The Effect of the Chevrolet Volt on the Oil Industry
If and when the Chevrolet Volt is mass produced and marketed we will all be happy, right? Happy about not spending money on gas and helping to avert oil dependence, Peak Oil, and not contributing to global warming.
Indeed George Bush has requested that Americans reduce our gasoline consumption by 20% in the next decade.
Certainly if GM produces a high quality, safe, effective and enjoyable electric car they stand to make a lot of money.
We need to consider what the effect of widespread acceptance and adaption of the Volt and similar cars will have on our economy.
Here are some interesting facts:
-Number of cars in US 240 million, ~100 million passenger cars
-Number of licensed drivers 196 million
-Each car has 23 mpg avg EPA and is driven 12000 miles per year
-75% of all drives less than 40 miles, that’s 900 billion miles
-This would amount to a savings of 40 billion gallons of gas saved, with a retail cost of ~100 billion dollars
-U.S. consumes 146 billions of gas per year.
This would mean 100 billion dollars of revenue yearly would be lost by the major oil companies, and only partly (we hope) recovered by the utility companies. The largest U.S. oil company, ExxonMobil had revenue of 370 billion in 2006 (a record) with 36 billion in profit. Would they be happy with 75 billion less revenue? We need to figure out how to keep Big Oil from squashing the electric car revolution. Let them make the batteries? We’d love to hear your thoughts…
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12 Responses to “The Effect of the Chevrolet Volt on the Oil Industry”
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March 4th, 2007 at 5:52 am
It is indeed more important to clean the air in America, send less money to terrorists, increase our security and help President Bush to succeed in at least his only sensible vision to quit the habit of our dependence on oil, than helping few Americans richer. I am sure our oil buddies are smart enough to start saving their money for the future, and maybe invest in solar or wind energy.
GM, I LOVE YOU.
Congratulations.
Kudos also for Pheonix, ZAP cars and others…..
March 4th, 2007 at 3:57 pm
“We need to figure out how to keep Big Oil from squashing the electric car revolution. Let them make the batteries? We’d love to hear your thoughts…” >
GM had Nickel-metal-hydride technology and sold it to an oil company. Chevron now holds the patents, I’m reading on the web how they limit the types of applications their batteries can be used for.
Let the oil companies build and hold patents on the batteries? That would be the best way to prevent electric cars from happening.
Better the oil companies build photovoltaic arrays so they can compete against the power grid.
March 4th, 2007 at 8:45 pm
Batteries are not fuel, they are part of the propulsion system, kind of elaborate gas tank. With the capacity and life of batteries going up and new technologies developed all the time, the electric energy storage will simply be a function of the vehicle, so it makes little sense to promote that oil companies make batteries - it would be more logical for them to create tires, because that are also oil products. I am OK if they want to produce batteries, in fact they have the power to make one of the best batteries for EVs already for a long time, Chevron chose to not allow any licenses of the NiMH for larger than 10 Ah batteries and even sued others that were already producing batteries for EVs, such as Toyota for the RAV4-EV. Chevron never made batteries available for EVs, only one license holder from before Chvron took this step, GoldPeak, can make large NiMH batteries.
What I want to say is that the track record of oil companies is not pointing to a promotion or even a support for EVs.
Since EVs are the (only) future, the oil companies will become extinct wrt transportation fuel. Whoever can deliver the electricity will be the new supplier of transportation fuel.
The interesting thing is that you already get this fuel delivered to every wall outlet in your house and you can create it on your own roof, so the future is already here for those that have the discernment and you are in control.
Every night that I plug my EV into the wall outlet I take a step further away from the oil companies’ bondage. Only my Prius still needs a 10 gallon fill-up once a month, all my other transportation is electric or human-powered.
March 5th, 2007 at 8:43 am
Oil companies, like auto companies, have been investing in developing alternative energy for years, and should be planning to transition their business to this.
However, public policy is not encouraging this. CAFE is an obsolete tool. Reducing our dependence on foreign oil is a matter of national security, and the government should not just point to auto OEMs and leave the future up to them with CAFE. They are in business to make a profit and can only respond to demand.
Most economists agree the best approach is a gas tax, but no lawmaker will sign up because it has been political suicide — so they cowardly hold a gun to auto OEMs heads.
I think citizens might be finally ready to accept the necessity of reducing foreign oil dependence, and accept a gas tax which has been so effective in Europe. Lawmakers need to implement a progressive tax — perhaps regulated by an Alan Greenspan type to mitigate economic effects — it will create the demand necessary. When automakers see this, they will forecast consumer demand and build a business case for vehicles like Volt to come to market.
Having the courage to implement a gas tax is the only way.
I would like to hear comment on this — especially from Bob Lutz if he weighs in on this blog.
March 5th, 2007 at 8:46 am
I would love to hear from Tim Leuliette of Metaldyne who has spoken in favor of a gas tax.
March 5th, 2007 at 10:21 am
I had the opportunity to speak with author Sherry Boshert, who wrote Plug-In Hybrids, the Cars That Will Re-Charge America. We speak alot about the EV1, the Volt, GM and more. She’s a wealth of knowledge! You can listen here http://www.podtech.net/home/technology/2283/author-sherry-boshert-speaks
March 6th, 2007 at 3:59 pm
Who cares what happens to big oil. The majority of the salaries are based at the top. Let those losers take a hit for a change.
March 8th, 2007 at 4:47 pm
I think you’re forgetting that the electricity to charge all those batteries has to come from somewhere, and in the short term that will be through increased consumption of fossil fuels by utilities. Nothing comes for free. But I generally share your enthusiasm in moving away from internal combustion.
March 9th, 2007 at 8:11 pm
Yes, the electricity for electric cars does come from somewhere, but it takes less resources to power and charge up those batteries than it does to use a gas burning engine. Gas burning engines are notoriously inefficient in comparison to electic motors.
March 27th, 2007 at 12:15 pm
If the big oil companies keep buying battery and fuel cell companies there wont be any Chevy Volt\’s ever make it to market. The day will come when the oil companies own the car companies, then we will all be screwed.
April 6th, 2007 at 11:40 am
GM: Don’t worry about apartment dwellers not (currently) having electric outlets in the parking areas.
Of course apartment owners will add plugs to entice renters just as they added cable for their tvs and WiFi for their laptops. Triust the market! Duh!
This transportation revolution will create entrepreneurs who will build thousands of Solar Parking garages we’ll leave our vehicles plugged in to while we are at work.
April 6th, 2007 at 11:57 am
And on this question: NO! Don’t let oil companies buy our precious battery technology!
That is a public good like water.
Instead, force them to charge what gas really costs us in wars, and a blighted future on this planet.
Gas would need to be $20 a gallon to fund the continuing plunder of the Middle East, and to adequately look after our returning troops. Make the oil companies hire the mercenaries (Halliburton) directly as a Cost of Doing Business.
Don’t have us taxpayers fund their wars.
Let them make more money selling less gas, as it dwindles to its end.
We will be driving the Volt!