Despite a new report out of the United Kingdom that says the future of the business is bleak without government subsidies, a three-year-old unprofitable electric truck company that received $32 million in U.S. taxpayer stimulus plans to raise more money via an initial public offering.
Kansas City-based Smith Electric Vehicles was launched in January 2009, and despite its lack of track record and the inexperience of its leadership, the Department of Energy awarded the company $10 million in August 2009, and an additional $22 million in March 2010, for an electric truck demonstration program. The company was little more than a spinoff of a failed U.K. operation with the same name, owned by a troubled parent company called The Tanfield Group. In July 2008 – largely because of Smith-UK’s shortcomings – Tanfield’s stock price “collapsed” (scroll down at link) and was harming other holdings of its founder, Roy Stanley.
Smith-UK’s electric truck venture, part of the “green” energy economy euphoria that swept Europe, once received praise from luminaries such as former Prime Minister Tony Blair, who called Tanfield “UK manufacturing innovation at its best.” But soon afterward media discovered that customers for the electric trucks were sparse, and investors wondered whether the company was “more hype than reality.”
A study commissioned by the U.K. Department of Transport confirms the industry was unworthy of the publicity it received. British consulting firm Element Energy examined the total costs of ownership of low emission vans, in light of the government’s plans (implemented in February) to extend its Plug-In Car Grant program to electric trucks. It found that for electric trucks to make economic sense, government would need to provide grants indefinitely in order to compete with diesel-powered vehicles.