Why The McCain Proposal Will Do Nothing For Battery Technology

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On Monday, John McCain, in a drive to build his environmental credentials, pledged that if he were elected he would initiate a contest to come up with a car battery design that leapfrogs current technology and makes electric car and plug-in hybrids a reality. The winner would get a $300 million prize, or about $1 per American, which according to McCain is a small price to pay for the benefits this technology would yield. A politician would only make such a pledge for one of two reasons: (a) he has no insight into how innovation occurs in an economy or (b) he is looking to regain ground with environmentalists following a controversial turn-around on drilling for oil in protected areas. In this case, I have my money on B. If McCain truly intended to inject a strong dose of steroids into the US battery sector, he would take that $300 million, triple it, and pledge it as research grants and other research incentives. See the problem with ventures based on scientific research and breakthroughs – and folks who follow the pharma sector know this all too well – isn’t the end prize if your technology pans out. The problem is to fund your research until you get there, because labs and other required fixtures are incredibly costly to run. This proposal misses the point on the 500-lb gorilla in the room: this game isn’t about the payout at the back end, it’s about risk mitigation at the front end. If you came up with the kind of battery McCain has in mind, the $300 million would barely be enough to pay for your IPO roadshow as every single investor in the nation would try to throw money at you. Of course, I’m exaggerating, but you get the point. Promising a $300 million cash prize will do little to at the margin to incent entrepreneurs and small labs to get involved. What they need is a break on their start-up and initial operating costs, so that they can get to a level where they’re actually in a position to innovate and even commercialize.


  1. Let’s not forget the fact that existing battery technology is plenty sufficient for widespread adoption of electric vehicles.
    Electric vehicles have higher up-front costs but lower operation and maintenance costs when compared to internal combustion vehicles. Gas prices are high enough (and they’re only going to go up) that EVs are competitive with gas guzzlers on a cash-flow basis.
    McCain pulled this stunt in part because he and his advisers saw that the “insufficient battery technology” myth was starting to crumble due to a slight decrease in ignorance among energy-concerned Americans. This was the perfect way to counteract that.

  2. Typical politician. Lets see 300 million dollars for a 100 billion dollar idea. The US uses 320 million gallons gasoline per day times 4 dollars a gallon 1.2 billion dollars per day. Why a battery idea that would save that much gas should be worth at least a weeks worth of gas savings.

  3. Another side of this issue is where the power will come from to charge electric cars. Once we all have efficient & cost-effective PV on our roof this may not be a concern but in the meantime electric cars have a disadvantage of using fossil fuels anyway – to generate the power thousands of miles away! All of the inefficiencies and losses in that process make electric vehicles at best a wash on energy in my book. (i.e. as a society we MUST look at source energy consumption, not consumer cost) And that’s not considering the cost of ownership, maintenance, and toxic material disposal.
    On a side note, here’s a similar op-ed piece regarding Pres. Bush’s offshore plans:

  4. I’m convinced that environmentally, McCain would be no better than Bush.
    greensolutions: You absolutely nailed it: McCain’s prize is just a feint to support Big Oil’s continuing disinformation campaign. Adequate batteries already existed – Ovonic’s NiMH – when Chevron used intellectual property theft and some help from skulduggery in D.C. to kill the EV-1 in 2000… and decent lithium-ion batteries are more than twice as capable as those, never mind the latest ones being developed by A123 and Ener1. The prize is just another scam to get all the battery developers to spend themselves broke trying for the stupid prize, which will be given to a “winner” that can’t be commercialized… and the worst part is that all the other entrants will have to turn over their intellectual property in order to be considered. Evidently McCain either never saw “Who Killed The Electric Car”, or he thinks no one else did.
    Dane: your intuition about electrical generation is too pessimistic. Cars burning gasoline are so incredibly inefficient compared to electrical utilities’ use of fossil fuels that EV’s are a net CO2 win even after transmission losses. Don’t forget that gasoline has some “transmission” losses too: the networks of trains and trucks that deliver it to the gas stations all burn diesel.

  5. The taxes on gasoline and diesel help pay for roads and bridges. The states and federal governments also dip into road tax for other uses.
    With that said; what government (state or otherwise) is going to kill this golden goose. How they (government) going to get by without the road tax? Right now the government is worried about cars getting better mileage that equal less fuel, with equals less taxes for them squander.
    If there was a way today to convert to hydrogen for run our cars or even to plug into your house..how are they going to tax it for road use?


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