Strumming the heartstrings of what many Americans want to hear, this week Virginia-based GreenTech Automotive announced American production of green energy cars that would compete favorably with China.

In a reversal of the usual, GreenTech’s chairman – and former Democratic National Committee chairman – Terry McAuliffe said the company will begin manufacturing Smart-sized MyCar neighborhood electric vehicles (NEVs) in Mississippi.

“I am sick and tired of seeing our jobs go to China,” McAuliffe told MSNBC recently. “I am sick and tired of seeing big cargo ships coming in from China.”


The MyCar was designed for a Hong Kong firm GreenTech acquired in 2010.

The two-seat vehicles are said to begin production this year, and McAuliffe has pledged to make available the first 100,000 for a mere $10,000 each before subsidies.

Earlier plans to import them from China are on hold although the company's CEO says an assembly plant in the desert of Inner Mongolia is still being constructed.

We’ll get to that shortly, but this week’s news is the MyCar will be the first of several hybrid and electric vehicles made in America, by Americans, with plans to heavily export them as well.

The MyCar was originally designed by Giorgetto Giugaro's Italdesign and discovered by McAuliffe on a trip to London.

Performance reports vary, but the car may be capable of about 70 miles maximum range, with a maximum speed of 50 mph, although in the U.S. as an NEV it would be limited to 25 or 35 mph.

The first exports are intended to go to Denmark for European distribution later this year where higher speeds may be permitted.

In its press release, GreenTech says the Danish company Greenabout, which distributes electric vehicles and related products and services, "will purchase a sizable percentage of GTA's MyCar production through 2014."

And of these announced American beginnings, McAuliffe shared his vision.

"This agreement is a major step in the relationship we have proudly formed with Danish leaders," said McAuliffe. "We share a desire to create and utilize affordable green transportation and with this MyCar agreement, we are making broad strides to begin selling our American-made MyCars throughout Europe. Not only does this agreement reflect our principles of affordable green energy, it also means new manufacturing jobs in America."

Similarly, Greenabout CEO Per Boesen expressed his enthusiasm.

"GreenTech's MyCar is proof that it is possible to create high-quality, sustainable products. We will be helping to reduce carbon emissions and creating new jobs in Denmark and elsewhere across the globe," Boesen said. Earlier this year, Denmark released its "ambitious, highly-praised 'Energy Strategy 2050,'" which calls for the creation of a fossil-free energy network, independent from oil, coal, and gas by 2050.

A little bit of background

To be fair, we gave you the positive spin up front, although as you will see, industry observers have expressed strong words of doubt for this venture's viability.

First off, whether NEVs are even a great idea is in question. The Insurance Institute of Highway Safety (IIHS) has issued warnings for consumers to stay away from NEVs because they don’t have to pass crash tests. When subjected to them informally, they invariably allow catastrophic or fatal injuries to their would-be occupants.

The Truth About Cars has followed the GreenTech story and reported some “ stranger than fiction ” dealings in the saga of the company said to have been founded in 2006.

Originally GreenTech was an offshoot of Hybrid Kinetic Motors, founded by Yang Rong – who also goes by Benjamin Yeung. He was the former CEO of Chinese automaker, Brilliance.

It was in 2009 that a pin was stuck on the U.S. map in Alabama as a future site of manufacturing for GreenTech cars. At that time, Rong and GreenTech’s current CEO and former founder of Brilliance, Charles Yang developed plans that fell apart before coming to fruition.

The New York Times reported that in 2001, due to his success at Brilliance, Forbes ranked Yang as China’s third-richest tycoon, with an estimated wealth of $840 million.


CEO Wang and Chairman McAuliffe in Mongolia.

The Times recently interviewed Wang who said plans were indeed still proceeding at “warp speed” to build the assembly plant in Ordos, Inner Mongolia.

Wang told the Times it would be completed by the end of 2012 and have capacity to produce 300,000 vehicles per year.

As for this week's Mississippi plans, GreenTech has found it expedient to “rely heavily” on funding provided by the “EB-5” Immigrant Investor Program.

This federal program provides green cards and permanent residency to foreign nationals and their families who contribute $500,000 or more to a successful business in rural areas and areas of high unemployment.

In a story the Times wrote last year titled " Green Cards for Green Cars ," it was shown affluent Chinese were escaping their homeland by buying their way into America’s heartland.

This week the Times reported that Wang said GreenTech “has been utilizing the EB-5 program as part of our funding sources.”

To do what the company intends to do will take billions. The company told Automotive News it is well funded, but did not disclose details.

Audacity of Hope

Automotive News has reported that McAuliffe’s plans for a bright American green future are – to be charitable – perhaps a wee bit optimistic.

On second thought, let’s forget being charitable: Actually the term used by Automotive News writer Charles Child is that the plan is “dead on arrival,” and he also wrote:

“What keeps the vision alive is McAuliffe’s audacity. With confidence and verve, he spells out his job-creating optimism on friendly national cable shows such as “The Daily Rundown” and “The Ed Show,” also on MSNBC … Bold auto visions are fine. But they require staggering amounts of money and manpower. And there’s no tangible indication that McAuliffe has either."

