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Lutz: Gas Must Rise to $5 or $6 per Gallon to Allow Generalization of Volt Technology
For some of us interested in electrification of the automobile, it can’t happen soon enough.
The Volt is a great first step, though as GM says it is a car for most people, not a car for everyone. Even considering the wide swath of those for whom it will be ideal, production volumes are expected to remain relatively low; 10,000 the first year, and around 60,000 in the second according to reports.
Since the Voltec propulsion system is so flexible and scalable, it seems reasonable to believe GM will eventually use it in other vehicle types and sizes. We have seen the Cadillac Converj concept though the car has not be approved for production. We have also heard that GM is at least studying putting a Voltec drivetrain into the upcoming Orlando MPV.
Clearly GM is proceeding with caution largely due to the very high cost and likely, some uncertainty, not too mention the high initial price for consumers. Recently it was disclosed that the Volt will likely start at $32,000 after tax credits.
GM vice-chairman Bob Lutz was recently asked in a webchat whether he believes GM will generalize Voltec technology.
“The Volt technology is very exciting, but costs will have to come down before it can become generalized,” he said. “And US fuel prices will have to rise to world levels, meaning $5 or $6 per gallon.”
Larry Burns, who has been GM’s chief of R&D at GM for 11 years, and will retire on October 1st put it this way:
It is important to recognize that first generation technology in the auto industry, or industry in general, is usually costly vs. the mature alternatives that it competes with. The key is to kick off a generation-by-generation learning cycle that allows the new technology to reach its mature, high-volume potential. GM believes that Lithium Ion batteries at maturity and in high volume will be cost competitive for personal mobility. This is why we are launching the Volt, to kick off the commercialization dynamic.
So how long will it take for technology costs to come down or gas prices to get so high, and do we have time to wait?
September 17th, 2009 at 6:15 am
Excellent post, thank you. It allows us to understand better the thinking at gm’s higher management levels. I was afraid it was going to end with a “So we are postponing Volt production until…” but fortunately they did not say that about Volt, though in effect they did for Converj. So I am happy for now that gm is at least proceeding with the Volt despite their obvious internal misgivings about how many will be sold.
The wild card in predicting the future is the upcoming change in CAFE/CO2 standards. According to stories in USA Today and elsewhere appearing yesterday, these standards will add $500 to $2000 to the price of cars, phasing in from the 2012 to the 2015 model years. Automakers were said to be responding by also trying to shift toward smaller cars.
Will that help the Volt, or hurt it? Help, if it makes alternative choices more nearly the same price? Hurt, if it makes smaller cars more nearly a give-away item?
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September 17th, 2009 at 6:26 am
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September 17th, 2009 at 6:44 am
Yes an excellant article which sums up GM’s thinking. It doesn’t make any sense to me their caution. After all we already had $4 gas before the world economic meltdown. So I assume their caution in moving faster is based on their astute knowledge that the world will not return to economic growth and that peak oil is a long way off.
Of course if any combination of world energy demand increasing and world oil supply decreasing happens, gas prices will fly past $5 a gallon very quickly. If (when) this happens over next 3 years will GM be able to ramp up quickly to meet demand?
This board had discussed the math many times that makes the EREV concept pay off. First Generation saves money already at $5 gas (the increase in your monthly car payment would be a LOT less than your monthly savings in gas for folks that could charge at work for instance).
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September 17th, 2009 at 6:48 am
I’m European and I can’t help thinking the Volt concept should work better here than in the US — at least on the paper: gas prices high enough, 220V outlet as standard, in general shorter commutes (well, I admit I have no backup to this last point).
I’m only skeptical whether we can have similar tax credit like in the US.
And then it will also be hard against the diesels, but still…
Let’s see. I’m curious as hell.
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September 17th, 2009 at 6:49 am
They sold trucks and SUVs because that was what the public wanted.. the cost of batteries and other components will drop as the cost of gas goes up, a BEV does not have to match the low cost of an ICE vehicle before people realize it makes sense to get one for the peace of mind.. but the cost penalty does have to come down a bit.
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September 17th, 2009 at 6:52 am
GM is (was) a private, for profit business. It is not in any way their responsibility to shape America’s fleet of vehicles in a way that pleases you or anyone else. Their job is to sell 1 vehicle to 1 person, and to do that many times over. “Policy” is up to our elected officials. Our current fleet of vehicles is the result of our govt policy and the individual needs/wants of consumers. Nobody put a gun to anyones head as they were about to buy a Prius and marched them over to a Chevrolet dealership and forced them to buy a Suburban instead.
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September 17th, 2009 at 6:56 am
Jacksunny –> You’re right, it seems to me, that at the moment Europe is a more attractive environment for the Volt, or maybe Ampera, at least from the viewpoint of the economics. There’s will be a lot of interest in the USA, but how much of that will convert to purchases we will have to wait and see.
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September 17th, 2009 at 6:58 am
tom —> pretty big ifs so I’d hate to have too much money riding on them coming to pass in the next few years. But as you say, these are things that might happen.
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September 17th, 2009 at 7:00 am
Herm –> I like your new avatar.
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September 17th, 2009 at 7:01 am
The tech will be generalized at about the same time as I have saved enough for it. (Or I won’t be buying anything from them at all.)
VOLTEC my Buick roadster baby!
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September 17th, 2009 at 7:02 am
1. Its not and never has been GMs job to lobby for higher fuel prices. That makes no sense.
2. Toyota has been making and trying to sell large gas guzzling trucks too. It must make some business sense.
3. GM has made small cars, people just don’t buy them.
4. The american public is not saddled by large trucks because GM makes them. Some people chose these vehicles.
I like how the GM haters don’t talk about the Japanese fuel hogs. The bias is telling.
Go to the Lexus site and look
LX10 12/18 city/highway
GX09 14/18
RX 18/25
sedans
LS09 16/24
GS09 17/24
LS Hybrid 20/22 (a real green car for sure)
At least those buying a Chevy truck and haul something and these vehicles have a utility.
What is the utility of the LS hybrid sedan?
GM actually has some pretty good mileage numbers. Especially in the car classes that the majority of people buy from. I agree that they need a good hybrid and a good small car at 40 mpg + but other than those niche markets, they are very good.
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September 17th, 2009 at 7:05 am
The really big item in today’s post may be hidden in there as Larry Burns, who has been GM’s chief of R&D at GM for 11 years, and will retire on October 1st…
Bob Lutz has been the visionary and visible face of the Volt, but Larry Burns is the person who I think really made it happen. He took strong feelings and turning them into a real car with the EREV design. For Mr. Burns to be leaving in just a few days is a big big change for Volt fans.
So all I can say is Thanks Larry and may everything go well for you.
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September 17th, 2009 at 7:11 am
dagwood55 –> You ask, sarcastically I think, whether gm has been lobbying for higher fuel prices. In actuality gm people have often said that it would be beneficial for the US to have a higher gas tax. Please give credit where it is due.
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September 17th, 2009 at 7:15 am
RB;
You must work for GM if you think these are ‘pretty big ifs’.
I think it is pretty much a given that one or both of my ‘IFs’ will happen and that demand for oil will exceed supply in the next 3 years.
I’ll state it differently. For gas to stay below $4 a gallon for the next 3 years both the world will have to avoid economic growth for 3 years and Oil Production must somehow increase fast enough to replace the decline that is now occurring in it’s largest Oil Fields.
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September 17th, 2009 at 7:21 am
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September 17th, 2009 at 7:21 am
RB,
Well said. I too noticed that he was leaving very soon. I can only hope that it doesn’t have anything to do with the Volt, and given all the other upheaval there are certainly plenty of other reasons to leave.
Be well,
Tagamet
Let’s Just Get The Volts’ Wheels On The Road!!**********NPNS
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September 17th, 2009 at 7:22 am
I believe Mr. Lutz meant to say that $5 per gallon for gasoline will be best for the launch of the Volt.
The Volt is the CAFE counter weight to NGMCO’s heavy trucks. How many trucks and full size SUV’s will sell with a $5 per gallon pump price?
BTW:This mornings news…
LONDON (Reuters) – Oil prices fell toward $72 a barrel on Thursday after rising more than 5 percent this week as swollen U.S. distillate stocks such as diesel offset positive sentiment in other markets.
=D~
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September 17th, 2009 at 7:23 am
Anyone know the “why” as to Larry Burns leaving? It strikes me as odd that the chief of R&D for 11 years would be heading out right as the Volt is picking up speed on the PR front.
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September 17th, 2009 at 7:23 am
RB says: “…gm is at least proceeding with the Volt despite their obvious internal misgivings about how many will be sold.”
Makes one wonder if GM’s misgivings are A: that not enough will be sold (not likely, IMO)
or B: that they’ll sell as fast as they can make them, unfortunately, each at a loss….
Regardless, it’s a necesary first step on the way to gen 2 and lower unit costs.
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September 17th, 2009 at 7:28 am
Well said, RB! And I want to add a couple of other thoughts….
1) Lutz is absolutely right that gas prices in the US will be a MAJOR factor in the wide adoption here of Voltec (and of BEVs, for that matter)!
2) GM’s retiring R&D chief Larry Burns may very well also be right in his belief that ultimately fuel cells may largely replace batteries as the best electric power source
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September 17th, 2009 at 7:28 am
The gas tax is far better than the CAFE standards that our govt imposes IMHO. A gas tax would cut down on driving and make carpooling and mass transit more appealing to many. In addition, it allows the car makers complete freedom on what they want to build in a simpler system with less government regulation. Finally, we could use the money to pay off some government debt.
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September 17th, 2009 at 7:33 am
Our good friends in Russia would love to see oil at $200 a barrel. That would greatly help their economy. Perhaps that is why they are arming Iran. A nice little war near IRAN would close the straight of Hormuz. Russia would have to help out and boost its oil production.
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September 17th, 2009 at 7:38 am
Jacksunny,
Welcome to the site. I’m curious about the availability of logistically situated plugs in most European homes. Would that be a hurdle?
Be well,
Tagamet
Let’s Just Get The Volts’ Wheels On The Road!!**********NPNS
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September 17th, 2009 at 7:46 am
FME III “At a loss…” means expenses exceed income. At the high initial price, it is certain that income exceeds the expense of the parts and assembly of the car, and in that sense the Volt is going to be profitable from the first sale. Now when “expense” expands to include general administration, advertising, legacy costs etc it may be that the first Volts are sold at a loss. However, even under this negative scenario, every Volt sold helps gm’s financial situation.
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September 17th, 2009 at 7:46 am
lol. Fuel cells? They are four times more inefficient than the BEV system. The fuel cell is dead for passenger cars. The sooner people realize that the better. For higher energy systems like long-haul trucks and such, who knows. Fuel cells might find their niche.
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September 17th, 2009 at 7:48 am
herm,
What IS that new avatar? My old eyes can’t make it out.
Thanks in advance,
Be well,
Tagamet
Let’s Just Get The Volts’ Wheels On The Road!!**********NPNS
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September 17th, 2009 at 7:51 am
I do think fuel prices will increase, due to high demand from emerging markets like China and India, so no one needs to wish for it – it is inevitable.
Those, who cannot afford the Volt or similar electric propulsion vehicles, can always buy a very cheap and fuel efficient ICE vehicle and /or a hybrid / electric motorbike or scooter. The goal is to reduce petroleum consumption.
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September 17th, 2009 at 7:51 am
News flash, this is the price of gas in most countries around the world! If American’s can’t properly cost out fossil fuels then we will have to deal with that. If we are going down, might as well go out driving a Hummer. Right?
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September 17th, 2009 at 7:53 am
nuclearboy,
A gas tax hurts low income people the most – disproportionally so.
Be well,
Tagamet
Let’s Just Get The Volts’ Wheels On The Road!!**********NPNS
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September 17th, 2009 at 7:53 am
I think that a $5 or $6 gas would be the best thing to reduce foreign oil consumption. Price is such a great motivator. Small increases in gas price radically change peoples habits.
Ok.. I’ll say it…. “Increase the Gas Tax”
and I’ll clarify it by saying only gas for personal transportation vehicles, not for things such as semi-trucks.
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September 17th, 2009 at 7:56 am
He is fishing for more subsidies. Don’t worry, they are already deep into gen II design. He knows what they have and is trying to throw his competitors for a loop, I hope.
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September 17th, 2009 at 7:58 am
I want to elaborate a bit on my point 1) above…. There is enormous political pressure in the US for added drilling (offshore, ANWR, etc), as I’ve said here before. Also, our politicians all know it would be political suicide to significantly increase taxes on gasoline. So as a near term effect of lower fuel costs in the US vs the EU, I predict the Opel Ampera will do much better in Europe than the Volt will do here!
