FORTUNE: A gas tax in America's future

Oil is no gas

Gas tax. Gas tax. Gas tax.

No one really likes the idea, yet the call for a gas tax is growing louder.

So far, Barack Obama has been against the idea, but Fortune's Alex Taylor suggests it's one of the critical issues that Obama can seize upon to have the greatest impact on the auto industry of anyone since Henry Ford. Now, that's saying a lot.

Likewise, another Fortune article has Paul Foster, the chairman and CEO of El Paso-based Western Refining, also calling for a new gas tax. In fact, he suggests a gradual increase of up to $2.00.

One might expect gas tax calls from liberal organizations, but when oil men and conservative business magazines start advocating a gas tax, you have to accept that it just might happen.

What is the Fisker Sunset?

The Fisker Sunset

In addition to the Fisker Karma plug-in hybrid, Fisker will also debut the Sunset at NAIAS in January. Not many other details, other this this photo, have been released. Many believe the Sunset will be a convertible. We just hope it's also a plug-in, or at least some sort of hybrid.

Gas tax gaining momentum, or at least air

A gas tax now inevitable

A gas tax is an idea that has been floated around this blog many times over the last few years. My gas tax - really an oil tax - was always a way to help fund credits for more fuel efficient vehicles. Likewise, the tax helps drive investment in non-oil fuels and technologies, while also changing consumer behavior.

Lately, the drumbeat behind a new gas tax has been increasing. MotorTrend, the LATimes, and the New York Times, for instance, have each covered the idea in the last few days.

New gas taxes are coming, but they won't be used to provide incentives for hybrid cars and other fuel efficient technologies..

Since gas tax revenue helps fund much transportation infrastructure throughout the US, and US drivers have been driving less, already there is a huge budget shortfall. Even worse, before Americans started driving less, most in Congress believed that current gas taxes were not sufficient, which helps explain America's dilapidated infrastructure. Thus, if Americans continue to drive less, gas taxes are an absolute necessity.

Oddly enough, higher gas taxes will probably lead to even less driving, which will require even greater taxes, while pushing Americans to more fuel efficient, but less profitable, vehicles.

Thus, can US automakers survive such a reality without far more massive cuts than already expected, and without many, many tens of billions more in US aid? Likewise, can America be a real technological leader in the world if we continue to strive for the cheapest gas possible regardless of any other costs?

A few 2010 Toyota Prius details

Blue man group hypes the Prius

There is a YouTube video featuring the Blue Man Group and the new Toyota Prius. The video isn't terribly exciting, but if you are wondering what new features the third generation Prius will offer, the video does provide some insight. I think it looks great, but I don't think Toyota is striving to sell the cheapest hybrid. And, ultimately, the Prius is still about fuel economy, so the EPA's new rating might be what most are waiting to learn.

How far will hybrid sales decline in 2009?

Not the year of the hybrid

Six months ago, one might have speculated that 2009 would be the year that hybrid cars forever changed the auto industry. It's not just that hybrids were selling for thousands above MSRP six months ago thanks to high gas prices, but that 2009 would also see the launch of the new Honda Insight and the third generation Toyota Prius.

Yet, as we head into 2009 the hype around these two significant hybrid launches has been squashed. In fact, I wouldn't be surprised to see Toyota push back the launch of the new Prius until as close to 2010 as possible.

With a crappy economy and falling gas prices, hybrid sales appear on track for a record year in 2009. Unfortunately, the record will be for biggest year-to-year sales decline.

Fusion hybrid punks Camry hybrid in the city

Hybrid wars are on?

Ford's new hybrid, the Fusion hybrid, will beat the Toyota Camry hybrid in city fuel economy by 8 mpg according to the latest EPA findings. In the city, the Fusion hybrid will be rated at 41 mpg, 8 mpg more than the Camry hybrid. On the highway, the Camry hybrid will be rated 36 mpg, 2 mpg more than the Camry hybrid.

While this is fantastic and exciting news, I'm still uncertain that Ford is truly ready to challenge Toyota's supremacy in hybrid cars.

Even before the bottom fell out of hybrid sales last month, Ford still only planned on producing 25,000 Fusion hybrids next year. Why? This is a car that should outsell the Camry hybrid. Is Ford's new hybrid technology cost-competitive compared to Toyota's Hybrid Synergy Drive?

Still, whether by luck or not, 25,000 Fusion hybrids per year might be the right number until gas prices pick back up. For now, the Fusion hybrid is a hopeful development for the US auto industry.

A good time for a hybrid truck?

The GMC Sierra hybrid

Sales of big trucks are on the rise. Thanks to incentives and cheap gas, consumers are again interested in big vehicles.

Could this help launch GM's large hybrid pickups, which will hit dealerships early next year?

Probably not since the sales of hybrid vehicles are tanking, and GM won't be able to offer the kinds of discounts on hybrid trucks as it can on conventional trucks. Plus, consumers are returning to trucks because gas is cheap, which means fuel economy is less important.

