On the Road Again

The automobile, with its gas engine, is perhaps the strongest symbol of an economy powered (and driven) by fossil fuels. It may surprise the reader to learn that at one time, the gasoline engine was only one of numerous competing technologies. In the early 20th Century, the gasoline engine won. In the early 21st Century, there is another competition for engine technology. The incumbent is the standard gas engine, while some of the challengers are gas-electric hybrid, electric only, diesel, diesel-electric hybrids, etc. From a sustainability perspective, none of the challengers have to dethrone the incumbent; they just need enough people to buy them to keep them in business. If these technologies are commercially successful at all, then the amount of petroleum needed for transportation will go down, even if only incrementally.

Model years 2010 and 2011 (and to a lesser extent, 2012) are shaping up to be critical years for automobile engine technology. The most well known challengers are gas-electric hybrids like the Toyota Prius, Honda Insight, Ford Escape, etc. In 2010, for the first time in recent memory, a primarily electric car will be on the market, courtesy of the GM Chevy Volt—40 mile range, around $40,000. Nissan is promising a 100- mile range vehicle (the Leaf), available in the US by the end of 2010. Renault’s all electric entry, announced at the recent Frankfurt Auto Show, will follow in 2011. (If you are a lucky New Yorker, you are road testing an all-electric BMW Mini Cooper slated for launch in 2012). All of these electric cars feature rechargeable batteries.

At the same time, other “greener car” technologies are in various stages of development. Companies like Toyota and Ford are expanding and improving their hybrid product line. Volkswagen is testing diesel-electric models. Diesel is also gaining more attention as a fuel-efficient alternative to the conventional gas engine. Subaru is one company (along with Volkswagen) working on this kind of technology. And, other companies are trying to make the conventional gas engine more efficient with better gas mileage.

All of this activity implies that the manufacturers feel that a market exists to buy some kind of electric or hybrid car. Does it? That is open question. Some elements of the auto industry are rather dubious. The head of Audi North America has been quoted as saying that no one will pay $40,000 for a Chevy Volt (electric) when there are numerous competitive gas engine options for $25,000. And there have many comments to the effect that buying a Toyota Prius does not make sense because you cannot save enough in gas money to make up for the hybrid price differential. So therefore, the argument goes, only a few people will buy these cars. This flies in the face of the success of the Prius and other hybrids, especially during last year’s spike in gas prices.

Even if the “green car” buyers are only a segment—so what? There are many segments of the auto market. There are SUV buyers, truck buyers, muscle car aficionados, family minivans, cruisers, etc. Those segments thrive. The evidence is anecdotal, but I do think that there are enough people to make a segment of buyers for some version of electric or hybrid cars. After all, almost all of the world’s carmakers are developing some sort of non-gas engine technology.

The skeptics are also forgetting that new technologies in many fields tend to come down in price as they get introduced into the market place. Also, if something becomes fashionable, cost becomes a whole lot less important if it is even remotely competitive. If enough people buy these cars, then “electrics” or “hybrids” will become a sustainable segment in the auto market. When it comes time for me to buy another car, hopefully I can join one of these segments.

http://www.businessweek.com/globalbiz/content/sep2009/gb20090917_962378.htm

http://www.nytimes.com/2009/09/16/business/energy-environment/16electric.html?sq=electric%20cars&st=cse&adxnnl=1&scp=2&adxnnlx=1253667664-lNOjX6nAZ5dETLpEXnIFpA

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