13 Jan 2009

U.S. Automakers Worry that Greener Cars May Not Sell

Even as they debut the next generation of hybrids and battery-powered cars, auto company executives are not confident that the American public will buy them.
By jim motavalli

After many years of resisting calls to green their product lines, U.S. auto companies are finally getting the message. The North American International Auto Show in Detroit, which is open to the public Jan. 17-25, is a showcase for environmentally friendly technology. Many of the new cars on the revolving stands are hybrids (including at least two plug-in hybrids) and battery electric cars. The third generation of the Toyota Prius is parked close to an all-electric Smart car.

But interviews with automakers present at the show reveal a profound unease with the industry’s new direction. With gasoline now below $2 a gallon, they’re asking if U.S. customers who have been gravitating back to SUVs really care about the fuel efficiency the new, cleaner models offer. And, with the recession, they say, will consumers be able to pay the higher prices these innovative cars and trucks often demand? One thing lacking at the show was any confident predictions about where the economy and fuel prices will be next year, when the first of the new battery-based vehicles will appear.

“To really ramp up volume, we need a clear energy policy,” said Ford executive board chairman William Clay Ford at a private dinner during the show’s press previews. Without that, he said, “It’s really difficult to plan the volumes for our new models, and to know what product mix to offer.” Ford did not endorse a specific approach for the incoming Obama administration, but he spoke approvingly of the stabilizing effects of a gas tax.

Ford is planning to build a battery electric car based on the Focus for 2011, but it is cautious about how many buyers there might be, and is currently forecasting only 10,000 annually for the global market. General Motors’ plans are led by the innovative Chevrolet Volt, which uses a small gas engine as a generator to extend its battery range. But the expected small initial sales volumes are unlikely to significantly affect the company’s future. The company has also said it could lose money on early production of the Volt.

Chrysler president Jim Press opened his show remarks by assuring the media that the company will not go bankrupt. Then he and his colleagues unveiled a fleet of hybrid and battery cars, from a very fast, battery-powered sports car, the Dodge Circuit, to a Jeep Patriot with a range-extended gas-and-electric system similar to that of the Volt. Chrysler says it wants to build a full range of these cars, but analysts wonder if the financially challenged company has the wherewithal to fully develop them.

Another brave approach to green is being taken by small-volume, luxury

More From Yale e360

Click below to read more from Yale Environment 360 about greener technology for the automobile industry.

Revenge of the Electric Car | Plugging In To The Electric Car Revolution | A Detroit Bailout Must Include a Green Makeover
automakers Fisker and Tesla. Fisker will start selling its $87,900 plug-in hybrid sports car at the end of this year. Henrik Fisker told Yale Environment 360 that more than 1,000 customers have put down $5,000 deposits, and that the recession—and low gas prices—have so far not dampened demand. Franz von Holzhausen of Tesla said in an interview that the company has delivered 160 of its $109,000 electric roadsters, and is aiming to sell 1,200 cars a year.


Jim Motavalli is a senior writer at E/The Environmental Magazine, a blogger for the New York Times and The Daily Green, and a syndicated auto columnist. In his last article for Yale e360, he wrote about efforts to build a network of charging stations for electric vehicles.

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Of the money we have seen thrown around thus far let me ask you this, that 168 billion that our country borrowed to give away to us in the form of an "economic stimulus package" ...did it do a darn thing to create jobs or stimulate our economy? NO, nothing. And we borrowed the money from China.

This past year the high cost of gas nearly destroyed our economy and society. More people lost jobs and homes as a direct result of that than any other factor in our history.

Fannie and Freddie continue to get all the blame. Of all the homes I have seen lost in my area SW FL and believe me I have seen many, none were due to an adjustable mortgage. They were due to lack of work.

Families went broke at the pump alone. Then added to that most saw record rate hikes at their utility companies. The high cost of fuel resulted in higher production and shipping costs that were passed on to the consumer, in most cases higher prices for smaller packaging.

Consumers tightened their belts, cut back, went out to eat less or stopped totally. Drove around on tires that needed replacing longer, some even quit buying medicines they really need.Unfortunately cutting back and spending less results in even more layoffs. A real economical catch-22.

And, as we are doing the happy dance around the lower prices at the pumps OPEC is planning to cut production to raise prices. They are even getting Russia in on the cutbacks. Oil is finite. We have used up the easy to get to reserves already. It will run out one day.

We have so much available to us. Solar and Wind are free sources of energy. Of course to get the harnessing process set up is somewhat costly it is still free energy.

It would cost the equivalent of 60 cents per gallon to charge and drive an electric car. The electricity to charge the car could be generated by solar or wind at least in part and in most cases totally.

If all gasoline cars, trucks, and suv’s instead had plug-in electric drive trains, the amount of electricity needed to replace gasoline is about equal to the estimated wind energy potential of the state of North Dakota. What a powerful resources we have neglected.

Jeff Wilson has a profound new book out called The Manhattan Project of 2009 Energy Independence Now. Powerful, powerful book! Also, if you think electric cars are way out there in some futuristic lala land please check out the web site for a company Better Place. they are setting up infrastructures in San Francisco, San Jose and Oakland as well as the state of Hawaii to accommodate electric car use.

I think we need to rethink all these bailouts and stimulus packages. We need to use some of these billions to bail America out of it's dependence on foreign oil. Create clean cheap energy, create millions of badly needed new green collar jobs and get out from under the grip foreign oil has on us. What a win -win situation that would be for America at large

Posted by sherry on 14 Jan 2009

It's a matter of economics. If the price of gas doesn't justify the x amount of dollars extra these vehicles cost they will not sell well.

The only way to clean the air is with nuclear power. The only way to stop our dependence on foreign oil is to develop our 2.2 trillion barrels of proven reserves and to force the use of domestic oil by taxing foreign oil. We could also have virtually unlimited oil by building coal to oil plants which would utilize the energy of coal without the current level of pollution caused by burning it directly.

We don't need a Manhattan Project we just need a little common sense applied.
Posted by Dahun on 16 Mar 2009

I have been waiting for US auto makers to finally bite the bullet, and release electric cars that have been economical and viable for decades. They can make a product which is both proven and practical (see the movie: Who Killed the Electric Car.) Somehow the refuse to, even with the threat of bankruptcy these automakers refuse to believe that the American consumers want to destroy the environment in sake of their vanity. Give us a usable, chargeable, electric car, with around a 200 mile range; and you will have a new consumer base. Most other details are irrelevant. DO IT! Save your company!
Posted by John Stunnins on 21 Mar 2009

US automakers have enough reason to worry since fewer people are willing to buy new cars at this time of the credit crunch; hybrid or not.

It is however good that they are taking the chances to put the cars out in the market because it's high time cars went entirely green.
Posted by limo hire manchester on 29 Apr 2009



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