McAuliffe's Green Car Startup Faces Uphill Battle
In 2006, longtime Democratic power player Terry McAuliffe founded a little-known electric vehicle startup called GreenTech Automotive. Five years and one failed Virginia gubernatorial bid later, he appears to have devoted his full attentions back to the company as it gears up for its first release later this year. McAuliffe took to the airwaves last month to talk up GreenTech and its plans to open a manufacturing facility in Tunica, Mississippi, where it plans to build powertrains and other components for its vehicles.
The former DNC chair’s message straddled the line between business and politics, veering into a familiar territory for many politicians looking to link environmental improvement to economic growth: green jobs. But does GreenTech really stand a chance of competing in a space already crowded with established automotive giants, or will it fizzle out like Aptera and other startups before selling a single car?
The company’s first vehicle won’t be a full car like the hybrids and plug-ins it says it has planned for down the road, but rather a neighborhood electric vehicle (NEV) called MyCar. The rights to MyCar—which initially went on sale in Europe under a different manufacturer in 2009—were purchased as part of the acquisition of a Chinese electric vehicle company by GreenTech last year. It hopes to build funds by eventually selling 100,000 units of the NEV in the United States and China, at a cost of about $10,000 each. Gradually, the company says it plans to build up its manufacturing facilities in Tunica in preparation for a full-speed, crash-tested hybrid or EV in a few years—though many express doubts that such a feat is possible.
Over the weekend, Auto News [subscription required] published an article examining GreenTech’s prospects for success and found little reason for optimism over McAuliffe’s bold promise to bring 2,000 new green jobs to the United States. According to the story, GreenTech currently has a staff of just 50 employees and plans to expand to just 100 by year’s end—by which time MyCar is slated to already be on sale in the U.S. And though the company claims to have secured plenty of funding to see its vision through, details about where that money will come from have been very limited.
The announced site of the Tunica factory—which was originally supposed to be a $1 billion facility employing 5,000 workers by 2014—is still yet to be built upon, and Greentech has dropped its projected release date, telling Auto News “we have not yet set a timetable for the next product introduction.” Likely translation: the company is still a long way away from releasing its first highway-ready car.
In the meantime, GreenTech’s MyCar will face an uphill battle as it works toward its 100,000-unit sales goal. As Auto News points out, just 25,600 low-speed vehicles were sold in the United States last year, and there is little indication that the NEV market is poised to pick up much steam any time soon.
So how will GreenTech round up the $1 billion it once claimed to be close to raising when it “broke ground” on the Tunica facility back in 2009? It’s an interesting question, and one that Terry McAuliffe may be prompted to answer the next time he trumpets his own personal green jobs vision on television.