The Auto Industry Can Be Saved

November 25, 2008 by preplan

I just read yet another article stating that the American auto

industry is a decade or more away from being able to profitably

produce and market alternate energy vehicles. They have been saying

this for 30 years. The problem is, that compared to gasoline and

diesel powered cars, all electric and electric hybrid cars are

substantially more expensive. Some claim that Toyota loses money on

every Prius it sells. I’m not sure why that needs to be, but let’s

just accept the cost differential as fact. I’ve said it before, the

answer is simple, eliminate the competition - pass legislation

banning the production and import of gasoline and diesel powered

vehicles. Poof, problem solved, now all car companies will be

competing with each other to produce the most desirable next-gen

vehicles. All car companies will not be distracted developing and

marketing a dozen different lines of vehicles that compete with

next-gen vehicles. The rush will be on to design, develop, and tool

up, and as I also said before, if we can produce hundreds of

thousands of tanks, aircraft, jeeps, and heavy weapons in the span

of 4 years during World War II, with our robot driven highly

efficient production methods today, we certainly can do what it

takes to solve this problem.

The focus has been on the cost of the car when in reality the focus

should be on the cost of ownership. Cost of ownership includes the

purchase price, service, and all operating costs such as fuel and

oil. When we look at operating costs and if we come up with the

most cost effective means of fueling alternative vehicles, the

next-gen vehicles win hands down even if you need to replace a

$6,000 battery every 5 years!

Anyone that has been following my articles knows that I have been

pushing the PRE-Plan, a plan to allow every electricity consumer,

individual and business alike, to invest directly in large-scale

renewable energy and get their share of the electricity produced as

their return on investment. I won’t rehash the PRE-Plan, you can

read about it in my book or visit the web site. Lets take two

vehicles, a $30,000 gasoline powered car and a $45,000 all electric.

I’m going to add $5,000 to the all-electric vehicle to invest

(using the PRE-Plan) in large-scale renewable energy, enough to

eliminate my fuel expense for 20 to 30 years. So, I now have a

$30,000 gasoline powered car and a $50,000 all electric.

Let’s assume that gasoline remains relatively cheap for the next

10years ($3/gallon average) and that our cars last exactly 10 years.

An all electric vehicle doesn’t need much regular service, doesn’t

need the oil changed, has an all electric transmission, and is

basically significantly less mechanical than the gasoline powered

cars. We might expect to spend $500 per year on regular maintenance

for the gasoline powered car and perhaps $100 per year for the

all-electric. With current battery technology it is estimated that

we may need to replace the battery as often as every 5 years and

possibly only every 10 years, we’ll go with 5. Let’s assume we drive

15,000 miles a year and the gasoline powered car gets 30 miles to

the gallon.


Gasoline All Electric
Purchase Price $30,000 $45,000
Annual Service $5,000 $1,000
Battery Replacement $0 $6,000
Fuel $15,000 $5,000
Total $50,000 $56,000

The alternative fuel vehicle turns out to be $6,000 more expensive,

but that’s not the whole picture. I said before, the added $5,000 to

purchase electricity through the PRE-Plan covered 20 to 30 years,

yet we are assuming our vehicle only lasts 10 years. That implies

that we have an additional 10 to 20 years worth of pre-paid fuel for

our next vehicle(s), thus reducing the initial costs of those by at

the very least $5,000 each. We can also anticipate that gasoline and

even electricity prices ten years from now will be substantially

higher, substantially tilting the equation in favor of an

all-electric vehicle.

There are a number of advances in battery technology that may

already be nearing production, but even if they aren’t widely

available for ten years, such advances will further and further tilt

the cost advantage of all-electric. These new batteries promise to

receive a full charge in as little as 5 minutes, offer 15 or more

years of useful life, and be relatively cheap to produce and be

environmentally friendly. Assuming all other things remain equal and

the cost of these new battery technologies is the same as existing

batteries, we would end up eliminating the $6,000 battery

replacement cost from the table above and since we have already

pre-paid for the electricity, we eliminate the added $5,000 for fuel

and this holds true for not only our next car but our next two cars;

a total saving of $11,000 per purchase or $22,000.

