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Gov't Funded Electric Car Company Goes Out of Business

Soulskill posted about 3 years ago | from the money-well-flushed dept.

Government 195

thecarchik writes "Consider yesterday's collapse of electric car company Green Vehicles an object lesson in why it's a bad idea for cities to invest in the risky business of start-up car companies — perhaps especially start-up electric car companies. Even such companies with a viable product have seen their fair share of financial troubles, but Green Vehicles did not even have a product to sell off at a fire sale. The city of Salinas, California learned that lesson as Green Vehicles shut its doors, costing the city more than $500,000."

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195 comments

Just cities? (5, Insightful)

MrEricSir (398214) | about 3 years ago | (#36817418)

I'd say it's a bad idea for *anyone* to invest in a company that has no product and/or does not make money.

Business plans are a dime a dozen; ability to execute is an uncommon skill.

ability to execute (1)

Anonymous Coward | about 3 years ago | (#36817430)

ability to execute isn't the only barrier. the economy environment, and frankly a lot of luck, is required as well.

Re:ability to execute (1)

CrazyDuke (529195) | about 3 years ago | (#36817818)

Not to mention they need to have good relationships with the right people while staying under the radar of the wrong people. ...at least until the business is big enough to not get litigated and hamstrung into a mountainside easily.

Re:Just cities? (2, Informative)

Anonymous Coward | about 3 years ago | (#36817510)

So many people don't understand the amount of work that's involved. Any class in entrepreneurship will push that starting a business takes many long hours, with almost no days off, and you should expect to lose money the first few years.

After seeing a promise of $700,000 in tax revenue a year, I sincerely hope the business plan didn't state that was in the first year. You ALWAYS plan for losses in the first couple of years (at least that's what I was taught.) That should be a sign to anyone investing in a start up that things won't end well.

The company website said they have been making cars. So that says they likely operated on a job order basis (website does mention targeting companies and government.)

*note*

Their flash based website has some very annoying sounds on mouse over (designer should be drawn and quartered for such.)

http://www.greenvehicles.com/ [greenvehicles.com]

Re:Just cities? (1)

mikiN (75494) | about 3 years ago | (#36817892)

There is only one business plan that is viable in the long run.

1 Work
2 Your
3 Ass
4 Off
5 Profit!!

In that order, no cheating. Those who doubt should watch the Asian tigers, especially China, now and in the coming years.
Yes, seriously. No, really, there's no way around it. And yes, thou should study. Hard. Aim for Engineering or Ph.D, preferably in combination.

Re:Just cities? (2)

Darinbob (1142669) | about 3 years ago | (#36818798)

The real story here is a city employee deciding to invest in a bad investment. This happens all the time. The investors think they have a good deal, and it's someone else's money, and rarely does anything bad happen to this person.. Usually these aren't even elected officials so the voter anger gets aimed at their boss instead.

US treasury makes money (0)

Anonymous Coward | about 3 years ago | (#36818868)

lol hows that working out

Please... (0)

nebaz (453974) | about 3 years ago | (#36817438)

Investing in any company has risk. Cities should obviously weigh the pros and cons of where to invest their moneys and such but to single out an entire industry because one company failed smacks of fear-mongering. You wouldn't have seen such alarmist claptrap if a city had invested in General Motors as "it is a bad idea for the government to invest in an American Car Company".

Re:Please... (0)

Anonymous Coward | about 3 years ago | (#36817594)

How about this: It's a bad idea to use the money of tax payers to do anything involving risk outside of national defense. Leave the whole capitalism thing to the capitalists.

Re:Please... (2)

Gadget_Guy (627405) | about 3 years ago | (#36818090)

How about this: It's a bad idea to use the money of tax payers to do anything involving risk outside of national defense. Leave the whole capitalism thing to the capitalists.

Because capitalists always have the best interests of the human race at heart, and will never do anything that will adversely affect the economy. (How did that global financial crisis work out for you?)

The world is based on technology and infrastructure created by government investment. Sure there have been failures, but no system will have a 100% success rate.

Re:Please... (0)

Anonymous Coward | about 3 years ago | (#36818478)

Because capitalists always have the best interests of the human race at heart, and will never do anything that will adversely affect the economy. (How did that global financial crisis work out for you?)

Oh, you must mean the crisis caused by regulatory capture.

Shocking (2, Insightful)

Anonymous Coward | about 3 years ago | (#36817442)

A "green jobs" investment that went sour. A car without a market. Socialists everywhere scratching their heads.

Yes the pun was intended.

Re:Shocking (2)

flaming error (1041742) | about 3 years ago | (#36817516)

I'm confused too. What do Socialists have to do with venture capitalism and entrepeneurship?

Re:Shocking (0)

Anonymous Coward | about 3 years ago | (#36817570)

It takes a socialist to believe that government "investment" in business startups has anything at all to do with venture capitalism or entrepreneurship.

Re:Shocking (2)

flaming error (1041742) | about 3 years ago | (#36817660)

Are government "investments" in the bond market ok? The stock market? The real estate market? Can they invest in luring large employers? Retail stores?

Why would investing in some less traditional market be any more socialist?

Re:Shocking (0)

Anonymous Coward | about 3 years ago | (#36817706)

I wish you damn commies would just go back to Russia!

Re:Shocking (0)

Anonymous Coward | about 3 years ago | (#36818190)

Rent seeking and redistribution of wealth are not "investment" except in socialist doubletalk.