Also, in regard to my point 2) above, I agree with Larry Burns that fuel cells will ultimately prove to be a better source of electricity than batteries. And fuel cells should outlast batteries as well as remove the need for an ICE as a means of eliminating range anxiety. If the efforts GM, DOE and many other are supporting to produce cellulosic ethanol or methanol on a large scale are successful, the infrastructure is already here (our gas stations)! And ethanol fuel cell technology has already been proven practical, renewable and (almost) non-polluting. I’ll even take a leap of logic and suggest that research (probably classified) may find a way to extract pure hydrogen from ethanol/methanol on board vehicles. This could explain Burn’s belief (expressed in his chat yesterday)* that a “hydrogen economy is both real and practical”. This guy obviously knows something I don’t and I can’t believe he would make a fool of himself on the eve of his retirement!
* http://green.autoblog.com/2009/09/16/chat-with-retiring-gm-research-vp-larry-burns-today-at-3pm-edt/
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September 17th, 2009 at 7:58 am
kdawg
Low income people will be killed by a gas tax (not literally, but you know what I mean). Middle income people may modify their driving if they can find work. Upper income people probably won’t be nearly as effected as a %age of their income. It’s a kind of reverse class warfare. As you can tell, I’m not a big fan of social engineering with the tax code. JMO.
Be well,
Tagamet
Let’s Just Get The Volts’ Wheels On The Road!!**********NPNS
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September 17th, 2009 at 8:00 am
” I agree that they need a good hybrid and a good small car at 40 mpg + but other than those niche markets, they are very good.”
Unfortunately, these are the only real markets going forward. Ain’t that a bitch.
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September 17th, 2009 at 8:04 am
It the first gen is only going to have 10,000 made, of course they will be sold at a loss…. They have 5 years of intense R&D to recover.
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September 17th, 2009 at 8:08 am
Maybe they want a little revenge for busting them during the Cold War?
Even though you are off by the fact that even Russia can’t boost their production, the continued exclusive use of petroleum for our transportations systems should make Americans take notice. Russia peaked, just check their production graphs. Yes, they have increased exports a small amount lately but that was because their own internal use has dropped due to the financial crisis.
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September 17th, 2009 at 8:15 am
Also being european (from France), I agree with Jacksunny.
Today’s price for 1 liter gasoline in France is roughly 1.2 euros (1euro for diesel), more than 6$/gallon (thanks to our high taxes).
According to Lutz, it would already be interesting.
But there’s here yet much small cars (<4 meters-long) 50MPG-rated that are available (mainly diesels). And some volt-sized cars achieve such a fuel economy (with less hp than volt, typically 110). So 50MPG on ICE is not figured as extraordinary here.
“Our” Volt, the ampera is forcasted to arrive about 1 year later than americans’ Volt, and as some have said, barrel price will certainly raise again until that.
But It may still not be completely interesting, due to the high price expected for the Ampera : about 40K euros (what is the EUR/USD conversion rate at GM? Well that’s another story).
When you may have either a 136hp-Diesel-peugeot 308 for 28K euros, or a 180hp-Diesel-Volvo C30 for 31K, having both great equipment (Automatic AC, wipers, full leather seats, and so on..) and a more-than-38MPG (44MPG for the 308) economy.
Even with our high prices, it makes a long road to spend 10K euros in fuel.
Let’s see. I’m curious as hell.
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September 17th, 2009 at 8:16 am
Oh good , gas is $5.54 a gallon in Canada now .
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September 17th, 2009 at 8:20 am
I agree that it shifts the burden some but…. The burden is alreay skewed highly away from low income people. Around 45 % of tax payers apparently don’t pay federal taxes. I think that reducing our need for oil is more important than sheidling low income people from a relatviely small tax. If necessary, adjust the 45% number to 50% by other means and then add the gas tax.
Tax rates are arbitrary anyway. There are already many fees and sales taxes that low income pay in the same way that the wealthy do. These are “larger” taxes on the poor.
I am simply saying that our dependence on oil might be a big enough problem that the additional burden on the poor might be more than compensated for.
1. A little more tax on the poor.
or
2. the possibiltiy of more tax revenues, less debt, potentially lower oil prices due to smaller demand (ie: this shifts money from the mullah’s to our tax coffers), more use of public transporation, more carpooling, more efficient cars coming online faster, a smaller potential for war in the middle east, and most importantly (jk)… a greater demand for the VOLT.
I don’t fall into the category of the poor thankfully, but we cannot be crippled in our ability to move forward (if we need to) by the possibility that the poor could be harmed. I have a general feeling that people are not as vulnerable as some people make them out to be. People are all very smart, in general, and will adapt to the conditions around them as necessary to survive and prosper. Low income people are no exception.
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September 17th, 2009 at 8:22 am
If GM loses money on each Volt sold, it can’t help their “financial situation”. I must be missing something (again).
Be well,
Tagamet
Let’s Just Get The Volts’ Wheels On The Road!!**********NPNS
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September 17th, 2009 at 8:27 am
Hi Tag,
What is it with this avatar thingy…well I know about avatars, but how come some poster have them and some don’t (not even a blank one)?
How do create one?
Do you need to belong to some special group (Free Masons, maybe…just kidding)?
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September 17th, 2009 at 8:31 am
I don’t know if it’s answering your question, but many houses have yet 220V/16A plug in the garage, for a washing-machine for instance. Anyway, as the whole house is using 220V, it’s not great work to get that to garage, even for a 24A or 32A plug (just a new wire from the meter).
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September 17th, 2009 at 8:32 am
I guess I don’t see it personally or in my area. I still see the V6 models selling well and small SUV’s (I am in the Baltimore/Washington DC area where the recession has not hit). From my perspective here, the really small cars are still the niche markets.
Hopefully GM will have these smaller cars (Cruze, Spark, Volt) ready when the next big oil shock hits.
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September 17th, 2009 at 8:37 am
Nuclearboy,
Although your post is well thought out the only important word that’s a bit subjective is “little”. As in a “little” more tax for the poor. $4 or $5 gas is a huge tax as a percentage of income. For some that’s nearly an hours work for a gallon of gas. Given your reasoning it’d be “better” to base the tax on a “miles driven” basis and then REALLY hit the middle income people – that’s where the money is (just based on a normal curve). I still think that any further govt manipulation of gas tax for WHATEVER good reasons is bad medicine (and will cost jobs).
JMO.
As I said your motives shoot for good outcomes. The means I’d oppose.
Be well,
Tagamet
Let’s Just Get The Volts’ Wheels On The Road!!**********NPNS
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September 17th, 2009 at 8:39 am
Dave K,
You have to know the secret handshake….. or go to Gravatar.com. It’s free and easy.
Be well,
Tagamet
Let’s Just Get The Volts’ Wheels On The Road!!**********NPNS
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September 17th, 2009 at 8:40 am
They should offer this technology as an option in their other vehicles as soon as possible. As the price of oil increases, people will be more willing to pay a premium for more efficient transportation.
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September 17th, 2009 at 8:40 am
Not really surprising news… personally I’m one who would pay *somewhat* of a premium (if I didn’t live in an apartment and could charge it… perhaps by the 3rd gen volt) for the technology. Even if I could charge it, I’ll admit, at current gas prices the 1st gen volt is beyond what I would pay for. But mathematically, the news isn’t surprising… I just bought a commuter car, and did the hybrid-math a hundred times… it always comes out to the same thing.. average of $5/gallon over the next 10 years will cover the premium for either a prius or an insight (insight is cheaper, but lower mpg, so they come out about the same). While I’m convinced gas will certainly reach $5/gall over 10 years, I don’t think we’ll average it (inflation taken out of the equation of course). So I went out and got a regular ole combustion engine 33mpg+ compact car for commuting. That being said … if the volt came to 25k after incentives (today’s dollars) and gas was at $3-$4 (also todays’ dollars), while it still probably wouldn’t mathematically make sense (depending how long my commute was, what electric rates were at that time, etc…), I’d pay the premium for it – especially if my commute was <60miles RT (i.e. 2/3 electric) and the range extender actually hit the 50mpg they’ve been saying. The part that GM doesn’t know and is probably why they’re sending out survey’s to find out, is how many people WOULD pay that premium beyond where it’s mathematically break-even and how much of a premium they’ll pay. Obviously the higher the premium over that break-even point, the fewer customers they have.
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September 17th, 2009 at 8:41 am
Herto,
I was wondering more about what % of houses actually have a garage (or a spot very near the house) within which they could charge.
Thanks,
Be well,
Tagamet
Let’s Just Get The Volts’ Wheels On The Road!!**********NPNS
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September 17th, 2009 at 8:43 am
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September 17th, 2009 at 8:45 am
if anyone in the US tries to change something at a federal level which has the potential to take away anything from a large group of people (especially corporations), you will see a 1000 lobby groups jumping up and down complaining with half the senate backing big business who sent the lobby groups as that is where their donations come from.
Take for example the US health care system – whether you like if or not, the world see’s Americas health care system as a joke; defend it all you like, but that is the way the world see’s it… Now instead of actually trying to give the people something, if you even try and put a tax on fuel anything like what the rest of the developed countries, you will have x10 the difficulty.
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September 17th, 2009 at 8:47 am
The quote from Larry Burns makes a lot more sense than what Lutz said.
And if you believe the CEO from CPI (the company that makes the Volt battery packs today), battery packs should be 1/4 to 1/2 of today’s prices in the next 5-10 years:
http://www.greencarcongress.com/2009/02/profile-li-ion.html#more
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September 17th, 2009 at 8:56 am
Tagamet,
Points made and heard.
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September 17th, 2009 at 8:58 am
When the price of oil triples, people can find creative ways to sell more of it if needed.
Even if they did not boost production, a huge runup in oil prices would really help mother russia.
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September 17th, 2009 at 9:01 am
This is as March, 2005:
http://money.cnn.com/pf/features/lists/global_gasprices/
Better start cranking those Voltec offerings out now, GM.
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September 17th, 2009 at 9:05 am
Nope, you are not missing anything.
If the Volt is seling for $40k as many predict for the Gen 1 car, then it’s quite likely that it actually costs GM $45k to build that car.
The EV-1’s MSRP was $34k but it’s quite clear it cost GM nearly $80k per car to build them. http://en.wikipedia.org/wiki/General_Motors_EV1
This my friends is what killed the EV-1.
GM has to move it on the Volt Gen 2 to make it profitable.
This is why you KNOW there are engineers working their butts off cost reducing the Gen 2 car to a ’slightly’ profitable $28k selling price.
From Rob’s foggy crystal ball.
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September 17th, 2009 at 9:05 am
Tagamet, I agree; gas tax would hurt the low income to lower end of middle income class and not really affect the rich. People keep talking about gas tax & talk about how the rest of the world is okay with higher prices.
Well here’s a little piece of news! Do you who support gas tax (& are not rich sobs) ever been to Japan, Korea, France, Britain, Germany, etc? These countries may have much higher gas prices but they also have well developed transit systems like rapid transit subways & buses. I’ve been to a few Asian countries and we have nothing here compared to what they have. Same with Europe; my good buddy went over to Britain & France for an extended vacation and the first thing he noted was how everyone walk/use transit to go around & that in many ways it was faster to take transit instead of calling a cab. Another big factor is their cities actually have people in them instead of people commuting from the suburbs, and people do not need to make a ‘grocery run’ since they can walk to the local market/grocery store, buy stuff, take them home if it’s small/light or have them delivered at no charge (most of time) or in some cases minimal charge; I saw this happening in S. Korea & I was pretty shocked that they have it over there while in our much touted NA, we have diddly squat compared to that…I don’t think Wal-Mart/local market would give people free deliveries of their groceries.
Unless something is done to change the city dynamic here, Tagamet is right; if meaningful amount of gas tax is imposed, only the rich will not suffer…they’ll whine as if their livelihood depended on it but really the low to mid income class will bear the full brunt of it. But if people really wanna charge gas tax, they should really think & come up with a meaningful counter-measures to above problems. Not sure if this would work, but here’s an idea: impose ‘x’ amt of gas tax on reg.-grade gas (x being amount significant enough to affect behavior change while not being too high to ruin people’s livelihood), ‘1.4x’ on mid-grade., & ‘2.5x’ on premium? Just some random #s being thrown out here.
