The bailout, electrification and gas prices

Is electrification going to save the US auto industry?

The article Will Detroit's cash crisis kill the electric car? questions whether the Chevy Volt can survive without the bailout, and whether the electric car dies if Detroit dies.

Please. The electrification of the automobile isn't dependent upon either GM or Detroit. In fact, very major automaker, and a number of minor automakers, are working on some form of electrification.

A smarter question might be, when is the electric car going to be profitable for any major automaker? Or, in what year will the first automaker produce even 100,000 EVs in a single year - something the Chevy Volt won't do for several years after it launches in late 2010.

Reality sucks

Tomorrow, the highly anticipated Honda Insight hybrid will hit the floors of the LA Auto Show. Yet, some are already questioning its viability at today's gas prices because study after study demonstrate that auto consumer interest in fuel economy is driven by one thing: gas prices.

Not global warming. Not foreign oil dependency. Simple economics.

Ultimately, gas prices could remain low for several more years. Coupled with a recession, these lower prices could severely dampen interest in hybrid cars and electric vehicles - vehicles that won't be profitable for already struggling US automakers for many years.

Saving the US auto industry is not going to be easy, and it is certainly not as simple as saving the Volt. While the Volt is undoubtedly an extremely important vehicle, it, and electrification in general, won't help solve any financial woes for many years. What happens until then?