Go Go Green Cars

President Obama made a much awaited announcement yesterday on the Hill regarding the future of GM and Chrysler.

GM has had its plans and strategies thrown back with the government initiating much greater concessions from the company including the current CEO, Rick Wagoner, to step aside in favor of Frederick “Fritz” Henderson. In a move designed to allay the fears of potential buyers the US government will also from Monday back the manufacturers warranties on the vehicles it sells but it is clear the US government feels GM has something worth salvaging and has agreed another 60 days of working capital financing will be made available.

Chrysler is a much more troubled child with serious financial entanglements, however the US government is again stepping to help with the potential sale of the company to Fiat, the Italian car giant. President Obama announced the provision of another $6 billion to the car giant which is contingent on finding a buyer whether it be Fiat or another potential partner.

The announcement yesterday is very interesting for the comments made by the President on the issues not directly at hand with the survival of these two giants – GM in particular came in for serious mention when President Obama said,

I am absolutely committed to working with Congress and the auto companies to meet one goal: the United States of America will lead the world in building the next generation of clean cars.

Now if the administration is as serious as it sounds on delivering fuel efficient green car technology to the mass market then someone, somewhere will have to be around to produce the technology and manufacture the cars. The scale of the market in green cars is simply enormous and it makes a great deal of sense for USA, Inc to have a share in manufacturing these vehicles for the future instead of allowing the country to slip further into debt down the road by importing cars we could be making right here at home – but first we have to deal with the financial issues surrounding our automobile industry.

A serious reminder that green issues are just like any other – the money issue must be resolved first for everything else to follow on.

While the bail-out of the major car makers may have been doomed to failure but the green initiatives being launched are still out there and continuing in pace.

Back in December 2008 with the parties still celebrating Obama’s election success, a deal was struck with China on the development of electric batteries for car power.

Now we have touched on battery development previously and it is right we do so again because battery-powered vehicles are a prime player in the future of green cares while development and progress within this field will be a fair weather vane of progress in delivering green initiatives across the board.

China is in an even worse position than the US when it comes to the need to develop green power sources – over half of the oil it uses comes from imports leaving it highly susceptible to the global oil markets (remember when $5 a gallon was a reality for us – now imagine that multiplied several times).

The deal involving the US Department of Energy, involves BYD Autos, a Chinese company which is heavily involved in green car development and with a market such as China which is beginning to open and has billions of consumers in it, there is a huge profit potential.

What’s in it for the US?

Green car developments are not going to be 100% American researched and developed – the technologies involved are diverse and many are leading edge; no one country will have a monopoly on the technology or the cars. The US in this instance gains direct access to battery testing and benchmarking standards that are essential to measuring true battery performance and in turn this has a direct impact on the actual battery development for use by consumers.

The battery market alone is thought to be worth some USD $40 billion by 2020 based on one million electric cars on US roads – this is the target now set by President Obama for the country.