Green Car Mirage
Ronald Bailey | January 8, 2009, 10:30am
Pete Geddes, executive director of the Foundation for Research on Economics and the Environment (FREE), has a sharp column explaining "The Inconvenient Truth About Cars."
U.S. energy policy is best described as “keep it cheap.” It’s ironic that our political class is berating the Big Three for building the vehicles Americans bought in response. Congress is now poised to mandate that Detroit manufacture electric and hybrid vehicles. This approach is bound to fail, for these are cars consumers (a) don’t want and (b) even if they did, can’t afford. The recent plunge in the price of gas at the pump has not helped. November sales of hybrid cars fell 50 percent. U.S. hybrid sales are now back where they were in 2005. (Ford’s best selling product in November was the F-150 pickup.) Only when electric and hybrid vehicles really do provide more value to consumers than the alternatives will they succeed.
There is a straightforward way to transition the U.S. auto fleet to a greener future. Place a gradual tax on gasoline such that in five years it reaches a floor of $5 per gallon. Nothing else will work, certainly not the Rube Goldberg approach Congress has taken since the 1970s, best exemplified by the Corporate Average Fleet Economy (CAFÉ) standards.
In a masterstroke of special-interest politics, the UAW used CAFÉ’s “two fleet” rule to forbid Detroit from importing smaller cars from its foreign operations. Forced to build small cars in domestic plants, with above market labor costs, Detroit could not make a profit. (In 2007, Toyota made 9.37 million vehicles and GM about the same. Toyota made a profit of about $1,874 per car, while GM lost $4,055.) Even Japanese and European carmakers rely on sedans with moderate fuel economy for profits. Small, super-efficient cars remain a niche product. Here’s an inconvenient truth: forcing Detroit to build fuel-efficient cars in UAW factories is inconsistent with viable, sustainable manufacturing.
Critics often portray the Detroit automakers as “greedy, short-sighted profit seekers.” To claim Detroit is refusing to sell cars consumers “really” want, compared with the cars they actually purchase, is a stretch. Is there a simpler explanation? Perhaps alternative cars are simply not ready for prime time?
The Financial Times reports on a French government study that analyzed the options for building cleaner, more fuel-efficient cars by 2030. After reviewing a leaked copy, the FT notes: “It [the report] concludes...there is not much future in...all electric-powered cars. Instead, ...the traditional combustion engine powered by petrol, diesel, ethanol or new biofuels...offers the most realistic prospect of developing cleaner vehicles. ... {T}he overall cost of an all-electric car is unviable at around double that of a conventional vehicle. Battery technology...still...severely limits performance both in terms of range and speed.”
The Wall Street Journal’s Holman Jenkins’ coverage of this issue nails it: “Ford and GM in Europe successfully sell cars that are small, but not cheap. Europeans are willing to pay top dollar for a refined small car that gets excellent mileage, because they face gasoline prices as high as $9. … In the U.S., except during bouts of high gas prices or in the grip of a Prius fad, the small cars that American consumers buy aren’t bought for high mileage, but for low sticker prices. And the Big Three, with their high labor costs, cannot deliver as much value in a cheap car…. {Legislators] won't repeal CAFE because they fear the greens. They won't repeal CAFÉ’s “two fleet” rule...because they fear the UAW. They won’t hike gas prices because they fear voters.”
It should be noted that most auto industry observers believe that Toyota has never made a profit on its Prius hybrid. President-elect Obama has promised to put 1 million plug-in hybrids on American roads by 2015. How? By bribing consumers with a $7,000 tax credit for each car. Since there are about 250 million passenger vehicles in the U.S., that would mean that such hybrids would total less than one half of a percent of the cars on American roads.
Whole Geddes column here.
Disclosure: I have had the happy experience of having FREE pay my travel expenses several times to participate in the organization's superb conferences.
Ebeneezer Scrooge | January 8, 2009, 12:41pm | #
cunnivore,
Batteries in hybrids are a tad on the heavy side, and heavier still for a full electric. You probably aren't going to be hopping out of your car and changing them out. Second battery would have to be built in.
There's a weight to energy density ratio issue here, which combustion engines seem to keep winning.
And then there's another little detail that few people seem to talk about -- the overall efficiency of the proposition of using all-electric rechargable battery driven cars.
To begin with, I assume you've heard about the problems southern California seems to have with providing enough electricity for people right now? Well wait until the demand peak gets spiked because everybody's got their cars plugged in so they can get home from work.
Then there's the fact that if you're charging a battery by plugging it in, then the source of that energy is a fossil fired plant somewhere. Granted, large base generation electric plants are more efficient than car engines, but then you have the losses of doing the whole energy conversion process twice (once to charge the batter, again to get the power back out of it).
I haven't studied this whole process in detail, but I'd say there's a good chance the net emissions will be a wash.
So you could say "well we need nukes", or something else. And maybe we do, but building base electric generating capacity is a hugely expensive proposition.
So we have the added cost of electric cars in the first place, and we're going to compound it by adding the costs of a) bigger power distribution systems so everybody can recharge, and b) the need for more electric generating capacity.
Somehow I think our combustion engines remain the way-cheaper solution when this story is all said and done.
Pro Libertate | January 8, 2009, 12:41pm | #
Can you name the truck with four wheel drive,
smells like a steak and seats thirty-five.
Canyonero! Canyonero!
Well, it goes real slow with the hammer down,
It's the country-fried truck endorsed by a clown!
Canyonero! (Yah!) Canyonero!
[Krusty:] Hey Hey
The Federal Highway comission has ruled the
Canyonero unsafe for highway or city driving.
Canyonero!
12 yards long, 2 lanes wide,
65 tons of American Pride!
Canyonero! Canyonero!
Top of the line in utility sports,
Unexplained fires are a matter for the courts!
Canyonero! Canyonero! (Yah!)
She blinds everybody with her super high beams,
She's a squirrel crushing, deer smacking, driving machine!
Canyonero!-oh woah, Canyonero! (Yah!)
Drive Canyonero!
Woah Canyonero!
Woah!
Kolohe | January 8, 2009, 3:01pm | #
I don't find the 'swappable' battery idea entirely unworkable. (the 'carry of spare', is yes unfeasible)
The engineering challenges described by kinnath @ 12:29 can all be worked around. What it would require, of course, is a complete redesign of the car. More importantly, it would require a subtle change in how you use the car and the business model for how 'refueling' works.
Postulate: the typical metro area driver puts on no more than about 50 miles a day. (20 mile commute, 10 mile for other purposes). So, it is quite feasible for your 'everyday' car to go about 24hrs between recharging.
So, first of all, the business model is that you own the car, but lease the batteries. More precisely, you have a battery service. So sometime during the day, when parked in your usual spot - or, when you know your going to be at a place for an hour or so, you activate the GPS locator on your car to tell the battery company where you are - they will come and replace your batteries while you wait. For a less 'premium' service, your downtown parking garage (and/or larger malls) include this battery swap out service.
The advantages are two fold - 1) swapping out batteries, while obviously not a fast as gasoline refueling, can be with proper design, immensely faster than recharging and 2) the biggest current problem with hybrids is that very few are accounting for end of life disposal costs. By concentrating the problem of battery disposal onto companies whose entire purpose is to manage batteries, you get economies of scale and an easier way of managing the disposal externality.
I agree that there will need to be some improvements in the electrical distro system that are already strained in some places. But this will need to be done eventually, anyway. Last, naturally, none of this will be feasible without some improvements in battery technology and a (very, very, very) substantial rise in the retail price of gasoline. (I am favor of raising the gas tax, but not by this much)
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