CAFE: GM Spokesman Sets "Very Conservative Expectations" On Initial Volt Production

[jkennedy293]

Originally Posted by PontiacBixler

It's not going to be CAFE that makes GM and others increase the MPG on their vehicles... It'll be the consumer in these higher gas price periods. Just like any situation in capitalism, the consumer will buy the most fuel efficient car from Car-Maker A while Car-Maker B sits there and decides that in order to get that consumer back they have to offer a car that doesn't meet the fuel efficiency of Car A but exceed it.

But unfortunately the auto industry doesn't work like every other tech company out there for some unknown reason.

Think about this, remember back in the day on THE PRICE IS RIGHT the price of a new car they were playing for usually began with an 8 or 9 in the four digit price tag? Then in the 90's they added the FIFTH digit and 1 became the first number!!!! Now it seems 2 is starting to replace 1.

Why is that? Sure people will say it is because of the cost of labor, materials and such but now think about this: Why is it that you can now buy a computer today that is half the size, 10x more powerful, does 1000 things more and is only about 40% the cost of what it was 15 years ago? My God people.... you can buy High Def LCD TVs that fill your whole wall up for the price of what an old 32" tube used to cost.

The auto industry has gotten lazy and fat and now they have been caught by a financial crisis that is hurting everyone from the poor all the way up to the rich.

The reason LCD TVs and computers have dropped decidedly in price while increasing performance is because all of the costs are related to development. For example: The cost to develop a Pentium microprocessor was in the millions of dollars. The cost to manufacture that chip is in the tens of dollars. So, as Intel sells more Pentium chips, the cheaper it can sell them.

[377Z]

Originally Posted by jbernie

You can never defy the laws of physics. Add in inflation costs, mandated safety features, mandated smog control, mandated this mandated that. The last time I checked you don't need airbags, tire pressure sensors, stability control, plus associated electronics to go somewhere on the internet.

Your argument is old, tired and annoying. There is only so much weight you can take out of a vehicle at a reasonable & affordable cost before you end up with a car the size of an Aveo costing $100k and made out super exotic materials to remove the weight which few consumers can afford and even fewer will want to buy.

Oh, and don't forget the extra weight every vehicle is hauling around as this country gets fatter and fatter.

To add to that, the sharp decrease in automobile cost already happened--back in the earlier part of the last century.

[hrcslam]

Originally Posted by megeebee

I saw a very interesting show on PBS last night about the "Car of the Future".

Interesting statistic:

In 1975 the average fuel economy of US vehicles, and remember there were very few imports at the time, was about 13.8 MPG. After the first round of government intervention, that had climbed to 22.0 in 1987. Fuel useage had been declining in the US until 1987 as well. Of course at that time Cihna didn't exist as a force either.

This decline in demand begat a decline in crude prices and the price of gas stayed steady for many years even as real household income, property, and stock values all soared. This "fueled" the love of trucks and SUV's and we all know what that has wrought. But the most interesting statistic was that the average fuel economy of US sold vehicles has dropped since 1987 to about 20.7 MPG today.

The only problem I see with increasing CAFE standards is that right now CAFE doesn't include light pick-ups/SUV's (ex. GMT900) the new CAFE of 35 will include (to some extent) these vehicles. Your 20.7mpg includes the GMT900 type vehicles while the actual CAFE average for GM is more than 27.5 today. increasing the Average by 15 mpg is going to take drastic and very expensive changes. Hence, the Auto companies are saying the new standard is too tough. I think it is more the time line than the actual average fuel economy number.

Originally Posted by member12

I hate CAFE as much as the next guy, but it's a little funny how they all say that the 35 mpg mandate is too strict while they can't sell their own products now because they don't have enough fuel efficient options.

The fuel efficient options are on the way. It takes time to get there. I think the too strict part is the timeline not the actual 35mpg goal.

Originally Posted by WishIhadatruck

The way your statistics are worded implies that the government intervention was what increased the average fuel economy to 22.0 mpg in 1987. It was more likely the price of fuel in the early 80's that caused the drastic shift in consumer preferences that actually made it happen. I recall many people buying tiny cars at the time as they sold their bigger cars because they WANTED to use less gas. As gas became cheaper and cheaper to buy we shifted the other way. Now we are starting to buy smaller cars again and I bet our average fuel economy of cars being bought now is much higher than it was 2 years ago. New CAFE rules haven't kicked it yet either so it is obviously just from consumer preference fueled by high gas prices. Same as before. The government really can't respond any faster than the consumer can react to prices.

Good point. We'll see this trend again. Oh wait, we are. Add to that, cars like the Cruze and Volt hitting the market will help increase that number.