Re:Shocking (0)

Anonymous Coward | about 3 years ago | (#36818372)

Yes, it is so much better when we have gov. that works actively against free enterprise and will build their own. For example, Shelby(R), Wolf(R), Hatch(R), Hutchinson(R), Coffman(R), Nelson(D), and a slew of mostly republicans, are busy trying to stop private space and push the Senate launch system. Yes, that should fit your idea of what free enterprise is all about. Right?

Re:Shocking (1)

JeremyR (6924) | about 3 years ago | (#36817602)

I believe it's a suggestion that the investment was made based more on an ideological basis (i.e. the desire to be seen as supporting "green jobs") than on a robust economic analysis. Not that this has anything to do with socialism...

Re:Shocking (0)

Anonymous Coward | about 3 years ago | (#36817612)

It is fairly simple, really. You probably have heard the phrase "life, liberty and the pursuit of happiness." Government is the use of force. If you don't believe that, stop paying your taxes and people with guns will come and take away one of the above three things. It is immoral for government to do any more than to protect your Life, your Liberty or your Property, precisely for the same reason that it would be wrong for a person to go to his neighbors house and require them to make a donation to a local charity at gunpoint. If it is wrong for an individual to force someone to do something, it is wrong for them to use government to do the same thing. Socialists think that it's okay to force citizens at gunpoint to pay for "green projects," hence the reference above to socialists.

Re:Shocking (1)

icebraining (1313345) | about 3 years ago | (#36817798)

It's funny and sad at the same time that you replaced "pursuit of happiness" with "property", as if the two were interchangeable.

And by the way, I know quite a few people that don't pay taxes and they haven't lost neither their life nor liberty, nor have men with guns came. I suppose it may be it's different in the US.

Re:Shocking (1)

muindaur (925372) | about 3 years ago | (#36818110)

It's called tax evasion, and is a felony. With fines, jail time(up to five years), or both. You go to jail automatically if you can't pay the fine (though I'm not aware of cases that the judge just specified a fine despite it being an option), or the back taxes. In which case the government can liquidate your assets to pay the back taxes.

You don't lose your life, but you do lose your freedom and pursuit of happiness: sound better than property. Some historians will argue that property was intended as the British officials were seizing cargo, but was dropped because it made the cause sound too greedy.

Re:Shocking (1)

flaming error (1041742) | about 3 years ago | (#36818066)

What's special about "green projects"? Does the same concept not apply to prison projects, or foreign regime change projects, or central bank projects, or aerospace projects, or public school projects, or neighborhood park projects?

Re:Shocking (1)

the eric conspiracy (20178) | about 3 years ago | (#36818912)

Few seem to realize it any more but the actual definition of Socialism is government ownership of the means of production.

The city buying into this company is a classical example of socialism.

Re:Shocking (1)

Sulphur (1548251) | about 3 years ago | (#36817538)

Startup electric car company fails to start up. Shocking.

Re:Shocking (1)

LandDolphin (1202876) | about 3 years ago | (#36818378)

Reads like a fark headline

they shoulda called it the anti-terrorism car (0)

decora (1710862) | about 3 years ago | (#36818028)

then they would have gotten a billion dollars a year, no questions asked.

in fact, asking questions would get journalists arrested for espionage and harming the troops.

if you dont believe me, ask Thomas Drake or Bradley Manning.

Science is built on failures (-1)

Anonymous Coward | about 3 years ago | (#36817446)

You keep trying. When you start using economics to throttle hypothesis testing, you stop innovating and end up like Rome.

Re:Science is built on failures (1)

countertrolling (1585477) | about 3 years ago | (#36817676)

What about Rome? Looks to me like it's still doing okay. Don't always consider a divestiture as a loss. The empire will bring safe and secure society

If you can't afford to do it, don't do it! (4, Insightful)

bennomatic (691188) | about 3 years ago | (#36817454)

Who exactly expected to have a fully functional prototype of a sale-able electric vehicle with a $500,000 investment? Cities, counties, states and the Federal Government get into all sorts of businesses that take time and money to set up. Medicare, BART, the TVA... it's not always a good idea, nor always a bad idea. But if you're going to do it, do it. $500,000 gets you two engineers, some materials and a fab plant for a year, and not much else. That may be a nice way to do a lean start-up, but it's entirely possible that the only reason that the half-mil was a waste was because that was the limit, so it was doomed to fail.

It may not be an impossible task, but if inventing the next generation of EV were easy and cheap--and in this context, I'd suggest that a $500,000 investment is cheap--then everyone would be doing it.

Re:If you can't afford to do it, don't do it! (0)

Anonymous Coward | about 3 years ago | (#36817496)

So it would have worked if only they'd used more tax dollars!

Makes me want to vomit.

Re:If you can't afford to do it, don't do it! (1)

flaming error (1041742) | about 3 years ago | (#36817546)

Perhaps you'd get sick less if you didn't imagine horrors nobody said.

Re:If you can't afford to do it, don't do it! (1)

SomeKDEUser (1243392) | about 3 years ago | (#36817674)

No. He says that investing in what is pretty much blue-sky development takes a lot of ressources.

The government should absolutely bankroll such ventures: if you invest enough in enough of them for long enough, it will pay off. And only states typically have the ressources and patience (they do, look at CERN, or the moonshot, or the Manhattan project) do do that on a significant scale.

But an electric car on a 500 000 $ budget is magical thinking. Almost as dumb as "tax cuts will help the budget balance". Only almost because there is actually a minusucle chance it might have worked. Unlike the cut thing.

