How to Save Detroit Automakers From Ourselves
There is concern that the Detroit bailout (which is, in part, requiring the automakers to devote resources towards developing more efficient cars) could backfire. In a couple of years if gas prices have remained relatively low and the economy recovers, high SUV demand from the public could very well return. However, since Detroit is being forced to redirect its focus away from SUVs, it could once again be producing cars that the public does not desire.
The most obvious way to avoid this situation is to set a higher price floor for gas prices so that demand for bigger cars is permanently softened.
DotEarth takes a look at this issue, noting that a new report co-authored by John D. Graham, a former Bush administration official, argues that a series of incentives could actually help accomplish this goal: READ MORE
This Electric Car is Amazing!
This is a video of the Tango electric car plowing snow from its own driveway. Apparently it was shot in December after a record snow storm hit Spokane, WA (where Tango is based).
This is not the first time this little EV that could has made YouTube stardom. We previously looked at this video of the Tango beating the socks off of a Tesla Roadster in a drag race.
Hat-tip: AutoBlogGreen
Michigan May See Growth in Local Battery Production
Given that battery technology will be the key to any Detroit renaissance, it is welcome news that domestic companies are beginning to apply for the government loan program for next generation battery development. One such company is A123Systems, which said on Wednesday that it had applied for such a loan under the U.S. Department of Energy’s Advanced Technology Vehicles Manufacturing Incentive Program.
If the company receives this nearly $2 billion loan, they intend to build a series of factories in Michigan to produce lithium-ion batteries for hybrid and plug-in hybrid cars.
The Detroit News notes that “more than 70 companies have applied to the $25 billion retooling program, with Detroit’s Big Three requesting more than $21 billion. None have been approved yet.”
It is unclear whether A123Systems would also be applying for local tax rebates recently made available to battery companies by the state of Michigan.
Vermont Adopts CA Environmental Labels Requirement for New Cars
As often occurs, California’s recent regulation requiring environmental impact labels on new cars, has been adopted beyond that state’s borders. The first state in New England to adopt this rule is Vermont. Similar to California, the rule requires the label to indicate both a “global warming” and a “smog” score for each every new car.
Vermont Agency of Natural Resources Secretary Jonathan Wood explains, “These new labels will make it easy for Vermonters to choose cleaner vehicles while comparing fuel efficiency. Vermont is still the greenest state in the country but our largest output of greenhouse gas emissions comes from transportation.”
All New Cars in CA Have Environmental Impact Labels
As of January 1, every 2009 model year and newer car sold in California now carries a label that ranks that vehicle’s environmental impact. The label can be found under the hood on the emissions control information label. There are two rankings (global warming score and smog score) on a scale from 1 to 10, with five being the average score in the state. The more environmentally friendly a car is, the higher the ranking.
Check out this link to see the top 10 cleanest cars.
Michigan Law to Encourage Local Battery Production
While the federal government was busy with the travel habits of CEOs and propping up a failed business model, the state legislature in Michigan was planning for the future. Recognizing that the real technology for 21st century cars will be battery technology, the state legislature has agreed to offer up to $335 million in local tax rebates for the development of next generation car batteries. With this move, Michigan is aiming to carve out a piece of what is predicted to be a $50 billion market by 2020.
Ford Rains on Its Own Parade: ‘Fusion Hybrid May Face Battery Shortages’
It was so refreshing to write a positive post about a Detroit automaker earlier this week. The topic was Ford’s new Fusion hybrid which is rated by the EPA to get 39 mpg combined, which would make it the third most efficient mainstream car on the road in the U.S. (After the Prius and Civic hybrid).
However, ensuring that this excitement didn’t become contagious, or last too long, Ford is already warning that they cannot get enough hybrid batteries to meet potential demand. Ford Americas President Mark Fields said, “We are constrained by the amount of components, including batteries, that the supply base can provide us.” The Fusion uses nickel metal hydride batteries that are supplied by Japanese company Sanyo.
Two things. First, this comes as little surprise. Ford hasn’t had a really hot car since the Ford Explorers began imploding ten years ago and it probably doesn’t remember how to be successful anymore. And second, this reinforces the importance of encouraging a domestic battery industry. Of course, battery shortages could still occur with domestic production, but the sheer importance of batteries in the 21st century is so enormous that it would behoove us to have our own industry and expertise, as well.
New York Times Editorial Board in-Favor of a Gas Tax
The NY Times editorial board on Saturday followed the lead of co-worker Tom Friedman and endorsed the concept of a gas tax. Here are the highlights:
“…for all the conditions attached to it, the multibillion-dollar aid package for Detroit’s carmakers approved by the White House (with Mr. Obama’s support) fails to address one crucial question: Who will buy all the fuel-efficient cars that Detroit carmakers are supposed to make?
