Supply and demand lessons--too many batteries too few electric cars

Daily Caller:

In the future, White House speechwriters might want to check the financial statuses of the businesses the president plans to tout as clean-energy success stories. In his 2010 State of the Union address, President Obama praised Solyndra as a “true engine of economic growth.” Not long after, the solar panel maker went belly up. In his most recent State of the Union address, the president extolled the success of subsidies for manufacturers of electric car batteries. Two days later, battery maker Ener1 filed for Chapter 11 bankruptcy protection.

Ener1’s bankruptcy is a blow to taxpayers — the company received a grant of $118 million from the Department of Energy’s $2.4 billion stash to jump-start the electric car industry — but it isn’t a surprise. A recent Scientific American article questioned whether U.S. battery makers would survive the early months of 2012: “In the short term, the world-wide capacity for making batteries far outruns the demand for electric cars. Market analysts expect a multi-year cull starting as early as 2012.” Although automakers have committed to producing over 800,000 electric vehicles in the next few years, battery makers worldwide already have the capacity to supply twice that amount. The Scientific American article singled out Ener1 as the U.S. battery maker most likely to fail. Ener1 had trouble securing customers beyond a single contract with a small upstart automaker that filed for bankruptcy in June 2011. With $90 million in debt, $74 million in assets, withering demand and strong competition from Japan, Korea and China, Ener1 hit the skids.

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Not many people are willing to live with the limited range of electric cars that also take too long to recharge.

We are also seeing he problem with central planning by the government which is ignoring the basic laws of supply and demand in its push for "clean tech."