Now I’m not saying tax the rich; I’m saying tax the ones who want high performance vehicles. Remember, driving is not a right, it’s a privilege. You want a machine with a lota torque & HP? Sure, you have freedom to do so but you also have to pay a bit more for that privilege. If I want a pizza from Pizza Hut, whatever. If I want Pizza from a so-expensive-it’ll-cost-arm-leg-and-then-some restaurant, I’ll probably have to sell an oran to pay for it. Same thing with cars. Oil is a finite resource & everyone in the globe has to share it. If you want a higher performance gas guzzler, be ready to pay for the initial cost as well as upkeep which includes premium grade gas. The rest of us will be fine with our regular/mid grade gas sipping vehicles that offers decent performace (really…who needs more than say 233HP? Only people with speed in mind).
There! Now that was my ‘ramble o’the day’…see you all later.
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September 17th, 2009 at 9:07 am
kdawg
Existing semi-trucks and real commercial grade vehicles (as opposed to poseur hobby ranchers and sub-contractor wannabes) use diesel, not gasoline, so tax gasoline as high as you want. I don’t care how high (or low) the price of gas is, cause my daily driver is a BEV, so I’m already protected not only from high prices but from price volatility, just as important, as well.
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September 17th, 2009 at 9:07 am
Hey all… Update on my 2010 Fusion Hybrid.
Just filled up this morning….
950 KMS (247 KMS left in tank till emplty)
… 5.3 L /100 KMS .. 53 MPG Canadian…
Life time average (just over 2 months)
5.4 L 100 KMS ..52.3 MPG Canadian.
Approximately 4500 KMS on car so far
Worst trip 9.6 L/100 KM 29.4 MPG Canadian (drove really agressively for 80 KMS … city and highway)
Best trip 2.6 L/100 KM 108 MPG Canadian (hypermiled)
Still loving this car.. bigger than the Voit.. seats 5 and super milage.
I still want my Volt but will keep the Fusion for the Family trips.
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September 17th, 2009 at 9:08 am
The future of “VOLT Technology” could very well rest in the results of the next presidential election.
His Majesty Obama will have a lot of questions to answer if GM and Chrysler are still needing bailouts and ‘loans’ while every other foreign maker is bringing out BEV’s and EREV’s for 25% less across the board.
Yep. You don’t hear the phrase “Hope and Change” anymore around Washington. And as much as I would like to own a VOLT, it seems that my budget will force me to wait for the ‘lower priced’ EREV Cruze or Orlando, and they may not get here if Barack is not around to spend more of YOUR tax money to make it happen.
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September 17th, 2009 at 9:09 am
Gas at $3.50 a gallon would be plenty of incentive enough for the Voltec to expand, it seems to me, for at least the numbers-crunchers.
Things we decide to do, especially big decisions like spending $40,000, are never only based on one motivation alone. It is multi-motivational logic that has many factors in a decision to buy, not just the price of gasoline.
For very many, the decision is partly altruistic as well, at least in one of the motives so as to somehow contribute to the advancement for a wise set of changes for society and the planet.
All the different motives have been discussed here in precise depth for everyone else to read. So, while the numbers-crunching for return on investment can be guessed at in a really vague manner in the form of an opinion, things like the Volt are also representative of a philosophy. That philosophy is under represented because there may not be sufficient ways to concretely measure it as an influence to buy Voltec.
This is the valid problem that Bob and other execs have, where all the good interest in the World is spoken/written/posted, but how can that be translated into a concrete foundation of some sort where he can really count on any of it?
Pre-approval & commitment logistics. That’s how. But no one else on this site is conversing about this to my knowledge.
If all 50,000 people (while not at all likely, but as a start) on this Want List were to get pre-approved tomorrow from their financial institutions for some sort of credit-escrow-in-reserve, how far would that go to assure and convince both upper management as well as investors to go ahead and expand Voltec production facilities?
I would be really unimpressed if a simple set of procedures like that would never be set up. REALLY UNIMPRESSED.
To me, that would be a sign that there is not any “thinking out of the box” anywhere, including especially, outside financial institutions like banks, credit unions, and especially, the financing arms of the OEM’s. That, actually, would be pretty dysfunctional if not pathetic.
Volt is not just a car, it is a philosophical benchmark that many of us will put a large part of our assets on the line for it’s purchase. GM has gone all out as far as possible to get us here to this point. Why is there not discussion on this site about what it might take to set up Voltec pre-approval AND FINANCIAL COMMITMENT methods, especially since there are these following abbreviations on this site every day?:
“NPNS” “LJGTVOTR”
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September 17th, 2009 at 9:11 am
Great. Thanks.
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September 17th, 2009 at 9:15 am
Xaio,
Thanks for an individual’s world view. You ought to try Democracy. You might like it. Warts and all, it’s still the best system out there (just another individual’s opinion of a world view).
Be well,
Tagamet
Let’s Just Get The Volts’ Wheels On The Road!!**********NPNS
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September 17th, 2009 at 9:25 am
Wow..now that sounds impressive! Can you tell me how the car handles, its performance characteristics, interior quality? If it’s really that good, I might lean towards this…from the looks of things I would not be able to afford a VOLT due to low production volumes & undoubtly high price gouging by the dealers.
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September 17th, 2009 at 9:25 am
Unfortunately Bob is going to get his wish. Gas prices are on the rise again for no good reason. Whatever the price is we have to pay it. It was so nice of GM to destroy is pre 2003 electric vehicle program! The lawyers said it was a good idea for GM irregardless if it was good for America. Now we are looking at a 10 year setback in vehicle electrification. We’ve seen what over-dependence on foreign oil can do for the US economy. Just ask businessman, you can not keep throwing large amounts of money out the door and stay viable.
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September 17th, 2009 at 9:26 am
Muddy
Yes, we get sooo focused on getting those initial wheels on the road that Gen II and III seem a distant dream. Here’s hoping that their mentions form time to time about the parallel development process covers the second and third gen vehicles too. At the very best (and remember, I’m the resident optimist, I can’t see Gen II until 2012. I’ve been wrong before but rarely in a pessimist direction. Then again, my crystal balls (I have a spare) are pretty foggy too. (g)
Be well,
Tagamet
Let’s Just Get The Volts’ Wheels On The Road!!**********NPNS
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September 17th, 2009 at 9:27 am
There was an excellent proposition some times ago about “gas tax”. The idea is that government put a tax on gasoline, collect it to the dedicated fund that by the law must be evenly distributed to everyone. In short, the gas is $5/gallon, the real price is $3, $2 goes to the fund and it makes a monthly check from the government.
This way people who do not use cars, or use fuel efficient cars suddenly get extra money, while gas-guzzlers drivers over a sudden face more expensive gasoline and only partial reimbursement.
The nice part of the proposal is that low income people are not affected that much (unless they need to drive lot more than an average person in a fuel inefficient car) and everyone suddenly have an incentive to use more fuel efficient technology.
OK, I remembered – the author of the idea is Michael McGraph, here it is:
http://www.youtube.com/watch?v=B7anhCgdiao
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September 17th, 2009 at 9:29 am
Texas,
Your message is extremely consistant and I respect that.
BUT, lets get real.
Most grown-up people do not want to drive a tiny little car, my kid drives one of those.
I’m firmly in ‘middle age’ and want a comfortable car to travel in. Generally speaking this means a ‘mid-size’ car.
I currently drive a Malibu.
I think the Volt with it’s 4 seats (giving more room for each passenger) will ‘just’ be roomy enough for my needs/requirements but I’m very unlikely to look at anything smaller than that as a daily driver.
I’d consider a Lotus/Caterham Super 7 roadsport (which is a tiny car) as a toy though! Definately a weekend/dry road car.
http://www.caterham.co.uk/
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September 17th, 2009 at 9:29 am
The problem is not every can afford a $40,000 car just because.
$6 gas wont change peoples habits just because.
$6 gas doesnt mean people will just run out and buy a new car, or move, or get a new job – for 95% of people it will just mean more financial hardship. “We” still have the cars we have, the house we have, the job we have – now it will just cost us more to do the things we do.
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September 17th, 2009 at 9:30 am
I’m not sure I completely agree with Lutz thinking $5 – $6 gas is required. What if we had $4 gas in 2012 and the Volt Production cost was closer to $30 without out any rebates. And what if the government kept in some a $2k rebate/discount.
Think about all of our mind set 2 years ago when we were paying $4 gas…. It shifted car buying habits ALOT.
Either way… gas at $2.50 I conceed won’t cut it, but we may not be as far off as Lutz thinks…
Todd
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September 17th, 2009 at 9:33 am
>> News flash, this is the price of gas in most countries around the world!
That’s not quite the whole story. $5-6/gallon is the price of the fuel itself PLUS much higher fuel taxes than we pay here.
Taxes, taxes, taxes…. that’s some people’s answer to EVERYTHING.
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September 17th, 2009 at 9:35 am
If not H2-consuming fuel cells, due to the infrastructure and H2 production issues, then maybe DEFC (direct ethanol fuel cells) may ultimately become cost-effective.
That, coupled with inexpensive algae-formed (ex: Algenol) or cellulosic ethanol (ex: Coskata), may provide a bright spot in the pantheon of liquid fuels and electric drivetrains.
Good GAWD, I just came –>| |<– THIS CLOSE to being an optimist. Forgive me.
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September 17th, 2009 at 9:37 am
what are you trying to say? you want somebody to pay you for your “altruistic” desire to get Volt? get a job!
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September 17th, 2009 at 9:41 am
Mike-O re optimism
Come on in the water is ALWAYS fine! (even if it’s not)
Be well,
Tagamet
Let’s Just Get The Volts’ Wheels On The Road!!**********NPNS
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September 17th, 2009 at 9:43 am
absolutely. Not to mention there will not be enough “good” cars, jobs and houses to move to. This will be devastating. And if middle and upper middle class think they can get over high cost of gas, think again. Middle class in US will die as we know it. Majority will go below poverty line, few rich guys will enjoy their lives no matter what.
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September 17th, 2009 at 9:44 am
They are taking a page out of Toyota’s play book. Develop new tech, hope it’s a hit with early adopters, hope gas prices remain high and the environmental issues stay in the news and then ten years later, start selling them at reasonable, competitive cost. Worked for the Prius, why not the Volt?
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September 17th, 2009 at 9:47 am
This is Lutz lobbying in the media for a gas tax in conjunction with rasing Cafe or EV requirements. Privately the pitch will be do this or don’t raise the requirements.
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September 17th, 2009 at 9:48 am
… or stay at home and die.
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September 17th, 2009 at 9:48 am
Even if gas is $5, you will still never recoup the cost of the Volt over a lower priced hybrid. If you compare something like a $20k Insight vs a $40k+ Volt, you just can’t recoup the difference in fuel savings.
They can’t sell the Volt as a money saver with a $40k+ price tag. Sure I still want one, but not because I have any delusions of it saving me money.
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September 17th, 2009 at 9:52 am
Then go look at the actual number of SALES. Toyota’s car/truck mix is about 60/40 (and that includes “trucks” like the Sienna and Rav). GM’s car/truck mix has shifted a lot, lately, but topped out somewhere around 30/70.
As for “It’s not GM’s business to lobby…” GM has lobbied for all kinds of things over the years. Why do you think we don’t have a decent fuel tax at this point, after foreign countries have repeatedly demonstrated their power to step on our strategic neck? After price shocks have repeatedly rocked our economy? GM pushed, and pushed HARD, for a CAFE system that could be easily gamed… and then gamed it. GM worked very hard for a legislative and regulatory environment that was very friendly to their gas guzzlers. The E-85 rules, for example, make the entire CAFE idea a complete joke.
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September 17th, 2009 at 9:53 am
Huh????
You want another government beaurocracy to give me back money they have taken from me in the first place???? And how much overhead will that take to produce 50 million checks per month????
And the poor people are the ones that would get hit the hardest, as they drive the old used gas hogs, not the bright new shiny Chevy Volts, and Toyota Prius!
Don’t make this a class warfare issue, and part of a liberal agenda to “redistribute” the wealth.
If gasoline has to be $6.00 per gallon, then it has to be felt by all. But be prepared for the huge increase in price for everything we buy…..
And what exactly will the government do with all that new “revenue”? If is is just to be wasted on some new program with no real benefit, except to get themselves re-elected, then I think I would rather keep my hard earned money and figure out how to spend it myself……
They have spent way too much money that does not exist already. If we do not stop the madness, then our kids and grand kids will be living in a bankrupt country.
JMHO
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September 17th, 2009 at 9:54 am
Dave K
Looks like you GOT it!
Congrats.
Be well,
Tagamet
Let’s Just Get The Volts’ Wheels On The Road!!**********NPNS
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September 17th, 2009 at 9:56 am
And where has GM put its lobbyist money? Lutz has remarked that higher fuel prices will be what really propels small/fuel efficient cars in the market.
