Photo courtesy of jolengs at Flickr.com.
American car manufacturers love pickups and SUVs. These high end vehicles have been lavished with elaborate advertising, intensive research, and promotional test driving campaigns because of high profit margins. As a result of this infatuation, gas guzzlers account for an unhealthy percentage of sales from the Big Three.
Profits at Detroit’s Big Three will shrink by $7 billion to $11 billion. Reductions in vehicle sales, especially SUVs, will lead to an industry-wide decline in pretax profits of $11.2 billion to $17.6 billion. Detroit’s Big Three will absorb $7 billion to $11 billion in total reductions because of their dependence on SUV and pickup sales.
Detroit’s Big Three will absorb nearly 75 percent of the decline in total sales volume. Without deeper discounts, sales volumes in the North American car and light truck market will shrink between 9 and 14 percent, or 1.9 to 3.0 million vehicles, because of the overall effect of higher oil prices on the economy. Detroit’s Big Three automakers absorb nearly 75 percent of the sales decreases.
The chickens are coming home to roost. For years, American car manufacturers have lobbied for freedom to produce cars that are less and less fuel efficient. While protesting legislation to raise the CAFE standards, Senator Bennett summed up the position nicely:
…the manufacturer deals directly with the customer in producing the kinds of automobiles people want to buy. And if people say: I really don’t want to buy that automobile, if CAFE standards disappear, the manufacturer can say: OK, if you don’t want to buy it, we won’t produce it. Whereas, now there is pressure; we have to produce it in order to meet the CAFE average, whether people want to buy it or not.
Unfortunately for American autoworkers, car manufacturers were slow to recognize that consumer tastes are shifting. With oil headed over $120 a barrel, sales of most American made cars have fallen sharply, but, believe it or not, economy cars are selling pretty well. Even “economy” cars that would barely meet foreign standards are selling well in the US:
Focus sales are up 23 percent through March compared with the first quarter of last year. The redesigned car is taking 7.6 percent of the U.S. small car market.
Photo courtesy of Ochileer at Flickr.com.
Anyone out there in the market for a new car?
What kind of car are you considering, and why? Leave us a comment!
Popularity: 11% [?]
1 Feb 08 |
Photo courtesy of uzvards at Flickr.com.
Israel imports about 99 percent of its oil supplies. This fuel situation makes Israelis particularly sensitive to blockade, and the country’s economy is getting hammered by rising oil prices. Perhaps that’s why electric cars are taking off in Tel Aviv.
Thanks in part to a tax system that heavily favors electric vehicles, companies are designing and testing all-electric Israeli cars, and imports of hybrid vehicles are way up! If a combination of new technology and tax incentives works in Israel, perhaps the future will bring similar developments stateside. Wouldn’t it be ironic if a company in the Middle East put Big Oil out of business?
Photo courtesy of Project Better Place and Photographer Israel Hadari at Flickr.com.
Popularity: 7% [?]
Photo courtesy of efo at Flickr.com.
Coal Liquefication is a controversial technology that turns coal into a high carbon liquid. The resulting fuel can be substituted for gasoline in cars, trains, and planes. It’s controversial because the process that produces liquefied coal is energy intensive and it releases a lot of carbon dioxide during production and again when it’s burned. All told, a gallon of liquified coal has about twice the carbon footprint of a gallon of gas.
To put it another way, a Prius burning liquified coal will release as much carbon as a Hummer burning regular gasoline. Many environmental groups oppose Coal Liquification. If liquid coal replaced gasoline at the pump, the American auto fleet would have to become twice as fuel efficient just to maintain current CO2 emissions. Increased coal use could also accelerate environmental damage from coal mining.
Yet, there are reasons why Coal to Liquid (CTL) conversion is getting a lot of attention. As the price of oil hovers around $100 a barrel, there’s intense pressure to develop alternative energy sources. Coal mining employs a lot of people (~80,000 in the United States) and creating an industry that converts coal to fuel could create a lot of new jobs at a time when the US economy is sluggish.
Another reason why CTL is getting renewed attention - liquefied coal is a domestic energy source. Every gallon of liquid coal would replace a gallon of gasoline - and you may have noticed that we’re having trouble with several oil producing countries. There are balance-of-trade concerns that reinforce energy independence - lately our trade deficit has been one factor driving down the value of the US Dollar. The buying power of the petrodollar has experienced a sustained decline since 2003.
At the beginning of 2003, one euro bought one US dollar. Eighteen months ago, it bought $1.20. Now it is pushing $1.50, and there is no reason to think that it will stop there.
