Posts Tagged ‘Automakers’

Premium fuel only

10 percent more for 5 percent better efficiency

So, the Chevy Volt will require premium gasoline, but don’t worry, premium gasoline makes the Volt 5 percent more fuel efficient when in range extended mode. Unfortunately, however, premium gasoline costs about 10 percent more.

Then again, if you can afford a Chevy Volt, do you care about the cost of premium gas? Of course, if you can afford a Volt, do you need a 00 tax credit?

“The Volt is a game-changing product,” says an Obama vehicles executive. The iPhone was a game-changing product, and it didn’t take a tax credit. And they sold over 90 million of the things. A game-changing product does not need a tax credit. They’re mutually exclusive.”

Rush Limbaugh made that point, recently, according to Straightline, which then used Limbaugh’s rant to ask whether vehicles like the Volt are deserving of tax credits.

I say yes, but not in the way the plug-in tax code is currently written. Like the Volt, the current plug-in tax credit doesn’t make cost-effective sense. Too much focus is on battery size rather than the potential of real world change. Unfortunately, if a plug-in is going to achieve success, it’s probably going to have to be a small battery plug-in hybrid according to the experts, and even then success will be difficult.

Consequently, while I’m not a big Limbaugh fan or hater (to be honest I’ve never listened to a show), he makes a valid point. Ultimately, competition and free markets are not purely evil tools of the devil’s capitalism, and when tax credits are focused on political favoritism rather than real world realities, inefficiency is inevitable.

Today, automakers have many tools to increase automotive efficiency, they just don’t have any incentive. Consumers don’t care that much, unless gas prices are sustainably significantly higher, and regulations don’t demand pushing the limits of efficiency. Thus,  if tax credits are the best solution, then they must inspire cost-effective, efficient competition. Otherwise, it’s all just tax-funded greenwashing and a prayer for a miracle.

On the other hand, to be sure, America can expect Japan, Korea and China, for instance, to compete against our products, and in the end it will all boil down to one thing: the most bang for the buck.

For now plug-in tax credits have little to do with the most bang for the buck or real competition, and that might be OK, at the R&D level. The possibility of speeding up a battery breakthrough is a worthwhile endeavor, but it can’t be the primary goal, especially when the science isn’t very supportive. Furthermore, the move to battery-powered vehicles is ultimately about efficiency, and we should be striving towards that efficiency as efficiently as possible if we want the most bang for our tax-funded policies.

Hybridcarblog

Back in style again?

SUVs make a come back

Compared to last year US auto sales are up 17 percent and the biggest surprise in that turnaround is the increase in large SUV sales according to recent reports.

Large SUV sales have increased 19 percent. Compacts have picked up share, but sales are only up 14 percent. As of June, hybrid cars, on the other hand, have witnessed a 17.5 percent decline in sales.

Large SUV sales are good for automakers because it’s basically like “printing cash,” says Jim Hall at 2953 Analytics.

Nonetheless, since the gas spike of 2008 cars are still outselling trucks, so automakers – or consumers – appear to be learning how to redefine success in America using more efficient vehicle designs, at least somewhat more efficient designs. Of course, declining interest in hybrid cars during this same period of time demonstrates just how hard significant reductions in oil consumption will be to achieve.

Hybridcarblog

Can this really change the auto industry?

Game changer? Not any time soon

The latest energy bill provides nice tax credits for natural gas vehicles. Honda executive claims, “This could be a game-changer.”

“The Volt is a game-changing product,” recently claimed a Volt executive.

Maybe. Nonetheless, shouldn’t we wait until the game actually changes before claiming a product a “game changer”?

As the Progressive Insurance Automotive X-Prize comes to an end, for instance, one thing appears obvious, just “how difficult it will be to make truly revolutionary improvements to the automobile.” Despite numerous hybrid and plug-in attempts, only one technology has emerged as the most “revolutionary” potential game changer: weight reduction.

Ultimately, the game isn’t really changing, and the only reason there is any change at all has nothing to do with “game-changing” products. Instead, new CAFE regulations are forcing automakers to make a few changes. Of course, not enough changes to have any real impact on oil dependence, or even foreign oil dependence.

Even if every other American commuter drove a Chevy Volt 40 miles or less per day, so that only electricity was used, America would still be heavily dependent upon foreign oil. That’s how little and how slowly the game is actually changing.

