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Opinion: Nice try for the solar industry

November 19, 2008 | | 212100842
What does photovoltaic systems vendor Solarworld AG intend with its offer to take over an automotive OEM? Does the current situation in the automotive industry call for unorthodox approaches? Here's why this push won't work.

Unusual situations demand unusual methods. And the situation is unusual: Automotive OEMs are in a financial squeeze, and neither General Motors nor its German subsidiary Adam Opel AG is an exception. Currently, the German public debates fiercely if Opel should be saved on taxpayer's expense. In this situation, photovoltaic systems vendor Solarworld has piped up with the suggestion to acquire Opel and turn it the first "green" car maker, focusing heavily on fuel efficiency and emission mitigation.

In terms of technology, hybrid drives and even more so electrical drives could offer a solution to the problem of a "clean" mobility. Virtually all automotive OEMs are working intensively on new concepts which would include these technologies, and the automotive industry has gotten straight that the deployment of electric cars is directly connected to a fundamental change in the industry's business model: Instead of gasoline stations, battery charging stations would be required to fuel the vehicles up. Electric utilities are already considering concepts which would include providing electric vehicles to users (at a low price) and get their profits from selling the energy. However, nobody really knows where this energy could come from, and it does not come as a surprise that the nuclear power lobby suddenly emerges as ardent advocate of "green" cars.

In this environment, the push of Solarworld CEO Frank Asbeck deserves one credit: It highlights the need to leave the well-trodden paths and seek for new approaches. After all, many experts believe that solar energy could offer an answer to the energy question.

However, in financial terms the Solarworld announcement seems rather unsound. The amount offered is far from being sufficient to motivate GM to let go its entire German assets. Apparently Asbeck even believes that ailing GM would be willing to pay another billion to bail out Opel. Even in the unlikely case that GM would agree, it is highly questionable if the amount offered would be enough to fund the development of a new car generation. Voices in the automotive industry express doubtfulness. "Does this guy have a clue what it costs to develop a car?" one expert asked rhetorically.

Solarworld and the automotive OEM play in two different leagues. For a single company the size of Solarworld, this game is too large. Nevertheless, there is a positive aspect in Asbeck's approach: It highlights the role the solar energy as a whole could play in the individual mobility game.

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