Re:If you can't afford to do it, don't do it! (2)

avoisin (105703) | about 3 years ago | (#36817578)

It's not impossible. My co-worker has produced, for far less than $500,000 a fully functional, 100% legit, electric-only vehicle. He uses it to commute to work, or at least he did, until he quit to pursue creating more with his new company. And oh by the way, he drives it on public roads because it's DMV certified. And it will also beat a porche at a drag race. Fun, eh?

http://evdrive.com/ [evdrive.com]

If they couldn't turn $500k into a prototype, then they did not have the required skills to create the prototype in the first place.

Re:If you can't afford to do it, don't do it! (1)

div_2n (525075) | about 3 years ago | (#36817666)

Can't see a cost anywhere on that page, but if it isn't less than 75K, it's a waste of time. I can buy a Tesla Model S for about that that gets over 200 miles per charge. His gets 140. And if there are issues, he has to fix it (no warranty).

Building electric cars is not exceptionally difficult. Building one that doesn't suck that gets good range for a reasonable price is.

Re:If you can't afford to do it, don't do it! (1)

avoisin (105703) | about 3 years ago | (#36818076)

Costs are somewhat protected right now, but it was less than 75k. And since it's a prototype and not a full company, yes, there really is no warranty (unlike the motorbike project, where there is).

Range is also a negotiable thing, to a point - this doesn't get as much as the Tesla (yet?) but it doesn't need to. He can commute to and from work, and then some, and charge up. Considering charge times take in the minutes with the right setup, that's plenty. It's a pretty small group of people that are driving more than 200 miles everyday without stopping for a charge.

The other nice thing is that since we already have the gas station infrastructure in place, it can be converted to charging stations. With the right setup, you can charge this kind of car in mere minutes (think 15 minutes). All this means is that while the 200 mile range is nice, it's unneeded and a waste of money.

Re:If you can't afford to do it, don't do it! (0)

Anonymous Coward | about 3 years ago | (#36818554)

Mine cost $6k. A lithium system will cost $10-$15k on up. It's not tough. e-volks.com has been doing conversions for 30 years.

Re:If you can't afford to do it, don't do it! (1)

screwzloos (1942336) | about 3 years ago | (#36817754)

The car on the site you linked ran sixteen (plus) second quarter miles. I suppose it is technically faster than some Porsche if you include every model they ever made, but I think saying that might give people the wrong idea. It's not faster than a modern 911 by any stretch of the imagination. In fact, that's not much faster than a Prius.

Your coworker also didn't design a vehicle from the ground up - it looks to me like he just put an electric engine in his car. There's no way you can start from scratch and fully design and prototype a mass production ready electric trike for a half million. That kind of scope is what this company failed at.

No huge surprise, though. Just like nearly every other "green" car these days, that thing is ugly.

Re:If you can't afford to do it, don't do it! (1)

avoisin (105703) | about 3 years ago | (#36817946)

Ok the Porche comment was a bit much I guess, but you get the idea.

But why bother designing an entire auto? Yes he started with a stock car, but there's nothing wrong with that. The question here isn't whether or not you can design something ground up, it's whether you can make a good electric car. Same deal for his electric bike - motorbike design is decades old, don't mess with that section, just do the electric parts.

The OP was trying to make a prototype for under $500k - that's what this is, nothing more. I'm only saying that they failed miserably in that task, and should not have. I don't claim that this car is the end-all of electric car designs, or that it is going to be the next big company. But to not have a prototype means they squandered the money, since it clearly could have been done.

Re:If you can't afford to do it, don't do it! (0)

Anonymous Coward | about 3 years ago | (#36817758)

'This wear prone dinosoaur is out of here.'

uh that is a bmw 325. That engine will probably outlast any electric motor you put in it. BMWs are crazy over engineered. But you pay for it. I regularly see 250k+ BMWs from the 80s. Also 0-60 in 8 seconds? He was doing something wrong. With the BMW the engine will probably well outlast most things on that car. The rest of the things on that car though not so good and prone to breakage. With about 5 known design flaws.

Getting something DMV certified like that is not particularly hard. It is a BMW frame after all. They paid for the crash testing already. In effect he did a motor swap. They are not going to look too hard at that.

Bet he blows the doors off most cars though. An electric motor has amazing torque and pretty good acceleration ramp up.

Re:If you can't afford to do it, don't do it! (2)

DerekLyons (302214) | about 3 years ago | (#36817760)

It's not impossible. My co-worker has produced, for far less than $500,000 a fully functional, 100% legit, electric-only vehicle.

It's easy to produce something cheaply when someone else has paid 99.99% of the costs.
 

And oh by the way, he drives it on public roads because it's DMV certified.

You cleverly forget to mention that someone else has done 99.99% of the work needed to get that certification.
 
Had your co-worker actually had to pay for engineering the body and suspension, getting the original safety certification, setting up the production line, and all the other overhead, his car wouldn't have been nearly so cheap.
 

If they couldn't turn $500k into a prototype, then they did not have the required skills to create the prototype in the first place.

That's an opinion, not a fact. That you can't tell the difference between a new design and conversion makes your opinion suspect.

Re:If you can't afford to do it, don't do it! (1)

avoisin (105703) | about 3 years ago | (#36817980)

I'm not claiming that my buddy has made a brand new car. I'm claiming that for under $500k, he has made a road worthy prototype, nothing more. Clearly he needs more work and investment if it's going to become the next Tesla (or better, hopefully!).

The thing people forget is that we have 100 years of car design - why throw that out the window? Certainly there are cheaper cars he could have picked to start from. Regardless, it's a prototype, nothing more.

