Researchers find backdoor on ZTE Android phones

The summary is that “Two mobile phones, developed by Chinese telecommunications device manufacturer ZTE, have been found to carry a hidden backdoor, which can be used to instantly gain root access with a password, that has been hard-coded into the software.”

We’re awfully dependent on foreign manufacturing. In the 1980s, the concern was “The Japan That Can Say No.” Now it’s Chinese manufacturing OEM/ODMs embedding rogue code in our cellphones, routers, and other electronic infrastructure.

I don’t always agree with Alexander Hamilton, but he got it right in his “Report on Manufactures” in 1791:

Not only the wealth, but the independence and security of a Country, appear to be materially connected with the prosperity of manufactures. Every nation, with a view to those great objects, ought to endeavour to possess within itself all the essentials of national supply. These comprise the means of Subsistence, habitation, clothing, and defence.

The possession of these is necessary to the perfection of the body politic; to the safety as well as to the welfare of the society; the want of either is the want of an important Organ of political life and Motion; and in the various crises which await a state, it must severely feel the effects of any such deficiency.

He was right 220 years ago, and he’s right today. I hope that learning this lesson again only costs us economic pain and not something worse.

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I understand liver failure due to acetaminophen toxicity, and I think it’s a darned shame that it kills 200 people per year. Of course, half of those are intentional suicides who would find another way to die… and, remember, doctors kill fifty times as many patients a year with bad handwriting. Never mind. I commented:

I realize I have a minority opinion. (Nothing to do with the toxicity of acetaminophen… I simply reject the entire premise that the FDA should have the authority to regulate what is sold to American citizens. Once again we’ve chosen to trade freedom for the illusion of security. C’est la guerre.)

One commenter replied:

Anti-regulation libertarianism assumes an informed and active consumer, and the diabetes epidemic proves that you don’t have that in the real world – libertarianism is based on even more magical thinking than communism. I work in this space, run companies in this space, and trust me please – you wouldn’t want to give up the FDA. You certainly wouldn’t want your loved ones in a hospital if they weren’t doing their job (imperfectly, yes, this is the real world).

I confess to being a rational libertarian — not an anarchist, and not a disciple of the Ayn Rand cult. But I do think that, in most cases, adults should be allowed to make their own decisions as long as they don’t hurt others. That includes drugs. Prescription drugs. Non-prescription drugs (tried to buy Sudafed lately?). Megadoses of Vitamin C. Alcohol. Nicotine. Peach pits from Mexico. And the whole phylum of illegal drugs that I’ve never tried, don’t want to try, but which don’t seem to be destroying Amsterdam nor Portugal at the moment. Rack ‘em all up behind the counter, convince the pharmacist that you’re rational and have the cash, and walk away with a bag of whatever you want.

It’s just like I tweeted at the TEDMED conference two weeks ago when the Commissioner for Food and Drugs was on stage:

That doesn’t mean the FDA should be abolished… in fact, I’d increase their budget to speed up the testing of drugs and medical devices. But I would take away their police power to determine what may or may not be sold to adult citizens who haven’t been declared wards of the state.

What I would do is print a whole bunch of stickers, and enforce a law that anything that looks, smells, or is advertised to be even in the same neighborhood as a medical treatment should have one of these stickers. (See? I’m really NOT an anarchist!)

Black Label

First sticker: We’ve tested this stuff, and it will kill you. If you take it, you’re a damned fool. Hope your affairs are in order. Bye.

Red Label

Second sticker: STOP. We haven’t tested it and have no idea what’s in it. Could be anything from arsenic to angelhair pasta. Unless you have done your homework, taking this probably makes you as big a damned fool as someone taking the black label brew.

But anything — anything! — could be put on the shelves with a red label with no laboratory testing. That includes products from ethical pharmaceutical houses who are working through their billion-dollar FDA clinical trials (objective: green label), but want to make the product available early under red label.

Orange Label

Now things get interesting. The orange label is roughly consistent with completing today’s Phase I clinical trial. The product isn’t poison (at least at recommended dosages) and it doesn’t do any obvious damage.

Put it on the shelves with a big orange question mark, and the FDA should put all its data online for analysis and summation by the WebMD’s of the world. Maybe this is good for you, maybe it’s not, but some drug developers may choose to pause their clinical trials at this stage and not incur the Phase II/III costs until they get market feedback.

And, given what we know now, acetaminophen would likely get an orange label.

I could see an entire class of “orange-label” venture investors emerging… they provide enough capital to get to orange-label, start selling the product… and if a green-label company wants to scoop them up for a few hundred million dollars then invest a few hundred million more in a successful Phase III trial… well, that’s a nice exit, too.

Green Label

Green label: this is the good one! This signifies that the drug has met the same standards as a Pre Market Approval (PMA) after undergoing successful Phase I/II/III trials (many years and many millions of dollars).

Ethical pharma companies will still pursue this label for their blockbuster drugs since they can charge whatever the market will bear to those patients who will only take green-label drugs. (And there will be a lot of those patients!)

If you don’t like this proposal, you could choose to be unaffected by it. Only buy green-label drugs, and you have the same level of nanny-state oversight and “safety” that you have now. (We won’t mention Vioxx.) Maybe you’ll choose to go to a hospital that only provides green-label drugs. Maybe your health plan only reimburses for green-label.

If you’re willing to do a little more digging yourself, and finding trustworthy sources, and weighing the risks, it’s not hard to see you taking an orange-label medication sometimes.

A smaller fraction will take red-label. And only the terminally-ill (including, sadly, the terminally mentally ill) would ever take black-label… either as a suicide pill, or in a last-ditch effort to kill a cancer or equivalent condition before it kills him.

Through the entire process, individuals (who are over 18 and not wards of the state) are allowed to make their own decisions. Some will make bad decisions. Some will die from those bad decisions.

“Think of it as evolution in action.”

