Without specifying timing, Fletcher told Tech Insider it could happen sooner than some think.
“We have not made that announcement yet, but what I would say is this is all coming much faster than people anticipate, so I’ll say that much. We have been transparent about that,” she said. “We are working on an on-demand ride-sharing network with Lyft, it’s not something we are thinking about, it’s something we are very much readying for consumer use.”
Lyft works a lot like Uber, and GM sees it as a natural fit for it to assert its own products into the growing market of hailing a vehicle from one’s smartphone, or other device.
Fletcher added the 200-plus-mile range Bolt EV, which could go into production by October, and is to be on sale from $37,500 late this year, was designed with autonomous ride sharing in mind.
“There are a number of things that you can piece together,” said Fletcher of indicators that GM is working on autonomous electric ride sharing. “We introduced the car about the same time at CES as when we really started talking about mobility and rideshare. So it’s not by coincidence, and if you look at a lot of aspects of the Bolt EV there are a lot of elements about it that are really crafted around a good ride share application, so that takes it into the future” she said.
“They (EVs) operate very smoothly, they operate very quietly, seamlessly, and so you can create this very positive experience inside the car,” she said. “People they want that, they want to get in the car and for it to feel like a cocoon, so they can take a nap or have a conference call.”
GM’s CEO Mary Bara has previously said more than once that the next five years of the automobile business will see more changes than have the last 50, and Fletcher echoed that in speaking to Tech Insider.
“So what I would say is this car is a big part of a transformation of transportation and mobility,” said Fletcher.
Among things that can be “pieced together,” as Fletcher said of evidence for what GM is up to, is the trail of expenditures and an announcements leading to a ride-sharing GM EV.
Aside from the $500 million spent on Lyft, in March GM announced its acquisition of start-up self-driving car company Cruise Automation to augment its autonomous efforts. In May GM said Cruise was using a Bolt to test its self-driving tech.
The Wall Street Journal also said in May GM and Lyft could before the end of the year begin testing on public streets self-driving EVs.
Speaking to Tech Insider, the company however said currently Lyft’s efforts and Cruise’s Bolt tests are separate programs, but the likelihood is high they will eventually overlap.
What will it take to overcome this? Will there be a sudden tipping point, or a gradual shift?
If you talk to plug-in electrified vehicle (PEV) drivers, many will tell you why they’re sure they did the right thing in acquiring their battery electric car or plug-in hybrid, but other consumers are on the fence.
On the positive attributes checklist, PEV drivers may frequently bypass or altogether divorce themselves from the gas pump, and that, they say, feels great.
Further, their fuel and maintenance costs are often reported as lower, the drive experience is novel, and it’s also gratifying to help the environment and contribute their part toward energy security as well.
With such bipartisan appeal, word is getting out about plug-in vehicles in the face of the entrenched internal combustion industry which supplies a U.S. transportation sector that consumes 70 percent of all petroleum and keeps the country reliant upon OPEC.
Published PEV-oriented stories may alternately say sales are up, or disappointingly low, and beyond this there’s been a maelstrom of contradicting or subjective reports surrounding these vehicles.
Here’s a few objective facts: Five years ago President Obama set a 1 million unit plug-in electrified vehicle (PEV) goal that came and went unfulfilled last December. The U.S. today is about to crest past 500,000 cumulative unit sales, and Obama’s press office nearly backpedaled last year saying it was just an “aspirational” goal.
In 2015 the U.S. purchased 17.39 million passenger cars and light trucks. Of these just 43,143 were plug-in hybrids, or 0.25 percent, and 71,105 were battery electric, or 0.41 percent. Plug-in market share in June 2016 was not significantly better, if at all, than it was two years ago in June 2014.
Since the modern major manufacturer PEV market started in December 2010, the U.S. was the global sales leader, but last year China and Europe overtook its early lead relegating U.S. to third place.