Yet, all along, GM’s lobbyist and ad dollars have worked to promote bigger and bigger and bigger gas guzzlers. Not because people won’t buy small/fuel efficient cars but because GM hasn’t figured out how to produce them competitively and prefers to reap soft profits from a gas guzzler business that has, repeatedly, been hammered by oil price shocks.
GM never learns and they work against our interests. The 10K units of the Volt due out in 2011 are a fig leaf and nothing more.
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September 17th, 2009 at 9:57 am
Another scuba diver – cool!!!!
I am NAUI Instructor # 19017.
I hope all me gear will fit in the trunk of my Volt…….
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September 17th, 2009 at 9:59 am
In response to nasaman’s statement: “I agree with Larry Burns that fuel cells will ultimately prove to be a better source of electricity than batteries. ”
I’m confused by this. A fuel cell application INCLUDES a battery. Free electrons from the fuel cell are used to charge the battery. Could you clarify a bit?
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September 17th, 2009 at 9:59 am
Your post is right on. I just think it is a chicken or the egg analogy. Why do you think they have great transportation systems. This is partially because of the fuel tax. Gas has been high priced in Europe for many decades. People want the mass transit.
If fuel taxes were raised here, more people would walk and take the bus. If fuel taxes were raised here, more people would shift their locations closer to the city or closer to work. If fuel prices remained high here people would demand and vote for better mass transporation options.
We use CAFE standards to try and make people buy small cars. It does not work to well. A gas tax would have people clamoring for small cars.
We have public transportation systems that are under used. From my office window, I can see the DC metro trains go buy. The tracks are not as busy as they should be. People are still driving to work with 1 person in the car.
A gas tax changes peoples behavior and does not require any rules or regulations to do this. People change on their own at their own pace. Its definitely something our spineless politicians should consider.
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September 17th, 2009 at 10:02 am
It’s not just about taxes. It’s also about the strength of the dollar. If the dollar goes down, the price of gasoline goes up. And vice versa.
If you look at our trade deficit, the dollar is obviously still too strong–equilibrium would be neither a trade deficit or a trade surplus. It makes sense since it’s still, by default, the world reserve currency.
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September 17th, 2009 at 10:05 am
I’m sick of government intervention in the market prices. Oil will be where it’s going to be–without Obama playing communist. Oh wait, he owns the means of production (GM). I think I’ll buy a Tesla.
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September 17th, 2009 at 10:10 am
The 2011 Chevy Cruze will fill the 40+ mpg category.
http://www.chevrolet.com/future-vehicles/cruze/
And it’s a good looking car, especially compared to it’s high mpg competitors.
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September 17th, 2009 at 10:11 am
They can use the money to reduce the deficit. We’re going to have to pay it off somehow. And just raising income taxes on the top 1% of the country won’t even begin to cover the bill.
Other than that, I can think of a dozen other decent non-controversial uses for the money. Building decent public transportation comes to mind. Fixing the roads? Replacing the numerous bridges that are about the collapse? Fixing our worn out levees so we don’t have another Katrina? Providing companies with incentives to manufacture here instead of Asia. (The Asian governments do it. We have to too if we want to remain competitive as an economy.)?
But, alternatively, they can use the funds to cut payroll taxes. They could make it deficit neutral. The point is to encourage people to reduce their gasoline consumption. Not to raise money.
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September 17th, 2009 at 10:11 am
I agree with you. Sure, high gas prices will help adoption of Voltec, but there are other considerations that help reach the same goal of cost reductions.
Time passing, improved supplier partnerships, increased public awareness, cost-saving R&D breakthroughs, government intervention and incentives… all of these will play a role, too.
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September 17th, 2009 at 10:13 am
To this end there is a tax on engines over 2 litres in many places including Europe.
It has resulted in some very efficent (and powerful) small bore engines. Both gas and diesel.
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September 17th, 2009 at 10:14 am
I don’t even have a car and I take public transportation. So, I’m “insulated” as well. But, realistically, if we tax gasoline, food prices will probably go up. And so will things like heating oil, airline tickets, etc.
But these things should be more expensive. When they’re artifically cheap, we overconsume.
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September 17th, 2009 at 10:15 am
Well, I can provide one possible answer.
If *I* could retire two weeks from now, I would do so! Maybe he’s retiring simply because he can!
Besides, there’ll always be something new coming down the turnpike. Gotta retire someday (or die trying).
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September 17th, 2009 at 10:15 am
So Far… fit and finish is excellent… It handles well… does not have any troubles getting up to freeway speeds for merging etc..
Definetely not a sports car but handles adequately in the corners…
The only thing that I have found to be a bit unsettling at first was the CVT transmission… The engine revs up when acccelerating (and you are waiting for a transmission shift that never happens)..and you watch the spedometer… it rises quickly and steadily til you acheive the speed limit. And when you ease off the pedal… the engine RPMs drop right off..
Go to your Ford dealer and take one for a test drive…
You will be impressed.
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September 17th, 2009 at 10:20 am
Good question, CaffeineBuzz! Of course, fuel cells can’t be used to recapture kinetic energy as in regenerative coasting & braking. So what I mean is that a fuel cell can replace both an ICE in an EREV like the Volt or a plug-in hybrid as well as MOST of the large battery —a MUCH smaller battery and/or a capacitor bank should suffice— and I’m guessing from Larry Burn’s remarks yesterday that considerable (classified) progress has been made in generating hydrogen (perhaps even on-board vehicles) in an extremely economical and environmental-friendly way.
/ BTW, Frank Weber’s concern about ICE noise would disappear with a silent fuel cell
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September 17th, 2009 at 10:21 am
Tag, not to get into a debate on socialism, but gas is much higher in Europe and their low-income ppl seem to survive. Typically lower income ppl often have other means of transportation than an Hummer/gas guzzler. Many take public transportation. Many are unemployed and don’t drive that much at all. I dont think $5 gas would destroy low income ppl as much as you think, but I dont have any #’s I can show. What will low income ppl do when gas reaches $5 on its own? There’s also the debate of where the tax $ will go, and the possibilities of what could be done with it. I believe taxes are a necessity for any society, and should be used to benefit that society. Call it social engineering, but its the world we live in.
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September 17th, 2009 at 10:22 am
It’s not brainwashed, it’s simple truth.
The general public at large will not buy cars with great fuel economy unless gas prices skyrocket–and I’m not talking about Volts, either. When gas prices came down since last summer, small car sales have slowed, and truck sales have gone back up.
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September 17th, 2009 at 10:22 am
Really? Then why is GM boosting production due to dealer demand for the Equinox, the Camaro, the GMC Terrain, Cadilac SRX, etc.?
http://online.wsj.com/article/SB125305886067314043.html
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September 17th, 2009 at 10:25 am
I understand the high price at first. IE:( New toy for the rich and a way for GM to recoup some money) But if you want the Volt to exceed, you will have to get it in the the mid to low $20,000 range and promote it as a way to say good bye to being held hostage by big oil and you will have a winner no matter what the gas prices are IMHO. I myself would have an all gas powered car and a Volt to deal with the ups and downs IE:(gettiing ripped off and not getting ripped off so much)of the oil markets and refineries. Get it affordable for 50% of the nation and tell us to buy it for the good of America and lets see what happens!!?? My guess is we would have a STAR of a car on our hands.
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September 17th, 2009 at 10:28 am
Bruce;
No one ever argued the volt would be a good deal at $40,000.
We have to wait a few years for the price to come down.
With the Tax Credit through, a $32,500 does pay for itself, even compared to an insight if you are a typical person that drives to work and back and can charge at work.
Simple math, if 2 folks have $20,000 to spend. One pays cash for an Insight and another pays $20,000 for a Volt and gets a second mortgage for $12,500 for 10 years at 6% yielding a Monthly $138.78 payment.
Then if you assume gas is $4 more then the cost of electricity for the same amount of propulsion, a volt driver needs to save 35 gallons a month which is 1750 miles of AER.
I guess to equal a $20,000 car that AVERAGES 50 MPG,, you would have to have a one way trip of 35 miles to work, charge it there and then drive home to get 70 miles of AER on work days. And you’d have to schoot around town 50 miles per day on the weekends with a mid day charge as well.
But as always what you are missing is the Volt is a much nicer car than an Insight, and that gas is going to average way more than $5 a gallon between 2012 and 2022, without a doubt.
And of course you’d be doing a huge service to your country by pumping that money that would go overseas to buy the oil into our economy instead. That is a payback you will receive in lower taxes down the road and a better quality of life for you and your family.
To anyone that looks at the ‘WHOLE PICTURE’ it isn’t hard to justify moving in this direction. It is just that the first few years the folks that should buy the car are the folks that have a long drive to work and can charge it there.
When the prices come down in a few years everyone else can buy them.
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September 17th, 2009 at 10:29 am
There are currently unused oil fields that become viable at higher oil prices. If gas prices go high enough–the last estimate I read was $10.00 a gallon, the oil shale found right here in the US becomes viable.
So, yes, as price goes up, production also goes up. But that’s not a good long term solution. Our economy (and every modern economy in the world for that matter) requires cheap energy. We need to incentivize alternatives now. So that they’ll be affordable when the time comes that we really need them. (Not that we don’t already.)
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September 17th, 2009 at 10:31 am
. . . with the exception of the True Believers who must act to save the planet, regardless of economics (or at lest, be seen as ‘acting to save the planet’).
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September 17th, 2009 at 10:32 am
While the article mentions that Larry Burns has led R&D for only 11 years, it doesn’t mention that he has spent a total of roughly 40 years at GM…. it’s just time for retirment. No need to read anything into it. It’s definitely not due to anything VOLT-related.
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September 17th, 2009 at 10:33 am
Agreed. Sadly, the way things are going now, the Volt may be the last product GM makes before shutting the doors for good. The public will not stomach another auto bailout. I don’t see any product on the lots or in the pipeline yet that is going to radically alter the public’s perception of GM cars in the next four years. Their current ad campaigns don’t help much either. They reek of desperation (which GM is) and people shy away from sinking ships when making big ticket durable purchases. Throw into the mix a group of traditional GM buyers who are boycotting them for getting a bailout in the first place. GM isn’t even in as good a spot as Chrysler because they don’t have a new leader with surplus money and delusions of grandeur.
Their only hope of survival is to sell off assets as best they can to buy time and become the right size for what they now have become, a medium to small car maker and really work hard to get new, exciting, quality product out the door faster than usual. They are probably safe as long as Barack is around, but four years from now, they both may be gone.
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September 17th, 2009 at 10:33 am
Meanwhile, look for gas to drop below $2 a gallon here, due to the soft economy (and attendant supply increases). Sure, it will go up again; but when? It took a hurricane bulls-eye on New Orleans to get it above $4.
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September 17th, 2009 at 10:36 am
According to this article, Mr. Burns has been with GM since 1969. If he was 25 then, that would make him 65 now. I don’t know that for sure, but In any event he is around retirement age.
So maybe he is not like Maximum Bob, and has no problem with retirement……..
http://hydrogendiscoveries.wordpress.com/2009/07/14/larry-burns-from-gm-to-retire-leaves-legacy-as-rd-chief-and-hydrogen-advocate/
Everything does not have to be a conspriracy!!!
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September 17th, 2009 at 10:36 am
You seem to be in a worse mood than normal RVD.
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September 17th, 2009 at 10:38 am
LauraM:
Alas, that’s much too smart of an approach to ever find traction in this country, IMHO.
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September 17th, 2009 at 10:38 am
An article with some background information about Larry Burns:
http://hydrogendiscoveries.wordpress.com/2009/07/14/larry-burns-from-gm-to-retire-leaves-legacy-as-rd-chief-and-hydrogen-advocate/
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September 17th, 2009 at 10:39 am
This would not be the best of ideas. Taxing gasoline and diesel at different rates just leads to the situation, found for example in Europe, where consumers buy diesel because the taxes are lower.
If you want to go this route you could tax gasoline and diesel but not ethanol or bio-diesel. That might get you to where you want to go much faster.
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September 17th, 2009 at 10:39 am
The recent “Stimulus” raised the deficit so high, that even if the government took every penny (and then gave us a 10 – 20% ‘allowance’), it could still take decades (maybe generations) to pay down. And this doesn’t address future spending plans which have been mentioned.
Do you really believe that those guys inside the Beltway won’t spend any money they can get, as fast as they get it? Not playing partisan here, either: pork comes in two flavors.