Ironically, as truck sales increase, it would seem this is a bad time to launch a new truck.

Toyota's $20,000 city EV

As small as the Auris?

Toyota will debut a small, limited range electric vehicle at the Detroit Auto Show in January. According to early reports the new EV will be a small car intended for short range city use and it will cost about $20,000.

The new EV concept is to be based off a new subcompact design that Toyota hopes to begin selling in a few years.

$1.66 gas to fuel hybrid bargains

Happy days for hybrid shoppers

Hybrid sales were down 50 percent in November, and they will probably be about the same in December. Likewise, gasoline prices are now averaging $1.66 per gallon. So, aside from economic problems, one can only assume gas prices are significantly contributing to the hybrid sales slide.

Yet, 2009 will see a number of new hybrid cars hitting the road, such as the Honda Insight and the third generation Toyota Prius. Hence, supply glut seems inevitable.

For shoppers of hybrid cars, happy days are coming.

Can EVs save the US auto industry?

More expensive EVs, or cheaper, smaller vehicles?

Since the bailout was announced this morning, I've watched quite a bit of CNBC coverage on the subject. And, both GM's CEO and the Michigan Governor, have now claimed that EVs and battery-powered vehicles are the key to turning the US auto industry around.

Is that believable?

Recently, the CEO of Valence Technology, a US-based battery maker said that Europe was far more prepared for electrification than the US.

Other reports have indicated that the battery manufacturing industry in the US is just shy of dead, and resurrection won't be easy, even if massive investments are made. Whom will the US industry rely on for batteries for this EV revolution? Our competitors?

Even if a battery industry can be developed, a bigger question might be, when will EVs be profitable? Likewise, will consumers want EVs and plug-in hybrid vehicles if they cost $30,000 or more, especially if next year's economy is just as bad as this year's economy?

Crushed pension funds and 401k's, foreclosure and negative home value, job insecurity - these conditions might stick for a few years, and, even when resolved, these conditions might stick in consumer's collective consciousness for many years after.

Add that to recent findings that suggest that America's love affair with the car has shifted, and maybe Americans are finally ready for very different forms of transportation. Certainly, that doesn't mean that Americans won't want cars, but maybe we'll want much cheaper, smaller cars or just far, far less cars - another circumstance that will kill Detroit profits regardless of electrification.

Can EVs really save the US auto industry? Or has EV become a buzz word used for placation and distraction?

GM reiterates: Volt on schedule

Still ready for 2010

Earlier this week GM announced that a plant to build engines for both the Chevy Volt and the Chevy Cruze was being delayed pending the bailout. However, GM also announced that this delay would not delay the development of the Volt.

Jon Lauckner, GM's Vice President Global Program Management reiterated that yesterday on GM's FastLaneBlog. "The development of the Volt remains on-schedule despite the ongoing talks in Washington, D.C. It is one of the highest, if not the highest, priority programs in the company and that hasn’t changed, nor has the commitment of resources to fund it. In fact, with the successful completion of each development activity, we have more confidence than ever the Volt will start production as planned in late 2010."

Bailout over, for now. Any predictions?

How long will Chrysler survive?

So, the Big 2 have been given their bailout, although they were given an amount that was far less than they suggested they needed. Likewise, the bailout was for an amount far less than what many independent economists have claimed would be needed.

Thus, is this just the beginning? Will the Obama Administration and the new Congress erase some of the tougher requirements that Bush's bailout imposes, such as those on UAW wages? Will the bailout lead to a new, vibrant American auto industry? Will the bailout lead to a massive increase in hybrid cars and electric vehicles?

What are your predictions for the automakers bailout?

$1 billion to kick start the US battery industry?

Is it already too late for a US battery industry?

3M and Johnson Controls have joined a consortium of 14 US technology companies, called the National Alliance for Advanced Transportation Battery Cell Manufacture, which is seeking $1 billion in aid from the US government to help develop advanced batteries for hybrid and electric cars.

Argonne National Lab is advising the alliance on how to bring lithium technology, much of it invented into the US, back into US manufacturing according to the Wall Street Journal.

With many calling batteries the new oil, such an effort should be no surprise. Still, while much of this battery technology was first developed in the US, few US companies have found battery manufacturing to be profitable, largely because most electronic devices are made in Asia. It is hoped, however, that since the US still has a large auto manufacturing sector - at least for now - manufacturing auto batteries could be different, and profitable.

67 mpg Honda Fit hybrid ready in 2010?

Even cheaper than the Insight hybrid?

While US automakers are struggling just to survive to President-Elect Obama's inauguration, Honda is ramping up plans to put many more hybrid vehicles on the road soon. The Honda Insight is just around the corner and the Honda Fit hybrid should be available in 2010.

Reports coming out of Britain are claiming the new Honda hybrid will achieve at least 67 mpg, which is what the report claims the new Honda Insight will achieve.

This is nonsense. Already Honda has stated that the new Insight will not be as fuel efficient as the original Insight, which did achieve close to 67 mpg with the manual version but not the automatic. Of course, the new Insight is a good bit larger. Likewise, since then, the EPA has tightened its testing and the Insight would not be rated as high.