As long as the auto industry is allowed to produce gasoline and

diesel powered vehicles they will be compelled to do so at the

expense of the environment while pitting their existing gasoline and

diesel marketing strategy against next-gen vehicles. The above

formulas won’t work as well if we assume that automakers can boost

the average gas mileage to 60 miles per gallon, yet that ignores the

reality of our need to eliminate out dependence on foreign oil and

to address climate change. Once again, we tend to lose focus when

we look at the window sticker price in isolation. We should not

allow the car companies to continue adding to the problems of oil

dependency and global warming and the car companies should be

begging the government to impose such legislation, thus eliminating

the fall-back on gasoline and diesel. If the vehicles end up

costing more in order to be profitable, fine, that’s the price we

pay.

One of the things we all know to be true but haven’t found a way to

quantify are the hidden costs of gasoline and diesel powered

vehicles. There are health costs, terrorism tied to our Middle East

dealings over oil, military expenditures, and on and on. We all

know that a gallon of gasoline should cost closer to $10/gallon, we

just can’t figure out how to get from the current $2 to the $10

figure, nor do any of us want that. What we want is for these

sticky problems to go away and for us to be able to drive as far and

fast as we wish and for it to cost little or nothing and cause no

pollution and no hardship.

If we don;t use the PRE-Plan to fund the electricity used to power

all-electric vehicles, we might be looking at electric costs of

around $100/month depending on where you live and the cost of

electricity. For people living in an area where electricity costs

$0.06/kWh, their cost might be less than $50, for people living in

Hawaii or Alaska, thier price might be over $200. With the

PRE-Plan, assuming that the cost to build the reneable energy

projects are essentially the same from one region to the other, the

cost of conventionally produced electricity is irellevant and our

$5,000 investment will purchase all the electricity needed

regardless of if you live in Hawaii or Spokane which have vastly

different costs for electricity. To really understand how we can

save the auto industry, the economy, and the environment all at the

same time, I suggest you read my book. The book was written before

the current financial meltdown but it is even more viable now that

our economy is teetering on the brink of disaster.

Study Confirms Future Of Electric Vehicles(UK)

Electric vehicles recharged from the national grid could

potentially cut greenhouse gas emissions by more than 40% compared

to vehicles powered by carbon-based fuels, new research has found.

The study by Arup and Cenex on behalf of the Department for Business

Enterprise and Regulatory Reform and the Department for Transport,

also found that contrary to common perception, the UK electricity

grid has sufficient generating capacity to cope with a greater

uptake of electrified vehicles.


"Beyond the long-term reduction in greenhouse gas emissions created

by switching to electric vehicles, it also makes sense to try to use

the surplus capacity in the grid during off-peak times,” said Arup's

director of advanced technology and research, Neil Ridley.
"And one of the keys to an improved uptake of electric and hybrid

cars will be the collaboration between stakeholders including

manufacturers, local authorities and energy providers to address

issues related to standards for charging, consumer education and the

development and deployment of new technologies."

The news follows confirmation of the largest public funding of any

initiative aimed at developing technology within the automotive

industry, with the government pledging £100 million to develop low

carbon vehicles in the UK and private companies pledging a further

£100 million.

A raft of major projects have since been announced, all aimed at

rapidly advancing low-carbon vehicle technology and developing a

mass market for these vehicles.

One such project will see 10 public sector fleets trial low-carbon

vans in real-world fleet conditions.
Adrian Vinsome, programme manager for the Low Carbon Vehicle

Procurement Programme, which is overseeing the project, said: “We

recognised the broad desire among local authorities to reduce carbon

emissions from their sizeable fleets and improve operational

efficiency.”

Alongside this, a new £10 million initiative has also been announced

that will see 100 low-carbon demonstration vehicles trialled by

fleets across the country.

It is expected that these vehicles will be on the road within 12

months.

To Bailout Or Not To Bailout?

GoGreenSolar.com

Blog Roll


Monday, November 17, 2008
Support Electric Cars, Let the Big Three Fall

Did you know over 3 million jobs will be lost if the Big Three Fail?

As a clean energy supporter and free markets advocate I say SO WHAT!

Not because I am a heartless soul, I do understand the human impact

that will be caused by the collapse of these dysfunctional companies

but because I have an insider's view of the huge opportunity in

terms of vehicles that are very efficient and take advantage of

renewable energy, they're on the market today and getting better

everyday.

