Published: August 27, 2008 08:06 pm            

China to U.S.

Company betting Americans will buy small electric cars

Plans by California-based Zero Air Pollution — or ZAP — to begin building electric cars in Kentucky represents a rare, almost unheard of example of a manufacturing operation moving from China to the United States. In a country that one study says has lost an estimated 2.3 million jobs to China since 2001, ZAP’s announcement is not only good news for Kentucky but for the nation as a whole.

In fact, according to the recent study by the Economic Policy Institute, Kentucky alone lost 33,400 jobs to China between 2001 and 2007, including 5,300 in 2007. However, if predictions that the ZAP manufacturing plant that will be built near Franklin, located along the Kentucky-Tennessee border south of Bowling Green, could employ 4,000 within four years prove true, those will be jobs in Kentucky instead of China.

Randall Waldman, CEO of Integrity Automotive, said his company will build the Franklin plant as part of a “venture partnership” with ZAP. The intent is to build electric cars that are affordable, ranging in price from $10,000 to about $63,000. The small electric cars can travel up to 40 mph and obviously are intended for urban areas.

The executive order Gov. Steve Beshear signed earlier this month to allow three- and four-wheel electric cars to travel on Kentucky roadways with speed limits of 45 mph or less apparently was the last essential piece of the puzzle Integrity Automotive needed to build in Simpson County.

Waldman had said earlier this year that the company would not build the electric cars in a state where they were banned from all public roadways. Nevertheless, a bill that would have accomplished the same thing as Beshear’s executive order failed to gain the approval of the 2008 General Assembly. If the 2009 General Assembly fails to enact the provisions of Beshear’s executive order into law, the order will expire at the end of the 30-day legislative session.

Thus, Integrity Automotive’s decision to build in Kentucky is at least partially built on an executive order that may expire. Of course, with a plant promising scores of new jobs under construction, the odds of legislators enacting a law allowing electric cars limited access to Kentucky roadways are much greater in 2009 than they were in 2008.

Not suprisingly, the state is offering ZAP and Integrity other incentives, but the governor said most of those incentives will not kick in until the plant is actually producing vehicles.

State officials have authorized $48 million in tax credits, Beshear said. Meanwhile, local city and Simpson County officials have offered about $80 million in investment revenue bonds as incentives for the plant, said Dennis Griffin, director of the Franklin-Simpson Industrial Authority.

Waldman said the company had sold more than 100,000 vehicles in the last three years — all of them made in China. Waldman claims his company’s vehicles could travel for up to 400 miles on a single four-hour charge. The company has also been in talks to set up recharging stations throughout the area, Waldman said.

While more than $60,000 seems to us to be a bit steep for a vehicle that essentially can only travel in urban areas, people may pay $10,000 for a vehicle that is inexpensive to operate and environmentally friendly. While the safety of such vehicles remains a concern, if they are only traveling in 45 mph zones, they are unlikely to encounter many — if any — semi-trailer rigs or other large trucks, and assuming other drivers stay within the speed limits, the odds of a deadly crash at such low speeds are greatly diminished.

ZAP and Integrity Automotive are gambling that the appeal of electric cars will increase as gas prices remain high and Americans become more concerned about global warming and other environmental threats. Kentucky’s interest in that gamble paying off has just increased greatly.

        

• Click to discuss this story with other readers on our forums.