While Honda has indicated that improvements have been made on its hybrid powertrain, especially with regards to weight, the new Insight hybrid will still use a powertrain very similar to the Civic hybrid, which is rated 40 mpg city/ 45 mpg highway.

EIA Outlook: PHEVs over-hyped and more bailout questions

Is this really going to save GM?

By 2014, automakers will be selling 90,000 plug-in hybrid vehicles per year in the US, thanks to tax credits, according to a new EIA report. And, by 2030 PHEVs will make up just 2 percent of total new vehicle sales in the US.

Conventional hybrid vehicles, on the other hand, will make up 38 percent of new sales, compared to 2.4 percent in 2008.

The report is based on what the EIA sees as no growth in oil consumption between now and 2030 - a finding which seems to be supported by the Brookings Institute. This lack of growth, according to the EIA, will be caused by a combination of higher CAFE standards, higher oil prices, and greater biofuel use.

Additionally, increased US oil production and biofuel use will provide significant declines in the use of imported oil, according to the EIA.

This EIA data, coupled with the Brookings Institute Report, does suggest a cultural shift in US transportation, such as less cars, more public transportation, living closer to work, etc. Yet, it does not appear that automakers, nor Congress and it's bailout plans, are considering this potential reality.

For instance, this data, coupled with the Brookings data, suggests that US auto sales won't return to 17 million units per year, possibly, ever. In fact, today's run rate could be closer to reality. If so, a bailout will be useless, especially when automakers are switching to new fuel efficient vehicles with significantly smaller profit margins. Significant, painful restructuring will be required.

And, if hybrids, rather than plug-in hybrids, are the key to auto sales success for the next decade or two, will the Big 3 be ready to compete with Toyota and Honda when neither yet have a Toyota Prius contender?

Bailout Warning: Love affair with the car over?

Time to rethink transportation?

The Brookings Institution has released a fantastic study on the relationship of the car and America that adds an interesting element to the auto bailout.

"America is experiencing its longest and steepest drop in driving, signaling a permanent shift away from reliance on the car to other modes of transportation. In the coming years, this shift will have far reaching implications for transportation, environmental, energy, and land-use planning."

Even before the run up in gas prices in 2007 and 2008, the report finds, American driving habits were starting to plateau. Since, however, American vehicle miles traveled dropped by 90 billion miles. Obviously, higher gas prices helped put a spike in this trend, but cheaper gas has had little effect on reversing this trend thus far.

Thus Brookings warns, for instance, that the current gas tax will be insufficient to manage US transportation needs (although many argue it has been insufficient for years already), which probably means the need for higher gas taxes. Of course, higher taxes would help exacerbate this trend away from the car.

How would this affect the real world run rate of the auto industry?

Higher gas taxes for infrastructure, plus higher costs due to world oil demand, could mean much higher gas prices for the future. Such events could result in an even larger drop in miles traveled and much less demand for new autos. Such a scenario, according to Big 3 testimony, would crush the US auto industry, regardless of any bailout.

Will any bailout for the US auto industry even consider and utilize such findings?

Volt plant delayed

Launch date still on target

GM has delayed plans to begin construction on a new factory that will make engines for both the Chevy Volt and the Chevy Cruze until the bailout issue is resolved to help save its dwindling cash supply. Nonetheless, according to those reports, the Volt will still hit showrooms in 2010.

Honda, GS Yuasa form hybrid battery partnership

Eventually lithium powered?

Honda and GS Yuasa will "establish a joint venture company which will manufacture, sell and conduct R&D for high-power lithium-ion batteries with a central focus on applications in hybrid electric vehicles," according to GreenCarCongress.

While Honda might be a laggard on plug-in vehicles, it has aggressively increased its efforts into hybrid vehicles.

Still, Honda continues to develop electric cars as well, as the Honda Clarity is powered by an electric drivetrain. Thus, it seems that Honda will be quite capable of adapting to the electric vehicle market when it matures into full scale mass production.

Yet, Honda's interim plans for fuel economy will not suffer if EV adoption is slow, unlike many other automakers. Since, you can make a lot more hybrids than EVs with the same supply of batteries, Honda could flood the market with cheap hybrids as the issues of electrification are worked through without hurting EV development.

Chrysler EVs: Not a one trick pony

Chrysler's first electric vehicle?

While many believe that Chrysler won't be around in a couple of years, Chrysler is moving ahead with plans to electrify the automobile. And, in a CNN piece, Chrysler took a poke at the Chevy Volt and claimed that it wouldn't be a one trick pony, or "one electric vehicle company."

Thus, Chrysler's big EV plans are to forgo aerodynamics, weight and fancy designs. Instead, Chrysler will begin its EV program by converting traditional Chrysler vehicles into electric vehicles, while achieving the same kinds of performance as a Volt - all at a cheaper cost to the automaker and to consumers.