And are those deaths any worse than the 10,000 Americans who die of bad handwriting per year… where the fix is so simple as to be laughable? Be careful criticizing the mote in my eye when you have a whole damn tree lodged in yours…

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So it appears that a group of billionaires are going to announce the first asteroid mining company tomorrow. (You don’t need me to repeat the news here. Visit http://planetaryresources.com and follow their Twitter account @PlanetaryRsrcs.)

Buried deep in this site, you might stumble across a Letter to the Editor that the Washington Post printed on October 12, 1990 under the headline “Go Get an Asteroid”… 22 years ago. None of the ideas were original with me, but it’s one of the first discussions of asteroid mining in the mainstream media. (Seven years before “Mining the Sky” was published!)

Here’s the PDF .

Just for the heck of it, I’m going to reproduce the text here.

Go Get an Asteroid

I am concerned by the tone of Jessica Tuchman Mathews’s op-ed piece last week, “The Mars Extravaganza” {Oct. 5}. I am not going to debate whether sending Americans to the Moon and Mars is wise or affordable under current budget restraints. I am not going to deny that there are numerous challenges facing our environment (pollution, deforestation, extinctions, etc.), as Mrs. Mathews points out. But Mrs. Mathews falls into the environmentalist trap of asking, “Why should we spend all that money on space when there are so many problems here on Earth?”

The right question to ask is, “How can we best spend money to solve these problems here on Earth?” The surprising answer is: in space. Only through space-based observations can we understand what’s happening to this planet. More important, only through space-based industry can we halt and reverse the trends threatening our environment.

Are messy industrial processes threatening groundwater supplies? Move the industries to orbit and send down only the finished goods. Is open-pit mining erasing huge tracts of wilderness? Go get an asteroid, which contains far more nickel, iron and other metals than humanity has mined to date. Are burning fossil fuels polluting the atmosphere and contributing to CO2 buildup? Put solar power stations in orbit and beam down limitless quantities of safe, clean, unpolluting energy. Are Third World children dying from disease for lack of medicine? Build a pharmaceutical factory in the microgravity of orbit, where we can make life-saving drugs for a tiny fraction of the cost of Earth-based processes.

These activities, and hundreds more, do not require a trip to Mars, but they cannot be carried out by machines. Only the intelligence and flexibility of men and women in orbit can break the grip of Earth’s gravity and bring the bounty of space to all mankind.

America knows how to carry out these activities quickly, safely and economically. So do Japan, the Soviet Union and the Europeans. But we are hobbled by NASA, a bureaucracy beholden to its unreliable and obsolete Shuttle, its bloated Space Station Freedom and a host of other constituencies. If private industry were encouraged to begin the commercial and profitable use of space without the 1,001 regulations enforced by our government, then we could see astonishing gains in space technology — and in the benefits of space for the first, second and third worlds — by the end of the decade.

A vigorous and independent space program could be the best friend of the entire environmental movement. I encourage Mrs. Mathews to explore its potential benefits for the problems she deplores; she shouldn’t throw out this baby industry with NASA’s dirty bath water.

Stephen Fleming, Sterling, Virginia

With 22 years of hindsight, it’s kind of amusing that the Soviet Union has ceased to exist, and I was worried about the Japanese and not the Chinese. And the claims for the orbital pharmaceutical factory are still unproven. But I think the rest of it was right on target.

For of all sad words of tongue or pen,
the saddest are these: “It might have been!”
–John Greenleaf Whittier, 1856

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First, we found him exploring the electric car corner of the auto show: two Volts, one Tesla Roadster, an original Honda Insight, four Nissan Leafs (Leaves?), and a Prius that has been hacked into becoming a plug-in hybrid. He posed next to Cissa’s brand-new Volt, and answered a few questions that we had (details below).

Later, we went indoors, where Bly spoke about the Chevy Volt. Micky is an experienced and accomplished speaker. He spoke for over half an hour with no notes, and I suspect he would have done just as well without his PowerPoint slides also.

Takeaways

Some possibly-incoherent notes typed on my iPhone while Bly was talking:

Bly leads a team of 3000 engineers; 1800 in Michigan, and 1200 around the world. The Volt, and its follow-ons, are a major investment by General Motors, and he claims that electrification is “redefining the automobile.” This isn’t a skunkworks or hobby project. This is GM’s major bet on transitioning to building cars that are not 100% dependent on petroleum.

Gasoline-powered cars have made a lot of progress. According to Bly, in the last 30 years, tailpipe emissions have been reduced by 99%, mileage has increased by 130%, and safety has increased by 70%. The average car today has 30 onboard computers to optimize performance. But there are political, technical, and economical reasons to move away from internal combustion and mechanical systems to electric and electronic systems. World petroleum demand would require bringing six new Saudi Arabias online by 2030, which isn’t going to happen.

General Motors is a big believer in the Volt architecture. Bly made a big point of emphasizing that the Volt is not a “plug-in hybrid”… it is an “extended range electric vehicle” (EREV). (Please have any religious wars over terminology elsewhere, not in my Comments section.)

Low-light photo of one of Bly's PowerPoint slides. Sorry about the quality.

Batteries are lousy. And “gasoline is an amazing substance.” The very complex, very heavy, very expensive, very state-of-the-art battery underpinning the Volt stores the equivalent energy of one gallon of gasoline. General Motors evaluated 155 suppliers and tested 60 different battery formulations before settling on their partnership with LG Chem. In his words, “There are liars, damned liars, and battery suppliers.”

To bring the battery pack into production, GM built the largest battery testing facility in the world. He showed some great pictures (which I didn’t capture well with my phone) of batteries being tested on fire, underwater, and when being rammed into concrete barriers. The Volt batteries aren’t perfect, but he claims they’re the best ever placed into a production vehicle.