Counter-balancing that unflattering report, it’s also true the first crop of sub-$40,000, 200-plus mile EVs are due this year, with five manufacturers and counting projecting similar spec cars in the next few years. A U.S. manufacturer, General Motors, will be first with its Chevy Bolt EV, and U.S.-based Tesla has also lined up over 400,000 intenders for its Model 3, serious signaling demand.
Actually, almost all manufacturers are ramping up their battery electric and plug-in hybrid portfolios in response to global regulations, other market forces, so the upside potential is positive.
To date though, PEVs have been a bit of a blind spot for many a consumer. While not a comprehensive list, following are five factors to be aware of if: 1) you want to spread the word, or 2) you are just researching whether a plug-in could be right for you.
Almost not news, the story about low petroleum and pump gas prices has been the kneejerk response from many reporters, often looking at PEVs from an outsider’s perspective, but there is truth to it.
Manufacturers are reporting truck, SUV, and larger more gas-consuming vehicle sales are up, and we’ve already seen how PEV sales are doing.
On the flip side, at the January 2015 Chevy Volt debut, GM’s executives and media personnel were emphasizing gas is not as much a factor for those who wish to avoid gas altogether. These people buy for some of the reasons mentioned in this article’s opener, so if gas is cheap or expensive, it matters less. They don’t want the stuff, no matter the price.
Perhaps even more hurt by gas prices have been regular non-plug-in hybrid sales which were as high as 3.2 percent of the U.S. market, and currently are around 1.88 percent. Hybrids always need gas, but do save more of it than conventional cars.
It’s also predicted gas prices will eventually go back up, and meanwhile there is more to consider.
The automaker lobby, the Auto Alliance, however, describes “market realities” that have kept the average window stickers to 25.3 mpg, while several PEVs are either not distributed outside of California zero-emission states, or at all, as the case may be.
It warns of unintended consequences to a mandated market, including costs going out of control, and vehicles people still won’t want to buy in years ahead.
Tesla, with nowhere to go but up, is the one pure EV maker, and it’s out to prove battery electrics are viable now, or bust. Other legacy automakers have their fiduciary eggs in several already profitable baskets, and they balance numerous priorities lest they dissapoint shareholders.
PEV advocates have frequently questioned whether conflicts of interests, or secret desire to stall as long as possible are at play. At least true is a large ship does not turn on a dime.
Further, the U.S. EPA does not require more than 1-3 percent PEVs to make the grade through 2025, but combined with global regulations, and California ZEV rules, the shift is underway, if not as fast as the most zealous would like.
Outside of the state of California and a few other PEV hot spots, the availability of plug-in cars on the lot for shoppers to kick their low rolling resistance tires has reportedly been hit or miss.
In the Northeast, a secondary market to California with several states signed onto its ZEV rules, dealer inventory has been disappointing to advocates like Volt-owning Mark Renburke, of Drive Electric Cars New England.
“I’ve come to realize the single biggest thing is actually three things that have been difficult to measure and somewhat under the radar (and manipulated by manufacturer and/or dealers),” said Renburke of factors for this list. “They are inventory, inventory and INVENTORY!”
In other words, he continued, there’s a sheer lack of PEVs available at dealers in his region, and it can be spotty elsewhere in the country besides.
Want a truck? No problem. The dealer has them lined up out front. Want a PEV? Some dealers do stock them, but not that many. For example, a recent Edmunds.com study found only 733 plug-in vehicles available in the Boston region since the start of 2016. For the same period, 5,800 PEVs were for sale within 50 miles of Oakland, Calif., and 8,200 were in LA and surrounding regions.
Onerous issues like dealers who make intenders pay for special orders before they can even test drive are just one source of consternation for those who’d like to see the market grow.
Deliberate or Inadvertent Obfuscation
As the Auto Alliance has abundantly stated, there are untold billions of dollars and jobs on the line, and PEVs, frankly, are threatening to some, even if they are heartening to others.