So, why didn't GM think of that?

Because, at least initially, it doesn't seem to make sense. For instance, the Volt will use a 16 kwh battery pack - the most critical and expensive component of the Volt. Chrysler's Jeep EV, on the other hand, will use a 27 kwh battery. Yet, somehow, Chrysler's EVs will be more cost-effective?

In the future, however, Chrysler's plans make a bit more sense. New EV production will be coordinated with conventional vehicle production. Thus, every Chrysler auto made can be either a gasoline-powered car, or an EV. Hence, Chrysler will be able to react quickly to market demand if it switches from gas to EV and back to gas again, for instance. Still, that program won't begin until at least 2012, and it seems a little perfect world.

Nonetheless, it's good to see Chrysler developing sophisticated EV plans, even if they are more about bailout bribery than reality. Still, do such plans really make Chrysler any more viable in the next 10 years?

Market uncertainty delays Toyota hybrid plant

Not to be built in America anytime soon

Sales of hybrid cars, just like conventional vehicles, are tanking. Add in a significant decline in gas prices, and declining hybrid interest shouldn't surprise anyone. Thus, Toyota will delay the launch of a new US factory to build the Toyota Prius.

Majority still oppose auto bailout

Who does Congress represent?

According to a Washington Post poll, 55 percent of Americans still oppose a bailout for automakers, versus 42 percent that support a bailout. Those against the bailout believe that the US auto industry is nearing bankruptcy because of bad business practices, and that bankruptcy won't disrupt the economy too adversely.

I guess you can't blame the people. The auto industry and the UAW continue to accept little responsibility for the condition they are now in.

Yes, Toyota and Honda are now suffering, but they are still sitting on hordes of cash, and they have not been bleeding money for the last several years, unlike the Big 3. Likewise, if the UAW is so innocent, why did they accept major contract changes in recent years? Is that not proof that for decades UAW contracts were uncompetitive?

While I continue to support a bailout, begrudgingly, the Big 3 and the UAW continue to blame, rather than accept responsibility. That certainly isn't the way to appeal to Americans in fear of losing their jobs, pensions and health care funds - benefits which have never been as good as the UAW's for most.

China launches plug-in hybrid, but not ready for America

Watch out world?

Chinese battery and automaker BYD has launched the F3DM, the first hybrid vehicle made in China by a Chinese company. The F3DM can travel up to 62 miles on electricity before tapping into it's gasoline engine, and can be fully charged in 9 hours from a regular electric outlet.

Still, while BYD is claiming to have beat the rest of the world to plug-in hybrids, the vehicle is not up to US safety standards according to reports.

American-made hypocrisy: Buying imports and foreign oil dependency

Are American-made gas-guzzlers really patriotic?

With bailout talk heating up in recent weeks, I've received a number of e-mails and blog comments calling import buyers un-American. So, I guess I'm not very patriotic, however....

After 9/11, I decided that I had to kill my foreign oil footprint. And, today, I rarely drive, as I've built most of my life around LA's public transportation system, often to my inconvenience. When I do drive, however, I drive a foreign-made hybrid because in LA congestion, foreign-made hybrid cars offer the best fuel economy of any mainstream autos, PERIOD.

Like, ex-CIA director, James Woolsey, I believe foreign oil dependency is the greatest threat to American national security. In fact, I think regularly driving an American-made gas-guzzler is unpatriotic. I don't care if it's made in America. The foreign oil it guzzles is contributing to what Boone Pickens has called the greatest transfer of wealth the world has ever seen, while bin Laden has called it the greatest theft the world has ever seen.

So, take your American-made gas guzzler and stick it where the sun don't shine, cuz without tons of American national security-threatening Persian Gulf oil, you couldn't drive your gas hog. And waving your American flag can't cover up that hypocrisy.

Bailout downed in Congress

White House to the rescue

The Senate has rejected the automaker bailout 52 - 35. However, both the Treasury and the White House have indicated that TARP funds might now be used to save the Big 3 from bankruptcy.

Will the Big 3 ever top the Prius?

The poster child of fuel economy

I'm an advocate for the Chevy Volt. The Volt and, more important, the E Flex Drive powering the Volt, demonstrate that GM is preparing for the future.

Unfortunately, however, 100,000 Volts per year is still many years away. In fact, even though the 3rd generation of the Toyota Prius is set to launch next year, Toyota will probably be rolling out the 4th generation Prius by the time GM is ready to start producing 100,000 Volts per year. By then the Hybrid Synergy Drive powering the Prius will be vastly different than today's version.

Which will be better? Which will be more cost-effective?

On the other hand, Chrysler....well, I don't even know what to say about Chrysler.

Fortunately, Ford's new hybrid powertrain represents some hope, and early Fusion hybrid reports indicate that Ford has a hit on its hands, maybe. With plans to only produce 25,000 Fusion hybrids next year, it's hard not to be a bit concerned. Likewise, why didn't Ford roll out its new hybrid powertrain in a unique, hybrid-only vehicle? Thus, I cannot help but wonder if Ford's new hybrid powertrain is cost-effective, for instance. Still, Ford is a wild card.