The Big Three automakers (GM, Ford and Chrysler) should not get

bailed out because their actions are the reasons why the automakers

are in the position they are in today. Some people don't know, but

GM released an electric car called the EV-1 back in 1996 which could

only be leased with a clause in the contract making it impossible

for the lessee to ever purchase the car! In 2003, GM decided to

cancel the electric vehicle project and destroyed their fleet of

electric vehicles. According to GM's CEO Rick Wagoner said the worst

decision of his tenure at GM was, "axing the EV1 electric-car

program and not putting the right resources into hybrids. It didn’t

affect profitability, but it did affect image."



In 2007, GM R&D chief Larry Burns stated in a Newsweek article, "I

wish GM did not kill the electric vehicle project and If we could

turn back the hands of time we could have had the Chevy Volt 10

years earlier." The Chevy Volt is an prototype electric vehicle that

GM is rushing to complete, but does not know if the Volt will ever

hit the market due to GM's unstable position today.

It does not make sense..there was surging demand for the EV-1, long

waiting lists, customers begging GM to buy the cars, but the

automaker refused. Any savvy Business man would take the customer

feedback as a sign of moving forward with a project. So why are the

American automakers notorious for making fuel inefficient vehicles?

It's quite obvious the Oil Industry is in bed with the Big Three

Automakers.

The Toyota Prius Hybrid is the best selling fuel efficient car in

the US. Although full electric vehicles being manufactured by Tesla

Motors right here in the good ole USA are in high demand too. Fisker

Automotive is another company that is developing a sports Hybrid.

Electrorides is selling an Electric Mini Cooper and a very

interesting Utility Truck called the ZeroTruck, sweet an all

electric truck!



The point I'm trying to make is that there are entrepreneurial

companies out there that can create a better car, that people are

demanding today. If the Big Three fall, it would create a huge

opportunity in the automobile market in which many new jobs would be

formed, simulating the economy. People are already retrofitting

hybrids with solar panels and charging up electric vehicles from

solar electric systems. These new vehicles would also simulate the

"new energy economy". Should we bail the US auto industry out too?

Can we afford to?

Deny The Bailout

Kicking Our Oil Addiction Back to Opinion

Denying Big Three a Bailout Can Be a Historic Opportunity to Get America off Oil and Save Detroit
Edwin Black November 17th 2008



The impulse to accede to political pressure and jobs blackmail from the Big Three for a $25 billion bailout offers America a historic turning-point opportunity. This is the country’s chance to both reform the auto industry and ignite a massive shift off of oil in one master stroke. How?

The $25 billion in lending should not go to the Big Three as a reward for consciously addicting this country to oil and subverting the alternatives. A better idea is to allocate the same $25 billion in lending—but not to the Big Three. Instead, offer loans at rates as low as student loans to any American citizen or fleet manager willing to buy an alternative fuel, flex-fuel, open fuel standard, or alternative propulsion vehicle--new or retrofitted. This would provide an immediate incentive for Detroit and Torrance, California to spend the approximate $100 per vehicle necessary to make every car and truck a multi-fuel or open-fuel vehicle.

When we say open-fuel or multi-fuel, we are not talking about the governmental cash cow currently going to the corn ethanol-big oil combine. We are talking about fuel systems that can function on all forms of combustibles from methanol (the Chinese use 50 million gallons a year while we use none) to second generation biofuel such as cellulosic ethanol. There is already pending legislation advocating the open-fuel standard and the multi-fuel approach. Why wait?

At the same time, legislation should immediately eliminate the $.54 per gallon penalty tax assessed to every gallon of sugar cane ethanol that Brazil struggles to export to America’s Southeast. In the process, we should cut the $8 billion in government subsidies annually handed to the corn ethanol-big oil combine and use that money to both fund 25 percent of the bailout money and open a string of multi-fuel service stations throughout the country offering everything from compressed natural gas (CNG) to methanol to hydrogen to electric charging.

Washington can also use a portion of that $25 billion to fund surge production of alternative fuels and propulsion from trash-to-gas to hydrogen to electric. Dozens of small companies are waiting to implement their ideas or expand beyond their mom-and-pop operations into regional or national purveyors.

