Dump Detroit if they can't compete with the Prius
How can Detroit compete in the future without a Prius-contender?President Barack Obama and Democrats in Congress have some new and refreshing ideas for America. To fight foreign oil dependency and global warming - while creating jobs - Democrats are proposing huge investments in cost-inefficient green technologies often built by inefficient companies.
To make these green technologies more cost-effective, many - including this blogger - have suggested a gas tax. Thus far, however, President Obama has been against the idea. In these economic times, it's hard to blame him for such a stance. Still, eventually, some tough decisions must be made.
US automakers are struggling just to survive and if US auto sales don't pick up next year, it's going to be hard for these automakers to survive without a massive bailout. As a result, many are suggesting tax incentives for the consumers of US-made vehicles - most of which are gas-guzzlers. That's not very green.
Yet, this is the conundrum Obama and Democrats must manage. Is it really worth it to create a false market based upon gas-guzzler sales? Maybe the reality is, is that Americans are going to be purchasing less cars. That could be the new automotive reality, and there have been a few studies suggesting that America's love affair with the car is over.
Even more important, there is a good chance that California will soon be regulating its own emissions standards. That means vehicles like the Toyota Prius and the Honda Insight might quickly become the best selling vehicles in California, and as many as 17 other states. Yet, what will Detroit automakers sell? They have few, if any, hot, fuel efficient models.
Some will undoubtedly claim that GM can sell the Chevy Volt, for instance. Well, GM probably won't be selling many Volts by 2016 when California's 30 percent reduction goes into effect. And, even if GM can increase production, the Insight will cost $20,000, the Volt $40,000. Can the Volt really be enough, especially if gas prices don't increase drastically?
Even Ford, with its new hybrid technology, still doesn't have a Prius-contender. While its new Ford Fusion hybrid is compelling, why is Ford only planning to make 25,000 of these hybrid vehicles? More important, if you're rolling out a new hybrid drive, why would you not challenge the standard, the Prius, as Honda did? Can you not compete?
By 2016, when California emission standards go live, Toyota could be selling a million hybrids per year, a majority of them Prius hybrids, yet Detroit might not yet have a competitive - in terms of technology AND costs - product. Can you really bank on Detroit in that reality?
Labels: Chevy Volt electric vehicle concept, Foreign Oil Dependency, global warming, Hybrid Vehicles, toyota prius
posted by Dahcredyns at
9:05 AM
5 Comments:
Indigo Incarnates
The problem with Detroit's hybrids is that they're all 20 MPG $75k SUV hulks. I see no reason to subsidize such things.
The "Big Three" are under bankruptcy watch and begging for more bailout money. President Barack Obama thinks this is a good time to appease his environmental base by weighing Detroit down with a new round of environmental regulations. This is a horrible timing and it will severely damage the ability of the "Big Three" to return to profitability. The first increase in CAFE will take place by the 2011 model year. Detroit is now preparing to launch the 2010 model year in July. Read more here. The "Big Three" are sinking and Barack Obama fires a salvo of torpedoes
About Ford, have you asked them why they only make 25K hybrids per model. Is a supply chain issue, is it related to their license from Toyota for the synergy like hybrid system, or is it just a marketing/strategic choice, do you think?
alcatholic-
Ford's new hybrid technology - now in the Fusion hybrid - is now independent from Toyota if I recall correctly.
Nonetheless, the supply chains are an issue. Toyota has gone to great lengths to set up its own supply chains for NiMH and copper, for instance.
Ford, on the other hand, hasn't been so committed. It seems to me that they are only doing as much as needed to have a few chips in the game.
They are taking a safe, conservative strategy, which makes some sense in these times. Still, if the future is green and efficient, as Obama is suggesting, conservative isn't going to cut it.
redneck-
To an extent I don't disagree that this is bad timing as far as the auto industry. And, believe it or not, I do have some compassion for the US auto industry.
Cheap gas, I believe, retarded the auto industry for the last few decades. So the Big 3 aren't deserving of all blame.
Still, after events like 9/11, the Big 3 didn't change their mix at all. In fact, just after, GM launched a new line of guzzlers.
Forget, global warming if you want, but this is also about foreign oil dependency, a dependency which has cost this country dearly. So, I agree with Obama in general on this position.
And the Big 3 are warming to this as they see lots of money coming from the government to go green.
And, that's my issue with the Big 3. Despite 10 years of the Prius, gas spikes, oil wars, 9/11, etc., Detroit still hasn't challenged the Prius.
In my opinion that's pure ignorance and its left me questioning whether the Big 3 are capable of competing if efficiency is the standard for the future.
Can the Big 3 be efficient and profitable?
Thus far, they've proven little, which makes me question the amount of money we might eventually throw at them.
BTW - While Obama is beholden to the green movement, he's also quite beholden to the UAW.
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