Despite climate concerns and technological hurdles, the US Air Force is already flying some planes using liquefied coal. And the technology is supported by some surprising faces:
Illinois basin coal has more untapped energy potential than the oil reserves of Saudi Arabia and Kuwait combined. Senator Obama believes it is crucial that we invest in technologies to use these resources to reduce our dependence on foreign oil.
Photo courtesy of rollerboogie at Flickr.com.
Popularity: 9% [?]
Flickr photo courtesy of juancnuno.
I’ve been reading up on PZEV vehicles, ever since I saw a local advertisement for one here in Dallas.
What I didn’t realize until now is that you can’t buy PZEV cars in most states!
From the Green Car Advisor at Edmunds.com:
Vehicles with PZEV equipment are specially certified under California rules, which only six states now use. The total will jump to eleven in the next few years as Arizona, New Jersey, Pennsylvania, Rhode Island and Maryland join the green team.
The EPA doesn’t have a PZEV classification. And it won’t simply recognize the California certification and let the cars be sold wherever there’s a market for them.
Nope, the Feds insist that if a carmaker wants to sell a vehicle all decked out in PZEV accoutrements, it must re-certify it under federal standards. That’s despite the fact, well worth repeating, that by attaining the California PZEV rating, a manufacturer already has demonstrated that the car is cleaner than anything required by EPA standards.
The Feds do provide one break, though. Recognizing that a lot of people who live in one state might cross the border to buy in another, the EPA allows car dealers in states that share boundary lines with the “California Rule” states to sell PZEVs if the manufacturers will provide them. That brings to 15 the number of states in which PZEVs can be sold.
It also casts a shadow over the EPA’s insistence that it has to certify the cars itself.
“We try to be practical,” said EPA spokesman John Millett.
So, if you live in Nevada, Arizona or Idaho, for instance, your local Ford dealer can sell you a PZEV-rated Ford Focus, if he has one in stock or can get one from a California dealer.
Volvo spokesman Geno Effler said his company, which markets two PZEV models, even honors the 10-year emissions warranty in the nine states that share borders with the official PZEV states.
But if a dealership in Kansas, gets its hands on a PZEV, heaven forfend!
There’s that fine of up to $27,000 for selling a California-certified PZEV car in any state that doesn’t use the California rules or doesn’t share borders with those that do.
But that didn’t explain why Subaru is selling one in Texas, until I found this article from the Dallas Morning News.
So why aren’t PZEVs in every showroom? The main reason, as you might guess, is cost. Although Subaru charges $200 for the option, some estimate that it costs as much as $1,500. If Subaru passed on the entire expense, it could hinder sales and slow the automaker’s compliance with ultra-low-emission laws.
Most PZEV builders don’t even offer them outside the hot-air – er, clean-air – states because they don’t want to multiply their losses. Subaru says it’s one of the few manufacturers that make PZEVs available everywhere.
Still, PZEV is one-tenth as expensive as hybrid hardware and technology. And if the cost were spread among a larger number of vehicles, it would probably drop further.
“That’s why test markets like Texas are important to us to see how much demand there is for PZEVs,” said Subaru spokeswoman Lisa Fleming.
So why are they only available in certain states? A columnist from MSN Autos spells it out.
Not only can’t you buy one, but the government says it’s currently illegal for automakers to sell these green cars outside of the special states. Under terms of the Clean Air Act—in the kind of delicious irony only our government can pull off—anyone (dealer, consumer, automaker) involved in an out-of-bounds PZEV sale could be subject to civil fines of up to $27,500. Volvo sent its dealers a memo alerting them to this fact, noting that its greenest S40 and V50 models were only for the special states.
So, just how green is a PZEV machine? Well, if you just cut your lawn with a gas mower, congratulations, you just put out more pollution in one hour than these cars do in 2,000 miles of driving. Grill a single juicy burger, and you’ve cooked up the same hydrocarbon emissions as a three-hour drive in a Ford Focus PZEV. As the California Air Resources Board has noted, the tailpipe emissions of these cars can be cleaner than the outside air in smoggy cities.
That’s amazing stuff. But what’s more amazing is how few people have a clue that the gas-powered, internal combustion engine could ever be this clean.
Naturally, no company wants to bring too much attention to a car that most people can’t buy, unless it’s Ferrari. And there’s the catch. PZEV models are already available from Toyota, Ford, Honda, GM, Subaru, Volvo and VW. They’re scrubbed-up versions of familiar models, from the VW Jettato the Subaru Outback. But chances are, you’ve never heard of them.
So now I’m looking to see if there is a list of PZEV vehicles that are nationally available. Does anyone know if there is such a thing as a nationally available PZEV car, and which makes and models they might be?
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