So, will the Big 3 ever top the Prius? I don't know, but if it does happen, it won't be any time soon.

Gas tax: Is Obama smoking something?

The EV1 and the Chevy Volt

I've never thought much of GM killing the electric car. Besides, it was really just a delay. Large automakers survive on economies of scale, and with gas prices what they've been, except for the last couple of years, there was never an incentive for such vehicles, especially if GM had to price them at a break even point, let alone a profitable price.

Recently, as gas prices rose, interest in fuel economy also increased because people could see a financial incentive to invest in more expensive hybrid cars. High gas prices, not the government, justified the higher price of fuel efficient vehicles, as anyone that shopped for a hybrid this summer learned.

Thus, with gas prices skyrocketing downward, it's a bit alarming to learn that President-Elect Barack Obama thinks that a gas tax is a bad idea. Obviously, I don't expect him to outright advocate for a gas tax, it's political suicide, but can the government solve all of America's problems without asking for any help from the people?

I guess I shouldn't be surprised. We're bailing out Wall Street, bailing out homeowners - many of whom were gaming the system from the beginning, bailing out the auto industry, etc., and we're going to upgrade our dilapidated infrastructure, build a $1/2 trillion super grid, add massive solar and wind capabilities, and it won't cost the taxpayer anything.

I guess there is such a thing as a free lunch.

Peugeot's diesel hybrids set for 2011

A diesel hybrid concept from Peugeot

Peugeot will begin selling hybrid cars in 2011 according to new reports. Accordingly, Peugeot will partner with Bosch to build a number of diesel hybrid vehicles. InsideLine reports, "Bosch will supply Peugeot with electric motors and the electronic systems for PSA Peugeot Citroën's four-wheel-drive diesel hybrids. The company will also supply the anti-lock braking system and electronic stability program to maximize energy recovery."

Chrysler EV spyshots? Whoopdidoo!

Not the spyshots

So, I finally checked out the Dodge EV spyshots on AutoWeek, and all I can say is whoopdidoo.

Chances are that Chrysler won't even be around by the time these vehicles are customer-ready, and how realistic are any of Chrysler's 3 EV prototypes for mass-market consumption?

Theater.

Certainly, it's great that Chrsyler is at least pursuing EV technology, but this Dodge EV is going nowhere regardless of how fast it gets there.

Tesla's cheap, $57,000, EV dependent on government aid

100th Roadster finally delivered

Tesla will delay plans to build it's new $57,000 four door sedan if the government doesn't give it $350 million in auto loans. If the government does deliver the money, Tesla hopes to build 20,000 sedans per year by 2011.

While I have great respect for Elon Musk, I have a hard time buying this business if it requires government help. Thus far Tesla has produced just 100 cars. In 2011, if Tesla can start selling $57,000 EVs, they will have to compete with much cheaper plug-in hybrids and EVs from numerous major automakers.

In my opinion, unless gas costs at least $5.00 in 2011, $40,000 for a Volt is too expensive. Still, I'd take a range extended $40,000 Volt over a $57,000 EV any day of the week.

I just don't see a legitimate business case.

Bailouts just the beginning if CAFE increased

Everything as efficient as the Prius under new Congress?

If you don't believe in an automaker bailout, you ain't seen nothing yet. Unless the economy quickly starts soaring, within the next few years, automakers could need as much as $120 billion according to recent Congressional testimony.

And, even if the economy warms, but car buying stays slow, the US auto industry isn't even "viable".

"At 10.8 or 10.5 million total market," for yearly auto sales, Bob Lutz told CNN, "we do not have a viable automobile industry in this country for anybody."

Yet, the push in Congress is to now raise fuel economy standards for the Big 3, under the direction of Congress. An aggressive increase in fuel economy means that US automakers won't be profitable for more than a decade, maybe decades. In fact, such a move will require significantly more money from the government beyond the $120 billion if the economy doesn't quickly and vastly improve.

Is socialization of the US auto industry now inevitable?

Hybrid cars market fading

No more markups

A few weeks ago I posted as story about Toyota Prius discounts that I had noticed in the LATimes - one of the hottest markets for hybrid cars.

Considering the economy, such discounts shouldn't be surprising, especially with gas prices declining on a daily basis. In fact, November Prius sales were almost half of what they were the previous year.

Data from Cars.com also indicates a slow down in Prius demand. However, the data also seems to indicate that Toyota's supply of hybrids is also down.

Nonetheless, there is no doubt that demand for hybrid cars is fading. If gas prices remain low for a few years, isn't it inevitable that automakers will slow their push towards such vehicles?

Stupid America? Automaker blame and cheap gas

Cheap gas hurts America

GM is bleeding money in the US, yet throughout the world GM's auto business is profitable. Why? Why is GM near bankruptcy?

Is it all bad management? Is it all the fault of the UAW? Is it all because GM killed the electric car?