Consider that Social Security was supposed to be a “fund” we pay into with taxes, but the reality has been a kind of cash-grab ponzi scheme. Go looking for the SS “lockbox” and you’ll find a filing cabinet somewhere in Virginia full of IOUs.
There’s a reason many of us are here, hoping that the Volt pans out; a technological solution has the potential of doing an end run around our dysfunctional government. Yes, that has already become a forlorn hope, following Government Sponsored Bankruptcy.
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September 17th, 2009 at 10:41 am
As to “reaping soft profits from gas guzzlers”, GM is no different than any other manufacturer, period. Particularly Toyota/Lexus.
If I’m not mistaken, Are not GM’s cars and trucks, IN GENERAL, the best fuel economy options in their classes? I think this is true, although I won’t swear to it. Aside from the halo Prius, of course.
The definition and use of the term “gas guzzler” is constantly shifting depending on the agenda of the poster. How exactly do you define it, Dagwood?
I do not understand at all the comment about GM “working against our interests”. Whos interests? Yours? Toyotas? GM-Volt.com?
Your constant GM hatred on display begs the question as to why you are even here on this site.
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September 17th, 2009 at 10:41 am
EVO:
According to Jean-Charles Jacquemin, gasoline is taxed at a much higher rate than diesel in Europe, to benefit the trucking industry. As a result, there is a profusion of diesel cars in Europe to take advantage of the lower price.
It’s like making rules for kids. They find a way around the rule befroe you even finish making it up, LOL.
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September 17th, 2009 at 10:42 am
or maybe, just maybe, there might be other (lower cost, electric) alternatives besides the volt, . . . . hmmmmm?
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September 17th, 2009 at 10:42 am
Tag, the gas tax proposals I’ve seen all give a credit on payroll taxes so that the “gas tax” also includes a “payroll tax cut” of the same magnitude, making the entire approach revenue neutral, meaning there is in effect no actual tax increase so long as you actually work,
But there will be no gas tax. The Obama Administration has gone the Cap&Trade route.
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September 17th, 2009 at 10:44 am
I agree that the tax would be a big deal for low-income people. However, I think the long run, they’d be better off since oil prices are going to inevitably go up anyway. And this way the economy in general will be more prepared for it. And, eventually, there will be good, cheaper substitutes.
By the way, a tax on miliage wouldn’t work nearly as well. We want to encourage people to buy more fuel efficient vehicles like hybrids, BEVs, etc. Also, if a family has a truck and a small car, we want to encourage them to use the small car instead of the truck whenever possible. A miliage tax wouldn’t do that.
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September 17th, 2009 at 10:45 am
WTF!!!!!!!
I said it before and I’ll say it again……
IF I ONE CAN’T AFFORD A $43,000.000 CAR WHEN GAS IS $2/GALLON, WHAT THE PHUK MAKES YOU THINK ONE CAN AFFORD ONE WHEN IT’S $5 or $6 PER GALLON!!!!
Is the car going to be less expensive if gas was highr? NO!
Won’t “Supply and Demand” dictate the price? Yes (Per Mr. DonC)
So where the hell does this justification of higher gas prices come from for GM to say is required for the car to be a success?
Hey GM, WTF yall smokin cause that mus be some gooood azz sh|t and yall need to “Puff, Puff…..GIVE!!!” so I can see your ways too!
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September 17th, 2009 at 10:46 am
No new taxes, ever. I would like to understand why certain people want the government to take control and “make” them do everything. Make your own financial decisions wisely and you don’t need the government. If you want an EREV, fork over the money. I would if i had it, but I am lower middle class. If you don’t, then don’t. I don’t want the government deciding when I am going to purchase something by effectively hurting me with another tax that will bring revenue to a bureaucracy that does not know how to manage the money they have now. I have very conservative views on taxes I know, but why do I need the government to tell me when I need to buy a vehicle? I am already not happy that the government owns the company that is trying to sell me the vehicle. Too much government. But someone please explain why someone would so eagerly want to spend more of their income, whether it be on taxes or a 40,000 car? If gas to $6 a gallon soon, that doesn’t mean the price of the Volt (or any other BEV or EREV) is gonna come down at the same time, so you will be paying a new tax to uncle Sam, and buying a $30000 – $40,000 car. Makes no sense. Oh and for those of us that cannot afford both (or any new car over 20K) guess we will be stuck with a second rate econo box that only gets 40mpgs (if we have the money for a new car at all) and still have to pay $6 for gas. I have just finished paying off a basic vehicle with power nothing and it gets 23mpg combined and I bought it in 2004. I was not looking to purchase another vehicle for a little while, at least not until I saved for a few years. I work 40 miles from home. If gas hit $6, or even $4, I would be strapped and still would not be able to afford a new car. I am probably not the only one in this or a partial of this situation. Think about it.
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September 17th, 2009 at 10:46 am
nuclearboy:
The utility of the LS Hybrid sedan is as a highly effective ‘greenwashing” and PR tool. No more, no less.
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September 17th, 2009 at 10:47 am
I doesn’t hurt them as much as you would think as low income folks often don’t have enough money to even have a car.
Raise the fuel taxes and invest in public transport and we all would be better off.
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September 17th, 2009 at 10:48 am
I didn’t realize the state of vehicle electrification in the world was the sole responsibility of GM.
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September 17th, 2009 at 10:48 am
Thanks for the clarification nasaman. I agree that the battery required as part of a fuel cell application is much smaller than that required of a PHEV or EREV application (and obviously a BEV as well).
Regenerative braking aside though, the primary reason why a smaller battery is required as part of a fuel cell system is that there is no reluctance to enter charge sustaining mode, while in an EREV for example, there is. You want to avoid using the ICE as much as possible.
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September 17th, 2009 at 10:49 am
“The Obama Administration has gone the Cap&Trade route.”
… but so far, they’ve been fought to a standstill on it.
They don’t want to tax the “goes-inta,” they want to tax the “goes-outa.” Ironically, the result of this would be an astronomical increase in the cost of electricity: the worst thing possible for vehicle electrification.
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September 17th, 2009 at 10:49 am
I agree. When gasoline prices are reliably high, people invest in alternatives. That includes things like a)moving close to work, b)finding ways to telecommute, and c)building more and better public transportation.
The availability of these things will make everyone (including those will low incomes) better off in the long run. The problem is that we’ve put this off for so long that it makes the transition much much more difficult. But the longer we wait, the harder it will be.
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September 17th, 2009 at 10:51 am
+1 not because I approve, but because I think you are absolutely correct.
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September 17th, 2009 at 10:54 am
Ooo boy…..
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September 17th, 2009 at 10:55 am
Off topic comment:
On the way to work today I passed a beautiful new blue Corvette on I270 in Maryland with the license plate that said:
MYPRIUS
After I got finished laughing and smiling I thought about that a little. This country was founded on freedom and choice.
Lets hope is stays that way.
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September 17th, 2009 at 10:55 am
Average miles driven per year is 12000. Assume 30 miles per gallon (overly optimistic, I know). That’s 400 gallons per year. Taxed at $3 per gallon, that’s $1200 per year in taxes.
Cash for Clunkers was popular. If you take that program, you could fund cash for clunkers $1200 the first year, $2400 the second year, $3600 the third year and so forth. Add that to the $7500 for electric vehicles and you could start making real incentives.
And those incentives would be paid for.
Suppose you even go farther to incentivize the worst miles per gallon offenders. You could start the tax, and give the cash for clunkers a value of $3 per gallon that this owner has used, measured by the car’s mileage and it’s mpg. Then the person upgrading to an electric vehicle basically gets back the tax money they spent. This costs the tax payer nothing, but gives a good incentive for gas hogs to do better.
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September 17th, 2009 at 10:57 am
Lower cost? Please let us know. Oh, it must have the same convenience of an ICE, like the Volt. The only other alternative I know of is Better Place. I’m for that as well. Well? What have you got? No, not a silly EV with 100 mile range and no way to charge it in a few minutes. That’s a toy. Prius plug-in? Yeah, that’s good too but you only get around 12 miles of AER. The batteries are expensive for EVERYONE, not just GM.
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September 17th, 2009 at 10:57 am
Ray, thanks for the data bro!!!
Keep em coming. Can you describe how you drove to acieve the 108MPG and how far?
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September 17th, 2009 at 11:00 am
Dang dude…
RVD, U & ME @ H( . y . )TERS for chicken wings and beer(s) matey.
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September 17th, 2009 at 11:00 am
As I opined in yesterday’s thread, I think that EREV architecture will allow for many kinds of electricity production technology to be used; perhaps even a fuel cell.
All technical considerations aside, finding a new, initially rare fuel will be much less painful if you can plug in to do 80% of your driving.
I think liquid fuel reformed on-board is the likeliest route to automobile fuel cells (no more ‘how do you distribute / store on-board’ problems), but I believe that there will still be some work to do in reducing the cell costs significantly. Meanwhile, battery costs will be dropping, as performance improves. Could a small fuel cell augment plug-in electricity for an extended range?
There is a lot of ‘room in the middle’ with an EREV for two technologies to meet. Just as the Volt serves as a bridge from ICE to electric, a future application of the architecture can serve as a bridge to fuel cells, or maybe something we can’t imagine now.
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September 17th, 2009 at 11:00 am
Bob Lutz, LOL.
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September 17th, 2009 at 11:03 am
IF, and that’s a big IF Mr. Lutz does not get peak oil or the fact that we need to move away from SUVs and other wasteful, fossil fuel burning vehicles look on the light side, he is very close to retirement.
Just kidding Mr. Lutz! I know you are full joy on the Volt and Voltec. You are a smart guy, of course you get it.
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September 17th, 2009 at 11:05 am
This is Lutz acknowledging that they can’t work the price of the Volt down …This is Lutz acknowledging that “voltec” is not viable.
These are valid points but perhaps overstated. As to your first point, I’d say that it’s an acknowledgement that GM can’t work the price of the Volt down “enough”. IOW if the goal is to make money at $30K without rebates then getting the car to $35 rather than $45 won’t hit the goal.
As to the point about Voltec not being viable, I’d say that it’s an acknowledgment that unless gas goes up dramatically “voltec” is not a viable mainstream product. On the other hand, using this same thought process, you could make the case — and Lutz has — that hybrid technology is not a viable mainstream technology. The fact that where I live the Prius has to be the most popular car on the road, and that in the US the Prius is is a hot product — easily outselling the Camaro, suggests that perhaps his thinking on this point needs more refinement.
People buy cars for many reasons. One primary reason is to be cool. It’s beyond me why Lutz thinks everyone would think it was cool to drive a Camaro or a Corvette (sorry Corvette Guy) but not to drive a Voltec vehicle.
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September 17th, 2009 at 11:08 am
Actually it is just a car.
You should never put a large part of your assets on the line for ANY car. That is financial suicide, plain and simple.
No matter how great a car is, its not a necassary purchase for anyone, and you should never stretch yourself buy it.
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September 17th, 2009 at 11:10 am
Its time to put down the kool aid and turn off Beck for a while…
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September 17th, 2009 at 11:11 am
Great points and thanks for elaborating further. But I have a question. You talk about fuel cells that run on ethanol. What would be the advantages of a set up like this? For $150 you can make any ICE capable of running on ethanol. Why put the ethanol into a fuel cell rather than an “ethanol tank”? Wouldn’t the fuel cell cost a lot more? And you wouldn’t get any less CO2. Particulate emissions? Other emissions?
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September 17th, 2009 at 11:11 am
If gas reaches $10 per gallon you will be surprised how fast your buddies will be looking for small and efficient vehicles. Just because we are use to SUVs and huge ego trucks does not mean they are what we actually need. Just ask most other “adults” around the world. Funny how the rest of the world doesn’t need such heaps of metal, nor the McMansions we lust over. School is about to begin.
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September 17th, 2009 at 11:16 am
What is this word “Generalization”. Isn’t the new GM seeing the world in love with the new Volt? With this attitude or notion that it will take a raise in fuel prices to make the EV technology viable, you will never get one on the road.
It hasn’t been that long ago when the fuel raised above a dollar a gallon and people jumper up and down as if they were going to stop driving their automobiles. At 5 or 6 dollars the public would probably adjust and of course the oil industry will just keep raising the price.
Bob Lutz is old enough to know better than this idea.
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September 17th, 2009 at 11:17 am
Dave, this is just a FYI thing, but under the new CAFE rules trucks and cars are in different segments, and each segment must meet separate CAFE standards. So GM can’t use the Volt to offset sales of SUVs or pickup trucks.
