Wednesday, December 26, 2007

Greenwashing: GM's dual mode hybrids?

Is the marketing budget bigger than the production budget?

A few years ago Dan Neil wrote an article that so offended GM that the automaker pulled all of their advertising from the LA Times. Well, he might have achieved the same result with his recent article, Just Right, Yet Wrong.

Dan says a lot of great things about vehicles like the Chevy Tahoe hybrid and the GMC Yukon hybrid. Still, he has questions, a lot of questions about GM's dual mode hybrid vehicles, and those questions lead Dan to the word 'greenwashing'. Read more....

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Blogger Dahcredyns said...

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A few years ago Dan Neil wrote an article that so offended GM that the automaker pulled all of their advertising from the LA Times. Well, he might have achieved the same result with his recent article, Just Right, Yet Wrong.

Dan says a lot of great things about vehicles like the Chevy Tahoe hybrid and the GMC Yukon hybrid. Still, he has questions, a lot of questions about GM's dual mode hybrid vehicles, and those questions lead Dan to the word 'greenwashing'.

Dan asks, "what would the mileage of this vehicle [conventional Tahoe] be with all the improved aerodynamics, low-rolling resistance tires and aluminum body panels, yet without the fretful weight (and cost) of the hybrid system? What is the cost-benefit ratio of the hybrid system apart from these improvements? And shouldn't the improvements be standard issue?"

Ohhh, the mysteries of hybrid economics, but Dan isn't done yet.

"It's hard to tell exactly what the "hybrid premium" is on the Tahoe Hybrid (MSRP of $50,490) but it looks to be, at a minimum, $8,000. That's a huge lump. One argument to celebrate this technology is that it could be mainstreamed into the hundreds of thousands of full-size trucks and SUVs GM sells. But how realistic is that? Does this super-low-volume program do more for corporate image than corporate average fuel economy?What is this program's budget? How does it compare to GM's ad budget that crows about the program? The word is greenwashing."

Ouch!

Still, Dan offers GM a few caveats. "Perhaps GM means what it says when announcing that the company plans to electrify personal transportation, and has tackled the biggest challenge first: putting its most fuel-thirsty products on a gasoline diet. Could it be we're being cynical about a good-faith effort," asks Dan.

Then again, GM's first major step towards electrification is the Chevy Volt. And, while the Volt is still expected to meet its launch date of 2010, there is a very good chance that Volt could be delayed as much as a year or more - maybe even forever.

What if the Volt never happens?

Will flex-fuel vehicles, mild hybrid cars, and full sized hybrid SUVs be enough?

By 2010, Toyota is hoping to sell 1,000,000 hybrid vehicles per year, largely led by hybrid cars, such as the Prius and the Camry hybrid. Yet, the smallest hybrid to come from GM is probably going to be the Saturn Vue hybrid.

If GM's dual mode technology is confined to large hybrid SUVs, can GM really compete if fuel efficiency drives the future of automotive sales? And, when GM's hybrid technology is confined to $50,000 vehicles, how can economies of scale ever be achieved?

It's far too early for me to call GM's dual mode hybrids a greenwashing effort, but it's hard not to be a bit suspect. Just a few years ago GM's Bob Lutz claimed that GM could have built and developed the Prius for just a fraction of one year's marketing budget.

Were GM's dual mode hybrids developed with just a fraction of one year's marketing budget as the ultimate PR tool? Only time will tell.

9:44 AM  

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