With that fact as a back drop, whether willfully or inadvertently, numerous articles have clouded issues. You’ve heard the phrase: “If it walks like a duck, quacks like a duck, then it must be a duck?” Others have said: “If it walks like propaganda, quacks like propaganda, then it must be propaganda.
In a society laced with conspiracy theories back to who was behind Kennedy’s assassination, and before, evidence of deliberate slam attacks against PEVs, while not utterly lacking, has been scarce enough to make it difficult to define clear-cut cases, but the effects are clearer.
Mixed messages on PEV benefits are many and varied. These include stories about whether coal fuels them, or whether their carbon footprint is worse than for conventional cars; whether their raw lithium or rare earth materials are just as damaging or troublesome as petroleum; whether they are unprofitable, boring, ugly, and more have all been reported in spades.
Without attempting to address these issues here, at least true is they remain up for grabs for people to spin stories about. Combine that with consumers leery of taking chances on the first generation of the second-most-costly purchase they might make, and sales suffer.
Advocates are encouraged this all stands to change with next-generation cars, increased commitments and forward-looking statements by automakers aside from Tesla, and a few others, but this has been a factor.
Do you believe “you are what you drive?”
Have you ever seen a bumper sticker on the back of a diesel pickup that says “Prius repellant?”
American culture has long prized the road trip, the drag strip, the Indy 500, hotrods, land yachts, oversized pickups, 4X4s, and so much more product and mythology that keeps car culture alive.
You have truck people, sports car people, hot hatch hoonigans, everyday “mainstream” family types, and then you have proud greenies. Cliches? Stereotypes? Yes, and whether valid or invalid, some do buy into it, whether consciously, or not.
It has often been said purchase decisions are ultimately based on how people feel. Feelings dictate getting what we want – be it social recognition, personal satisfaction, you name it. And, depending on the person, after he or she has gotten what was desired, he or she may attempt to rationalize, justify, or explain why that was the right or reasonable thing to buy or lease.
As though unconsciously acknowledging as much, just today on the GM-Volt.com enthusiast’s forum, in one of hundreds of discussions over the years on how to get GM to do more faster with its plug-in lead, a Michigan-based engineer and Volt fan offered his view:
GM needs to come up with a cool name for the Voltec system in a truck, or even the non-plug version that the Malibu has. Call it something that refers to the 100% torque at zero RPM, and have Tim Allen grunting in the background. Then people won’t focus on the fact that it significantly improves the gas mileage (that’s weenie talk), but the fact that they have more power from the start than other truck drivers.
Tesla has been one company that has addressed biases and prejudice at their root by going after mind share where people live –- the Model S looks like a Euro car with blended in upscale design elements suitable to let it sit on equal footing next to a Jaguar or Maserati. Its presence shouts powerful, expensive, and then it backs it up with up to “ludicrous mode” and 0-60 time about as quick as a 1,000-cc superbike.
At this juncture, most major carmakers however have limited models, and how they market them has been another source of mixed impressions.
Another issue is to date the demographic appeal has catered to mid-to-upper strata. Considering PEVs’ fuel conservation ability is a major benefit, this has been viewed as quite the irony that one must spend well over the price of a conventional alternative just to save at the pump. Incentives and total cost of ownership analyses do help make a qualified case, but sales indicate the mass market is not on board with where things presently stand.
Also to be considered is manufacturers have observed PEV shoppers tend to be forward looking. With some models like the Nissan Leaf awaiting a refresh, and Tesla’s Model 3 not here yet, along with other models and styles of PEVs expected, the adoption pace has been what it is.
Beyond this, much more could be said on a macro-sized question, but the bottom line is that change is happening.
It took more than one hundred years to get the culture where it is, and despite perceived disappointments along the way, the shift toward electrification has begun.
Not unlike the last several cars Tesla has produced, CEO Elon Musk’s Master Plan, Part Deux was a little late, but promises great things.