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September 17th, 2009 at 11:25 am
While this has been discussed on this site extensively, the real problems are:
What happens if you put down a large deposit, and GM fails? Are you willing to take the chance that your $5K or $10K deposit might be lost to other creditors of GM?
And what if you do not like the car after you get to see it and give it a test drive? Are you going to expect to be paid interest on the deposit that GM was holding for those two years?
Would you expect Lyle to take the liability of holding the deposits?
These are not small sums of money and if you are talking about 10,000 people, the problems become very large to deal with.
I went to my local dealer to talk about pre-ordering, and they were not interested at all at this time. The only thing they would do is to start a “Volt Interest” folder, and put my name, address, and telephone number as #1 on the list.
But I have to say that I told them I would not buy another vehicle until it had E-REV technology. For a business that looks at weekly sales figures, that statement pretty much lost their interest…..
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September 17th, 2009 at 11:26 am
Dear Carcus1,
It’s been said, time and again, that the only reason why gas is so cheap in the US is because we are not accounting all the costs in the price.
Taxes, although impopular, are an effective way to change the behavior of customers.
If the price of gas goes back up to a more normal level (the current price is certainly not ‘normal’, it reflects how slow the US economy is; it will not last), or rather WHEN the price of gas goes back up, the Volt will make economic sense.
It will all be for the better.
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September 17th, 2009 at 11:26 am
LauraM, you don’t know any truly poor working people, do you? I would love to see you try to convince a single working mother of 3 that higher gas taxes are a good thing. Especially when she has to make a decision between food on the table, and gas so she can keep her 2 jobs.
But I guess, in your little world, that the poor should just “pull themselves up by their bootstraps”. After all, they have no one but themselves to blame for being poor. Yeah, right!
Instead of a gas tax, how about an electric tax, huh? Let’s make electric cost $1.00 or more per 100 watts. That would get rid of those incandescent light bulbs, quick. Ohhhh…did I just step on the toes of the Volt fanbois? I did? The Volt would cost over $50.00 to fill up? TOO BAD – suck it up and get over it ! That is exactly what you are telling the poor to do when you want to raise gas prices. If you can’t take it, don’t dish it out.
If you raised gas taxes on the top 5 percent of the rich (over $250,000.00 a year), I could go along with that. Other that that, keep your filthy hands off of America’s wallets. You want more of what we don’t have enough of right now – money.
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September 17th, 2009 at 11:27 am
Sometimes it’s inconvenient to look at what reality actually is.
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September 17th, 2009 at 11:32 am
Laura: Your ideas are wonderful.
Unfortunately, Noel, and Jackson are closer to being realistic, IMHO….
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September 17th, 2009 at 11:33 am
I just answered this in post above here. Read #17 answer, and realize there is little doubt between 2012-2022 gas will average WAY over $5 a gallon. Also no one will buy the car for $40,000. Those are the folks that get the $7500 back. And GM is acting going to be as negative as they can to get as much rebate money from the government as they can. Then the car will drop to $30,000 when the rebates are done, and by then the incremental costs of the car will more than be covered by the gas savings.
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September 17th, 2009 at 11:35 am
Better Place’s battery switch stations sure sound like a great idea…. but I wonder just how it will work without turning the auto industry upside-down. With the most costly component of a vehicle’s propulsion system continually kept fresh, a BP car would be able to last a lot longer than standard ICE vehicles. And with people keeping their cars longer, auto manufacturers would be faced with a shrinking market. Given that less volume = higher cost, cars would become more expensive to purchase and there would be fewer manufacturers able to keep their heads above water.
In the end, the Better Place approach might make owning a car more costly for everybody.
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September 17th, 2009 at 11:39 am
But, the income for each car will be greater than the cost to build that car in terms of parts and labor, so gm’s financial situation is improved with the sale.
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September 17th, 2009 at 11:41 am
yeah, I am getting aggravated…
need a vacation
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September 17th, 2009 at 11:41 am
Are you saying that most Americans are fat, compared to the rest of the world, which increases our health costs?
Checking google…. ohhh, apparently, so.
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September 17th, 2009 at 11:42 am
You are right on several points there.
The ~$40k Gen 1 car isn’t for the mass market and the production numbers reflect that.
I believe that the Gen 2 car will come in near $28k. With the resulting lower fuel bill from driving electric a lot of the time this should make the car attainable without a great hardship to a greater number of people.
There is not perfect solution of course but it’ll be a step in the right direction.
As for your government comments, I’m a Canadian so our idea of ‘less government’ STILL looks like communisim to you without a doubt!
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September 17th, 2009 at 11:42 am
Whatever you say.
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September 17th, 2009 at 11:44 am
Where I live if you sell cookies you are going to have to work from a certified commercial-grade kitchen. The cost to build or lease such a kitchen is substantial. That leaves the cook in the following situation — each cookie sold makes money, in that it can be sold for more than the cost of the cookie dough and labor involved. Each cookie may still lose money, if the price is not high enough to additionally pay for that cookies’ proportional share of the kitchen. However, every time a cookie is sold, the financial situation of the bakery improves, because there is marginal income that can help cover the cost of the kitchen.
This is the situation we have with the Volt, purportedly. The price is certainly high enough to cover the costs of parts, battery, assembly, and sales, but it may not be high enough to cover the ‘overhead’ costs, divided porportionally, because volume is low. However, every Volt sold improves the financial situation.
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September 17th, 2009 at 11:46 am
How about no taxes on anything? I’ll still be using my BEV, regardless. Since my point was that I have no opinion on gas taxes since I use a BEV, I’ll stop now while I’m so far behind.
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September 17th, 2009 at 11:48 am
they may not get here if Barack is not around to spend more of YOUR tax money to make it happen
Perhaps you can explain to me why some people get so upset about the $50B spent on saving the US auto industry — of which some part will be paid back — while ignoring the trillion dollars completely wasted on the war in Iraq. This seems to make as much sense as worrying about rearranging the deck chairs on the Titanic while ignoring the risks from ice bergs.
This is a serious question. I just don’t get it. It just seems obvious that one is considerably more important than the other, and yet there is an obsession with the one of vastly lesser importance.
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September 17th, 2009 at 11:49 am
you are right, but let me market forces do the work here
It is stupid from GM to ask for gas taxes to justify its bad decision (Volt)
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September 17th, 2009 at 11:50 am
DaV8or, absolutely and well said!!!
I.
Carpocalypse is now!
II.
I think you understand that which is beyond understanding. GM will take a lot of criticism until Voltec is profitable or canceled. I hope it’s profitable. The auto business OEM’s are looking at a golden age of innovation. Hope they are ready. As you point out, Toyota showed them innovation can be profitable. It will be interesting to watch and see who the winners and losers are in the midst of the upheavals to come.
III.
Big bureaucratic companies are not the best location for innovative idea incubation.
IV.
Perhaps new cars, platforms, drive trains etc. should be spun off into independent entities to protect shareholders from catastrophic losses. But only if the projects themselves can even gain enough support to be viable in organizations that have some independence from OEM’s. It’s said success has a thousand fathers but failure is an orphan.
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September 17th, 2009 at 11:54 am
“Lutz: Gas Must Rise to $5 or $6 per Gallon to Allow Generalization of Volt Technology”
I hate to break the news to you but if we had $5-6 dollars a gallon in the next 2 years we would be in a great depression, whats left of the economy and recovery would be gone.
So for the near term all the automobile manufactures need to press hard on new technology. The Europeans are wrong with their assumption that small Diesels are the answer its that and much more.
Whats interesting about this 100 year change going on is that it opens the door to small companies and technology allowing them to compete with the big companies. Right now everyone is on a level playing field so ideas and patents are going to drive the next successes. I dont think the big auto manufactures will be able to buy these patents and will have to pay a high royalty cost on the new technology which say one thing these cars wont be cheap.
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September 17th, 2009 at 11:55 am
RB,
That really is not known one way or the other.
I suspect they will be ‘upside down’ on the Gen 1 cars meaning that they will be taking a loss on each car.
(Just like Toyota did with the Prius)
Which is why they will get the ’slightly’ profitable Gen 2 car out ASAP.
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September 17th, 2009 at 11:55 am
Dan, this is completely non-responsive to your post here, but I wanted to share this story with you yesterday when you were talking about the advantage of maintaining GM vehicles and didn’t get to it.
Last week my neighbor asked me for a jump for his M3. When I pulled in next to him, his hood was up, and he proudly explained to me that “BMW thinks of everything” because, while the battery is in the trunk, there are battery terminals under the hood in the spot where the battery would normally be (there seemed to be space for the battery). My reply was “yeah, they’ve thought of everything, including how to sell you a $75 battery for $750!”.
Thought you might get a kick out of this.
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September 17th, 2009 at 11:55 am
So kdawg gets a +8 for suggesting we tax gasoline (private vehicles) but not diesel (semi-trucks) and I get a -1 and repeatedly lectured against for explicitly pointing out that that’s what kdawg did but otherwise having no opinion on the topic?
Great thinkers on this blog.
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September 17th, 2009 at 11:58 am
Nasaman, would’nt a battery also capsure overproduced energy from a fuel cell. I mean can it stop the combining of elements in an instant?
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September 17th, 2009 at 12:00 pm
This is why I like the Volt.
It is also why I like diesels.
You CAN have the cake AND eat it.
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September 17th, 2009 at 12:00 pm
“..between 2012-2022 gas will average WAY over $5 a gallon..”
lol, Nostradamus, is that you?
How can anyone speculate this up to 2022? Do you really think OPEC will increase prices when demand is low? What’s the rule of economics here? If demand is low prices go down. Isn’t that what happened in the very recent past? Remember when gas was $4/gallon? Demand went down and prices dropped proportionately. Sure it will go up again and just as it went up it will go down. That our roller coaster and that shouldn’t be the determinig factor of the sucess of a product. The Volt has to just perform as designed and last as a quality product. That’s what sells, not gas prices. Claiming gas prices is a factor as a bullsh|t backdoor for GM to cop out if something goes wrong.
As for the $7500 rebate, just as I have always said it, it does nothing when you purchase the car. The selling price will be $43,000.00 plus tax licens & doc fees minus your down and will never indicate a MINUS $7500. This means you are financing EVERYTHING including that $7500. So when I say if one can’t afford a $43,000.00 car when gas is $2/gallon, then one can’t afford it at $5 or $6 per gallon, that’s the honest truth. No fuzzy math can prove this wrong on the year you purchase and sign on the lines to buy and drive off in the Volt.
So now what happens when the rebates are all gone? I gaurantee you that the rebates will get used up before the second year the Volt is out because of the many other BEV’s and PHEV’s comong in 2010 and 2011. Battery cell costs will stay stagnant for a while because there really is no competition for the LiMn cells the Volt uses. This and the performance characteristics (of the cells) binds GM to LG and LG really has no incentive to drop the prices till 1 week before the contract is over. GM can b|tch all they want for LG to drop the prices but they are both commited to buy/deliver an XXX amount of cells per year for how ever long the contract is.
NOTE:
No spell checker was harmed in the writing of this post. So don’t flame on the grammar.
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September 17th, 2009 at 12:05 pm
” am probably not the only one in this or a partial of this situation.”
You’re not. There are many in the same boat. See post #20
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September 17th, 2009 at 12:07 pm
If we’re going to truly let the ‘market forces’ do their work, then in addition to not taxing gas more, we could stop heavily subsidizing it.
Look at all the places we put the miliary to protect foreign sources of oil. That all comes with a hefty price tag that’s not reflected in our prices at the pump.
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September 17th, 2009 at 12:07 pm
That wasn’t the point I was trying to make–it was more about the indirect uses of gasoline.
But since you brought it up….In case anyone else is interested…
http://www.nytimes.com/2009/09/10/opinion/10pollan.html?scp=1&sq=big%20food&st=cse
http://www.nytimes.com/2009/09/17/business/17soda.html?ref=health
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September 17th, 2009 at 12:09 pm
Laura has a good point though. The value of our dollar is largely maintained by it being the default world currency. Organizations such as BRIC are pushing for that to change, and if it does, our dollar will hold a more representative value based on our surplus and deficit. This would, in turn, cause gas prices to increase.
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September 17th, 2009 at 12:09 pm
There is an alternative to raising gas to $6 – $7 a gallon.
Price gas at $1.00 a gallon and make all cars and trucks get a mileage of 2 miles per gallon.
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September 17th, 2009 at 12:09 pm
I don’t think it’s on the front burner. Until health care is finished not much will happen with Cap&Trade.