A few billion dollars of that loan money should also go to fund any company that will retrofit America’s existing 250 million gas-consuming vehicles to alternative propulsion fuels such as compressed natural gas (CNG), electric and multi-fuel. A vehicle can be converted to CNG for $4,000 to $10,000 depending on the particular vehicle. A company in California can convert any internal combustion vehicle to electric for $10,000 to 16,000. Naturally, there would have to be a temporary suspension of the Environmental Protection Agency (EPA) and California Air Resources Board (CARB) regulations that prohibit retrofitting cars off gasoline without being subjected to onerous bureaucratic obstruction and $50,000 to $100,000 in processing fees. The Iranians are currently converting 20 percent of their automotive fleet annually from gasoline to CNG in an effort to circumvent anticipated sanctions against its importing of gasoline. The cost in Iran is about $50 per vehicle; the vehicles go in during the morning and come out in the afternoon.

Some of those billions can also fund Big Three transition to open-fuel or multi-fuel vehicles. The cost is about $100 per vehicle. About 1.5 million vehicles are produced monthly in the United States. Carmakers can be paid by the vehicle.

If Washington funds the purchase of alternative fuel and alternative propulsion vehicles and fuels, and mandates their use, the Big Three automakers will scrap their plans for sexed-up gas guzzlers and start producing and retrofitting the non-oil vehicles the entire nation needs.

Fund the public, not the problem. Help the country, not the corporations.

If all this sounds like a Manhattan Project, it should. The proposed Big Three bailout is $25 billion. The World War II Manhattan Project, in today’s money, only spent $22 billion.

Edwin Black is the author of The Plan: How to Rescue Society the Day the Oil Stops--or the Day Before (Dialog Press).




Copyright © 2007-2008 The Cutting Edge News

The news today is full of Congress debating whether we should bail out
the auto industry. They didn't ask for help when they arbitrarily lowered
the average miles per gallon ratings by foisting the suvs and trucks on us.
They didn't ask for help when they pulled back the electric vehicles because
they were too good (no gas, no mantainance). They didn't ask for help when they okayed exorbinant pay and fringes for the workers (and execs). They didn't
ask for help when they were the largest seller of vehicles in the world
(they lost that distinction to Toyota recently).
But now, when all of the ineptness becomes apparent ,they ask for help.
Wow, we are one dumb country if they get it. They should wallow in their
own mess.
Let the new companies that are producing electric vehicles we need reap the benefits and assimilate the workers displaced.

Electric vehicles on the move

We all know is that there is no panacea for our green transport problems. Solutions will come from a variety of different sources from use of lightweight materials, even better engineered internal combustion engines, more refined fuels, bio-fuels, hybrids, etc. And one option gaining increased favour is the electric vehicle. With fuel cell technology improving the possibility of wider take-up of this solution, we are hearing of more trials taking place.

The latest news is that Amey is trying out Smart electric cars in Birmingham, Oxford and Plymouth. This comes hot on the heels of an electric scooter being tested by Lothian and Borders Police in Edinburgh as a potential replacement for the patrol car.

One of the arguments against the electric vehicle is that you are replacing one kind of carbon footprint for another. If you charge an electric vehicle, you need to extract energy from the national grid, which means burning fossil fuels at local power stations.

Research conducted on behalf of the Department for Business Enterprise and Regulatory Reform and the Department for Transport (DfT) has now placed a green cost on recharging electric vehicles. According to the study, greenhouse gasses could be cut by as much as 40 per cent even though there is reliance on burning fossil fuels to charge the electric vehicles.

The study by Arup and Cenex also indicates that the national grid has sufficient capacity to handle the extra demand placed on it despite denials today by government that in ten years time the lights could go out at regular intervals.

Furthermore, as charging would take place mostly overnight, drivers of electric vehicles would be taking advantage of off-peak electricity.

Last month, the Technology Strategy Board unveiled a £10m project, co-funded by the DfT, to pilot up to 100 low-carbon demonstration vehicles across the UK to promote electric and hybrid vehicles in real-life situations. The Board is also to invest a further £10m on the ‘electrification’ of road transport.

It would appear that fresh impetus has been given to promoting the take-up of electric vehicles, which undoubtedly are a good solution in urban areas. The only major drawback I see is one of silence. How will pedestrians avoid stepping out into the path of electric vehicles when for years now they have not had the familiarity of listening out for the local milk float? Technology will have to be deployed to make such vehicles better heard on the road.

One thing’s for sure, the rise in popularity of the electric vehicle will give new meaning to the ‘Plug and Go’ slogan!