I don't think so. Certainly, GM's management was bad in decades past and the UAW was uncompetitive. However, killing the electric car didn't kill GM. Even if GM was making as many EVs today as Toyota does hybrid cars, GM would still be on the precipice of bankruptcy.

Complacency killed the Big 3. Complacency caused by cheap gas.

Certainly, auto companies lobbied Congress not to raise fuel economy standards, and, until recently, Congress has been more than happy to oblige. And Americans didn't care, as fuel economy was even less important than cup holders for the majority of car buyers.

Thus, any mention of a gas tax has been instant political suicide. Yet, protecting our foreign oil resources has cost more than a gas tax ever would have. And, what do we have to show for it?

Ooops. That's right. We have the greatest military the world loves to hate, Whooohooo! America! We're number 1!

Killing Detroit won't lead to any greater fuel efficiency than if Detroit is bailed out. If you want to blame someone, or something, blame cheap gas. If you can't do that, then you can't handle the truth.

Bailout agreement today

There should be a short-term bailout agreement announced by the end of today according to many reports coming out of Congress that could be signed by the White House before the end of the week. Developing....

Green technology patents: The Big 3's trump card?

How do we get the technology out of the lab and into the real world

"General Motors, Ford and Chrysler are collectively one of the world's primary sources for the research and development of green and fuel-efficient technologies," notes a commentary in the DetroitNews. "As Washington decides on aid to the ailing auto industry, top consideration should be given to the significant potential of these Big 3 technologies for stimulating economic and job growth and creating a greener and more fuel-efficient world."

Interesting piece on the green technology patents owned by the US auto industry and how bankruptcy "would create a historically unique opportunity for their foreign competitors to acquire a vast amount of crown jewel technology for a fraction of their true value."

GM's plans for the bailout money, for the future

Hard to get excited about hybrids like the Tahoe

Just checked out a video that GM is using to trump up support for the bailout of the US auto industry, something I already support, although tentatively. Yet, this video demonstrates the problem with the Big 3 and with GM. Too much tomorrow. The next big thing, such as the Chevy Volt, is never here today, it's always tomorrow.

No doubt, quality at GM has improved greatly over the years, and massive restructuring has been achieved and more is forthcoming. Cars like the Malibu are solid winners. And, next year, GM will have 9 hybrid cars available for sale, far more than anyone else. Yet, will any of them ever sell at least 50,000 units per year?

And, as exciting as the Chevy Volt is, it will still lag far behind Toyota Prius sales for at least another decade. In fact, while the Volt will be a game changer, it probably won't hit its game-changing stride until close to 2020. By then, it might not be quite as unique as it is today.

The Chevy Volt might be the best green vehicle selling at least 100,000 units per year in 2016, but America, at least those doubting GM, want to see GM challenge the Prius with a vehicle that can sell 100,000 units today.

Carpe diem, GM. Carpe diem.

Bailout plan ready for Vote next week

"Jolted by the loss of thousands of jobs, congressional Democrats and the White House reached for agreement Friday on about $15 billion in bailout loans for the beleaguered auto industry. President George W. Bush warned that at least one of the Big Three carmakers might not survive the current economic crisis." (AP via Yahoo)

Not a lot of details yet available, other than that this is purely a stop-gap loan meant to get automakers into next year and the next administration.

Chevy Volt cost-competitive by 2016?

A Congressional update

During Congressional testimony today, GM CEO Rick Wagoner was asked when the Chevy Volt would be cost-competitive to gasoline vehicles. Depending on sales volume, Wagoner stated that by 2016 or 2017 the Volt might be cost competitive.

Of course, this might not be in terms of sticker price, but in terms of overall ownership. For instance, a cheaper gas car plus the cost of gasoline versus a more expensive Volt and its energy savings. Likewise, it would take many years of profitability to recover the R&D and manufacturing start-up costs.

While that's good news, it also demonstrates that hybrid vehicles, such as the Volt, can't save GM or any other Big 3 automakers any time soon.

Some hope for fuel economy

The gas guzzler is done?

Well, that's probably not going to be true anytime soon, but the wild popularity of gas-guzzlers is dead. That's a step, and as I watch the automakers testify before Congress, I need some hope.

If the recession hitting the US lasts as long, including the recovery, as some economists are predicting, any chance of profitability for automakers is many, many years out. How are they going to be able to afford a serious push towards fuel economy if the technology costs more, especially if gas prices don't go significantly higher for the next few years? Aren't many consumers going to balk?

Or, have Americans smartened up?

That was the feeling I got after reading the comments to a MotorTrend article about the falling price of gas. Considering that MotorTrend is not a staunch advocate of fuel efficiency, it's a hopeful sign when many of MotorTrend's readers believe that cheap gas shouldn't be an excuse to a return to guzzling.

$1.00 gas by early 2009

When will these levels return?

CNBC just reported that the Gulf Oil CEO believes that a gallon of gas could drop to just $1.00 per gallon by early 2009. Part of the OPEC conspiracy?

