In the early days of the Bush administration, vice-president Dick Cheney met behind closed doors with oil companies to formulate national energy policy. A decade later, we see what happens when the government and oilies get too chummy: dangerous oil drilling and endless oil wars.
The Gulf oil spill is a catastrophe of epic proportions, but if nothing else comes out of it, the disaster could force a decisive break from the government-oil alliance—while forging a new alignment between the state and car companies. That’s right, the same car companies that stood defiant of government fuel efficiency mandates for generations are now forming alliances to produce cars that use little or no petroleum.
In this dawning age of battery-powered vehicles, the very definition of an automobile company’s function in the economy and society is shifting. Companies that recognize the change are positioning themselves as government allies in the struggle for oil dependence. “We are not only a carmaker. We are a sustainable mobility system provider,” said Carlos Ghosn, CEO of Nissan and Renault. He was speaking in Tennessee at the occasion of Nissan breaking ground on a new lithium ion battery factory—financed by a $1.4 billion loan from the Department of Energy.
Car Company or Systems Provider?
Mr. Ghosn proclaimed that Nissan-Renault is not only making cars. The company will also make batteries, help recycle them, make quick charging equipment—and most importantly, provide consulting services to governments. “We’re not only a carmaker here. We’re the provider of a system. And we are advising governments and cities about what system they should be in place in order to get the interest of the consumer,” Ghosn said.
Government dollars for research, manufacturing and consumer incentives are the key to jumpstarting the market for electric-drive vehicles. “We don’t make electric cars affordable. Governments make it affordable,” Ghosn said. Politicians are willing to make short-term investments in batteries and electric-drive technologies because it produces clean tech jobs—and it means weaning drivers off of oil which exacts a much more costly long-term price paid in environmental destruction, wars, and vulnerability to oil price shocks.
There’s proof that this strategy is working. Nissan’s phone is ringing. “When a government is interested, they call us. We don’t go to them. They call us,” Ghosn said. Nissan is providing sustainable mobility expertise to the United States, Canada, Mexico, Japan, United Kingdom, France, Portugal, Denmark, and Israel, as well as states such as Tennessee and California.
Staying the Course
This strategy is not without risks. When political winds shift, governments might not be willing to stay the course. For example, Germany and the U.K. have been gung ho on electric cars, but concerns over national debt are rising. Last month, German Chancellor Angela Merkel refused to subsidize electric-car purchases. The U.K.’s new Prime Minister David Cameron recently confirmed a £20 million grant to Nissan for building the Nissan LEAF in the U.K., but his Conservative party is intent on reducing government spending. Pulling incentives on electric-drive cars—from the most efficient hybrids to pure electric cars—could stymie the market before the technologies reach economies of scale.
The new government-industry alliance is bringing unprecedented choices to the marketplace. It’s now up to consumer-citizens to invest our own money in these vehicles—to show that we can begin pulling away from our oil-stained past.