehicle for our city and suburban households.
"The Bush and Obama administration[s have] allocated approximately $28 billion for EV and battery development for U.S. manufacturers. Over the past two years the Department of Energy (DOE) has only allocated approximately $1.5 billion of these funds (loan guarantees)... Most have gone to the auto producers that have spent millions on lobbying efforts.
"Fisker, [which] is introducing a $55,000-$75,000 EV, and Tesla, with a $105,000-$125,000 EV, have received loan guarantees. The remaining $26.5 billion is still sitting in the hands of the DOE to allocate [and] distribute. There does not seem to be any sense of urgency, even after America experienced $4.50/gallon gasoline two-three years ago and after the BP oil spill. All rhetoric and clearly no action.
"BG Automotive Group applied two years ago for a $150 million loan guarantee to build six assembly plants around the country to assemble 15,000 cars per year per facility for a total of 90,000 units per year. If the DOE approved our loan guarantee, we would have already produced and sold 180,000 electric cars to date, more than all combined EV producers in the world. We would have also created 1,800 permanent jobs for our assembly operations. This does not include the jobs for sales, service, tire and battery replacement, etc.
"Sadly to say, after amending our application several times (at the DOE's request), we have finally exhausted all efforts... BG is tired of the fight with our past and current administration. BG Automotive Group is closing its operations... Let China control the affordable EV market."
Bernsten has also sent a letter to the Franklin Institute offering to donate his prototype BG-C100 car, which made it street debut at the Franklin on Earth Day, 2009. "Maybe [US Energy Secretary] Steven Chu and President Obama can see the exhibit during their next visit to Philadelphia," Bernsten concludes. "You can call the exhibit, 'What Could Have Been'."