As did his first Master Plan from August 2006, the plan posted to Tesla’s blog page is a blending of Big Picture vision merged with a few relatively minor details, and some explanation and justification to try to head off critics.
Master Plan part one “is now in the final stage of completion,” wrote Musk, and plan two is actually a continuation and expansion of taking the vision hinted at from the beginning.
• Build sports car [Roadster]
• Use that money to build an affordable car [Model S, and X added on]
• Use that money to build an even more affordable car (Model 3, in the works]
• While doing above, also provide zero emission electric power generation options [See why Solar City acquisition makes sense now? said Musk]
• Don’t tell anyone. [Tongue in cheek]
In the follow-up to the above, Master Plan, Part Deux  continues the talk of sustainability and “the move from a mine-and-burn hydrocarbon economy towards a solar electric economy, which I believe to be the primary, but not exclusive, sustainable solution,” Musk said in the original plan. The new plan in complementary fashion calls for an electrified future merging solar power, on-site energy storage, car sharing, electric autonomous cars – including a “future compact SUV” and a “new kind of pickup truck” and a semi truck and bus too.
“The point of all this was, and remains, accelerating the advent of sustainable energy, so that we can imagine far into the future and life is still good,” wrote Musk of his original plan. “That’s what ‘sustainable’ means. It’s not some silly, hippy thing — it matters for everyone.”
The merging of Solar City and Tesla – recently renamed simply Tesla, and not Tesla Motors and including Tesla Energy – is to enable people a life of solar powered energy, energy storage, and autonomous electric vehicles.
Tesla has already been at work on Powerwall, which to date has not shipped very many units, but progress is reportedly on its way.
As he had about the original Tesla Roadster, Musk attempted to fend off some of the critics he said he expected over his idea to merge his solar business with the car/energy storage company.
Musk noted also despite his detailed math, and carbon footprint, and emissions analysis of the first plan, Tesla was attacked on all those same points.
One might infer Tesla will be attacked further on this latest plan, while of course others will support it.
That solar energy had been part of the plan from Day One was hidden in plain sight, he observed, as the original master plan one mentioned solar, as well as other sustainable sources.
For vehicle fans, without doing more than tease details, Musk said not only autonomous cars will one day be summoned sans driver to your door, but buses and big freight trucks are also in the plan.
“Both are in the early stages of development at Tesla and should be ready for unveiling next year,” wrote Musk. “We believe the Tesla Semi will deliver a substantial reduction in the cost of cargo transport, while increasing safety and making it really fun to operate.”
With the advent of autonomy, it will probably make sense to shrink the size of buses and transition the role of bus driver to that of fleet manager. Traffic congestion would improve due to increased passenger areal density by eliminating the center aisle and putting seats where there are currently entryways, and matching acceleration and braking to other vehicles, thus avoiding the inertial impedance to smooth traffic flow of traditional heavy buses. It would also take people all the way to their destination. Fixed summon buttons at existing bus stops would serve those who don’t have a phone. Design accommodates wheelchairs, strollers and bikes.
Whether the semi will be an open-road truck, or a short-distance local hauler with fast charge capability en route was not stated. To date, no company has demonstrated a battery that could drive an 18-wheeler without an engine coast to coast. Electric trucks and buses have been demonstrated on short routes, however.
Musk said we should find out next year.
Aside from these commercial vehicles, Musk said Tesla plans to address most of the consumer market as well. He also contradicted his previous statement that a car down-market from the Model 3 may also be built.
“A lower cost vehicle than the Model 3 is unlikely to be necessary, because of the third part of the plan described below,” he wrote.
How could that be? The answer depends upon many assumptions leading to an autonomous future, but one linchpin is a Tesla vehicle may be able to generate income for its owner as a shared vehicle working while the owner is doing something else.