If car buyers return, will demand for hybrid cars, such as the Toyota Prius, remain as high if gas hits $1.00 per gallon? Is that a stupid question? Or, are Americans that stupid?

Congress and fuel economy - Can you say hypocrisy?

Even Barack doesn't have much high ground

I remember, just as gas prices were rising, a press conference that members of Congress had at a Washington DC gas station to address the rising cost of gasoline prices. Even though the gas station was just ONE block from Congressional offices, most members drove. Even worse, their drivers waited in idling cars as members spoke, then were quickly driven back the one block to their offices.

Reporters on scene also noted how most drove SUVs, or gas-guzzling performance cars. Only a couple members - in total - drove hybrids then, at least in Washington.

Around the same time President-Elect Obama told supporters at a town hall meeting in Illinois that America had to give up their love affair with gas-guzzling SUVs, then he left the meeting in a gas-guzzling SUV. Later, reps for Obama explained that it was a flex fuel vehicle. Unfortunately, in Chicago, where Obama spent most his Illinois time, there weren't but a couple of ethanol stations throughout the entire metro area. Of course, ethanol guzzlers are little better than gas guzzlers.

Yet, these same politicians - now holier than thou - cannot understand why US automakers haven't focused on more fuel efficient vehicles, more hybrid vehicles. With their leadership - on both sides of the aisle - is there really any wonder?

Govt would have to fund Big 3 bankruptcy

No one has the money to fund a bankruptcy?

So, you want the Big 3 to go into bankruptcy to clean house? Alright. I was just watching some pre-coverage of the bailout testimony before Congress and analysts were discussing how there is no financial institution strong enough to finance the bankruptcy of the Big 3. Oddly enough, financing a bankruptcy would actually cost more than the bailout loans - and the bankruptcy wouldn't be a loan.

I don't know, folks. There is a lot of reason to hate the Big 3, I realize that. Still, we're giving hundreds of billions to just Citibank, and no one hardly says anything. Yet, when we try to help the auto industry - an employer of millions directly and indirectly - America wants to crush them? Does America really hate the UAW that much more than billionaire Wall Streeters?

Cramer calls out OPEC conspiracy

Killing alternative energy

Today on the Lightning Round of Jim Cramer's Mad Money, a caller questioned Cramer about solar plays under Obama. Cramer essentially responded that cheap gas is killing solar power and stated that OPEC had helped push oil prices lower to help offset interest in alternative energy.

Obviously, there are many out there espousing similar beliefs, but not many with the pulpit and Street cred of Cramer. While some consider Cramer a crackpot, it's still a pretty interesting statement.

Lithium breakthroughs just around the corner?

Who can make the best lithium anode

Interesting article in Technology Review regarding new techniques for developing lithium-ion batteries - breakthroughs that could instantly double the range of battery-powered vehicles. A number of researchers have been working on developing cost-effective ways of creating nanoporous silicon electrodes, with positive results, although many still believe that mass-production of such materials would be too cost-prohibitive for use in autos.

Still, while nanoporous silicon might not be the next big thing in batteries, most researchers believe that there is still a lot of potential to tap into when it comes to lithium batteries. Unlike the NiMH batteries powering today's hybrid cars, the upside potential of lithium batteries is still huge.

Interestingly, another piece of research cited in the report was the "impressive" work that GM demonstrated in September using silicon-coated carbon fibers in their lithium anodes.

Give the Big 3 a break, Take 2

How serious are we about ending foreign oil dependency

President Elect Barack Obama made a lot of strong statements during his Presidential campaign about energy security and green jobs, even touting $150 billion over 10 years to develop the green economy.

$150 billion will help, but it's a drop in the bucket needed for an energy revolution.

Not long ago, Al Gore suggested it would take $400 billion to develop a new, national smart grid - the kind of grid many experts claim is necessary for the widespread adoption of electric vehicles. Perhaps a company such as Better Place can alleviate the need for a such a super grid for EVs, but that's a different story.

Then, we need the electric vehicles, vehicles that are going to cost far more than conventional vehicles for many, many years. Finish: Give the Big 3 a break, Take 2

A Better Place than the Volt?

So yesterday?

It's 2016 and you need a new car. Now, you aren't rich. You're middle, middle class and living paycheck to paycheck. You really like the Chevy Volt, but all the consumer tax credits have been consumed, and the upfront costs are just too much. The new Toyota Prius, on the other hand, costs $10,000 less than the Volt, but skyrocketing gasoline prices mean even the fuel efficiency of hybrid cars might not be enough to save you from serious pump pain.

So, instead you buy a Prius-sized electric vehicle from one of Better Place's partners that not only costs several thousand less than the Prius, but your monthly fees for battery and charging are a third the cost of what you'd pay in monthly gas bills.

And, even if you have to take a few long trips that push you beyond Better Place's range, it would still be far cheaper to rent a Prius on those special occasions.

Seems a bit far-fetched, but the way Better Place keeps inking deals, I'm starting to believe that maybe it's possible. Maybe it isn't car makers that are critical to the future, but rather battery and infrastructure companies. And, maybe that future is closer than we think.