He tackled the NHTSA issue head on. “255,000 cars catch on fire in this country every year. One Volt, after being intentionally crashed and then left for three weeks without following published safety procedures, caught on fire. If you had been trapped in that car for three weeks, you’d have died of starvation or thirst a long time before you were threatened by fire!”

The 1.4 liter engine in the Volt eliminates range anxiety. He used the example of driving 1300 miles from Detroit to West Palm Beach. In a Corvette (he has seen not only the next Corvette, but the next next Corvette!), it would take two days, with an overnight stop in North Carolina. In a Chevrolet Volt, it would take the same two days… the first 40 miles on battery power, then the remaining 1260 miles on gasoline. In a Nissan Leaf (or, to be fair, a Chevy Spark) pure electric, it would take about 18 days! “With the Volt, there’s no need to change your life around your car.”

He finished by saying “We’ve had some really crappy TV commercials” but that the current owners of Volts were almost bizarrely happy with their cars. In his summary, he stated without hesitation that “In ten years, all of us will be driving some sort of electrified vehicle: hybrid, EREV, or pure electric. All of us.”

Questions & Answers

Bly then went on to handle a surprisingly lengthy, detailed, and wide-ranging Q&A session. He obviously already knew about the March sales figures (which turned out to be a record-setting 2289 Volts sold, double February sales and nearly four times January’s disappointing 609 units), but he couldn’t talk about it before the formal announcement two days later.

Why doesn’t GM have a small diesel engine?
To meet current emissions requirements, you need a chemical factory strapped to the back of a diesel engine. Emission control adds about $10,000 to the cost of a diesel vehicle, and it just doesn’t make economic sense for small cars.

Will the Volt architecture be extended to other vehicles?
Absolutely. The Cadillac ELR is nearing production. GM has already shown a minivan based on the Volt platform in Shanghai, and other models are in development. But you probably won’t see a full-size SUV built on the Volt EREV architecture anytime soon. Doubling the battery pack would cost too much.

How much will it cost to replace the Volt battery in 10 years?
We don’t know. (Major points for honesty!) But lithium cells are driving down the cost curve much faster than we thought possible. In 2008, Li-Ion energy densities were $1000/kilowatt-hour. Now, it’s $500/kWh. And the Department of Energy projects $200/kWh by the year 2020. So, in ten years, your current Volt’s battery will be replaced with something better and 80% cheaper.

What happens when you put a Volt into a landfill?
GM is already working with “second responders” (a new phrase for me) to prepare for scrapping volts. One of the leaders is the unfortunately-named Toxco. (Seriously. Would you name a company “Toxco”?)

What’s it like to travel with a Volt?
Hotels are already advertising to attract EV owners with conveniently-placed electrical outlets for charging. A few are installing 240V “Level II” chargers. In response to a follow-up question, GM has no interest in subsidizing those Level II chargers. Micky believes in a free market, and figures that market demand will convince the hotels to do this themselves. “GM makes cars.”

Won’t the gasoline in the tank get stale?
The Volt went back to a sealed steel gas tank to prevent vapor escape of volatile fractions. Even if your driving stays within electric capacity, the engine will start every six weeks just for maintenance purposes, to burn off some gasoline and to keep the parts lubricated.

Does the Volt qualify for single-occupancy use of HOV lanes?
Yes. Indeed, it just got qualified for HOV use in California… and the Prius just got kicked out!

Why isn’t the body built of carbon fiber?
Carbon fiber works well for race cars. For a production car, it’s still terribly expensive. And the nature of carbon-fiber layup leaves you with 30-40 percent scrap material that cannot be recycled. Waiting for a breakthrough, but for now, they’re minimizing weight with metal, not composites.

What about the Better Place model of swapping fully-charged batteries?
It won’t work. “Shah Agassi (CEO and founder) is a friend of mine” and the idea sounds good, but it’s impossible to scale. The cellphone industry sells 500 million batteries a year, and no one has figured out how to make those interchangeable yet. Cars will take longer. The logistics and economics of warehouse-sized battery-swap facilities add up to a business case that just doesn’t work. (Smugly, I note that I came to exactly this conclusion in my blog post in October 2010.)

What ever happened to the hydrogen fuel-cell “skateboard” design?
The HyWire concept has a lot of promise, and Micky’s team “looked at it for the Volt, but went a different direction.” It’s great for weight distribution, not so great in crash protection. He’s very skeptical about hydrogen in an automotive environment. “We will not be shipping a car that uses cryogenic fuel.” (Ahem. More smugness here and here.)

Is there enough lithium in the world to build all these batteries?
Lithium is being be mined in Bolivia, Brazil, Afghanistan, Russia, China, India, North Dakota, and Canada. There are known supplies equivalent to building 50 million Volts… and we hope to have that problem! Those taking lithium medication have no need to worry.

Will all these plug-in cars shut down the national electric grid?
The grid can currently handle 100 million plug-in vehicles. Again, GM hopes to have that problem!

Upcoming Goodies

In sidebar conversations before and after the presentation, I learned a few more bits and pieces to look forward to in future Volts.

My biggest disappointment with the car is the lack of a sunroof. Bly said “Not in the 2012 models.” The clear implication is that we’ll see it in 2013 models…

Also in 2013, Volts will have body-colored roofs as an option instead of the all-black roofs today.

The USB port will provide a very slow trickle charge to an iPad, but not enough for the iPad to admit it, so the display says “Not Charging.” Later this summer, there’s a fix coming so that new cars will double their output current. Existing Volts will be able to get the new circuit as an upgrade.

He understands the frustration with requiring the stereo to be turned on if you want the nav, climate, or energy status displays. A fix is coming. Cissa also demonstrated how, with long fingernails, it’s necessary to rest your hand along the top row of buttons to get the angle right, so she’s always pressing “Climate” or “Auto” by accident. He agreed that there needs to be some sort of shelf or lip there.

