Has the Balloon Burst for Inflatable Electric Cars?

By Marc Gunther
Published August 28, 2009



Crazy but true:  A California-based electric car company that wants to make inflatable cars, using pressure membrane technology developed by the aerospace industry, is indignant because the government won’t give it money to do so.

This is what our Bailout Nation is coming to: XP Vehicles, whose website won’t say who is running the company because “it is too easy for our competitors to poach them,” is calling upon supporters to write to Congress because the U.S. Department of Energy rejected its application form for an Advanced Technology Vehicles Manufacturing Loan.

The company says:

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The DOE reviewers, mostly from “Detroit”, have turned down XP’s loan application in favor of “Detroit” players. Are we a national where innovation and great ideas win support or where great influence buyers win the support? If you want an XP Vehicle, call Congress now and ask for action!

Now it’s true that Ford ($5.9 billion), Nissan ($1.6 billion) and Tesla ($465 million) were awarded loans under the $25-billion federal program in June. They’ll use the money to build or rebuild plants in Michigan, Tennessee and California, the interest rate is a very low 5 percent and they’ve got 25 years to pay the money back. If you don’t think politics comes into play when that kind of money is doled out, you’ve not spent much time in Washington.

Actually, I’ve got (a little) sympathy for the folks at XP. They say they have developed “an entirely new way to build a car; and it is a car that not a single one of our competitors has been able to beat on safety, price, performance, range, capital cost or over (sic) 200 other features and advantages.” You’ve got to be bold to try to start a car company from scratch.

But then there’s this, on the questions-and-answers page of the XP website:

Q: Have you built anything?

A: We have built a number of parts of the car and continue to develop those parts and components.

No wonder competitors can’t outperform the XP car. It doesn’t exist.

And there’s the fact that the company says it has raised only “a few million dollars.” In other words, people spending their own money don’t have much faith in the startup.

XP says “most of the smaller, advanced technology electric car companies’ applications are being rejected in favor of Ford, Nissan and GM applicants.” That wouldn’t surprise me. Government loans, grants and regulations tend to favor incumbents, partly because the big players have influence over how the loan programs are crafted and the rules are written.

Who knows? XP may be able to build a new, safe, clean and affordable car. If so, the company should take its plans to investors in Silicon Valley or Wall Street, not to D.C. The same goes for the Ford, Nissan, Tesla and the rest of the automakers who are lined up at DOE, waiting for subsidies. The competition to build the next great electric car ought to be waged in the marketplace, not in the halls of Congress.

GreenBiz.com Senior Writer Marc Gunther blogs at http://www.marcgunther.com.

Rendering of Inflatable Electric Car – Courtesy of XP Vehicles
Hot Air Balloons – Image by lizziem


About Indah Sri Wulandari

Gerak Ekonomi untuk Daulat Kemanusiaan Lihat semua pos milik Indah Sri Wulandari

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