On the cost, if you ignore the partisan studies, the serious studies put the cost per household at about $10/month, though admittedly there are many interactions and substitution effects which makes estimates difficult. This isn’t what I’d call “astronomical”.
http://en.wikipedia.org/wiki/American_Clean_Energy_and_Security_Act#Criticism
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September 17th, 2009 at 12:13 pm
I’d say increasing the minimum wage would address this fairly directly.
Just rememeber that YOUR expenses go up to support the higher wage for those lower income folks.
I’m not against them getting fair compensation but you need to keep in in perspective, the money has to come from somewhere.
Lower income jobs are almost always ’service’ related, so we the ‘middle class’ will pay.
As has been mentioned gas is ALREADY $5.50 a gallon here in Canada and people get by.
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September 17th, 2009 at 12:21 pm
Huh? You make no sense, Gas is already $3.15 where I live and we haven’t even fully recovered from the recession. This time next year gas will be well over $4.00 a gallon easily. Gas below $2.00 is a pipe dream.
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September 17th, 2009 at 12:22 pm
Wake up! China is currently making deals to insure that has the fuel oil it needs for its economy. With China’s and India’s huge populations, the demand for petroleum will cause to price to reach or exceed $5 or $6 sooner than you think. Visit PickensPlan and watch the recent video on our August usage of petroleum:
http://www.push.pickensplan.com/
355 billion barrels at $25.2 billion for August and with the trade deficit for July at $36 billion! The dependence of foreign oil is bankrupting our country. We need to and can end this dependence now.
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September 17th, 2009 at 12:24 pm
Tom,
“Yes an excellant article which sums up GM’s thinking. It doesn’t make any sense to me their caution.”
_________________
I don’t know about you, but I’ve never been in a position to lobby my company to bet my career on a $4 billion dollar start-up project that I know will lose money for years to come. Seems like I would be cautious too.
I’ve also never been in a position to tell my board, after my company loses $50 billion dollars, to hand over 4 billion more for something that we have never tried at scale before and then hand it off to production people who will have to take a loss on every vehicle built.
I have never taken the risk of setting billions of machinery in motion to take a known loss on every unit. Then beyond those losses take the risk of being so successful (at producing at a loss) that I put myself out of work by spending billions just to return continuing losses to the company.
Success means having to call the Ren Cen (or alternatively Dearborn) and say, “yes every thing is going according to plan – we’re taking a loss on every unit”; and possibly having to say, “by the way if we’re ever going to increase sales and lower costs, we have to get a new $1 billion dollar drop forge” (or any number of other tools and resources), “and I need that approved by Monday.”
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September 17th, 2009 at 12:25 pm
I have to disagree, it’s not like all of Europe is in shambles because they pay $5.00 per liter. That argument doesn’t hold water. The amount of foreign oil we consume is literally draining huge amounts of wealth OUT of the country, that has far more of an impact on American daily lives than the price of gas.
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September 17th, 2009 at 12:26 pm
We don’t need a gas tax to
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September 17th, 2009 at 12:26 pm
That’s how the Europeans ended up with so many nice little diesel cars!
When I visited the UK in 2005, they’d just started taxing diesel so that it was the same price as gasoline — both fuels were running about one pond per liter, and it was about two pounds per dollar, at the time, so the gas was costing us around $8/gal. On the other hand, what would have been a $5 lunch in the US was about 5 pounds, so it’s hard to make a really meaningful comparison.
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September 17th, 2009 at 12:27 pm
I like how lobbying is always blamed for bad government decisions and no energy policy. GM does not vote on CARB, congress, or any state legislatures. If those who do vote are swayed by lobbying, they are either corrupt, stupid, or else the lobbyist was right. In all choices, it is the legislator who has the final call. Don’t blame business for government’s failures.
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September 17th, 2009 at 12:29 pm
Commie.
jk…
I think you’re $28K for Gen 2 is off a little. I think it will be more in the range of $35,000.00 and no rebate.
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September 17th, 2009 at 12:30 pm
Actually, I do know some truly poor working people. But I live in NYC and they tend to take the subway. (They can’t afford a car.)
I understand that that’s not an option in most places in the country. But I believe that higher gas prices will lead to more investment in public transporation (like they have in Europe). Then they won’t need a car or gasoline to get them to those two jobs. That will ultimately reduce their cost of living in the long run. It’s the transitional period that’s the problem.
I also understand that the poor cannot “pull themselves up by their bootstraps.” That’s why I want to bring manufacturing jobs back to the US. So that they can get jobs that will enable them to afford more than just food on the table.
As far as your suggestion of just taxing gasoline for the top 5%? How exactly would that work? It sounds like an administrative nightmare.
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September 17th, 2009 at 12:30 pm
Toyota was losing money on Prius for almost 10 years. When demand for them spiked with higher gas prices, Toyota didn’t want to meet the demand because they would have to build an additional factory, increasing losses. In the end they caved in and now, many years later they are finally making money.
The same will happen with the Volt, except the Volt is the technology for the next 20-30 years.
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September 17th, 2009 at 12:33 pm
Well actually inflation alone would almost account for an average of $5 from 2012-2022, the time period of my hypothetical loan so that you could in effect prepay your fuel costs by financing that portion of your VOLT purchase price. Then you’d be making monthly payments on the Volt less than what you’d pay for gas.
And inflation will eventually catch up to us because of our unprecedented deficits unless we start growing the economy at a very fast rate (which would drive up oil demand).
I guess if most people are uninformed about the future prospects for fuel costs, then I guess those folks won’t be the early adopters will they.
If you do any real research on the subject, it isn’t arguable that the ‘easy’ oil has been found and that the cost of getting oil out of the ground will rise much faster then infliation. The demand for energy will continue to grow. The price for OIL will continue to rise faster and faster. There will be spikes up and down based on wars, hurricanes and recessions, but it isn’t hard to predict that electric cars will have a lower cost of ownership than gas cars, probably by 2015 even if gas were $4 a gallon then.
I don’t discount that gas could be that cheap, but I don’t think those scenarios are all that great. Like perhaps some huge pandemic kills off 2 or 3 billion people, then demand for oil will drop a lot.
The economics are in place now to move forward and get through the first generation of electric vehicles and on to the future where EVs will pay for themselves.
And as most people recognize there is a huge benefit to our society that justifies continued and expanded government credits to move this process along.
This isn’t a dead end where in 5 years they’ll realize batteries won’t work.
This is a process that is needed to restore a manufacutring base and help change our economy so we spend our money here.
Can you imagine the harm to our economy if OIL was at 200+ a barrell and we had no alternatives to gas cars. All that money going out of the country to buy OIL.
This is something we need to move on now before it is too late. It isn’t just a matter of the average guy having to pay more for gas, just like those few month in 2008, it is the average guy sending his money straight overseas to our enemies instead of keeping his money in our economy. When consumer spending slows our economy collapses.
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September 17th, 2009 at 12:33 pm
Well said. You add in commonality parts between the Volt and Cruze, as well as the selling of other “cookies” in the kitchen and the financial situation does indeed improve.
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September 17th, 2009 at 12:33 pm
Getting any equity from you house nowadays is gonna be none. That’s not an option for many folks. Doing so isn’t even really a good idea, unless you want to stay in debt longer in your lifetime.
Personally, I think that’s the worst thing you can do.
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September 17th, 2009 at 12:35 pm
I agree.
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September 17th, 2009 at 12:37 pm
I support cap-and-trade (although I would prefer a straight carbon tax–I think it’s simpler and easier to administser.) But I still don’t understand how it substitutes for a gas tax. Personally, I think that cap-and-trade increases the need for a gas tax. We want to retain the cost incentive for electric cars versus ICE.
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September 17th, 2009 at 12:39 pm
The problem with hydrogen being used as a fuel on any personal vehicle, is the fact that hydrogen must be stored at 10,000 psi. At that storage pressure the tank becomes extremely dangerous should it be ruptured. That is why such vehicles are designed completely around the tank. Not to mention the battery life of fuel cells is like 14,000 miles. I have quite a few friends of mine working at UC Davis that are dealing with these very same problems. Fuel Cell is a long way away from being ready for commercial use.
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September 17th, 2009 at 12:45 pm
The same can be said of laptops, tv’s and mountain bikes.
People WILL buy what they want necessary or not.
If their purchase does a little to make the world a little bit better place then why not.
Once again I firmly believe the ~$40k price will drop dramatically for Gen 2.
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September 17th, 2009 at 12:55 pm
Noel, the higher gasoline tax has encouraged people in Europe to buy diesel cars to avoid the extra cost in fuel. I believe that is on purpose. By encouraging diesel, it gets people to invest extra money in a more efficient technology that has a higher up-front cost…treasure out the country to oil producers goes down, and spending (and Gross Domestic Product) to make the diesel engines (often domestic in Europe) goes up.
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September 17th, 2009 at 1:05 pm
Another 200 billion barrels of oil found off the coast of West Africa yesterday. That makes almost a trillion new barrels of “easy oil” found in the last year or so. No way is oil even close to running out. Big oil can keep gas under $2 a gallon and make plenty of jack while stunting the growth of electrics. IMO Big Oil hold all the cards in this game. Consumers are little bitty pawns who are so easily manipulated by their governments. The consumers have virtually no say in their future. Sad but true.
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September 17th, 2009 at 1:08 pm
I filled up over lunch at $2.15 a gallon. Where the heck do you live, Hawaii?
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September 17th, 2009 at 1:09 pm
Thank you Ray, that was very good info there. I’m glad that after initial lustre/new car smell fades away, the car is still of a good quality & its performance is still very good.
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September 17th, 2009 at 1:11 pm
Not gonna happen. You can pick up your Doofus Award at the checkout desk of your asylum.
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September 17th, 2009 at 1:12 pm
DonC:
http://www.cbsnews.com/blogs/2009/09/15/taking_liberties/entry5314040.shtml
At best, there appears to be some discrepancy in the non-partisan studies & conclusions.
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September 17th, 2009 at 1:14 pm
ClarksonCote:
Exactly right. +1
In addition to $TRILLIONS for military adventures, there are many other “externalized costs”. These include, but are not limited to, the disastrous health impacts of air pollution, particularly from diesel exhaust, the very serious health impacts of noise on people living and working adjacent to higways and busy streets, and the ever looming multi-trillion dollar cost of deferred maintenance on our street and highway system.
That’s not even counting the urban sprawl typified by SoCal, and the disastrous land use and liveability impacts on communities of being cut up by freeways and arterial streets.
The used to be a blogger here who called himself jbfalaska. he was retired military. He always said that, if you factor in the externalized cost of military adventures alone, the true cost of gas in the US is something like $10/gallon. Add in all the rest, and who knows what it really is.
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September 17th, 2009 at 1:14 pm
That’s why GM should bite the bullet and make all light trucks 2-mode.
It would save a lot of fuel and put them way ahead in the average fuel usage per vehicle.
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September 17th, 2009 at 1:15 pm
I agree
But what would you do with Iraq and Afghanistan now? Quit?
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September 17th, 2009 at 1:16 pm
I am a fiscal conservative that hates the government getting involved in things. But they already spend a lot more money on things like making us get our healthcare from our employers (tax credits), subsidizing children (tax credits) and WARS (TRILLIONS), then the small amount I’m talking about to save our economy.
The next time Demand(world economic growth) exceeds Supply (peak oil) we will see oil prices spike much higher than the $147 of last year. And we’ll be spending a trillion a year or more to import our oil. And we aren’t moving fast enough to deal with this. Certainly $7500 credits for a million EREVs at a cost of 7.5 Billion will do a whole lot more than ‘Cash For Clunkers’ (3 Billion) or any other misguided idea. With Cash for Clunkers we threw money into the economy but with no long term gain. Credits for EREVs, BEVs is a REAL piece of the long term solution to our energy problem. 10 million cars with this credit would cost 75 billion, a tiny fraction of what will leave our economy to buy oil over the next 10 years. This is what is called making an investment in our economy. Like building infrastructure. Much better money spent then just giving money just to give money like the trillions spent by OBAMA this year. This money will help us change over our cars before the next OIL shock (200+/barrel) puts us down for the count.
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September 17th, 2009 at 1:19 pm
I do not understand why do you limit choices down to “raising gas to $6 – $7″ and “Price gas at $1.00″? This is ridiculous, how do you know what the price should be? That is what market is for, any other artificial price adjustments will not survive in the long run.
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September 17th, 2009 at 1:21 pm
the guy above me suggested this logic:
“who cannot afford the Volt or similar electric propulsion vehicles, can always buy a very cheap and fuel efficient ICE vehicle and /or a hybrid / electric motorbike or scooter”
I am just appending last piece in his chain.