“When true self-driving is approved by regulators, it will mean that you will be able to summon your Tesla from pretty much anywhere. Once it picks you up, you will be able to sleep, read or do anything else enroute to your destination,” wrote Musk.“You will also be able to add your car to the Tesla shared fleet just by tapping a button on the Tesla phone app and have it generate income for you while you’re at work or on vacation, significantly offsetting and at times potentially exceeding the monthly loan or lease cost. This dramatically lowers the true cost of ownership to the point where almost anyone could own a Tesla.”
Think: automatic Uber, and with an example of opportunity costs met to make John Maynard Keynes proud, the Tesla could be working while the owner is working.
This idea is a whole other level beyond traditional analysts’ view of scratching their heads trying to determine how Tesla will cut supply and production costs, and be profitable. While he was at it, Musk spoke of the factory being a “product.”
What really matters to accelerate a sustainable future is being able to scale up production volume as quickly as possible. That is why Tesla engineering has transitioned to focus heavily on designing the machine that makes the machine — turning the factory itself into a product. A first principles physics analysis of automotive production suggests that somewhere between a 5 to 10 fold improvement is achievable by version 3 on a roughly 2 year iteration cycle. The first Model 3 factory machine should be thought of as version 0.5, with version 1.0 probably in 2018.
On the Way To Driverless
Today, Autopilot is being investigated by two federal agencies, Consumer Reports issued a call to rename and redesign it, but Musk defended it on moral grounds, and said this is just the beginning.
“I should add a note here to explain why Tesla is deploying partial autonomy now, rather than waiting until some point in the future,” wrote Musk. “The most important reason is that, when used correctly, it is already significantly safer than a person driving by themselves and it would therefore be morally reprehensible to delay release simply for fear of bad press or some mercantile calculation of legal liability.”
Musk cited a 2015 federal report indicating despite recent accidents and one death reported, the record proves people are safer with Autopilot than without it.
Without naming Consumer Reports which objected to the “beta” system as basically semi-experimental, Musk defined beta as proof of Tesla’a extraordinary quality control leading to a better safety record.
“This is not beta software in any normal sense of the word. Every release goes through extensive internal validation before it reaches any customers,” wrote Musk. “It is called beta in order to decrease complacency and indicate that it will continue to improve (Autopilot is always off by default). Once we get to the point where Autopilot is approximately 10 times safer than the US vehicle average, the beta label will be removed.”
To sum again, Master Plan, Part 2 is outlined as:
• Create stunning solar roofs with seamlessly integrated battery storage
• Expand the electric vehicle product line to address all major segments
• Develop a self-driving capability that is 10X safer than manual via massive fleet learning
• Enable your car to make money for you when you aren’t using it
On this last point, that as mentioned hinges on true driverless cars.
“Even once the software is highly refined and far better than the average human driver, there will still be a significant time gap, varying widely by jurisdiction, before true self-driving is approved by regulators,” wrote Musk. “We expect that worldwide regulatory approval will require something on the order of 6 billion miles (10 billion km). Current fleet learning is happening at just over 3 million miles (5 million km) per day.”
Though Musk had said the “secret” follow-up plan was coming, he sidestepped pundits who might call him out for a plan that’s anything but secret as the media has been alerted via Twitter updates since last week.
The plan has just a few details not already mentioned or hinted at before, and merges things Musk and company have been pushing toward.
He said ultimately, plan two builds on what plan one actually wanted, but which had been written when Tesla’s chances of success were low. So, plan deux now essentially carries the dream forward of Powerwall, solar power and all-electric cars – and buses and trucks. That drive themselves.
Musk’s introduction to Master Plan, Part Deux, had opened on an overview of Master Plan One, and the necessity of what Tesla hopes to achieve.
“By definition, we must at some point achieve a sustainable energy economy or we will run out of fossil fuels to burn and civilization will collapse,” Musk wrote. “Given that we must get off fossil fuels anyway and that virtually all scientists agree that dramatically increasing atmospheric and oceanic carbon levels is insane, the faster we achieve sustainability, the better.”