And I certainly knew he did the conversion, duh. Though how much of it is a conversion and how much is a new design starts to blur when you remove half the stuff inside. He didn't design the chemical composition in the battery packs either, would those count as conversion? At some point, every company buys parts from another to make their product when it comes to consumer stuff. In his case, he bought a car "shell" and used that to hold everything else.

Re:If you can't afford to do it, don't do it! (1)

horza (87255) | about 3 years ago | (#36817780)

Except your friend didn't. According to the web site you already need to have something to start with... an existing car. It's a nice little niche product but nothing like what Green Vehicles is trying to do.

It's unlikely you can build a prototype of a next gen electric car for $500k, but this was more like an electric motorbike with a roof. Try comparing the photo of the prototype BMW 'Clever' [leftlanenews.com] shown off 2006 running on natural gas, and the Green Vehicles [allcarselectric.com] from the summary. Similar concept, and BMW did this with the research support of Bath University being thrown at it. And it still failed achieve production. It was an epic and brave undertaking, but seriously underfunded.

Phillip.

Re:If you can't afford to do it, don't do it! (1)

avoisin (105703) | about 3 years ago | (#36818016)

I certainly grant that Green Vehicles aimed too high, but that was their error. There are already 3 wheel vehicles around, why not use one of those? What about starting with one of the new Can-Am Spyder and turning that into an electric?

The question here isn't whether or not the entire car concept sucks - it doesn't. 100 years have proven that car transportation works pretty well to get from place to place. The only issue is how to propel it. Trying to start "ground up" on that is pretty silly.

Re:If you can't afford to do it, don't do it! (1)

Totenglocke (1291680) | about 3 years ago | (#36818928)

No, your co-worker did not produce a fully functional, 100% legit, electric-only vehicle. He bought a conversion kit to turn a car he already owned (which is 90+% of the engineering costs) and swapped the gasoline engine + gas tank for an electric motor + battery pack. That's like claiming that I "produced" a new invention because I plugged my TV into a portable generator instead of the wall socket.

Re:If you can't afford to do it, don't do it! (0)

Anonymous Coward | about 3 years ago | (#36817582)

Um, what makes you think that the 500,000$ was the only investment? Chances are they at least claimed to have other funding, and the money from the city was matching funds or whatever as an incentive to operate in the city.

Re:If you can't afford to do it, don't do it! (0)

Anonymous Coward | about 3 years ago | (#36817638)

It wasn't the only investment. Apparently they had 2.8 million in matching funds from the State, but couldn't find enough investors to access it http://www.kionrightnow.com/story/15103400/green-vehicles-goes-under-takes-salinas-with-it

$500k unlikely to have been the entire bankroll (1)

Firethorn (177587) | about 3 years ago | (#36817766)

It may not be an impossible task, but if inventing the next generation of EV were easy and cheap--and in this context, I'd suggest that a $500,000 investment is cheap--then everyone would be doing it.

It's doubtful that the $500k was the sole source of funding for the company. It's far more likely that it's the city that's out of $500k from things like forgone property taxes, perhaps the 'factory' went up on public land that was given to the company worth ~$500k, etc... Meanwhile there's lots of other investors out there that have lost their investment.

Not saying this makes it all that much better, or less of a gamble.

Re:If you can't afford to do it, don't do it! (2)

TubeSteak (669689) | about 3 years ago | (#36817924)

Who exactly expected to have a fully functional prototype of a sale-able electric vehicle with a $500,000 investment?

The linked articles don't include the full story.
http://www.montereycountyweekly.com/weblogs/news-blog/2011/jul/18/green-vehicles-in-salinas-closes/ [montereycountyweekly.com]

Salinas city officials announced Monday that Mike Ryan, president of Green Vehicles, said he had closed the headquarters due to a lack of investors. Green Vehicles was selected in 2009 to receive a $2.7 million grant from the California Energy Commission, and was required to raise matching funds.

"The reason why we failed is because we failed to raise the $2.8 million in matching funds," says former VP of Green Vehicles, Lee Colin, a Pacific Grove resident. Green Vehicles had planned to start making cars by the end of 2011.

we can afford to pat down babies (1)

decora (1710862) | about 3 years ago | (#36818058)

because holy fuck, you remember when that baby blew up the empire state building?

god damn it, load me up with a nother 10 billion dollars worth of backscatter x-rays, and dont ask me to give you an itemized list and keep those god damned auditers off our backs!

remember 9/11!

Why single out car companies? (2)

flaming error (1041742) | about 3 years ago | (#36817472)

> it's a bad idea for cities to invest in the risky
> business of start-up car companies

Perhaps it's a bad idea for cities to heavily invest in any high risk venture. But it should be noted that we don't all come out and cluck at them when their risk pays off.

Anyway, if the good people of Salinas wanted to risk $500 thousand in a questionable startup, it's a free country (sort of). I imagine other cities have squandered far more money on far worse ideas.

Re:Why single out car companies? (0)

Anonymous Coward | about 3 years ago | (#36817642)

> it's a bad idea for cities to invest in the risky
> business of start-up car companies

Perhaps it's a bad idea for cities to heavily invest in any high risk venture. But it should be noted that we don't all come out and cluck at them when their risk pays off.

I do. At the local level, even if it works, it's a magnet for corruption.

Anyway, if the good people of Salinas wanted to risk $500 thousand in a questionable startup, it's a free country (sort of). I imagine other cities have squandered far more money on far worse ideas.