We talked about having the center screen be a full AirPlay client (so that iPhones or iPads can mirror their display over Wi-Fi). They’ve made it work in the lab, but have serious concerns about driver distraction and safety.

Trivia

Turns out that after pressing the remote “Unlock” button twice (to unlock first the driver’s door, then all doors), holding down the button lowers all the windows. Nice for cooling off the car on a hot day. It’s probably in the manual, but I didn’t know it.

No way that I would have known this, but the first 1000 Volts have slightly different screen displays, including showing the VIN number on screen.

Conclusion

Micky Bly is clearly a helluva, helluva, helluva engineer, and I’m glad that Georgia Tech can claim him! I appreciate all the time he spent on campus, and his endless patience and good humor in answering our questions.

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After my post on the JOBS Act last night, I got an email from a friend with a good question. As I composed an answer, I realized it might be of general interest, so I’m putting it here.

My Friend Asks:

I’ve been sort of following the JOBS act over the past few months, and just saw your post. I’m trying to figure out how this will impact [redacted], and how to best align ourselves to benefit from the new law. One of David S. Rose‘s comments concerned me. He stated that several investors are of the opinion that going the crowdfunding route might make it harder to raise more traditional angel/VC money down the road, but he didn’t explain why. You know what he’s talking about?

The reason I ask is that when things are ready to actually push on [redacted], we’re likely going to need to raise $2-5M worth of investor money. However, being able to raise $50-150k in the near-term might make it a lot easier for us to get to that point (and also increase the odds that we’ll survive the ups-and-downs of the bootstrapping process). David’s a smart guy with a heck of a lot of experience, so if he’s making warnings like that I’d like to try and understand why he’s concerned, not just brush it off.

My Answer:

Looking at history, Rose is right. Traditionally, venture capitalists don’t want to invest in a company whose capital structure is cluttered up with a bunch of small individual investors. Having to get shareholder approval from dozens of Common stock shareholders is time-consuming and complicated.

But.

The passage of the JOBS Act means that thousands of startups are asking the same question you’re asking. I believe that norms will have to change.

I’m not a lawyer, but I think there’s a middle ground that would make both sides happy. Once the JOBS Act provisions take effect, round up the $50K-150K from individuals (including those who would not have passed the SEC’s “qualified investor” test). Take all of their investments and collect them into a single LLC with a single manager (not a company employee or close relative!) that everyone can trust. Move forward with building your business.

When the time comes to raise a Series A, the capital structure remains clean: founders, employees, and one LLC holding Common stock. You only need the signature of that LLC manager to issue new shares of Series A. I don’t think that’s going to turn away any venture investor who you’d want to have in your deal.

[Standard disclaimer about how this doesn't constitute legal advice and you should pay a good securities lawyer to set this up correctly.]

Now, you’ll have to protect those Common shareholders against cramdown and unnecessary dilution, but that’s not a new problem. And, again, as the JOBS Act ripples through the startup funding ecosystem, I hope that those norms change as well. VCs won’t ever grant full anti-dilution to these early Common investors, but I hope that some sort of reloading occurs… maybe something similar to what employees get, although perhaps at a lower ratio. There’s no sense in killing the geese that lay the golden eggs.

At the end of the day, the best way to prepare [redacted] for venture investment is to build great products and delight your customers. If that involves taking small individual investments… take the money.

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I was asked to write “a few sentences” about the JOBS Act for another website. Since I found myself with over 500 words, I decided to post it here.

In today’s political climate, it’s hard to believe that a major bipartisan reform has passed both houses of Congress and — as I type this on Wednesday night — is scheduled to be signed by the President tomorrow. The JOBS (Jumpstart Our Business Startups) Act is one of the first victories of a new class of politically-active entrepreneurs, angel investors, and venture capitalists. And, although no bill is perfect, the JOBS Act should lead to expansion opportunities for many small businesses… and, yes, to more jobs.

U.S. securities regulations are written for big companies. For successful ones, like GE and Apple. And for failed ones, like Enron and Worldcom. But little companies have to play by the same rules. That makes it incredibly difficult for small companies to raise capital, to reward their employees with equity instead of salary, and to build their businesses in the early years. The Kauffman Foundation has shown that all net new job growth since 1980 has come from companies less than five years old. The JOBS Act is aimed at helping precisely these companies.

Part of the act loosens some of the complex disclosure requirements which can be difficult for a fast-growing company to maintain when it exceeds 500 employees. It makes it legal for an entrepreneur to stand on stage and say “I’m trying to raise money” without violating SEC rules. These are good changes. It’s not appropriate to regulate a tiny company the same way we regulate GE.

Most controversially, the JOBS Act enables “crowdfunding.” Today, unless you meet the SEC’s “millionaire threshold,” you are forbidden to invest in private companies — that is, those companies who do not have their shares listed on a stock exchange like Nasdaq. Tomorrow, that will change. You will be able to invest up to 5 or 10% of your annual income (depending on income), up to $100,000/year, into a small private company.

And that doesn’t necessarily have to be a Georgia Tech startup creating a hot Internet security technology. It can be in your cousin’s landscaping business, or in the struggling Cuban restaurant down the street. The laws prohibiting these investments date back to 1933. It’s time to adapt them to current reality.

Will some people lose their investments? Absolutely. Will there be fraud? As surely as the sun rises in the east. But markets always involve risk (and, sadly, markets have always attracted a small number of fraudsters). I have a lot more faith in free markets that I do in SEC regulators trying to apply thousands of pages of regulations to small businesses that can’t afford platoons of lawyers on retainer.

Silicon Valley investors have played a big part in lobbying for the JOBS Act… but I think it will eventually have more of an impact on those of us who are happy to live in the rest of America. A startup in Silicon Valley can, eventually, always find money. That’s not true for a startup in Atlanta… or Albuquerque, or Alaska. Loosening the constraints and letting more Americans get involved in investment decisions will be a good step towards making more growth capital — and more growth — available to everyone.

