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The “iPod effect” for electric cars? No, but thanks for asking!

If I were a sitcom character, my catchphrase would be, “No, but thanks for asking!”  As in, someone asks a question that’s intended as “thought-provoking” but is actually really stupid, such as, “Could this be the year the Lions turn it around?” or “Did John McCain have an affair?” or (more distressingly) “Could thermite have been what brought down the World Trade Center?”, whereupon I respond with an unexpectedly firm pronouncement to the contrary.

Well, I think it would be funny, anyway.

Today’s question comes courtesy Phil LeBeau of CNBC, writing for RealMoney.com, and before I even start, I want to shelter him from ridicule in this because I find the content of his article to be reasonably skeptical.

That said, the question of the day that would elicit my hilarious retort comes from the headline to his piece: “Will Electric Cars Have an ‘iPod Effect’?”

The question is being posed in response to a confident assertion from Dave Vieau of Livonia, MI based A123 systems, who, a mere eight years after its incorporation and nearly a year as a publicly-traded company, which has seen its share price number from a high of over $28 shortly after its IPO to about $8 today, and only that after a significant bump up on the news of the opening of their first lithium-ion battery plant today, complete, of course, with the seal of approval from The One himself.  (Incidentally, in my youth I used to do temp work in the very videotape-dubbing facility the Free Press article mentions as being replaced by this factory.)

Normally, I wouldn’t snark at an entrepreneur like this, but with almost $375 million in government funding the label “entrepreneur” is a bit shaky for Mr. Vieau.  The term implies, among other things, a risk of failure, and with that kind of backing on your side it can take a very, very long time to fail.

But, there’s confidence in future, there’s hype, and then there’s just being flat-out ridiculous, and Vieau’s apparent attempt to draw a parallel between cars using this new battery (which, all by itself, is going to start out priced in five-figures territory), and the consumer phenomenon of the past half-decade, the Apple iPod and its many variants.  I say “apparent attempt” because LeBeau’s article does not contain a full quote from Vieau and I automatically raise my Skeptic Shield when that happens.

Jim Cramer, the flagship columnist of TheStreet.com, explained a few years ago what the “iPod effect” really was.  Yes, it’s great technology that in many cases serves a useful purpose, but it also became another thing that nobody expected: it became jewelry.  As in, the thing teenage girls, grownup teenage girls, and rap stars just can’t get enough of.  It wasn’t just “gotta have one”, it was, and still is, “gotta have more“.  Different color iPods for different moods?  Very possible!  That is the true “iPod effect”, and how Apple became a greater success than I imagine even they dared dream.

Unfortunately for A123 and other companies in the electric car industry, there’s a wide gulf between $100 and $200 pieces of iCandy (sorry) and a $40,000 (even after massive government subsidies) hunk of metal or plastic or whatever the primary component of a vehicle is these days.  It’s an awfully big commitment for even a relatively well-off family to invest in an electric car, hoping to make up the difference in fuel savings. Buying more than one? Hardly an option. And of course that’s assuming the family structure is such that even one would be useful.

Ironically, I’m in a demographic that’s pretty much the ideal market for these kinds of cars.  I have no young children who need hauling around, I don’t normally have any loads to haul, and my primary use for a vehicle is to go to and from work everyday.

Does that mean I might consider plunking down 40 G’s for a car with a battery sporting A123 battery technology?  No, but thanks for asking!

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