Cheap electric car maker gives up, cites US indifference

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'."