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But I also read “Car Guys vs. Bean Counters” by Bob Lutz, who knows more about the automobile business than anyone alive… and who proudly declares himself to be the father of the Chevy Volt. And I read his defenses of the Volt against right-wing smears here and here and here.

And I saw that the NHTSA ended its Volt safety investigation by stating that “no discernible defect trend exists.”

And I saw that the Volt (under its European badging as the Opel Ampera) just won European Car of the Year… the first American car ever to do so.

And, as an engineer, I like the idea of plug-in hybrids. As I’ve stated elsewhere on this blog, I don’t think pure electric vehicles make sense for most people. Not now. Maybe not ever. But plug-in hybrids eliminate “range anxiety” while letting you run 100% electric for short trips around town.

So I was rooting for this awkward underdog of a car, but wasn’t really involved. But, through an odd series of circumstances, we found ourselves with a Chevy Volt as a loaner car last week while Cissa’s car was being repaired.

It’s a great car.

Not “It’s a great car, considering it’s electric.”

Or “It’s a great car, if you’re an environmentalist.”

Or “It’s a great car, if you want something to put your Obama bumper sticker on.”

Just… “It’s a great car.”

First Impressions

First, it’s a real car. Not a golf cart, not a wannabe like the egg-shaped fiberglass GEMs that are best used for parking enforcement, not a barely-satisfactory vehicle like the General Motors EV1 of “Who Killed the Electric Car?” fame. (I rode in an EV1. Trust me, you didn’t want one.)

From the outside, the Volt looks a lot like the Chevrolet Cruze. There’s less of a family resemblance in the interior, but the American-designed Volt inherits the Cruze’s headroom and legroom. I’m 6’4″, and I’m completely comfortable sitting in it; I can even cross my legs in the passenger seat. By comparison, I cannot sit in a Prius, even a Prius V, for any length of time… my head pushes against the roof, and my knees are up against the dashboard.

The Volt dashboard is a bit overwhelming at first. There are two iPad-sized screens; one in front of the driver, and one in the middle stack. Even though the middle one is touch-sensitive, it perches atop 38 hardware buttons (maybe to avoid comparison with BMW’s much-reviled iDrive). It all takes a little getting used to. Knowing that normal humans are not going to read a 424-page owner’s manual (plus a 108-page navigation supplement), Chevy thoughtfully tucks a 16-page summary into the glove box. You should read that; you’ll learn some things.

(I read the big books. But I don’t claim to be a normal human.)

Driving the Volt

The Volt comes with wireless keys and pushbutton start, which I personally think is a solution in search of a problem, but all the cool kids are doing it, so….

But when you punch the big blue button, the dashboard breaks out into a kaleidoscope of images, the stereo makes a Star Trek “powering up” sound… and then SILENCE. The car is ready to drive, but the engine hasn’t started. And, unlike the Prius, where the engine starts by the time you’ve merged into traffic, the Volt’s engine won’t start for 30 or 40 miles.

Originally, the Volt was positioned as a series hybrid (as opposed to the Prius, which is a parallel hybrid). Series hybrids are a logically-simpler architecture, where the drive wheels are driven by an electric motor, and an internal combustion engine is used only as a generator to charge the batteries. (And the electric motor can “run backwards” to charge the batteries when braking or coasting.)

Series hybrids aren’t new… every diesel locomotive is designed this way. Ferdinand Porsche built series-hybrid automobiles over 100 years ago. But it’s hard to get all the pieces working right in a package smaller than a locomotive… so hard that even GM relented and settled for a mixed design where the gasoline engine helps drive the wheels at highway speeds. (But, from personal experience, I can testify that the Volt will happily cruise above 80 mph with the gasoline engine off. Um, I think I just used a public forum to confess to breaking the law. Oops.) But, even so, the architecture of a series hybrid is so much simpler that I have to believe they’ll dominate hybrid cars in the future. (Here are some other plug-in hybrids: a gaggle of Fisker Karmas. They cost more.)

Separately, the Volt is the first mass-produced plug-in hybrid. That means exactly what it sounds like: you can plug it into the wall socket to charge the batteries. A Prius gets all its power from burning gasoline in its own engine; it just does so more efficiently than many other vehicles of similar size and weight. The Chevy Volt can do that too, but it can also get power from your local utility… meaning you don’t spend money on gasoline.

In our first week of driving the Volt, we travelled 221 miles and burned half a gallon of gasoline.

Of course, we had to pay for electricity. But Georgia Power can generate electricity a lot cheaper than your Prius can. In fact, you can sign up for a time-of-day pricing plan where you pay 1.25¢ per kilowatt-hour. “Your mileage will vary” but the Volt gets about 5 miles per kWh, meaning you’re paying Georgia Power 0.25¢/mile. (Read that carefully. Not 25 cents per mile. A quarter of a cent per mile.) Looked at another way, ten cents of electricity at cheap overnight rates will run your Volt for 40 miles.

At today’s prices, ten cents of gasoline will run your comparably-sized 36-mpg Chevrolet Cruze about one mile.

40:1 ratios get my attention.

So why aren’t we all driving electric cars? Because we still don’t have decent batteries, even after billions (and billions and billions) of dollars of R&D. The very best pure-electric cars have only 100-mile range, even under optimum conditions. And when your battery is dead, your car is dead. And it’s dead for a long time. You can’t just hitch a ride to the corner gas station and trot back with a five-gallon jug. You’re in for a close encounter with a tow truck, then a long charging period at the nearest charging station, wherever that may be. Which is why pure-electrics like the Nissan Leaf, the Tesla Roadster, and others are just oddities. Range anxiety.

