Automakers eye next huge market: Iraq

While many have been extolling the huge market potential forautos in China, a few automakers have set their sights in what is quicklybecoming the fastest growing market for autos in the world – Iraq. This is certainly good news for all of the OEM manufacturers for AC compressors and air conditioning parts. They havethe fifth-largest oil reserves in the world, and a population bigger than SaudiArabia’s. Western vehicles were banned while Saddam Hussein was in power, butwith that issue taken care of, VW GM and Ford have flooded in to providevehicles for an expanding market.

 Rising incomes and declining violence are the main factorsaffecting this huge change in lifestyle for Iraqis. Although things are betterthan they were six years go, 1500 people were killed last year because ofbombs, sniper ambushes, and other related violence. That is shocking, butcompared to the 34,500 death toll in 2006, the improvement is felt in thequality of daily life for Iraqi citizens.

Iraq’s economy is set to grow by over 10% this year as oilrevenues and foreign investment boost the economy. Minimum wage has risen from$2.60 a month during Saddam Hussein to $400 a month now. Rising incomescombined with a population of more than 30 million people create a veryattractive potential market for automakers.

Underpass in Baghdad

 There are still many hurdles to overcome before Iraq’smarket potential can be realized however. Poverty and violence still persist.Iraq’s economy will probably grow to the equivalent of $3528 per person thisyear; compare this with Saudia Arabia’s $20214 per year and you understand howfar Iraq still has to go. Unemployment is an alarming 40%, four timeshigher than the official report of 11% according to the World Bank.

Even so, things are definitely looking up and automakers aretrying to get in on the ground floor. As Iraq’s economy continues to rise VW,GM, and Ford will be poised to take advantage of a growing middle class inIraq.

Source: Bloomberg

You Can Brick Your 109k Tesla Roadster

It's always a bummer when your Air Conditioning Parts or AC Compressor quits out on you - you're stuck in the heat for a few days while you order another one and have it installed. It is a decently easy fix though, and (depending on where you shop) a not-so-costly repair. Other repairs are more expensive - as a few Tesla Roadster owners found out when their lithium-ion car batteries died and discovered a replacement runs $40,000.

 Yes, you read that right. After placing a $5000 deposit and then coughing up an additional $104,000 a few hundred people have driven home in a fully electric Tesla Roadster. The batteries that are used to power the Roadster are not unlike the ones used to power your cell phone - rechargeable, and apparently, once flat dead they cannot be revived.

Some technology enthusiasts will recognize the term "bricking" - it means when a piece of technology is rendered completely unusable, making it about as useful as a giant brick. Five Tesla Roadster owners so far have discovered that not only can they brick their Roaster, but the only solution is to purchase an entirely new and un-discounted battery from Tesla for 40k.

Surely, with such dire consequences it must be really difficult to brick a Tesla, right? Unfortunately, the parasitic load from the cars subsystems will render any unplugged Tesla a brick in time. With a full charge, that might take up to six weeks or so, but if the battery was already run down it could take as little as one week. Even plugged in, if the voltage going to the car isn't sufficient it can brick anyway as one unfortunate Tesla owner found out.

Insurance won't cover it, either. Tesla is no better - they specifically state in their terms upon buying the car that they are not responsible for "neglect" of the battery. You would think Tesla would recognize the danger here and go to great lengths to warn customers about this issue, but it is markedly absent from any of the paperwork and manuals given to new Tesla owners.

Given this information, buying a Tesla leaves you open for a huge un-insurable liability. There are those who want to go green while maintaining serious style, but with $40,000 in the balance, is it worth it?