Originally Posted by Slideways

Ever wonder what goes through the minds of some of our legislators? I imagine it's a little something like this:
Even though I'm not an engineer or a designer, and have no idea what's realistic, it's still my duty to make a rukus and get reelected, so I should propose significantly more stringent CAFE regulation. If it will save that much money and fuel at 35mpg, why not make it 40mpg, or 50mpg? Who's with me? While we're at it, let's make cars safer, with more electronic monitoring systems since people can't check their own tire pressure.

They think it is a small 27.5 to 35 mpg increase. The realitly is that it is a 20 to 35 mpg increase in a very short amount of time.

Originally Posted by megeebee

No, it was the first CAFE standards set in the mid-70's. There would be even fewer "tiny cars" to buy if it weren't for that.

Unfortunately, this I have to agree with. Sometimes auto companies need a shove.

I do think that the government is doing the wrong things to get America to refocus on the imported oil problem. I say IMPORT TAX EVERYTHING!!!!! Gas at $10/gal vs. E85 at $3.50/gal guess what people will be doing?

Take the unfair profit margins away from foriegn companies here at home and we will see manufacturing and industrial companies come back to America. More of that and we have more jobs, then the economy will recover. Make it cheaper for Walmart to buy domestic products than import products from China and we will have a real solution to our economy woes. Give Americans a reason to not use gasoline and we will rid our dependence of foreign fuels. I don't think we should ever decrease the price of gas, it should continue to increase at the rate it is right now. Heck, look at what the prices have done to the ethanol and bio deisel production here in America.

I like what is happening here. I see the long term result being very good for Americas goal of fuel independence. And, if the government does impose an import tax tarrif, we will se a very prosporous American economy within a decade of implementing it.

Just my .02

[logansowner]

Originally Posted by PontiacBixler

It's not going to be CAFE that makes GM and others increase the MPG on their vehicles... It'll be the consumer in these higher gas price periods. Just like any situation in capitalism, the consumer will buy the most fuel efficient car from Car-Maker A while Car-Maker B sits there and decides that in order to get that consumer back they have to offer a car that doesn't meet the fuel efficiency of Car A but exceed it.

But unfortunately the auto industry doesn't work like every other tech company out there for some unknown reason.

Think about this, remember back in the day on THE PRICE IS RIGHT the price of a new car they were playing for usually began with an 8 or 9 in the four digit price tag? Then in the 90's they added the FIFTH digit and 1 became the first number!!!! Now it seems 2 is starting to replace 1.

Why is that? Sure people will say it is because of the cost of labor, materials and such but now think about this: Why is it that you can now buy a computer today that is half the size, 10x more powerful, does 1000 things more and is only about 40% the cost of what it was 15 years ago? My God people.... you can buy High Def LCD TVs that fill your whole wall up for the price of what an old 32" tube used to cost.

The auto industry has gotten lazy and fat and now they have been caught by a financial crisis that is hurting everyone from the poor all the way up to the rich.

Cars today are not cheaper, but that is becuase they are forced to add so much expensive stuff to them. To make the emissions legal they have hundreds of pounds of sensors converters and other such goodies which aren't cheap. To make them safe in a crash, they have hundreds of pounds of beams and bars and traction control and ABS and EBD.

It's the same thing, I'm sure if you wanted to drive a brand new 1990 Cavalier, the cost to build it would be much less than a Cobalt today because it is a much less safe, and a much less complicated car.

And yes, your numbers for computers and TV's are pretty accurate, but that's for normal stuff. You can buy a cheap ass Hyundai or a Lexus. You can also buy that $500 LCD TV from a company you never head of from Wal Mart, or you can go to the Sony store and spend $5000 on the same size TV.

You think cars havn't gone down in price, but look at the price of new tech when it first comes out. For example, Mercedes was one of the first with doors that sensed the keys and push button starting (without a key in the car..ala the old Caddy's in the 50's) and it was on the top end S class. Now you can get that on $25,000 cars.

Now if we want to argue about economy not improving much over the last 20 years in cars, you also have to realize that those toys we demand in cars are not light. Neither is the safety equipment. You add 500 pounds of safety equipment, 300 pounds of electronics and 200 pounds of converters bolted to the exhaust to keep it clean, all that weight can't be towed around for free.

Would I like to be able to buy a 2000 pound car just to commute in? Without the ABS and TC and Nav and 500 pounds of roll bars? Sure, but the safety Nazis have decided that you can't sell me one because I'm not capable of making my own choices, and need government regulation to protect me.

Nobody is ripping anyone off. If the higher cost of cars was profit off the top and GM was just screwing those poor Price is Right folk, they would be turning a profit, not losing money every day.

[AMERICA 123]

Originally Posted by megeebee

I saw a very interesting show on PBS last night about the "Car of the Future".