This said, many more details will have to be worked out. No doubt this will provide fodder for the bears and bulls to continue the fray, and the Tesla narrative continues.
On the heels of a U.S. EPA Technical Draft Assessment (TAR) report released yesterday on how automakers are meeting federal fuel economy mandates, advocates weighed in urging the industry and regulators to stay the course.
The main question is should federal authorities adjust mpg and greenhouse gas targets for 2022-2025 that stand to save – or cost, depending on who you ask – billions, and fundamentally shape cars consumers can buy into next decade. The stated goal by the Obama administration is to cut carbon emissions radically with rules that tighten to a nominal “54.5 mpg” average by 2025.
The EPA’s TAR is required under Corporate Average Fuel Economy (CAFE) law as part of several-step process called the Midterm Evaluation.
“Thanks to more stringent standards since 2011, new automobiles have reached record high levels,” said Luke Tonachel, NRDC’s Director, Clean Vehicles and Fuels Project, Energy & Transportation program. “Reduced fuel consumption has cut carbon pollution from vehicles, avoiding approximately 100 million metric tons of carbon dioxide from entering the atmosphere already. We’re making progress and we need to keep it up, not slip backward, as we did in the past. When standards stagnate — as they did from the late 1980’s through 2005 — fuel economy of new vehicles can drop, as the graph shows.”
Summing key findings, advocates for consumers – namely Consumers Union – and advocates for environment – the Natural Resources Defense Council – wasted no time in nailing home points in preparation for any pushback from the auto industry. Each offered statements, as have and will other interests who stand to gain or lose for their respective causes.
Not least of the “stakeholders” is of course the auto industry. Each carmaker can speak for itself, and the organization that represents them, the Auto Alliance, also issued the briefest of statements adding to a 25-page position paper previously published.
Its Communications Director, Wade Newton, yesterday said not much more than yesterday’s short comment could be offered yet as the organization is just now assimilating the TAR, must hear back from a dozen automakers, but the 25-page report for now represents its position.
So, the stage is now set to see whether the EPA’s ambitious program to reduce more carbon from the environment than any to date will move forward without much fuss.
Following are five general points arising from the TAR:
Automakers Already Outdoing Themselves
Perhaps first to anticipate any pushback from automakers was the EPA which has previously and yesterday again reinforced a message that automakers are relatively within compliance with federal rules to date.
“We’re already seeing automakers beating today’s standards, which only underscores the potential for future progress in this space,” said Shannon Baker-Branstetter, Energy Policy Counsel for Consumers Union.
The industry has nearly outdone itself with an a la carte menue of advanced technologies which each incrementally improve mpg and greenhouse gas emissions from light-duty passenger cars and trucks.
To be clear, CAFE technically does not mandate more than 1-3 percent of the cleanest plug-in electrified vehicles. The feds gave the industry an out and CAFE can be met with things like 48-volt electrical systems, 8-plus speed transmissions, Atkinson and Miller cycle engines, downsized turbos, cylinder deactivation, gasoline direct injection, light-weighting, and more.
Boiling it to the essence, Roland Hwang, the NRDC’s director of its Energy and Transportation program, said the handwriting is on the wall for automakers to pull out the stops.
“Automakers can meet 2025 carbon pollution and fuel economy standards with known technologies, on time, and at the same or lower cost than previously estimated,” he said.
“The key finding for the second half of the program is that the incremental cost for the second half of the program is the same or even lower than agencies previous estimates,” said Hwang. “The new study estimates the incremental cost compared to a model year 2021 baseline is $894 to $1,245 (in 2013 dollars), or an average of $1,070. The estimate from the 2012 final rule was $1,070 in 2010 dollars, which when adjusted to 2013 dollars, is $1,130.”
But while pro-environment forces – including the feds – observe carmakers are making the grade, the Auto Alliance has called the feasibility of continuing to do so on budget and on time into question.
