Cash for clunker's shocking reality
Legacy costsCash for Clunkers is over. After $2.88 billion we've removed 690,117 fuel inefficient clunkers from society while providing a quick bump to a down and out auto industry.
Good news, right?
Regardless, according to CNN, those 700,000 clunkers represent just "2% of the approximately 42 million fuel hoggers still clunking along." So, we have a long way to go, but at least 700,000 15 mpg vehicles were replaced, on average, with 25 mpg vehicles.
Unfortunately, if by some magic wand Cash for Clunkers could have worked for ALL clunkers, even at 25 mpg across the entire US fleet, America would still be terribly dependent upon foreign oil.
Labels: Foreign Oil Dependency, fuel efficiency
posted by Dahcredyns at
11:13 AM
17 Comments:
I have been a daily reader of your blog, for more than a year and I must say that your posts have taken a turn for the worst. It use to be more about doing more with hybrid cars, now it only negative and criticizing posts. I'm tired of the daily negative rant. I own a Prius and I'm very proud of it. Every time I know of someone that is about to buy a car I talk to them about the merits of the hybrid technology and not about how every other manufacturer is junk. I wish the blog was more about "hybrid cars" and less about how the American auto industry is doomed. I'm unsubscribing from your rss feed.
Thanks for your honesty. I truly do appreciate it, and I apologize that I'm no longer striking a chord with you.
And I did have much more optimism in the past. I even believed the Chevy Volt was going to radically transform not just GM, but America.
Unfortunately, over the years, reality has set in.
I imagine, during the Carter Administration, for instance, there were people just like me writing about a move towards fuel efficiency and away from foreign oil dependency. In fact, I know there were, and I've seen some great PBS footage on this subject.
Decades later we're still talking, and there are no plans to do anything that will change that situation for at least 30 to 50 years.
Yet, today, automakers, politicians, etc. have generated this perception that we are on the cusp of great change. Ironically, however, Bob Lutz of GM will openly state that this "great change" is purely a myth.
Also, for the record, I don't think the US auto industry is doomed. I've said many positive things about Alan Mulally.
As for the Volt and GM. Check out what one BusinessWeek's Award winning writers had to say on this subject, http://www.businessweek.com/lifestyle/content/aug2009/bw20090813_397576.htm?chan=autos_autos+--+lifestyle+subindex+page_top+stories.
Ultimately, my honest opinion is that foreign oil dependency is going to hurt you, me and everyone in America far more than 9/11 or Iraq and it'll happen within the next decade or two.
Yet, it's business as usual.
So, excuse me for being angry, cynical and critical.
Dahc is just coming over to the dark side like me....:)
I don't want to say I told you so about GM and the Volt....
As to ANON: What exactly do you want to be positive about ANON? The fact that everything is taking 10 times as long to accomplish as it could be?
still, i don't want to be on the dark side. there has to be a way forward that isn't dependent upon a terrible event to set us into action.
however, i fully doubt it's me becoming a hybrid-focused blogger with rose-skewed lenses.
anyone see this study?
Cash for clunker customers regretting decision
seems a number of buyers of new vehicles under this program aren't going to be able to afford these vehicles. so, will we need a bailout for cash for clunker car buyers?
by the way, your BusinessWeek link isn't working.
Here you go. Sorry.
Business Week article on Volt, GM
gotta take the world as it comes... good, bad and indifferent so Dahcredyns.. you're doing fine in my book.
what did Ricky Nelson say... ?
" you can't please everyone ".
you are right to delve into the issues even if they turn out less than sunny... sometimes
if you don't do that - you'll be removing yourself from the realities...
..... " First GM mounted a PR campaign proclaiming that its top priority is to alter how the public thinks of GM and its technological prowess. That's a dangerous position to take, particularly since GM has bragged that its new electric car, the Chevy Volt, would be able to travel 40 miles before the onboard generator kicks in to take over the propulsion and therefore the Volt will be rated around 230 miles to the gallon.
Now why would GM give the public the Volt's maximum range? That's only going to set the public up for disappointment, "
I have to agree... with GM's track record with new cars and new technology.. I'd not be out in public beating my breast on this...
if they are not careful .. this is going to be GM's Edsel...
but worse than that - it's going to further damage their credibility... sorta like providing more nails to the coffin maker.
the clunkers...
the clunker program was to jumpstart the dealers and the manufacturers...
a "stimulus" if you will...
the idea of the stimulus was/is to find things that have a benefit to society then provide SOME money to do SOME good things but there is no way the government could pay to remove all the clunkers...
they're getting hit right now for providing stimulus money... in fact...
the only reason the govt did this was because the credit market had dried up.. and people were afraid to buy...
so the clunker program was also about trying to get the credit market to start lending money again... which they have...