There's no imagining! I know that my tax dollars frequently go to subsidize entirely profitable businesses, like stadiums and movies. Those two are the worst offenders because they're such a transparent ploy to buy votes, and they work every fucking time.

Not all people would have wanted to (1)

anti-NAT (709310) | about 3 years ago | (#36817652)

It is unlikely that every single citizen of Salinas would have been happy with making the investment, so what you should have been able to say is - "if the good people of Salinas wanted to risk $500 thousand in a questionable startup, they should have done so individually"

Re:Not all people would have wanted to (1)

flaming error (1041742) | about 3 years ago | (#36817746)

Good plan. If there's a citizen that opposes it, the government shouldn't be allowed to do it.

If nothing else, your plan would have the virtue of saving lots of taxpayer money.

Re:Not all people would have wanted to (1)

anti-NAT (709310) | about 3 years ago | (#36818438)

Exactly. Governments aren't very good at getting value for tax payer's money, as this example (and plenty of others), shows. This served no public good (i.e. it wasn't building a common use road, or providing a social service), it was purely commercial venture. A government won't have done appropriate due diligence on this because "who cares, it's only $500k". An individual would have, and even if they didn't, they'd have only lost their own money. http://steshaw.org/economics-in-one-lesson/ [steshaw.org]

Re:Not all people would have wanted to (0)

Anonymous Coward | about 3 years ago | (#36818004)

I know you libertardians are fundamentally opposed to very idea of a functioning society, but this is a democracy. Look it up sometime.

Re:Why single out car companies? (1)

horza (87255) | about 3 years ago | (#36817898)

Risky is not the same as questionable. The Japanese cities invested in the mag-lev bullet train. In this case it paid off. London invested in building a railway system underground. Now we can't imagine the city without it. I think it was questionable rather than risky as common sense tells us that is seriously underfunded.

However critics love a failure. Look how people crowed when the Segway failed to change transport as we know it (ok not a city investment but just an example). However we don't know yet if it was squandered. If any of the research done manages to lead to any EV patents then there is every chance they can make all that money back and more. If the plan was reasonable, and the intentions of the people working on it honorable, then it was a noble venture nonetheless.

Phillip.

Meanwhile.. (4, Insightful)

lul_wat (1623489) | about 3 years ago | (#36817476)

Banks and finance companies don't make anything tangible either, yet get government bailouts in the hundreds of millions, if not billions.

Too bad they wern't 'too big to fail' while making nothing.

Re:Meanwhile.. (0)

benjamindees (441808) | about 3 years ago | (#36817514)

You realize it's hundreds of billions, right? And over short term, bailout loans of several trillion dollars were made as well.

Re:Meanwhile.. (1, Insightful)

tgd (2822) | about 3 years ago | (#36817610)

You realize it's hundreds of billions, right? And over short term, bailout loans of several trillion dollars were made as well.

You realize virtually all of it was payed back, with interest, right?

Re:Meanwhile.. (1)

Coolhand2120 (1001761) | about 3 years ago | (#36817648)

Not true. Do a little more research. You'll find that they "paid back" what "Bush loaned them" but not what Obama did. It's a damn lie.

Re:Meanwhile.. (0)

Anonymous Coward | about 3 years ago | (#36817722)

source?

Re:Meanwhile.. (1)

Mia'cova (691309) | about 3 years ago | (#36818328)

I think you have that backwards..

Re:Meanwhile.. (1)

msauve (701917) | about 3 years ago | (#36817756)

Every once in a while, you hit the number on roulette, too.

Re:Meanwhile.. (1)

mcbiondi (879388) | about 3 years ago | (#36818758)

Banks and finance companies create liquidity and marketplaces. Perhaps you don't understand the products they offer, but they definitely do exist. Without them things like home and car ownership would be all but out of reach save for the wealthiest Americans who can afford to pay in cash. And the fresh food in your refrigerator is made possible by lending money to farmers against their future crop yields. In short the America we all know and love would be drastically different if banks vanished.

Oh wow! A business collapsed! (0)

Anonymous Coward | about 3 years ago | (#36817480)

This has nothing to do with it being an electric car company, or a car company, or anything else.

It's just the cost of doing business, sooner or later some will turn bad on you, if you can't bear the risk of losing what you spend, don't spend it.

500,000$ may be a lot for an individual, but a city? Not so much. Especially one of 150,000 people. They're going to live through it.

Let me know when we have another Orange County Fiasco.

Re:Oh wow! A business collapsed! (1)

bennomatic (691188) | about 3 years ago | (#36817560)

500,000$ may be a lot for an individual, but a city? Not so much. Especially one of 150,000 people. They're going to live through it.

Good point; however, imagine if the project had been properly scoped and managed, and had been able to turn out a product with a little more time and money invested. What if they could have produced their own fleet of EVs for city use? Would that have justified the cost? Does the city own the electric power generation or distribution, allowing them to effectively give away the razors to local residents so they could then sell the blades for a bit more profit? Were they going to sell the cars on the open market?

Like I said above, $500,000 not only isn't that much for a city, it's a paltry amount for an automotive startup. When companies making a simple piece of photo sharing software get investments of multiple millions of dollars, you'd think that something like this would get a bit more in terms of resources. The number is right in that range where it actually probably is criminal. Way too much for a simple exploration, but way too little to think you could actually turn something out.