“Getting the midterm review analysis right is crucial for everyone. Given changes in the market landscape, it will be a daunting challenge to meet the very aggressive requirements of the 2022-2025 federal fuel economy and greenhouse gas rule,” said the Auto Alliance.
54.5 MPG a Myth
Reports criticizing the Obama administration’s purported heavy handed maneuvering have decried an almost impossibly high “54.5 mpg” standard that must be the average of all cars and trucks sold by 2025.
The average vehicle today gets close to 26 mpg, and high-volume selling pickups and SUVs might get high teens to low 20s. Why, even the pinnacle among non-plug-ins, the new 2016 Toyota Prius, only gets 52-56 mpg, so 54.5 mpg could sound draconian.
And it might be, if it were not overstated. In reality, federal rules for model year 2025 call for a mere 10-14 mpg improvement from today’s 25.3 mpg fleet average. The EPA measures mpg in different ways, and on window stickers, the reality may look like 35-39 mpg in 2025 depending on the actual vehicle sales mix between cars under one standard and light duty trucks on a more lax one.
As mentioned, CAFE can be met without much more electrification than today – which stands to radically skew the average mpg upwards if automakers so choose. And, they may, as costs for things like batteries and other components are coming down, and the global plug-in sub market is gaining momentum.
Cheap Gas Throws a Monkey Wrench into The Works?
Another point of contention is the unexpected decline in petroleum prices following a resurgence of fracked oil and natural gas that have reversed the dire predictions of “peak oil,” at least in the minds of some.
Not only is this changing the buying behaviors of Americans who lean toward larger, more gas-consuming vehicles when given a choice, the Auto Alliance says this is a variable to consider.
“The fuel economy/greenhouse gas targets for 2025 now reflect how the fleet mix has changed, largely due to low gas prices,” said a statement issued by Newton yesterday. In question is whether more trucks will upset rules that were set based on assumptions several years ago. “The government is acknowledging the effect of factors like low gas prices on consumer sales, and the impact of consumer sales on the targets.”
In response, however the NRDC’s Hwang countered that the statement appears confusing.
“The standards automatically adjust to reflect different sales mix, so there is no need to weaken the standard to help automakers with compliance,” he said. “That is, low fuel prices and more SUVs and pickup sales do not create a compliance problem. However it is a pollution problem since we are losing some tons of pollution reductions.”
People Won’t Buy Eco Cars?
An underlying premise with the Auto Alliance’s position paper is American consumers don’t place the highest priority on high mpg cars – and these will of necessity cost more and be unprofitable money pits.
Consumer Reports however counters this saying eco cars make good economic sense.
“Consumers often rate fuel economy as a key factor in choosing their next vehicle,” said Shannon Baker-Branstetter, Energy Policy Counsel for Consumers Union in stark contradiction to a statement by the Auto Alliance. “By meeting the existing CAFE standards for 2025, automakers will help save consumers money on operating costs and protect them against future gas price shocks.”
Most car buyers can expect immediate savings from cars and trucks that comply with the upcoming Corporate Average Fuel Economy (CAFE) standards for Model Year 2025, according to a new report published by Consumers Union, the policy and advocacy arm of Consumer Reports. The report finds that consumers will likely save approximately $3,000 per car and $4,200 per truck over the life of the vehicles. In the event gas prices rise again, the net savings will be even higher: $5,600 per car and $7,300 per truck. These findings reinforce the value of increasing fuel efficiency standards for new car buyers.
If that’s not enough, Hwang observes the numbers work out.
“The increased cost to meet the 2025 standards compared to a model year 2016 baseline is also the same or lower as estimated in the 2012 final rule,” he wrote. “The total increased cost from today’s levels (model year 2016) is $1,290 to $1,920 (in 2013 dollars), or an average of about $1,600. This is less then the inflation adjusted cost in the 2012 final rule of $1,940 ($1,836 in 2010 dollars used in the 2012 final rule).