Plug-in hybrids eliminate range anxiety. If we want to drive to Savannah, we’ll drive to Savannah, and buy some gasoline along the way. When we get home, we’ll plug it back into the wall, and go back to electric-only commutes around town. Right now, we’re using the regular 110v charger that comes with the vehicle. That takes 10 hours to charge the battery, so it’s basically an overnight operation, which works fine for us. For additional geek points, I’m thinking of installing the optional 240v charger. That runs off the same sized circuit as your electric clothes dryer, and that charges the vehicle in 4 hours. I can’t actually think of many circumstances in which that would make a meaningful difference in my life, but…. “MORE POWER!”

And, yes, I’m perfectly aware that, in Georgia Power’s service territory, I’m driving a coal-powered car. Two-thirds of the electrons pumping through that cable came from burning the fuel of Satan. But 21% of that power came from nice clean nuclear plants, and that percentage will rise when the Plant Vogtle expansion comes online. In sane countries like France (and I can’t believe I just typed that phrase), 80% of electric generation comes from nuclear power, which means things like cleaner air and prettier countrysides. In the meantime, don’t fool yourself into believing that any electric vehicle will do a lot about CO2 emissions. (Electric cars will reduce particulate emissions, since Georgia Power can afford expensive stack scrubbers that won’t fit on your car.)

Back to the Volt: in one of those unsung-but-painful behind-the-scenes advances, most major electric vehicle manufacturers (including BMW, Chrysler, Ford, GM, Honda, Mitsubishi, Nissan, Renault, Tesla, and Toyota) have signed onto the SAE J1772-2009 standard, meaning you can have a single cable that fits into every one of those cars. Imagine if public charging stations had to have GM plugs and Toyota plugs and Tesla plugs, and… ouch. The Volt even puts a nice LED flashlight into their plug so you can easily connect the cable in the dark. One of those nice touches which convinced me that a bunch of smart engineers in Detroit finally got the chance to build a car the right way, not just the cheap way.

Other Impressions

What all the specs don’t convey is the spooky silence of driving the Volt. Since the engine doesn’t kick in until you’ve driven forty miles (which, for Midtown denizens like us, can mean days and days of electric-only operation), you get used to wafting down the road in complete silence. There’s even a funky “Pedestrian Friendly Alert” on the turn signal, just to let people know you’re there. (I’ve always thought cars should have two horns: one to say “Hi, here I am!” and another to say “YOU IDIOT!” The Volt, finally, does.)

Unfortunately, you can’t enjoy this silence with the windows down. Anywhere above neighborhood speeds, lowering a window creates a weird fluttering pressure variation that makes you feel like a helicopter is hovering overhead. I guess that, after all those wind tunnel studies, it was a tradeoff that GM decided was worth making. Disappoints me, but I’m a fresh-air fiend in my car.

And you certainly can’t enjoy the silence with the sunroof open… because there is no sunroof. This is my biggest complaint about the car, actually. I guess the mileage zealots decided that having a sunroof open would play hell with fuel efficiency… but couldn’t they have put in an immobile glass panel? (With a sunshade, of course.) Wouldn’t have weighed more, wouldn’t have affected aerodynamic drag at all, and would have made the interior seem much airier. Two model years after introduction, Chevy shows no interest in a sunroof. Maybe they’re still planning to pave the roof with solar cells, but I haven’t seen that, either. Sigh.

The center stack system demonstrates a lot of development effort. The touchscreen navigation and climate control are far superior to the Toyota interface (we cross-shopped multiple Toyota and Lexus models). It comes with a trial subscription to a traffic information service that worked well in Atlanta; no guarantees about rural Saskatchewan.

Ditto for the well-thought-out iPod/iPhone interface… which lets you play your tunes, charge your phone, and access other apps, all at the same time. (By comparison, the Toyota iPod interface just freezes the iPhone screen… and scrolling through your playlists requires dozens of pokes at the dashboard touchscreen instead of the Volt’s fluid scrolling with a physical dial.) You can record 30 gigabytes of CD music to the built-in hard disk, which is nice. It even lets you pause live radio (just like TiVo) with a 20-minute buffer. That’s cool.

Bluetooth integration with your iPhone is flawless.

The only weirdness is that GM’s engineers apparently decided that, if you ever want to have any center-screen function on, you also want to have the stereo on. So if you just want to silently watch power flow from your battery to your wheels and back again through regenerative braking, you have to twist the volume knob to zero. That’s silly. (Maybe I should put an MP3 of John Cage on repeat.)

And, bizarrely, the thing plays DVDs. Only while you’re parked. Apparently, this is a big feature in Japan and Europe (where you can play them while driving). Here in the U.S., I can’t imagine a circumstance where I’d say “Hey! We’re home! Let’s pop in a DVD and watch a movie here in the garage rather than walking fourteen steps to our big-screen TV!” Ah, well, it doesn’t hurt anything.

The backseat is… habitable. It’s definitely a four-seater car, because the ginormous battery tunnel runs down the center of the car. No way to put a fifth person in back, even in a child seat. Great cupholders, though.

The hatchback is big enough for a trip to Costco, not big enough to move all your worldly possessions. (Unless you’re Andrew Hyde, but he’s nuts.)

Other nits: No rear-window wiper. Definitely noticeable during pollen season. I assume it was nixed for aerodynamic reasons. There’s a very low air dam in the front bumper which scrapes our driveway. Aerodynamics again. No spare tire (although there’s a sealer/inflation pump). Weight savings. All engineering tradeoffs that I’m sure were vociferously debated in the GM Design Center. I might have made different decisions, but I’m sure these weren’t made casually. The car is too well thought out.

Finally, the Volt lease comes with free OnStar… and a nifty iPhone app that lets you remotely monitor the battery, gas tank, tire pressure, and even lock/unlock the doors and honk the horn. Major geek points. Why can’t all cars do this?

