Just another story about a homeless man and his Lamborghini.

So you ever have a friend who has a bad year?  Their women walks out leaving them with a house and life they don't want.  Well this guy did the only thing reasonable.  He sold it all, bought a Lamborghini and traveled the United States for years.  If only he solved crimes while doing this he'd have a TV series spun off about it.

Wired Magazine covers it on their website.  You've got to read it.

Fisker Auto's $88,000 Plug-In Hybrid and my own random thoughts.

NOTE: The following post goes all over the place without a specific logic to it other than my coffee induced curiosity and the ability of Google to serve up info.

I noticed in the SIJ website this morning an update about the massive fund raising success of Fisker Auto in its pathway to market for a plug-in electric hybrid vehicle.  The price tag hit me though at $88,000.  Then I thought back to a few books I read about the invention of the auto industry and the early cost of utility vehicles such as the Curved Dash Olds and Model T.    

So I ran it through an inflation calculator (don't ask why I just did).  In 1908 the year the Model T came out that would have been $3,584.  Not comparably cheap even by early adopter status.

The Curved Dash Olds first sold for $650 in 1901.  According to Tom's Inflation Calculator a 1913 Olds selling for $650 would adjust to a $18,895 price tag.  Being the low end no frills electric vehicles with no options or safety go for way below this the industry ain't doing to bad.

The Model T first sold for $825 in 1908 and ultimately after decades of engineering excellence by the Ford Motor Company sold at it's lowest as $260 by 1924.  To adjust that get's fun for one reason.  In 1908 the 2010 value of a Model T was $20,253 which is what a reasonably equipped sedan goes for today.  By 1924 you could buy a more reliable and improved Model T for $3,257!  

Anyone else see a trend similar to computing power and gasoline power train?  That drop in true cost of a vehicle really blew me away.  Now lets hope that EV's take a similar pathway in innovation on a far accelerated timeline.

Side note.

The 1901 Curved Dash Olds was the first mass produced cheaper automobile.  The pioneering horseless carriage. Its original success beyond hobbyists was its ability to speed up the day for a travelling professional who would not have to worry about a horse.  For doctors and lawyers traveling within 30 miles of their home this hugely improved their productivity more than paying for itself as an investment.

I don't have proof of it handy.  But while reading one of the better histories of the auto industry they related the cost of a vehicle to the median income in the US at the time.  That would place a curved dash at the time it was introduced to being the equivalent of $70,000 today.

It wasn't till 1908 that Henry Ford introduced the Model T and began to focus on ever improved and lower cost vehicles (and of course we saw how cheap he got).  

The history of the early auto industry was of visionary engineers and entrepreneur wanting to mass produce cheap vehicles and the bankers, investors, and managers around the industry who demand high end high margin pleasure vehicles (because why would anyone want a vehicle for utility purposes?). In fact the amazing early history of Chevrolet and the founder of GM Billy Durant is one of lower mass markets versus higher end markets.  Billy Durant literally swindled his company back from a group of bankers by setting up Chevrolet and trading its stock on the open market for GM stock till he had 51% of the shares back.  

 Special note of personal perspective.  The Oldsmobile ushered in the modern auto industry of the world at the dawn of the 20th century.  It also exited business as an auto brand at the dawn of the 21st century.  There is a bookend story to be had here if I ever put it together.

Oregon's BETC Reform

In energy circles Oregon has been well known in the last ten years for it's generous Business Energy Tax Credit (BETC) which offers up to 50% off the capital cost of a project back as an income tax deduction.  Better yet if you are a low cash flow start up you can "Pass-Through" this BETC for 35% of face value cash up front.  So if you build a $1,000,000 project in theory Oregon will give you a $500,000 income tax break over five years and you can sell this tax break to an investor for $350,000 cash.

Its no doubt one of the greatest deals for project development out there.  Throw into that mix a huge clean energy consumer base and utility connection to wheel power to the California market and you've got a strong comparative advantage in Oregon.  I know I've done several project that would not have happened without the BETC which have directly created jobs at my family's business.  I've also used the BETC as a down payment with a bank as part of financing.  Its a great economic development tool but the lack of boundaries on the program has blown up its use.  Solar panel manufacturers, wind farm developers, and a few large projects have exploded the dollar figure this tax credit brings.

So in Oregon the Department of Energy (ODOE) has been under fire for the Business Energy Tax Credit  taking a large cash draw in the economic downturn.  The fact that the alternative energy tax break is primarily being taken by the Wal-Mart, large banks, and other huge corporations hasn't polished its image any either.  Corporate welfare is never a great selling point.  This causing Oregon's Legislature to push a "reform" to bring down the total dollar figure of the BETC.

