The very nice man at the Auto Alliance did not accuse me of being stupid, nor did he even accuse you of being short-sighted. But that's the bottom line. The auto manufacturers have been making high mileage cars and bringing out efficient models for years but you and I haven't been buying them until just recently. Actually it was $4/gallon gasoline in the US that prompted more people, finally, to buy more cars than bigger trucks and SUVs, for the first time in six years!
Furthermore we elect dummies to office. And I gotta plead doubly guilty there. Not only are the governing a group of nincompoops, but I keep paying my taxes to fund their stupidity and inanity. More on that in a moment.
AUTO MAKERS SIDE OF THE PICTURE
I have more than once been intensely snarky and negative about the auto industry right here in this blog. And it was time to give them their say. So I talked with Charlie Territo of the Auto Alliance, an organization funded by most major US, Japanese and German automakers to speak for the industry and its innovations.
Nincompoops? Our folks in DC and state capitals actually tax diesel higher than they tax gasoline in the US. In Europe that's reversed, so it's far more economical there to run diesel vehicles which burn cleaner and more efficiently (and run longer on fewer moving parts). About one percent of the light vehicle fleet in the US is diesel, in Europe it's over half. So the US government may pretend we have a free market but in fact US tax policy has heavily shoved American drivers toward buying gasoline not diesel. Right now both fuels are at record high levels in the US, and diesel continues to be more costly per gallon.
Territo pointed out how many alternative fuel cars are actually on the market in the US. Over seventy models from a variety of makers. And there are now 12-million of these cars on the road in the US. But the US auto market is over seventeen million new cars per year.
For years, Territo said, small and efficient cars sat on lots, unsold and unwanted by most US consumers. $4 gasoline has changed that, and the industry is responding he said. There will be fifty hybrid models on the market by the end of next year. There are plug-in electric cars coming from GM and Toyota with the 2010 model year. Yet not all American buyers are looking for economy: hot cars are, well, hot cars. Territo cited the Buick Enclave, so sellable that GM is working double-overtime at the Enclave plant to try to fill orders. And the Enclave website does not have to mention MPG ratings to sell this car. Americans are still buying twice as many new pick-ups as they are hybrid cars. It was only in March of this year that cars moved ahead of trucks/SUVs in total US monthly sales.
And Territo clearly stated the case for the auto manufacturers' need to do lengthy research and development before any new tech is rolled out. Cars need to be technically dependable and produced at an efficient price. Recalls and expensive repairs are not way to run a business. Territo says auto-makers spend $74 billion on research and development annually. That's far more than any other manufacturing industry, he says. He correctly pointed out how competitive the auto industry is. Numerous major manufacturers spread across three continents. FUTURE CARS?
Major manufacturers will be watching all new tech developments. It's expected the future of autos in the US will be a more complex mix of technologies and fuels. Plug-in cars in less than two years. More and more hybrids and flex fuel vehicles. The new technolgies will cost more up front for the consumer.
And there's real need to address the fuel supply system in the US, says Territo. Plug-in cars will use standrad household current and sockets. But LNG never became common. Today only 1500 service stations carry E-85 ethanol fuel. Where are you going to find hydrogen for your Honda fuel cell car? Far less than half of the gas stations in America even carry diesel, and it can be especially hard to find when you get away from major truck routes and agricultural areas.