Financial Terms

In general, I don’t like leasing unless you can write it off on your taxes. I don’t even like making car payments. I buy cars for cash. But, with the Volt, things are just too fuzzy. First, the car costs too damned much. Maybe I’m just old-fashioned, but $45,000 for a four-door sedan that doesn’t have a Maserati or Bentley badge just bugs me.

From a PR standpoint, the misreporting of the NHTSA tests has been a nightmare. And, politically, the GOP attacks aren’t helping. GM just stopped the production lines for five weeks due to weak demand. (Way to kill off American jobs, guys! Proud of yourselves?) If the worst happens and GM pulls the plug on the Volt, what’s a used one worth in five years? Zero?

Technically, no one knows what years of heavy use will do to these lithium-ion batteries. We know they’ll lose capacity; the only question is “How much?” And there is happy handwaving about repurposing used Volt batteries for electric-grid power balancing, but that may or may not happen. So what’s the residual value of a car that’s half battery when the battery is half-depleted? I don’t know.

So there are just too many uncertainties for me to write a check for this car. Luckily, GM is way ahead of me, and is offering a heavily-subsidized leasing option. It’s widely advertised as “$2500 down, $350/month.” Of course, that’s for a stripper model without the fancy nav system and backup camera and all the other toys that you really want. And it doesn’t include taxes and all the silly fees that the U.S. dealer network insists on charging. But it’s still a great deal, and I wish more people knew about it.

Taking the Plunge

After a week, our loaner car needed to go back home… and we realized that we would miss it. Cissa’s 2003 Pontiac was getting a bit tired after years of noble service, and it was time for a new car. We spent a few evenings shopping the competition, and finally decided that a Volt needed to live in our garage. Our loaner had over 4000 miles on it, and black leather seats. (Chevy really pushes the black leather. Apparently, none of their engineers have visited Georgia in the summer.) But we found a white car with beige leather seats and all the toys at Superior Chevrolet in Decatur… where the Internet sales manager happens to be a friend of mine from high school! To his credit, he’d noticed some of my Twitter posts about the Volt and emailed me pictures of the one on his lot… which led directly to the sale. (Daniel Hudson, (770) 595-5624. Tell him I said hi!)

(Yes, the huge stickers on the side are removable.)

We got a good deal, and we get a warm fuzzy feeling from supporting not only all the assembly line workers, but all the engineers and marketers and corporate managers who have put their butts on the line for this car. I think it’s a major step forward, and I’m proud that Cissa is going to be driving one. I hope you can look past the jokes and consider buying leasing one for your family as well.

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Derek Edwards found my ancient post Packets beat Circuits and wrote this response. I replied in his comment stream, but decided to duplicate my comment here on my own blog.

Well, since I wrote the original post that apparently triggered this (via @aarjav), let me take some time to answer your question.

“What the heck do I want?” Pretty much what I’ve got, and it sounds pretty much like what you want. I live in Midtown Atlanta (about six blocks from where your photograph of Piedmont Park was taken). I bike to work. My wife and I walk to the movies or to the Fox Theatre or to a dozen different restaurants. I take MARTA rail to the airport. I have a detached home on a teensy 1/6th acre without a blade of grass, and I love it. My pharmacist calls me by name when I walk into the store (can’t say the same about any bartenders, because I don’t go to bars much). I know waitresses by name at four different places within a mile from here, and I can get a meal from any of them by saying “the usual.” When I drive, I drive a MINI Cooper, which only racks up about 3000 miles a year; I only buy a tank of gas every six weeks or so. I’ve done the suburban-mansion thing, and decided it wasn’t for me.

So… that’s what the heck I want. And I have it. Big green checkmark in the book of life.

But — and this is where I part company with every urban planner I’ve ever met — I don’t believe that what I want is right, or even that it’s better than other choices, or that anybody else should be encouraged/coerced/required to live this way. I like my urban environment, but others will make different choices. And I passionately defend their freedom to do so, even though I might find their choices incomprehensible.

(One of my staff drives 120 miles round trip to the office every day. That’s 2.5 hours if traffic cooperates. I think he’s nuts, but he values a rural environment for his kids and grandkids. Freedom. His choice.)

The other driving force (if you’ll pardon the pun) behind my support of traffic-reduction measures is a hatred of waste. Not in a crunchy-granola hug-the-fuzzy-bunnies sense, but as an engineer. Time spent in traffic is wasted time. Fuel burned in traffic is wasted fuel. And the waste products (human stress, NOx particulates) are bad for the driver as well as for me on my bike. Engineers hate waste (at least, the good ones do).

So the solutions I suggest here aren’t taken from a vision of Le Corbusier’s Radiant City. They’re meant to minimize waste for those individuals who choose to live in the suburbs in car-centered lifestyles. And taking away their freedom to make that choice is a slippery slope that ends in Stalinist apartment blocks fed by fleets of Maoist bicycles. No, thanks.

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The impetus for the bill came from a coalition of Georgia angels and venture capital investors, who examined similar programs in other states (notably InvestSC and TNinvestco). You can read the complete text of the Georgia bill as drafted here. I’ve plowed through the seventeen pages of legalese to you don’t have to. Here’s what you need to know.

Invest Georgia Program

HB 718 creates the Invest Georgia program to invest in seed, early, and growth stage companies in order to create Georgia jobs, create wealth within Georgia, commercialize R&D at Georgia’s universities, and promote the economic development of Georgia. (The name in the bill is the Georgia Capital Acceleration program, but that will change.)

A new Invest Georgia Authority (IGA) will consist of five members: three appointed by the Governor, one by the Lieutenant Governor, and one by the Speaker of the House of Representatives. Each member must have experience as a venture investor, fund-of-funds manager, or as an entrepreneur. Members serve without compensation and cannot be affiliated in any way with a fund receiving investments.

