We're from the government and we're here to help...

A long, but a true story:

It should be no surprise to anyone that the great majority of the world's battery manufacturing capacity resides in the Far East; upwards of 90% of the world's batteries come out of China, Japan, and South Korea.  Elon Musk's adventure in northern Nevada may change those numbers some, but time will tell.

In 2009, the Department of Energy was fired with the fevered visions of new Secretary of Energy, Steven Chu.  Dr. Chu and Mr. Obama had dreams of a future without fossil fuels and an economy driven by windmills, solar panels, and electric cars...lots and lots of electric cars.  I sat in meetings where DOE bureaucrats predicted, with the dead-serious, stone-faced certainty that only people living in the fantasy world inside the Washington Beltway are capable of, that there would be 15 million electric cars on the road by 2015.  But someone had to make the batteries for all those cars.

Enter Congress, who at the behest of Mr. Obama, passed the ARRA bill (more commonly known as the "stimulus package"), which, among other things, funneled huge amounts of money into the DOE.  The DOE decided they would use some of that money - $2.4 billion dollars worth...that's "billion" with a "b" - to stimulate the moribund and virtually non-existent US battery and electric vehicle industries and the Advanced Battery Manufacturing Initiative came into being.  Under the ABMI, the DOE would pay companies to build battery factories in the United States.  Note that these were not the loan guarantees since made famous by other DOE boondoggles, like Solyndra, these were grants...cash, given to a company without expectation of repayment.  The only constraint on the grant was that the awardee had to match the amount of the grant with private funds.  In effect, the DOE would permit awardees to build a manufacturing plant for half-price.

The ABMI announcement, as might be expected, set off a frenzy of activity.  Joint ventures were formed, start-up companies were started, large corporations began including batteries or battery materials in their strategic development plans, and every battery company ( and a lot of wannabees) in America started writing a proposal.

The selection of awardees was Kabuki theater.  The Federal government cannot dole out $2 billion without the process becoming political.  If you did not propose building your factory in Michigan, you essentially took yourself out of the competition.  A joint venture between Johnson Controls and Saft (a French company) received $229 million to build a plant in Michigan.  LG Chem, a Korean company, received $151 million to build a plant in Michigan.  A123 Systems was the big winner with a $249 million award to build a plant in Livonia, MI.  There were other recipients of all this government largesse, of course, and if you're interested, you can find out more here.

The announcement left most people in the industry scratching their heads.  Money intended to stimulate the US battery industry had been awarded to foreign companies.  However, the award to A123 Systems surprised no one; they had been a DOE pet project for a number of years.  I met with a DOE program manager prior to the ABMI announcement who smiled at me and said, "You know, it was my SBIR grant that got A123 started."  Knowing the founders of A123, I knew this was not entirely true, but it did make clear to me that my company, a competitor, had essentially zero chance of getting funding from a program manager who was obviously bolstering his career by having given "A123 its start".

Upon announcing their awards, the DOE insisted that they were "not picking winners and losers", but in point of fact, that was exactly what they were doing.  The ABMI awards essentially killed any private investment in companies that had not received a grant.  After all, if your technology and talent couldn't pass muster with the DOE, why would anyone want to invest in you...and even if you knew what you were doing, how were you going to compete with companies that just received 9-figure grants from the U.S. government.

With the exception of the few anointed companies, the years that followed the AMBI grants were not kind to the U.S. battery industry.  Bankruptcies among both established and start-up companies were the rule, not the exception.  The founders of my own company were, on several occasions, reduced to loaning the company money to make payroll.  No one was feeling particularly "stimulated" by the DOE's program.

Fast forward to 2016:  The Johnson Controls/Saft JV dissolved with extreme prejudice before they even broke ground on their factory.  LG Chem built their factory, but it's use has been limited to importing cells from South Korea and assembling battery packs.  A123 seemed to be the sole success story; building a plant in Livonia and having a very successful IPO that raised $380 million.  But there was always a no-visible-means-of-support aspect to the company's apparent success and, after building $50 million worth of bad product in their new plant - how do you even do that? - that resulted in a number of fires, primarily in the Fisker Karma electric vehicles they were making batteries for, A123 went into a death spiral.  The company went spectacularly bankrupt and the assets were bought by the Chinese.

The country is still without a commercial battery manufacturing plant and, while Tesla's facility in northern Nevada may change that shortly, it is certainly no thanks to the technocrats at the Department of Energy.

Abandon Hope and Change Course

I am a firm believer of mutual self construction.
By which I mean individuals
united in their seclusion.
Conjoined disjointed orphans
Erecting a Solace of Fortitude,
Asylums of Family Disunity
A harmonious cacophony of orchestrated solos
Instrumental temperamental
monumental chorus vocalizing
localizing
Individual vision

Alas
Feral sheep shepherded astray
by a Piper's dulcet atonement
Promissory sour notes called
due
Bald faced ideological ribaldry
Preselected elected offal, officious
Inhumane scentipede
Mentally ill dressed succession
of public servants self servicing

Disarmed armada of the disillusioned
flotilla of fools on the Hill
Come sale away with me, indeed
Flotsam jet setters presiding
Deciding
Die-er consequences
Pirated copies of declarations
of interdependence.
Anchors a weigh

My country-
 tis for me
Sweet land where things are free
Of me Im singing
Land where our fathers sighed
Land where their dreams have died
State of Ship of State, Sinking

The Economics of Blue Nail Polish.

  Did my nails the other day. Now, I don't do that often, but when I do, I lean towards blues, teals and other non traditional colors. I even have a lovely shade of olive drab I picked up a few months ago. I certainly don't need all these colors, ( honestly don't need any..). But isn't it nice that I have all of them to choose from

  That right there, is the beauty of a capitalist system, choice. I stroll along through a store, something shiny and bright catches my eye.  I may see one, two or three different colors I need ( don't), and plop they go in the buggy. To the counter I go with my money, and the deal is done.

  Someone somewhere in the nail polish factory decided to add new and different colors, and people bought them. They sold so well, they kept adding more and more colors. And now we have the wonder that is the cosmetics aisle. The more we buy the more they make. The more they make, the more we buy.  The market dries up, and production stops.

  Socialism is anti-choice. Socialism says you can have too many choices, that other things are more important than choosing nail color, the planet is boiling for Pete's sake. If you don't believe me, ask Bernie Sanders

  "You can't just continue growth for the sake of growth in a world in which we are struggling with climate change and all kinds of environmental problems. All right? You don't necessarily need a choice of 23 underarm spray deodorants or of 18 different pairs of sneakers when children are hungry in this country. I don't think the media appreciates the kind of stress that ordinary Americans are working on."

  Choice is bad, gosh darn it. Everyone should just use the approved scent, flavor, colors. Everyone should drink the prescribed amount of the approved beverage and be happy. Do it for the planet.

  It fascinates me, the people that would vote for Bernie and his anti choice rhetoric  are typically those with rainbow locks, who stand in line at a specialty coffee store for diverse beverages chosen from a varied menu, and ponder seriously over the wide range of free range tofu at the local organic market. People who proudly proclaim their individuality, clamor for forced conformity, in the name of social justice and income equality, never equating equality with sameness.

  Diversity happens when there are choices to be made. The permutations available in our capitalistic American society are limited only by our imaginations. What grand imaginations they are, too! Why anyone would want to limit us to centrally planned choices is beyond my comprehension. Why anyone would willingly vote for someone that proudly proclaims he would limit your choices, even more so.