Re:Oh wow! A business collapsed! (1)

horza (87255) | about 3 years ago | (#36817948)

The town in which I live has 450,000 people, and we are spending $762,000,000 on a second line for the tramway. The same was spent on the first line completed a few years ago. So $1.5bn on a few electric trains that only serves a tiny fraction of the city. $1,400,000 was spent just on planting trees along the side of the first tram line, three times the budget of this tiny EV project. So no, $500k isn't much for a city.

Phillip.

That's nothing (0)

Anonymous Coward | about 3 years ago | (#36817498)

A typical 'feasibility study' on a new rail line costs 20x as much. And it takes 5-6 studies before it goes ahead or is shut down.

Hmmm.... (0)

Anonymous Coward | about 3 years ago | (#36817518)

Well I am no enterpreneur and I just read about this, so I may be completely off, but why do I suspect that this whole thing was set up?

WTF is Salinas doing? (0)

Anonymous Coward | about 3 years ago | (#36817584)

Salinas is essentially a medium sized farming community. WTF were they thinking? I could understand San Jose or Sunnyvale or Mountain View doing something like this, but Salinas?

Re:WTF is Salinas doing? (1)

BigFire (13822) | about 3 years ago | (#36818490)

This company is actually lured to relocate from San Jose. More Green Jobs.

Opening ANY manufacturing business in California?! (1)

Phizzle (1109923) | about 3 years ago | (#36817628)

Opening ANY manufacturing business in California is nuts! The state is remarkably hostile towards the manufacturing sector.

Doesn't say what went wrong (0)

Anonymous Coward | about 3 years ago | (#36817662)

By the time this comment shows up, there's probably going to be a hundred comments critical of everything under the sun, but the article does not give the slightest indication of WHY the company is going under. Who on Earth would think a car company could turn a prophet in a couple years?
AND the city wasn't expecting their return back so soon, just to bolster jobs and produce additional TAXES.

This is pretty much trollbait to put this on slashdot.

And ? (1)

unity100 (970058) | about 3 years ago | (#36817670)

Do you know how many people/investors supported how many inventions/inventors that ended up unsuccessful back in 1800-1900 ? ill tell you - you cant even start to count. you only read about the ones who had been successful, and a few of those who were unsuccessful, and you are led to naturally think it was like that. on the contrary.

Government funding is the first sign (0)

Anonymous Coward | about 3 years ago | (#36817704)

If a company has a viable business plan, it will attract private investment. If a company has to turn to government for funding, then chances are it's going to fail.

The city didn't lose $500K (1)

reboot246 (623534) | about 3 years ago | (#36817744)

The taxpayers of the city lost $500K. It's easy to spend or play with money that you haven't earned through working your ass off.

The good citizens worked hard for that money. Did they have a vote about how it was being "invested" in some feel-good scheme their know-it-all leaders wanted? Seriously, a man can be selling insurance one day, and then after he's elected he's suddenly an expert on everything? Give me a break.

Politicians of every stripe are out of control. Rein them in before they destroy everything.

Re:The city didn't lose $500K (1)

artor3 (1344997) | about 3 years ago | (#36818270)

The good citizens worked hard for that money. Did they have a vote about how it was being "invested" in some feel-good scheme their know-it-all leaders wanted?

This may come as a surprise to you, but the United States is a representative democracy. The people don't have to vote on every little thing. They chose representatives who they felt would look out for their interests. Those representatives spent $3 per person on one particular venture. That single venture didn't pay off. Others likely did. The people are most likely still quite happy with their elected leaders, and probably don't know or care about this.

The only reason you're hearing about it is because it has the word "green" in the title, so the right-wing hate machine wants to drum up some manufactured outrage over it. Judging by your post... mission accomplished.

Re:The city didn't lose $500K (1)

the eric conspiracy (20178) | about 3 years ago | (#36818870)

The United States is not uniformly a representative democracy. Examples where it is a direct democracy:

1. Referendum and initiatives on state ballots.
2. Cases where the Town Meeting system of government is practiced.

http://en.wikipedia.org/wiki/Town_meeting [wikipedia.org]

There is no particular reason that this town could not adopt this form of government.

Having lived in a town that used the Town Meeting system I'd say that it is not actually better than the representative systems as meeting turnout tends to consist of classes of people with special interests in the results.

half million? (2)

Lando (9348) | about 3 years ago | (#36817770)

Ummm, so they invested a half million and the company failed. It seems to me that more than half new businesses fail, as a matter of fact, the last time I checked new businesses have a failure rate of around 80% in the first five years of business. If your starting a new business with a new product, then the odds are stacked against you. Does that mean we stop trying to launch new products? If we stop trying to invest in new projects then I guess the only way to open up new funding is by legislating income for current product lines, which doesn't seem like a viable way to do business.

So the county invested in a new business and it failed. Chalk it up as a loss and move on. While the taxpayers might not like the way the gov is spending their taxes, cities/municipalities, counties, states and national governments do this all the time. Sometimes it works, sometimes it doesn't. But I'd rather fund a new startup that fails, rather than fund the good-ol boy network that siphons money off the top to fund their retirement account. It doesn't sound like the failure was due to mismanagement or corruption, just that they weren't able to continue and that it cost more than expected. This happens all the time. A half-million is a small investment and though it didn't work out this time, the only way to "win" is to make investments in the future. If all the bugs had been worked out before the company went into business there would have been no reason for the gov to invest. They gambled on a decent return and it failed. But one failure shouldn't be held up as an example to bash investing in the future, which is the slant the article seems to imply. If we don't invest in better ways of doing things, where will we end up?

Re:half million? (1, Insightful)

kmac06 (608921) | about 3 years ago | (#36817950)

But I'd rather fund a new startup that fails, rather than fund the good-ol boy network that siphons money off the top to fund their retirement account.