The Money

The state of Georgia will sell up to $200 million insurance premium tax credits, with the proceeds going to the new Invest Georgia Fund (IGF). This is a mechanism that has been proven in other states; credits against future premium taxes usually sell for about 85¢ on the dollar, which would nominally deliver $170 million in cash to the IGF (in equal thirds over three years, starting in June 2013). The proceeds will be invested in Georgia-based funds who are investing in Georgia-based businesses.

Administration

Through a transparent open-bid process, IGA will appoint a third-party “program administrator” that will evaluate and select Georgia-based venture capital funds. There are many respected third-parties who specialize in such assistance for other states and other institutional investors. Some of the more well known are Hamilton Lane, LP Advisors, Cambridge Associates, and many others.

Once appointed, the program administrator will conduct a separate transparent open-bid process for funds seeking investment of IGF monies, starting in September 2012. Applicant funds must have a history of investing in Georgia and/or commit to a permanent presence or affiliation in Georgia.

The Recipient Funds

The program administrator will recommend investments in funds that meet the state’s criteria and which cover a broad range of sectors that traditionally are good targets for venture capital and are important to Georgia’s economy, including technology, health care, life sciences, agribusiness, logistics, energy, and advanced manufacturing. (Retail, real estate, venue-based entertainment, financial services, mining, and professional services are specifically excluded.) Final fund selections — but not individual company investments — are approved by the IGA board.

IGF investments into the funds will be made over three years, coinciding with the sale of the tax credits. The allocation will be balanced between:

• 30% into early-stage venture capital funds, including first-time funds. IGF can account for up to 90% of the capital in such a fund, with the remainder coming from the principals and other investors. “Seed” or “early-stage” companies must have fewer than 20 employees and revenues of less than $1 million. Early-stage allocations will be between $10 million and $15 million per fund.
• 70% into growth-stage venture capital funds, where IGF can account for up of 50% of the capital in such a fund. “Growth-stage” companies must have fewer than 100 employees, but revenues of greater than $1 million. Growth-stage allocations will be at least $10 million per fund, with the cap to be determined by the IGA.

Any company receiving investment from IGF monies must be located in Georgia; if it leaves Georgia within three years, the investment must be returned.

Recipient funds will collect an industry-standard management fee and other fees (primarily legal and accounting, but specifically not to include lobbying or governmental relations).

Financial Soundness and Transparency

Investments in companies that are successfully acquired (M&A) or go public (IPO) will return capital to the IGF until it recovers 100% of its committed capital. Afterwards, the IGF and any fund returning capital will split returns: 80% to the state, 20% to the fund. This is a standard venture capital limited partnership arrangement.

Every year, each recipient fund will file a report with the Governor and legislative leaders detailing company names, amounts, and performance of qualified investments; number of Georgia employees and their average wages; and other information required by IGA to determine the fund’s contribution to the economic development of Georgia. This report will be published on a publicly-available website (after removing any proprietary or company-confidential information).

Note that this is not a CAPCO (Certified Capital Company) program such as those adopted (and regretted) by many states. You can read more about CAPCOs in the AJC here, and here, and here, and here.

My standard disclaimer applies. Also note that I am not a lawyer and I don’t play one on television. Any errors in representation above are my fault, and you should read the entire bill before making any decisions as to whether you support it. And, of course, bills in the Georgia Legislature sometimes change substantially between first reading and final passage, even if the bill number stays the same!

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Received in email, and too good not to post here in its entirety…

Checking out at the store, the young cashier suggested to the older woman, that she should bring her own grocery bags because plastic bags weren’t good for the environment.

The woman apologized and explained, “We didn’t have this green thing back in my earlier days.”

The clerk responded, “That’s our problem today. Your generation did not care enough to save our environment for future generations.”

She was right — our generation didn’t have the green thing in its day.

Back then, we returned milk bottles, soda bottles, and beer bottles to the store. The store sent them back to the plant to be washed and sterilized and refilled, so it could use the same bottles over and over. So they really were recycled. But we didn’t have the green thing back in our day.

We walked up stairs, because we didn’t have an escalator in every store and office building. We walked to the grocery store and didn’t climb into a 300-horsepower machine every time we had to go two blocks. But she was right. We didn’t have the green thing in our day.

Back then, we washed the baby’s diapers because we didn’t have the throw-away kind. We dried clothes on a line, not in an energy gobbling machine burning up 220 volts — wind and solar power really did dry our clothes back in our early days. Kids got hand-me-down clothes from their brothers or sisters, not always brand-new clothing. But that young lady is right; we didn’t have the green thing back in our day.

Back then, we had one TV, or radio, in the house — not a TV in every room. And the TV had a small screen the size of a handkerchief (remember them?), not a screen the size of the state of Montana . In the kitchen, we blended and stirred by hand because we didn’t have electric machines to do everything for us. When we packaged a fragile item to send in the mail, we used wadded up old newspapers to cushion it, not Styrofoam or plastic bubble wrap. Back then, we didn’t fire up an engine and burn gasoline just to cut the lawn. We used a push mower that ran on human power. We exercised by working so we didn’t need to go to a health club to run on treadmills that operate on electricity. But she’s right; we didn’t have the green thing back then.

We drank from a fountain when we were thirsty instead of using a cup or a plastic bottle every time we had a drink of water. We refilled writing pens with ink instead of buying a new pen, and we replaced the razor blades in a razor instead of throwing away the whole razor just because the blade got dull. But we didn’t have the green thing back then.

Back then, people took the streetcar or a bus and kids rode their bikes to school or walked instead of turning their moms into a 24-hour taxi service. We had one electrical outlet in a room, not an entire bank of sockets to power a dozen appliances. And we didn’t need a computerized gadget to receive a signal beamed from satellites 12,000 miles out in space in order to find the nearest pizza joint.

But isn’t it sad the current generation laments how wasteful we old folks were just because we didn’t have the green thing back then?

Please forward this on to another selfish old person who needs a lesson in conservation from a smart-ass young person.

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