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September 17th, 2009 at 1:23 pm
EVO & LauraM:
Laugh all you want, but I read a serious study some years ago that concluded that, if overweight American drivers lost an average of something like 10 pounds, it would save a substantial portion of our oil imports.
As an amatuer race car driver I have learned quite forcefully that it is a lot cheaper to take weight out of people than it is to take it out of cars.
Now that I think about it, how about a gov’t program to incentivize drivers to lose weight? Don’t panic, just kidding, LOL. I think. Or maybe an overhaul of the health care system, with more emphasis on preventitve medicine, will help CAFE?
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September 17th, 2009 at 1:25 pm
Business is more often the victim of government than the beneficiary.
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September 17th, 2009 at 1:32 pm
The war on Iraq is most definitely a bigger waste of money (and lives) but sadly, it was ol’ Bushy that bet his presidency on the war. Obama bet his on stopping the war; fixing the economy; nationalizing healthcare; and more… After spending or committing the U.S. to over 9 TRILLION dollars of debt, and not one of these things are fixed or improving… Who do you feel worse about electing?
To put that into perspective: You would have to spend $8,523.29 EVERY MINUTE of every day of every year since Jesus Christ died to equal 9 Trillion dollars, or about $511,397 per hour. Obama has spent that much in just the first few months of his reign.
But this site is about cars. I hope GM can get the VOLT on the road soon. That’s more fun to think about than all the reasons I can’t afford one this year.
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September 17th, 2009 at 1:34 pm
Nice. A Jim Jones reference. I suppose it depends on which side of the looking glass you live on, but it seems to me that many people respond to empty platitudes and unfulfilled promises from our current President. His hold over his supporters and their sometimes loud and violent suppression of those that disagree has more in common Rev. Jones, than the rantings of a conservative broadcaster who, by his own admission, is a clown.
So back away from the keyboard. Learn to hold your leaders responsible for their action and inaction, and whatever you do DON’T DRINK THE LATTE!
BTW it is NOT racist to prefer Black Cherry Kool Aid. mmmmm Kool Aid.
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September 17th, 2009 at 1:35 pm
I don’t believe that it is practical to provide European (or Japanese) style public transportation on a scale that would truly serve North America. City centers are one thing, but what about the poor who live out in the country, or smaller cities and towns? All would be taxed for the benefit of relatively few. There are limits to what can be funded by taxes, and the US deficit we have at this moment is already far too high.
Aren’t most of us posting here in the belief that the US would be better served through the electrification of private transportation? Didn’t this thread begin by speculating on the government’s proper role in that endeavor?
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September 17th, 2009 at 1:35 pm
Captain,
This is one of those points where we disagree but since we really have no idea one way or the other there’s no sense in fighting over it!
That beer sounds good…
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September 17th, 2009 at 1:40 pm
That would require an unqualified monoploy sized success story for “Better Place”.
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September 17th, 2009 at 1:40 pm
DonC:
Don’t forget Afghanistan. It’s going down the same toilet, IMHO.
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September 17th, 2009 at 1:41 pm
“The 10K units of the Volt due out in 2011 are a fig leaf and nothing more.”
If you’re going to invoke a metaphor from the plant world, it would be far more descriptive and accurate to choose a seed rather than a fig leaf.
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September 17th, 2009 at 1:41 pm
I think our friend Rashiid Amul was making a ‘funny’.
I laughed!
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September 17th, 2009 at 1:44 pm
its just an example to give apples to apples comparison.
But it also is something to consider for future BEV/EREV car owners.
Currently when you buy a car, if you keep it for 10 years you may pay 22,000 up front, but over the next 10 years you’ll pay $5,000 for insurance, $5,000 for maintenance (Oil Changes, Tires, other repairs) and $12,000 for gasoline.
So even if you pay cash for the car 22,000 up front, your cost of ownership has like 22,000 more over the next 10 years.
If you could buy a volt for $30,000 with rebate, but save $8000 in fuel costs (including electricity), then you’d be in exactly the same position by financing $8000 and paying $22,000 down as you would be with your conventional $22,000 car.
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September 17th, 2009 at 1:45 pm
If you didn’t have a job you wouldn’t need vacation!
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September 17th, 2009 at 1:49 pm
This is a true statement.
In Europe $6 gas is $4.50 taxes to their government.
In America $6 gas means 1.2 Trillion of OUR DOLLARS going to OUR ENEMIES. They would just start a war to get us to invade the middle east again and wring the last penny out of our economy.
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September 17th, 2009 at 1:50 pm
Good grief, who would ever want gas prices that high? That means diesel is that high. That means your food prices skyrocket, your clothing prices skyrocket, and you goods that sit in a truck skyrocket.
So, you might get a Volt (and lose money doing it for the next 5 years) everything else you buy will increase in cost making a $40k MSRP car even more unaffordable. Awesome planning GM! No wonder you went into a fascist version of Ch11.
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September 17th, 2009 at 1:52 pm
This is actually for anyone reading this who owns a Ford hybrid:
When you purchased your car, how plentiful were they; and what sort of dealer markups (if any) did you pay?
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September 17th, 2009 at 1:53 pm
Tom,
I agree! Go to:
http://www.push.pickensplan.com/
355 million barrels of foreign oil in August equal to $25.2 billion! There is where the trade deficit can be reduced significantly: GM must realize that total production of the Volt should be based on demand. Based on what we all see here there is a greater demand than 10,000 vehicles. The sooner we convert over to electric transportation the better. IMHO, I don’t see how the country can survive with gasoline going back up over $4.
I live in an area where there are many truck drivers in my neighborhood. One of them, a friend, complained about the cost of diesel for his truck. he was hauling loads on goods to Houston and Alabama for FEMA. He said, if he doesn’t get paid soon, he would have to sell his truck. And his buddies were having similar problems.
When, not if, the price of gas reaches $5 or $6, we can kiss the American way of life good-by! We need to be prepared for that day!!! That GM has been working on the Volt for years and will be releasing them for sale in November 2010 is important. We can thank GM for that because the cost of petroleum should be among the most important being addressed by this country. Congress will be voting on the Natural Gas Act in October. Pickens beleives that it will solve the problem in five years. He points out how China is working diligently to tie up world oil.
Natural Gas is a temporary fix to our energy problem; it is estimated that we have 150 years supply of Natural Gas locked in shale fields around the nation. It is a much cleaner burning fuel than petroleum or coal. It is available now and can be used to power our big trucks while the current state of battery development will power our cars. Technology is developing better batteries and new energy devices which will become our source of energy supply for the future.
As has been said in comments in this post, a gas tax, IMHO, is not workable means of lowering gas consumption here in the United States. It works in other countries because cars are not the only means of transportation and their gas tax doesn’t not have a hugh
e impact of the populous. It will only make the pending problem worse when high gasoline prices return.
I hate the gloom and doom scenario! But the writing is on the wall; the failure of GM can not be accepted as normal business in present situation. We need the capability of producing an electric vehicle, here in this country and now. GM is fulfilling that need. I hope that their sales of the Volt will meet the demand of envision and that GM will up that anticipated production!
No happy trail to you on this post unless GM increases production beyond 10,000 vehicles come November 2010.
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September 17th, 2009 at 1:55 pm
“ignoring the trillion dollars completely wasted on the war in Iraq”
… or the greater amount spent on the “stimulus” which was largely wasted on pork projects.
Government overspending is an equal opportunity disaster.
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September 17th, 2009 at 1:56 pm
Gas is about $2.50 in Wisconsin, FWIW.
You can get a feel for what prices are around the country, by looking here:
http://www.gasbuddy.com/gb_gastemperaturemap.aspx
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September 17th, 2009 at 1:56 pm
I was using the EPA and CBO scoring. The big difference is that the cited discussions were based on a theoretical bill that sold or auctioned the credits whereas the actual bill mostly gives away the credits. Big difference since if you give away the credits then there is no tax increase like they’re talking about.
But, yeah, there are many moving parts so it’s a guess. It also depends on how you want the numbers to come out. For example, if electrical costs go up, do people use the same amount or do they turn off the lights? The CA example indicates it’s the latter but you can score it using the former.
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September 17th, 2009 at 1:58 pm
Why can’t the goal of the Volt to be competitive @ low gas prices? Since you will never see high gas taxes across every state, Lutz must be hoping for high oil prices… that would destroy the economy even more than the statists have done over the last 100 years.
People, it is time to face it and realize the Volt is a rich person’s car but made like a Chevy. That doesn’t equal success. It equals more tax payer bailouts due to further GM failure…
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September 17th, 2009 at 1:58 pm
This is the price you pay for being a genius and far ahead of the rest of us!
But yes, the “+” and “-” ratings are frequently bizarre. No explaining the ratings.
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September 17th, 2009 at 2:00 pm
It is funny how so many quickly demonize the oil companies but let the government run all over them. The majority of the problems we have today is because of a powerful federal government. I could care less if oil is the fuel of choice as long the fuel used maximizes my profit making ability for me, my family, and my future generations.
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September 17th, 2009 at 2:02 pm
In the pic above….
Is it just me or does he look like he’s lifting a cheek to rip a hot one?
lol
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September 17th, 2009 at 2:04 pm
Yes, you are right… but many here don’t care about that.
I will say we face a great future fuel debate over the next 5 years. Hydrogen is making huge research leaps right now and has the backing of the majority of top tier economic countries. Natural gas is very plentiful, and electric cars have a few major hurdles left themselves.
I like hydrogen because you can combine cars with house power systems to be nearly truly independent of a federally regulated grid and your own time.
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September 17th, 2009 at 2:04 pm
. . . so, in 15 years, give or take, oil may start flowing from these new finds, with emerging economies growing over that whole time.
It’s not going to be cut-and-dried no matter what they find under the ground, or in a research lab. Real markets tend to be very complicated, and none more so than the strange world of Oil. I predict that the road to vehicle electrification is going to be bumpier than some here might think, but I don’t think it will turn out to be a dead end like a few others seem to.
It seems to me that the worst thing us “little-bitties” can do is sit in our living rooms and say: “There’s nothing I can do.”
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September 17th, 2009 at 2:05 pm
“That beer sounds good…”
Speaking of, it’s miller time here in CA.
SAKI bombs and Sushi today.
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September 17th, 2009 at 2:05 pm
I wasn’t laughing. If we could get Americans to eat less, it would solve a lot of problems. For one thing, if you’re a normal weight, small cars are comfortable. If you’re obese, you’re more likely to want an SUV.
But even aside from that, our factory based agricultural system uses a lot of oil to produce fertilizer, and to transport grain to feeding lots. It also emits massive amounts of various pollutants, and is unsustainable in terms of water consumption and soil depletion. Time magazine wrote a really interesting article on this last month.
http://www.time.com/time/health/article/0,8599,1917458,00.html
On a cost basis, our bad eating habits and obesity epidemic are bankrupting our health care system. That was the point in the article I linked above. If we didn’t have to pay those costs, there would be more money left over for other things.
Personally, I stopped eating beef about two years ago, and I buy organic whenever it’s available. But that’s hardly a long term solution. What we really need is for the government to reform our entire agricultural system. But good luck getting that through congress.
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September 17th, 2009 at 2:06 pm
I have a job and I still can’t afford a vacation. Unless you count Hooters and a basket of Buffalo Wings.
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September 17th, 2009 at 2:09 pm
So Tagamet , what are you going to do when gas hits six dollars a gallon ?
Go out and buy a poor person a Volt .
I can’t remember the last time I lost any sleep over a poor persons ability to pay for gas or anything else for that matter.
The government should put a floor price on gas of $5.00 a gallon so that the manufacturers know what kind of vehicles need to be manufactured .
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September 17th, 2009 at 2:09 pm
You are correct, sir. — I still don’t get where they are coming from when they use that analogy. They seem to confuse “needing a high-mpg vehicle” with “being able to afford one”. Those two concepts are not interchangeable.
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September 17th, 2009 at 2:10 pm
Oil prices are set by OPEC and the countries the oil fields sit in. OPEC doesn not directly equal BP-Shell-etc…
When oil hits $5-6 a gallon every you buy deliveried by truck also increases in price. So remember that if fuel ever triples in value, so will shipping costs and those are passed right on to the consumer. Last year some companies had layoffs and other cost cutting measures when gas hit $4/gallon. Can you imagine the depression the economy would go into if $5 or $6/gallon gas-diesel hit? Don’t ever hope for such a thing. What about airplane fees? Military spending would increase because of fuel prices.
Think before you type, the world needs oil right now. The point of the Volt should be to compete @$2.50/gallon not some depression level fuel price.
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September 17th, 2009 at 2:10 pm
God Bless America!