Overall, I don't think you can argue that the Clunker program did not have a net positive effect, but I'd argue it achieved the effect in an efficient manner.
Nonetheless, this post wasn't really about the Clunker program.
I'm just using data from the Clunker program to demonstrate just how deeply in bed our automotive culture is with foreign oil, and how long we're going to be bedmates.
larry,
re: your volt comments.
that's what keeps bugging me about the volt. is the PR department driving the development of the Volt, or the engineers?
i'm kidding of course, but i think a point can be found in my sarcasm.
From the article, "The average vehicle purchased under the program had fuel economy of 24.9 mpg in combined city and highway driving compared to an average of 15.8 mpg for vehicles being traded in."
Time for another round of fun with numbers.
Assuming 10K miles/year, gas usage for 690,114 cars @ 15.8 mpg vs 24.9 mpg:
Per car:
633 gallons of gas/year
vs
402 gallons of gas/year
SAVED: 231 gallons/year, 37% reduction
Program Total:
437 million gallons/year
vs
277 million gallons/year
SAVED: 160 million gallons/year
Cost $3 Billion to reach 1.7% of 42 million fuel hogs (according to article). Reaching 10% of fuel hogs, would cost 6 times as much, $18 billion, help sell 4.2 million cars and save 971 million gallons/year.
Currently the US uses about 378 millions gallons/DAY, which is about 138 trillion gallons/year.
BTW, I just found those US gas usage numbers via this website: http://www.eia.doe.gov/basics/quickoil.html
I'll have to play around with the info on that website some more.
Also, I list the cost not as a complaint.
I'm a firm Keynesian in my economics, and I believe this kind of government spending is not only needed at times, but is multiplied as it flows through the economy have a much smaller net impact on taxpayers than it seems.
I figure that in return for the $3 billion the taxpayer is getting less people on government unemployment rolls, more cash eventually flowing through their businesses and households, etc.
Anon with the cash for clunkers buyer's remorse figure, that is a hilarious article.
"'Primary reason: They are now facing a $275-$350-per-month car payment that didn't exist prior to acquiring the car or truck,' said the report. 'That amount, they say, could negatively impact the total family budget more than expected prior to buying the new vehicle.'
In contrast, buyers' remorse hits about 6-8 percent of new-vehicle buyers within a month, said CNW Purchase Path."
Uh, what did they expect to be facing after buying a car, $275-$350 in extra income!? Wow, I had never considered some people could be so comically foolish.
there are two ways to buy a car.
you can drive a clunker for as long as it will take you to save up for a new one - then pay for it in cash and continue saving so that when the new one gets old you can replace it with another cash purchase.
That's the cheapest way to buy a car.
or.. you can do it the other way.. get a new one on credit and then pay back the loan - with interest then when done ...decide if you want to repeat the cycle or keep the car and save for for a cash purchase or the next one.
this is not rocket science.
but how many people save up first?
what the govt did - was to essentially convince folks to not save up but instead buy the car on credit - then the purchase money would benefit the dealers keeping them in business and the manufacturing industry saving assembly line jobs.
..and we have to pay it back...
and that's how the stimulus/cash for clunker program works...
it wanted people to commit to purchases now - to jump-start our economy - knowing full well that the trade off would - less cars sold downstream because some folks had already gotten new ones... and wouldn't need another new one for a while.
unless of course..you're one of those folks who get one everyone two years.. on credit.
early data already indicated that some cash for clunker buyers were already over-extended and probably shouldn't have made these purchases.
likewise, i've hear that the clunker rebate is taxable, so that's going to push these buyers further into debt.
but, inevitable, that's america. in a weird way our consumer driven economy functions almost like a ponzi scheme.
alcatholic-
and i wasn't using those numbers to make any sort of judgment on the program, just to underscore how many clunkers are out there and how long it takes to retire them.
thus, we're retiring decades old vehicles with vehicles that will also be around for decades. unfortunately, the fuel economy of these replacement vehicles is still terribly low in terms of affecting foreign oil dependency.
and foolish american consumers? c'mon that didn't really surprise you did it?
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