First a law capping total dollars came down.  Then rules were written to figure out how to stay within the budget.  So the rules are set and now is the time to pay attention as any potential new project I may come across will be playing in this new league.  Through the recession I haven't had much in the way of project opportunity.  Just trying to keep momentum moving forward for what we built pre-2008.  Taking a look there are things I agree with and those I don't.

First I don't see any reference to property tax impact of a capital project (and I didn't in the debate during the reform). The local positive impact of these projects isn't considered at all.  If the state is losing on the income tax side but funneling more in a much more permanent base of property tax revenues I would call that great policy.  Unfortunately the only focus isn't on long term revenues but instead on a single ticket price

I've always thought the controversy of corporations taking BETC's to avoid income tax is over stated.  In fact its safe to say if it wasn't for the BETC many of these companies wouldn't have realized the same amount of income tax (then avoided by a BETC) by creative and legal accounting gimmicks to minimize profits in Oregon.  I am very confident that the BETC funnels what otherwise would have been money leaving Oregon into capital investments that raise local property taxes far in excess of their real cost to Oregon's general fund.

Now back to the actual reform.  One good thing is they moved the one year BETC opportunity up to a $20,000 one year project (meaning I can take a tax credit in one year instead of taking it over five years). Short payback of tax credits is very good for small businesses seeing great years and investing in improving their operation.  In the small business community you never know what the next year holds so five year paybacks are a tough sell for a BETC.   Better yet, one year is very positive for the type of projects I do with refueling infrastructure which can be kept under $20,000 if we work at it.  It's also very good for retrofit projects as well so local smaller scale contractors will benefit from this.

As of right now there is a cap of $300 million  in BETC money established through 2011's state budget.  Of this $300 million $218 million potential projects has already been pre-certified.  So in theory its already spent.  But of course it probably won't be close to spent.  It begs the question, how does this work that projects take years and are unpredictable and therefore when the BETC vests to being taken might effect other budget years?

There is a Q&A page but it hasn't posted any questions and answers.  I definitely have small talk to make next time I run into an ODOE staffer.  Just that much more reason to get to local conferences I guess.

To help they have created a "tiered" approach.  ODOE shows an under $500,000 project costs, $500,000 to $6,000,000 project cost, and of course an upward of $6,000,000 project.  This will be interesting.  It does not mention how they will break out the remaining sum of cash between these projects.  I also am curious what happens if you apply pre-project, don't get a pre-certification, then start building and finish in a specific time frame.  If other's in that tier didn't finish can you take their budget allotment?

Oh well. As with all changes questions and ideas pop up.

Zip-Car for Bicycles

Here is a cool concept that even the 'nu-uh' scrooge in me loves.

I saw it at Fastcompany.com and think its a great pay it's own way service.

B-Cycle is a large scale bicycle sharing program that just took off in Colorado.  This would work really good in the Metro area around Portland.  Especially if they had the check out stations at trail heads.  For over ten years I've been meaning to buy a better bicycle and never get around to investing the real money it takes.  I would jump on this and I know I'm not alone.

In Search of the Factory Equipped Hyper Miler

Wired Magazine online has a great article about where fuel efficiency will come from. The Federal government is seeking a 34.1 mpg fleetwide CAFE standard for vehicles sold in the US market.  Wired reports that the National Academy of Science asked 12 engineers, scientists and industry certified smart people to examine commercially available technologies and their impact on fuel economy.

This report is titled "Assessment of Technologies for Improving Light Duty Vehicle Fuel Economy"  and is for sale via the link shown.  The website will allow you to skim the document though.  Of course that's not assuming Wikipedia or some other site won't have it posted for free sometime soon (I can't wait to see).

What did they come up with? Fuel efficiency has a high capital cost.

But of course doesn't all new technology?

What else did they conclude? That VW TDI's kick the crap out of hybrids (okay I exaggerate their findings).  They comment that Hybrids cost around $9000 more per vehicle for a 50% fuel savings and Diesel cost around half that for a savings for 35% so therefore more miles and a longer engine life for less money.

Something I can't see mentioned is the energy impact of these technologies before their life on the road.  I would like to start seeing the energy cost of construction of these various technologies.  No luck there yet though.  Guess only the new fuels are held to this standard while the technologies that harness or precede new fuels aren't judged under this category.

Other note.  The Wikipedia post on CAFE standards is worth checking out.