Or they could refrain from confiscating people's hard earned money at gunpoint to hand out to favored group, whether it's the good-ol boy network or some green nonsense.

Re:half million? (2)

mozumder (178398) | about 3 years ago | (#36818626)

Your money you earn isn't yours anyways.

You are the last step in a giant network that money travels through to get to you... before it goes off to somewhere else.

Taxes are the price you pay to keep that network operational so that money flows through you.

At least Aptera is still going... (1)

cvtan (752695) | about 3 years ago | (#36817816)

But wait: http://www.allcarselectric.com/news/1063329_aptera-answers-our-questions-shares-no-new-information [allcarselectric.com] At least Tesla is still making the roadster, but wait: http://www.treehugger.com/files/2011/06/tesla-stop-production-electric-roadster-focus-model-s-sedan.php [treehugger.com] At least there's the Corbin Sparrow or the Sinclair C5 or ??? http://jalopnik.com/5809904/whats-historys-most-awesome-failed-electric-car [jalopnik.com] I'm an electrical engineer and this is depressing. Oh yeah, and there are still no batteries good enough!

Fraud (0)

amightywind (691887) | about 3 years ago | (#36817840)

Green jobs are a fraud and Obama and the democrats are still pushing them. Just makes the GOP's job easier in 2012.

sadly i have to agree (1)

decora (1710862) | about 3 years ago | (#36818108)

but the republican leaders are just as bad as the democrats though. both of our political parties are horribly corrupt and incompetent.

Hopefully The Car Company Learned Something, (0)

Anonymous Coward | about 3 years ago | (#36817954)

And whatever they learned/developed would now belong to the City of Salinas. Perhaps the city could either:
1) Sell it to G.M, Toyota, Tesla, etc. to recoup some of their loss
    or (preferably)
2) Release it to the public domain so that perhaps somebody, somewhere could benefit

.

maybe they should have been too big to fail (0)

decora (1710862) | about 3 years ago | (#36818116)

like Chrysler or General Motors (the latter of which is more like a finance company, GMAC, that happens to sell cars as a tiny part of its business)

then they could have gotten bailed out

Dontcha just love (1)

Vinegar Joe (998110) | about 3 years ago | (#36818030)

All those green jobs?

Re:Dontcha just love (0)

Anonymous Coward | about 3 years ago | (#36818238)

They are better than what the 'brown' jobs are doing to the Gulf, Yellowstone river, etc... Let alone the air quality in the cities, the greenhouse gases, and media slandering of opposition.

big oil: they have a long history of perverse safety violations, oil spills, explosions, operations deaths, pipe line ruptures, deep water mistakes, tankers crashing, mindless money air fouling flaring column use, extortion, bribery, human rights violations, eco-system destruction, technology suppression, misinformation and disinformation campaigns.

Plus, you have to keep paying for their product day after day. It's not like solar and wind, where once you buy it, it just works with little recurring costs.

Salinas has lots of green....lettuce (1)

Bob_Who (926234) | about 3 years ago | (#36818122)

Mayor Mayor Dennis Donohue and city Economic Development Director Jeff Weir hoped that this investment would attract green industry to Salinas. Salinas wants to be more than agriculture, and green industry is the current buzz. Unfortunately, the green money that cities must manage has begun to disappear. Money makes the green go around but without it growing lettuce seems more sensible and reliable. Salinas will survive, even if the economy leaves us all feeling green, lettuce continues to grow...

Government is the probelm (1, Insightful)

Coolhand2120 (1001761) | about 3 years ago | (#36818166)

A little is lost on where the tax money came from. A homeless man buying booze. A retired man on a fixed income paying more for his food. People who really cannot afford to give a cent. Taxation in the name of government tampering with the free market is the most insidious device yet conceived by the mind of man.

Forever will these well meaning busy bodies toil in the name of our betterment, because they do so free of guilt, thinking honestly that the strong arm of government is the way to prosperity. How can it be that the wants and desires of the few people elected to office know better than the many individuals and industry from whom they take? How can you tell me you have a better idea for .30 cents on every dollar I make? Look at what the government does with your money! They treat is as if it was theirs to burn! They call steeling less from us a "tax expenditure".

Just think about what that means for a second. Tax expenditure.

For a tax break to be a tax expenditure all profit must first belong to the government. What form of government are we running here? We do not serve at the behest of these temporary politicians. They serve at our will, and we can dismiss any of them any time we desire, and do so in a lawful and peaceful manner. As Alexis de Tocqueville in Democracy in America(1835) [wikipedia.org] said, and I'm paraphrasing: "The difference between the American and European democracies is that in Europe the government cedes a portion of its power to the people while in America the people cedes a portion of its power to the government. " For too long have we imported the top down aristocratic style of rule from Europe. We are a free people and we demand freedom! Government is a necessary evil, the problem, not the solution.

The free market does not need a government solution. Read I, Pencil My Family Tree: [econlib.org] written from the point of view of a pencil detailing the process involved in its construction. It talks about the hundreds of processes required for the creation of the simple pencil, and the lack of government control and the harmony created in the absence of such control. The author talks about the "Invisible Hand". This is the invisible force that guides you to get a job, or get a better job, or buy a car, or a candy bar. Basically the desires of society. The government cannot know your desires and cannot want to fulfill them more than you yourself want to. All the government can do is take away from your desires, guide them in new directions you never wanted to go, all the while claiming to do so because they "know better than you" and with the threat of violence if you don't comply. This is a fetter on the invisible hand that can and should be removed!