“The danger is that too few will, especially if gasoline prices remain low. Therefore, it might be time for the president-elect and Congress to think seriously about imposing a gas tax or similar levy to keep gas prices up after the economy recovers from recession. READ MORE
Ford’s Hybrid Fusion a Bright Light Coming Out of Detroit
Lately, the most progressive product to come out of Detroit is the marketing campaign for the planned electric Chevy Volt that may or may not eventually be built, and may or may not eventually work.
Fortunately, it appears that Ford may actually deliver a modern, efficient (and real) car next year. The new Ford Fusion hybrid, is slated to go on sale in the spring of 2009. The car has been certified by the EPA to get 41 mpg/city and 36 mpg/highway, with a combined rating of 39 mpg.
This will make the Fusion hybrid the third most efficient widely owned car on the road, after the Toyota Prius (46 mpg combined) and Honda Civic hybrid (42 mpg combined). READ MORE
Against the bailout: ‘An old man dies, a little girl lives; fair trade’
NYT columnist Roger Cohen had a great analysis of the Detroit bailout this week. Although President Bush did approve a $17 billion bailout on Friday, it is useful to look at Cohen’s points, since this is surely not the last time we will have to contemplate bailing out the Big Three.
Cohen’s op-ed, “Pan Am Dies, America Lives,” which reminds us of the classic line from Sin City, argues that the strength of the American system is derived from the natural rise and fall of companies. He uses the death of Pan Am, once a terrific airline, as an example:
“[F]acts are facts. Pan Am, which had been a leading U.S. international airline since the 1930s, collapsed in 1991. Like other great U.S. companies, it died in the marketplace because it blundered. Churn – of people and businesses – has always defined America. Nobody subsidized U.S. Steel or the automaker Packard in the belief that the world without them was unthinkable.” READ MORE
Ethanol stations coming online as gas prices sit well below E85
By the end of February, there will be 29 new E85 ethanol stations open near Sacramento, CA. These stations are part of a $3.5 million project by the state to make the relatively scarce alternative fuel more available to drivers. The intent of the plan was to create an “ethanol island” where enough E85 would be regionally available to encourage drivers to use flex-fuel cars and fill up with E85.
However, now that these E85 pumps are opening, the price of gas has plummeted below ethanol and station owners are concerned that drivers will opt for the less expensive choice. With ethanol nearly twice as expensive as gas right now, it is unlikely drivers will choose to fill their flex-fuel cars with E85.
The original intent of the government program was to help reduce greenhouse gases and dependency on foreign oil. Of course, even under ideal price conditions, the former is debatable and the latter is unrealistic– since it is unclear whether ethanol is actually good for the environment, and without advancements in cellulosic techniques, we’re replacing one unsustainable situation with another.
Oil and gas drilling in the U.S. falls 12% from peak
A recent report from oil services company, Baker Hughes Inc., shows that the number of oil and gas drilling rigs in the U.S. that are online has fallen by 12% from this September’s peak and is down 2% from this time last year. The total number of working drilling rigs currently sits at 1,790.
This slowdown in domestic oil and gas production (sub req) is being attributed to falling energy prices and tight credit. Higher cost wells and fields are being taken offline and less cash is available to pursue general operations. READ MORE
Friedman on ‘making cars the people want’
“Over the years, Detroit bosses kept repeating: ‘We have to make the cars people want.’ That’s why they’re in trouble. Their job is to make the cars people don’t know they want but will buy like crazy when they see them. I would have been happy with my Sony Walkman had Apple not invented the iPod. Now I can’t live without my iPod. I didn’t know I wanted it, but Apple did. Same with my Toyota hybrid.”
NYC’s recent population boom saw only an increase in public transit, not vehicle traffic
NYT reports that between 2003 and 2007, as New York City’s population and economy boomed, there was virtually no increase in street and highway traffic. Instead, all of the increased mobility went to the city’s public transit system.
While traffic held steady over this period of time, public transit ridership soared, increasing about 9%, according to a study to be released by the city on Monday.
Bruce Schaller, the city’s deputy transportation commissioner for planning an sustainability, who wrote the report said: READ MORE
Report: U.S. sees the biggest decline in miles driven in history
According to the Federal Highway Administration, for the 12 months between November 2007 and October 2008, the U.S. saw the biggest sustained decline in miles driven in our history. Drivers on U.S. roads drove 100.6 billion fewer miles during that period than the previous year.
The drop can be attributed to two factors: high gas prices for the first half of that year and a slowing economy in the second half. According to Transportation Secretary Mary Peters, “The fact that the trend persists even as gas prices are dropping confirms that America’s travel habits are fundamentally changing.” READ MORE
