Taking a Cruze beyond the Electric Vehicle Deployment Act

Volt 600; Cruze 25,000

Is Congress focusing on comprehensive energy policy?

There was a time when I believed the best hybrid was a plug-in hybrid. Additionally, if any new vehicle wasn’t at least a hybrid, then it simply didn’t matter – just another further bit of denial from an auto industry driven by the status quo it seemed to me.

Today, I’m not so sure what to believe anymore. However, one thing seems obvious, a focus only upon electrification is a mistake and that has me wondering whether the Electric Vehicle Deployment Act is a good piece of legislation, or maybe just the beginning of a real energy policy.

“Despite being initially laughed off by the oil industry, a consensus now holds that the world is reaching – or has just reached – peak oil,” claims a recent European Commission report.

All the more reason for the Electric Vehicle Deployment Act that seeks to offer up to $300 million apiece for up to 10 EV communities as well as additional incentives for EV buyers. All the more reason to embrace plug-in vehicles, right?

Yes. Absolutely. But can we build enough of them in time? That’s the real question.

Considering there are about 300 hundred million gas-guzzlers already on US roads and yearly auto sales are now around 13 million vehicles per year, it’s simply going to take decades to replace the current fleet even if we started building nothing but 100 mpg vehicles today. But, we’re not starting today, nor any time soon, and Congress seems to be ignoring the implications of this legacy effect.

Even if the highest CAFE requirements are approved for 2025 – more than a decade from today – plug-in vehicles are still expected to only achieve about a 15 percent share of the market according to government forecasts. This reality recently showed up in an AutoPOLIS report that suggests that too much focus on electric vehicles right now just isn’t the right focus. That doesn’t mean the government and the auto industry shouldn’t embrace electrification, they should. But, electrification based on the government’s own studies just isn’t a very good legacy effect fighter.

So, why does electrification seem to be the only congressional game in town?

Let’s be honest, politicians love to throw money around. That’s the specialty of Congress. And, without question, throwing a good chunk of money at electrification is a worthy endeavor, but it seems these politicians aren’t addressing any of the tougher questions. For example, why does Congress seem in complete denial of the legacy effect – the most critical issue if peak oil is the real deal.

Consequently, if peak oil is real, then more comprehensive energy policies are needed beyond the Electric Vehicle Deployment Act. And there appears to be some hope Americans are ready for more robust policies.

Last month, for instance, cars like the Chevy Cruze saw massive sale’s gains. Give ‘em a good bang for the buck product and consumers will embrace fuel efficiency and something like the Cruze could be just the beginning. We can do more today and we can do it cost-effectively. We have to stop pretending that we have the luxury of time because there is a very good chance we just don’t.

As a result, while the Chevy Volt is a great car with solid long term potential, it could be a decade or more before it can drive real profits to GM. That’s why GM only sold 600 Volts last month. On the other hand, GM sold more than 25,000 Chevy Cruze cars last month and they did so at a profit.

Today, automakers are touting their 40 mpg vehicles, therefore, why not offer some incentives to achieve 50 or 60 mpg, for instance? The Electric Deployment Act is a multi-billion dollar piece of legislation that is betting on technologies that consumers might not even want, technologies that are still in need of innovations.

On the other hand, it is a fact that consumers want vehicles like the Cruze according to last month’s sales numbers, so why not incentivize some start/stop or even mild hybrid technology for the Cruze to improve fuel economy even further? Isn’t that worthy of some kind of investment, for instance?

Again, that’s not a rip on electrification or the EV Act. Nevertheless, we have to look at the big picture and that requires comprehensive energy policies that offer real world change today while also embracing more futuristic technologies like plug-in vehicles.

Fortunately, it seems to me consumers are ready to embrace ideas like fuel economy, energy security and even energy independence. It’s not just cars like the Cruze, its Ford pickup trucks with EcoBoost, that are resonating with new car consumers. Yet, we can do better and we can do it today and it won’t cost that much. All that’s needed is a little incentive. As a result, instead of an endless quest for ever more horsepower, suddenly automakers might be judged by their ability to provide the most cost-effective, yet safe, fuel economy.

While electrification is the future, it’s going to take time and many innovations to achieve. We can do a lot more in the interim. That doesn’t mean the EVD Act is bad legislation, but maybe it should be just one piece of a comprehensive energy policy. Minimally, however, it shouldn’t be the primary focus of Congress when it comes to energy policy.