A free economy is a prosperous one. A happy free people is a prosperous one. The strong arm of government cannot force people to be prosperous and happy, it is the greatest folly that can befall man, destruction in the name of prosperity.

Re:Government is the probelm (1, Insightful)

artor3 (1344997) | about 3 years ago | (#36818298)

You're deluded. To just pick one of the many obviously wrong things in your post: you claim that it is offensive to think that the government is entitled to some share of our individual profits. But we wouldn't have those profits without a functioning government.

To paraphrase a wise man, taxes are the price we pay to live in a civilized society.

Re:Government is the probelm (0)

Coolhand2120 (1001761) | about 3 years ago | (#36818492)

The difference between you giving up some of your profit and the government allowing you to have a portion of their profit is profound. Indeed it is the deference between communism and freedom. My objections were not to taxes but to the idea that the government owns all profit. Government, at its best a necessary evil. That is why the founders of this country had the forethought to create enumerated powers, i.e.: "this is the only shit you can do".

Since FDR's illegal and corrupt supreme court [wikipedia.org] issued it's new deal commandments we have been on a slow slide to a soft tyranny. The enumerated powers have been ignored and the power of government has grown exponentially through the doctrine of the living constitution [wikipedia.org] allowing cases like Wickard v. Filburn [wikipedia.org] where the government forced a farmer to pay taxes on grain that he grew and he fed to his chickens and never entered into the market. This set the precedent for thousands of cases where the government now feels as if it owns everything. The fact that some people in the government feel ownership over our current and future labor profits is just a symptom of this problem.

But we wouldn't have those profits without a functioning government.

This is demonstrably false. If I lived on an island with 10 other people, a government would not be necessary, yet we would profit from our labors, therefore your logic is invalid. Please read the link in my post I, Pencil [econlib.org] as it further elucidates this point in a more practical and verbose way.

Re:Government is the probelm (1)

astar (203020) | about 3 years ago | (#36818640)

"free market"is sort of a funny idea. You need to get over adam smith, hmm, and real real quick. But nicely done polemics. With respect to governments investing, try this.

US government (feds) can print money. If they invest that money in (to keep it simple for you) infrastructure, then that supports the general welfare (remember that up in the unamendable preamble of the constitution) which, as intended, gives everyone a better shot at the pursuit of happiness, which often means some possibly greedy, but quite useful, industrial capitialist, does some good for himself and others, if the government keeps him in line. The really hard part for you to understand is that if the investment produces more wealth than the investment, even though the monetary ROI sucks because of present-value considerations, then this is a win.

As an example, look at the ROI on the Eire canal. But see also that we are still get wealth of a simple kind from it. But people like you really hate Hamilton, really for building the canals.

Re:Government is the probelm (0)

artor3 (1344997) | about 3 years ago | (#36818754)

Again, you're deluded. You speak in grandiose yet meaningless terms because it makes you feel important. If you want to go live on your ten person island, go ahead. In the real world, we have hundreds of millions of people. It's a tad more complex to keep a society of that size running smoothly.

In your ten person island, every one of you is profoundly important, because you represent a huge portion of the populace. You have to get along, because you need each other. In the real world, you are insignificant. You could be murdered tomorrow, and society as a whole wouldn't notice. Your neighbors might, but there would be nothing they can do. Your problems are equally insignificant. If you lose your job, your neighbors might try to help, but if times are tough they can't. Your town wants a company to stop dumping poison in your drinking water? Too damn bad.

But the government fixes all those problems. If someone kills you, they will notice, and they will hunt down the killer. If your town is going through a rough economic patch, they will collect money from luckier towns to help you out, with the understanding that you will pitch in when it's your turn to help someone else. If some monolithic corporation is pushing you around, they provide you with a means to fight back.

Despite the lies that have been drilled into your head since your youth, the government is not the enemy. The government is us. We are the government. Unfortunately, we've been convinced that we are evil. That we can only do good when we act as individuals. The notion of being a small, unimportant part of something bigger obviously terrifies you. That's why you cling to your childish notions that every man can be an island. But if you wake up, and take a hard look at what the government actually does, you'll see that you've been lied to your entire life. We are the government, and we can be a force for good, if only we decide to try.

LOL (1)

mozumder (178398) | about 3 years ago | (#36818634)

We need more government, not less government.

People should not be trusted with their own lives.

Government needs to intervene in people's lives.

California! (0)

Anonymous Coward | about 3 years ago | (#36818496)

Will be long gone before it breaks off into the ocean, destroying a once lush and rich landscape, and nothing else of value

California ... (0)

DalDei (1032670) | about 3 years ago | (#36818710)

I so bought into the California Liberal Philosophy when I lived there ... Da Evil Man, Green Green ! Down with Da Nukes ! Wicca Hippies with Tolerance (except towards anyone else) ... I still have my pony tail in my freezer to prove to the grandkids I was Cool Once ... Thankfully I moved out to the Midwest 10 years ago and met real people and came out of my lifetime of drug infused smokey haze and eventually woke up and realized "WTF" ? not that I'm apposed to drug induced smokey hazes ... but you should avoid making laws and spending other peoples money while so influenced. Drugs and Hallucinations are for personal enlightenment not fiscal policy. Salinas is a rich agricultural capital of he world ! whats wrong with that ? Now they are Green Techno-Bubble Idiots of the world. They should have asked the farmers if it was a sound investment. maybe they'd have sold some tulips instead and made a killing. -D -D
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