Electric Vehicles: X-Prize the Local Economy

April 1, 2013

Screen Shot 2013-04-01 at 4.27.16 PMX-Prize for local economic innovations in energy. Using entrenched old-school world of economics to determine ‘market viability’ of a new breed of transportation is like saying MRIs will never prove cost-effective to the developers of it before the first 1/10 of 1 percent of Americans begin to use them. The commuter market for small vehicles coupled with transportation sharing and innovative market approaches will likely expand the market.

The trouble with investors today, is they’d like centralized, patented, manufacturing and innovation to ‘capture’ the market and assure major returns. The problem I have isn’t the massive tax breaks given the ‘market makers’, or the political agendas for actually directing a tiny bit of American commonwealth spending (tax-revenue).

The problem I have is with the winner-take-all attitude of businesses and funders in this space. battery tech evolution is clearly needed, and yet, where is the X-Prize of 1 billion dollars to produce a 3x capacity improvement in battery storage. In an X-Prize economy, investors get paid a large, guaranteed sum of money when innovators produce a practical break-through product, in an open, competitive, traditionally American capitalist approach. The so-called ‘market’ doesn’t need to be there.

American markets are so stogy, so fully of crony capitalism, so impossible to innovate in its no wonder free market innovation and going after the market prize has less incentive than using dollars to block competition, assure distribution, consolidate patents, all decades before the basic tech is truly in there.

I give major props to Obama and like-minded individuals for attempting to jump start the market. Jump staring the gasoline consumption market is already fueled by 1.4 billion dollars a year per penny per gallon, so no one needs to ‘seed’ the buy-gasoline powered crap today, or in the future.

What we need is a different economic model to break up these markets into sizes where innovation takes place. We need to clear the regulatory / patent machinery so payback is immediate upon successful innovation a 100 billion dollar transportation sector X-Prize pool. When the technology for a Tesla electric motor is achieved, 70 lbs 300 horsepower – incredibly efficient engine, Tesla’s investors receive a 1 billion dollar X-Prize and the motor’s ‘market’ is assured because the X-Prize economy pays, and the motor’s technology becomes American national commonwealth – much like NASA’s inventions fuels the computer revolution, or the DoD’s invention of TCP/IP fueled the Internet market.

Without those kinds of basic technology deliverables into a market, the market will never shift painlessly. Likewise when a practical energy storage system exceeds the standard Lithium 16550 battery by 2x, then 3x, then 5x, then 10x – where energy density is equal to net gasoline conversion energy density, then those devices, techniques and patents are acquired in an X-Prize competition for 2 billion, 3 billion, 5 billion and 10 billion dollars respectively. The kind of numbers that today, are the balance sheet adjustment errors on American consolidate financial businesses.

I am a firm believer in American ingenuity. I’m a firm believer that free market investors will step up to find the brains and ingenuity for the 1 to 100 billion dollar guaranteed X-Prize reward for innovation. I’m a firm believer if the regulatory / patent rules around the base innovation were out of the way, 100s of startups would use the batteries, the motors and control systems for electric vehicles.

And that births a new vibrant, highly competitive, market. GE promising to buy some cars to seed the market? I can’t think of an example of a business that is less American free-market, open competition than GE. Why go to the monarchies of America for innovation when we have a 200 year legacy of small business innovation and investor excitement. Government could produce those X-Prizes, clear the patent trolls out of the way and allow the investor greed, innovator enthusiasm that’s needed to jump start the electric tech on which the revolution is built.

If we had no Intel there’d be no personal computer revolution. If Berkeley’s Regents hadn’t open-sourced the BSD TCP/IP protocol implementation there’d be no Cisco, 3Com and dozens of others that used it. Without DoD there’d be no Internet. Let’s get on with an X-Prize economy and let American investors, innovators approach the problems and solve them. In basements, in attics, in Mom’s garage, in glass towers, wherever the innovators are.

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