One day plug-in vehicles, natural gas and/or many other technologies could become real game changers. Unfortunately, none of today’s “game changers” are set to cause a revolution in the US auto industry any time soon. Likewise, any number of technological breakthroughs across many different technologies could easily make today’s “game changers” irrelevant.

“Game changer?” Sadly, the auto industry still has a long way to go before they can rightly claim such a description.

Hybridcarblog

Filed under: Sedan, Hatchback, Chevrolet, GM, Nissan, Electric

Proving once again the old adage that there’s more than one way to skin a cat battery, Chevrolet and Nissan have each designed new eco-friendly vehicles that are set to go head-to-head for sales supremacy starting at the end of this year. Though both automakers arrive at the same basic anti-gasoline (at least to a large extent) result, the Volt and the Leaf differ in more ways than they are alike.

We’ll start with the drivetrain. While the Volt and Leaf are both technically electric cars, Chevrolet’s solution to the range problem includes the addition of a small gasoline-fueled engine capable of recharging the Volt’s onboard battery pack. There’s enough battery capacity to travel at least 40 miles before the generator kicks in, but there’s no limit to the range after the engine takes over.

Nissan’s Leaf, on the other hand, has a somewhat larger battery that the automaker claims will allow for 100 miles of range per charge. After that, there is simply no more forward progress to be had until the Leaf is plugged into an outlet for a few hours – at least. But if going 100-percent gasoline free is your goal, this is your ride.

And then we have the body styles and shapes. Both cars spent plenty of time in the wind tunnel, with extremely different results. The Volt sports a more traditional sedan-like shape and offers seating for four. The Leaf, on the other hand, has a bit of an out-there look to its basic hatchback design and boasts seating for five.

Pricing too is a bit divergent. Nissan has affixed a ,780 sticker to its electric car, before federal or state incentives. That price will drop to the mid-s when a ,500 tax credit is applied. The General is making its Volt a bit more dear with a ,000 asking price that drops to ,500 after the credit. Interestingly, both automakers will offer leases for 0 per month for 36 months.

So, the big question is: Which electric car do you think is the better buy? Make yourself heard in our (totally unscientific) poll below.

View Poll

Poll: Chevrolet Volt takes on Nissan Leaf originally appeared on Autoblog on Tue, 27 Jul 2010 19:58:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments
Autoblog

Can automakers profit from outsourced batteries?

Can automakers afford lithium?

Today, lithium is already available on the high end of the luxury hybrid market. Soon, however, lithium battery packs will be available in many other hybrids, plug-in hybrids and electric vehicles.

Still, can automakers derive a profit from lithium-powered vehicles?

Certainly on the high end, automakers are very capable of deriving profits from battery-powered vehicles. Of course, such vehicles represent only a tiny percent of yearly auto sales.

On the conventional side, with sedans and cars making up a greater portion of yearly auto sales, profit margins are more and more difficult for automakers to realize. Consequently, automakers are adding extra amenities and high tech features to increase vehicle pricing points. If costly batteries are added to this equation, will these cars become even more difficult to derive a profit, as well as too expensive for consumers?

Before the launch of the third generation Toyota Prius, high level executives announced that the king of hybrid cars would be powered by lithium, only to recant those statements as Toyota claimed that such batteries would simply be too expensive compared to NiMH. Certainly, compared to every other automaker, Toyota invested much more money into NiMH technology. So, considering the lack of competition, perhaps there was simply no real reason for Toyota to rush into lithium.

As Hyundai prepares to offer the new lithium-powered Sonata hybrid – without ever embracing NiMH technologies -  company insiders claim that Hyundai is contemplating bringing battery development in house to reduce a layer of costs.

Now, certainly, automakers can offset some of the development costs of battery-powered vehicles with the extra marketing capabilities such vehicles can provide. Yet, if battery-powered vehicles ever move beyond niche-status, will profits become harder and harder for automakers to achieve?

The bulk of the battery research, including consumer studies, suggests that automakers are going to have a tough time converting the public to plug-ins because of costs and/or limited capabilities, such as range. That almost certainly seems to suggest the thinnest possible profit margins to compete in terms of sales.

Or, if automakers can bring more and more battery production in-house, there is greater profit potential. Of course, there is also more complexity, potentially huge R&D and supply chain costs, etc.

Do auto makers have to become battery makers to succeed at electrification?

Only time will tell, of course, and different automakers are certain to try various approaches that could possibly lead to entirely different business models. One thing, however, seems certain. Without some major technological innovations in the battery industry, automakers will be required to be more innovative than ever.

Hybridcarblog