Give the Big 3 a break, Take 1

Even Honda is getting hammered?

Both Toyota and Honda posted sales declines of over 30 percent in November compared to last year. While that wasn't as bad as GM or Chrysler, those numbers were roughly in line with Ford's numbers.

And, for those buying cars, would you buy a car from a company that was weeks away from bankruptcy without government help? I wouldn't.

Does that justify Detroit's years of SUV madness at the expense of a balanced product portfolio? Of course not, but all of these automakers had started making serious changes before the credit crisis - a crisis that is hurting all automakers, even those making hybrid cars and small cars.

This alone doesn't justify a bailout, but it adds a little perspective. More coming on Take 2.

Ford updates Congress - EVs coming in 2010

An electric version in 2012?

CNBC's Phil Lebeau interviewed Ford CEO Alan Mulally today about Ford's updated plans being provided for Congress. According to Lebeau, Ford plans to turn a profit around 2011. Although Ford doesn't need financing right now, they are seeking to secure about $9 billion in loans to have access to if needed. If needed, Mulally will work for $1 per year.

Ford also announced that it will begin selling commercially available electric vehicles by 2010. In 2010, Ford will sell an electric van for fleet sales, followed by an electric sedan in 2011. Ford plans to elaborate on these plans, as well as plans for new hybrid vehicles at the North American International Auto Show.

Autos: Let the new world order begin

Everything soon as efficient as the Prius?

By 2020, if all goes well, the average fleet-wide fuel economy of the US fleet will be 35 mpg, a far cry from the fuel efficiency required to end foreign oil dependency. On the upside, there could be more than a million plug-in vehicles on the road by 2020.

Unfortunately, even if automakers are selling 1 million plug-ins per year in the US by 2020, probably an aggressive number, that would still represent significantly less than 10 percent of total yearly US auto sales, and we'll still be very dependent upon Persian Gulf oil.

Yet, achieving that million EV mark is going to cost many, many billions in government tax incentives. Even then, most automakers will make little profit off these vehicles. In fact, the move towards fuel economy is probably going to mean that total US auto sales per year will decline, even significantly.

Sadly, getting serious about fuel economy probably means significant job loss, not gain - at least in the US.

Is Congress even considering these issues as they ponder the legitimacy of the Big 3's plans for the future? We'll soon find out, but one thing is certain: bailing America out of its foreign oil dependency will cost far, far, far more than US automakers are seeking in loans.

Too much hope built on hybrids?

Not another fuel cell vehicle

The hydrogen economy. For decades that was Detroit's mantra. Why worry about trying to increase fuel economy when gas was cheap and fuel cell vehicles were just around the corner, they argued. After decades of delays, the success of the Toyota Prius, and battery development breakthroughs, most have come to favor the plug-in revolution, rather than the hydrogen revolution. While hydrogen might make sense one day, battery-powered electrification makes more sense today.

But does plug-in electrification make enough sense today?

No one has yet proven that the safe, reliable and cost-effective mass production of battery technology for plug-ins is viable. Likewise, most lithium is mined in only a few places in the world, and there is much potential for supply and demand conflicts. Current NiMH technology, found in today's hybrid vehicles, is even more problematic for wide scale adoption.

None of this should be used as an excuse to limit efforts towards electrification. However, it does beg the question of whether electrification is enough, at least for today. Hence, isn't a push towards much smaller and lighter vehicles, for instance, also very important? Ultimately, shouldn't the revolution of the automobile be about much more than just what powers an automobile?

A bailout for Tesla?

$400 million for Tesla?

So, Tesla Motors is seeking some $400 million dollars in low interest loans from the government - a tiny piece of the $25 billion that Congress approved to help automakers restructure to meet new CAFE legislation.

Does Tesla really help American fleet fuel economy? Should government money go to a company that will undoubtedly use that money as a bridge to an IPO to further enrich it's VC funders?

Then again, if you're gonna give money to US automakers with a history of inefficiency, why not to a startup?

I'm not terribly against government loans to Tesla, but I do think that any vehicle produced via government money should require proper pricing points. For instance, vehicle cost should be guaranteed to be no more than $40,000, although I really think it should be closer to $30,000.

Big 3 "visionary leaders" of "rebranded green" autos?

So, when will the Big 3 make America foreign oil independent?

"They [Big 3] need to tell Congress next week and the world that they are visionary leaders of a rebranded green auto industry," Michigan Gov. Jennifer Granholm said in an interview with The Detroit News. "We're not whining. And I don't think the auto industry should whine. They just need to lead. ... They need to convey that they intend to lead our nation to energy independence."

Talk about denial. The problem is that the Big 3 are not leading us to energy independence, at least not in the next few decades. Already, Big 3 CEOs testified before Congress that 35 mpg by 2020 was already pushing their capabilities. That won't come close to ending even Persian Gulf oil dependence.

Is that the leadership to which Granholm is referring?