December 10 2012
Stimulus Funded Company Sold to Chinese Firm
Wanxiang’s interest in A123 sparked concern and scrutiny from the Hill, who worry about A123’s defense contracts falling into Chinese hands. The Administration must approve A123’s buyer, so the defense contracts have been sold to Navitas Systems, a domestic company about whom little is known.
Though national security may no longer be at risk, taxpayers should be very concerned about A123’s demise. The company represents more than a failed venture: as the main investment of the Administration’s $2 billion effort to boost electric car battery technology, the failure of A123 epitomizes the Administration’s foolish use of taxpayer money and energy policy.
Not only that, but taxpayer funded companies are falling into unfriendly foreign hands. According to the Chicago Tribune:
The Wanxiang purchase of A123 marks the second major foreign purchase of a U.S. battery company backed by Department of Energy funding. Gassenheimer, for instance, previously was the chief executive of Ener1, a battery maker with operations in Indiana that was snapped up in another bankruptcy by Boris Zingarevich, a Russian businessman who at one time was in business with Russian Prime Minister Dmitry Medvedev. Ener1's subsidiary, EnerDel, is a DOE grant recipient.
What’s more, consumers have flatly rejected electric cars in favor of fuel-efficient gas models, yet the Administration continues to funnel money into a dying industry. The Chinese believe technology will catch up to consumer demand, and Wanxiang Group itself expects to absorb losses on A123 for 5-10 years.
Consumers are much more adept at choosing affordable fuel efficient technology than any bureaucrat working a desk job at the Administration. Yet despite trillion dollar deficits, the Administration continues to throw taxpayer money at a failing industry.
Instead of funneling resources into products that are bankrupting businesses, why not allow the market to develop cars that use cheaper, cleaner energy?
Consumers to want to go farther on a gallon of gas. The Administration should not be in the business of using taxpayer money like a venture fund. Instead it should allow consumers to choose which technologies they will benefit the most from.