“We estimate the net lifetime cost savings for the 2025 standards is $3,640 to $4,310, or about $3,970 using the average incremental cost, compared to the estimate of $5,340 (adjusted for inflation) in the 2012 final rule that used the higher fuel prices previously forecast.”
Strong Federal Regulations Are Necessary
While the auto industry has its positions lined up, and urges caution, Consumer Reports chides it for rehashing old arguments that hold less water than the last time they were refuted.
At issue are environmental considerations, energy/national security in reducing oil dependence, and economic security in positioning the U.S. as a leader in the emerging technology of the transportation sector.
Assuming the goals of the 2012 to 2025 program are met, CAFE is projected to reduce 600 million metric tons of carbon pollution in 2030 – twice that of the federal Clean Power Plan’s 2030 goal to cut CO2 from powerplant smokestacks.
But in spite of that – and despite the U.S. being an early frontrunner in advanced technologies like plug-in electrification – consumers making choices blurred by contradicting viewpoints saw its plug-in sales ranking fall to third place behind Europe and China in 2015.
In other words, whatever happens in the U.S., other markets are making choices to go beyond to the cleanest electrified vehicles and have now surpassed the U.S. from its head start.
In back of U.S. clean car mandates however, coupled with the strong arm of California rules which do mandate zero emission vehicles, advocates are regardless hoping the industry is on the cusp of a turning point toward electrified cars. These do a far better job at meeting regs than tweaked conventional engines, but are included in the cautious outlook of automakers warning of costs and saying bureaucrats must not ignore “market realities.”
That said the Auto Alliance notes it is not against cleaner and greener, citing a record of improvements.
“More than 490 models are on sale that achieve high mileage (30+ MPG, highway) – up 700 percent from 2006 when there were 69 models. And, the number of models reaching 40 MPG is increasing as well, with 76 models on sale in 2015 versus just seven in 2006,” says its position paper.
Hwang and other advocates however want more, and says now should be the turning point where automakers kick their compliance plans into high gear.
“Overall, do stronger standards inhibit sales and profits? Empirically speaking, the answer is no,” he said. “Standards are as high as they ever been, and automakers are having near record sales and healthy profits. In fact, now is the time to keep strengthening the standards, to ensure they invest in clean car technology they need to remain competitive. Investing for a rainy day, if you will. I’m doubtful that the federal government will want to bail them out – again—if they head towards bankruptcy when the next oil price spike hits.”
General Motors has been advertising significantly, leading major competitors in dollars spent, but it appears it is not advertising the Volt.
Or so says the Knoxville Daily Sun which distilled this view after aggregating news from Advertising Age, a sister publication to Automotive News.
“Sadly, we don’t see any of that spending involve the 2016 and 2017 Chevrolet Volt, which is the second best-selling plug-in EV in the U.S. at the moment,” said an article bylined by “Staff Reporter.”
The last ads we saw were some of Chevrolet’s preferred “Real People Not Actors” spots poking at the Leaf and last-gen Prius. The Prius ad in particular had a shelf life, because Toyota soon introduced gen 4 with a li-ion battery, which GM had called out as lacking in an ostensibly behind the times gen 3.
Chevrolet has said previously that it would have a budget to launch its redesigned Volt, and we’re wondering has anyone here seen ads that may have escaped the attention of the Daily Sun?
According to AdAge, GM spent $3.5 billion last year on advertisements, including social media and other alternative avenues, up 8.6 percent, and third only behind Proctor&Gamble and AT&T. This placed GM ahead of Ford, FCA, Toyota, and Nissan which respectively placed 6th, 8th, 16th, and 39th.
GM has been willing to bring Volts to people’s’ houses, and did as mentioned spend a bit on ads we saw last year and with this, the Daily Sun asks questions:
“But other than that, GM has opted to keep the Volt out of the media limelight. Is that’s a good move? Do you think the Volt is actually benefiting from its current marketing strategy, or is there much more potential that can be tapped into via increased exposure via advertising?”