Child reported GreenTech of McLean, Va., a suburb of Washington D.C., has around 50 employees, and hopes by year’s end to have 100.

In contrast, just to expand its advanced-tech research and development, GM has hired around 2,000 engineers, let alone other employees.

And while it makes for a great sound bite to promise the first 100,000 MyCars for $10,000 apiece, consider that International Market Solutions showed the U.S. market for NEVs last year was less than 26,000 units

GreenTech did concede this when to an Automotive News inquiry it replied: Neighborhood electrics “are a small market for sure, at least right now. We have a few ideas on how to create some awareness and build that market. Our goal of 100,000 units is a cumulative sales figure over time. We look forward to achieving that.”

So the plan as it stands is to get the ball rolling by selling over one hundred thousand NEV death traps, as the IIHS essentially calls them, to a limited market. In the U.S. they will be banned from streets with speed limits over 45 mph, and the launch date for other green cars is nowhere in sight. Despite saying it has wads of cash ready to go, last week GreenTech scaled back plans to build hybrids and electrics at its Mongolia plant in 2013.

“Our expanding product portfolio, including hybrid and electric full-speed vehicle will come in due time and we have not yet set a timetable for the next product introduction” after this year’s NEV, said a GreenTech statement. “We fully understand the challenges in time, money, and technical expertise to produce a quality hybrid or electric vehicle.”

What to believe?

In the mean time, if you want an exciting story offering hope to the flagging American manufacturing sector and more, take the face value of news GreenTech is promising as it says thousands of American jobs will be created leading back toward greater domestic self reliance.

It has not convinced analysts or experienced reporters, as Truth About Cars editor Edward Niedermeyer expressed plainly.

"I’ve only been blogging about the car industry for about three and a half years, but I’ve seen this movie way too many times before," he said. "If you’ve missed out on the ZAP saga, to cite the most infamous example of the 'NEV today, domination tomorrow' scam, read this , this , this and this for a primer on how this game works. It’s not pretty, and I hoped it was left behind in 2008, when it still fooled a few people. Today there’s no excuse for anyone to be taken in by such an unimaginative, played-out scam.


McAuliffe and his friend Bill Clinton discuss the MyCar.

It would be really great if detractors are proven wrong. But if GreenTech plans turn out to be "over the top," as Automotive News says, it will be a disgrace to have built up hopes when the means to get there amounted to little more than a tired re-run of the usual chutzpah.

That McAuliffe has been sufficiently plausible to some should come as no surprise however, as he is past master at playing the right note from his days in high-level politics.

McAuliffe has a law degree from Georgetown University, and was a fundraiser for Jimmy Carter’s unsuccessful re-election campaign, and an “exceptionally effective” fundraiser for Bill Clinton's presidential bids.

In 2000 Al Gore called McAuliffe “the greatest fundraiser in the history of the universe.”

On GreenTech's Web site his biography says under his leadership the Democratic National Committee set party records by raising more than $535 million.

However the source that cited the Al Gore quote, Discoverthenetworks.org , also noted of his political dealings:

McAuliffe is particularly adept at the raising of soft money – funds that, by endorsing an overall cause or party rather than a specific candidate, are legally permitted to exceed the limits normally placed on contributions to a political campaign. Because they are not bound by such restrictions, soft money contributions are often so large – frequently in excess of $100,000 – that donors naturally expect to receive some form of payback in return for their generosity. McAuliffe’s soft money strategy was responsible for President Clinton’s 1996 scandal concerning the Lincoln Bedroom sleepovers and the White House coffees, two tactics employed to solicit huge donations from wealthy friends and patrons of the Clintons.

McAuliffe reportedly also initiated and chaired President Clinton’s multimillion-dollar legal defense fund during the Monica Lewinsky scandal, and has been investigated by federal officials for questionable business deals.

In 2009, he ran for Governor of Virginia, but was unsuccessful, and prior to that had headed Hillary Rodham Clinton’s unsuccessful presidential campaign.

Even left-leaning political commentators have called him a hypocrite for saying the way to create more American jobs is to build a large assembly plant in China.


But McAuliffe says he has started 25 businesses and they’ve all made money.

That he has talent, is connected, and knows how to network is not in question.

Last week, GreenTech's Alan Himelfarb, executive vice president for strategic planning, told Automotive News he knew there were skeptics, but said, "We are very realistic about the challenge."

GreenTech says it will pull off McAuliffe’s passion for green cars and desire to bring renewed optimism to Americans, and – to be charitable again – we’ll note that stranger things have happened, and it would be terrific if such grand plans could actually work out.

If they come to pass we will be in line to give credit where due. In the mean time, as others have said already, we'll believe it when we see it.

The Truth About Cars , Wheels Blog , Automotive News (subscription req'd).