Interesting - yes, as an unbalanced propaganda piece.

Interesting statistic:

In 1975 the average fuel economy of US vehicles, and remember there were very few imports at the time, was about 13.8 MPG.

Well, compared to now - sure but really that's not the only point of comparison - definitely not the best although certainly worth noting.

My memory can't produce the national registration total % ie 'in service' which is what really matters most but its a larger 'small' number than most think.

Related and more to your point - sales percentages - can't go look it up right now but in 1975 Imports were accounting for somewhere between 15 - 20% of total light vehicle sales - which is not small in any sense.

This number was more significant than it first appears - it was pretty much all retail.

We still had a fading fast ( '71 on ) but usable representation coming out of Europe besides the Germans - who were as a group going gang busters - outside of VW .

Worth noting antidotely, VW managed to sell 425,000 Beetles (or was it their total ? -which was mostly the Beetle anyway) - in 1967.

(Also worth noting, Mr. Lutz ends up doing good things at BMW around this time frame ( '72 -76 ish ) - which is when BMW truly starts to hit stride in a really big kind of way. No accident the two are related. )

The Japanese were ramping up from '67 forward (Nissan) and ever more quickly from '72 forward.

( About to hit second gear - our Japanese Import problem was in full bloom by '75. )

Imports were, compared to even 1968 ( just 5 years earlier ) thru the roof.

After the first round of government intervention, that had climbed to 22.0 in 1987. Fuel useage had been declining in the US until 1987 as well. Of course at that time China didn't exist as a force either.

The domestic fleet number was considerably below this - both in service and saleswise . At this point in time the import fleet was hugely different with a much higher achieved fleet mileage number - at no time since has it contributed so much to improving our fleet numbers. Our domestics were hitting the minimums - or being forced by the market to slightly above - the Imports as a group were considerably higher - although trending down.

This decline in demand begat a decline in crude prices and the price of gas stayed steady for many years even as real household income, property, and stock values all soared. This "fueled" the love of trucks and SUV's and we all know what that has wrought. But the most interesting statistic was that the average fuel economy of US sold vehicles has dropped since 1987 to about 20.7 MPG today.

CAFE, and what it could've done in a revised form and in co ordination with some other things could've been a highly significant positive factor for our Domestics from 1987 - thru 2008.

Another thing most forget here, is that the old CAFE program was absolutely despised by OPEC and some others like them - including certain oil/energy interests - once its effectiveness was recognized as an 'unexpected disappointment'.

Although completely mismanaged after 1987, it was the largest single factor in producing fuel prices below a dollar in the '98 -'99 time frame - China was slower coming on line than originally planned.

Just imagine what the debate would be today and where we would be if the whole fleet on an individual unit basis had slowly risen in a domestic producer friendly way - just 2.5 -3.0 MPG across the board during the 1987 -2007 period - along with a minimum performance 'floor' program ( multiple segments ) for vehicles below a 21,000 lbs gross.

Couple this with some other simple stuff and its compelling in the extreme.

One key concept missed was to - for as long as possible, always end up with a (slightly) lower total demand than the oil people were planning for.

'We' had that going on - until 2000 - 2001.

Two other easy to do high value items are worth mentioning for this time period.

A bio fuel content goal of 30%, and a dieselization goal of also 30%.

Finally, all of this would've 'necessarily' and desirably so involved special assistance and co ordination with our Domestic big three - and with other regulatory programs and standards.

[Ming]

The thing I took away from this article was that GM is admitting, and preparing for the fact that the Volt will not be a silver bullet that some (here) seem to think it will be.

GM will (need to) be attacking from many angles to hit that CAFE number, regardless of oil prices, and it's worth remembering. Low rolling resistance tires and more aerodynamic bumpers on SUVs and big cars can only do so much. One more reason for GM to bring a Beat-like minicar and an awesomely fuel efficient Cruze here ASAP. By themselves each of these cars might not make a dent, but all together? Yes.

Because we cannot count on the Volt to single handedly turn GM around - or even lead the turn around - on fuel efficiency. Not up until we close in on 2015 at least, by this GM spokesman's own words (though that is not clear from his quote, just implied).

So anytime you see a poster here say "An improved Aveo, a refreshed Cobalt, and the Volt is enough on small/fuel efficient cars," -- question the logic...

GM does not need to play catch up. It's embarassing enough seeing all of these Honda Fuel Cell vehicle advertisements when just 5 years ago GM was making the claim that they'd have one for consumers (and not some limited little fleet thing) by 2010 - engineering by press release? Honda's Fuel Cell vehicle (even if it isn't all that accessible to anyone) and their upcoming hybrid will just hammer the point in further that Honda is the place to go for fuel efficiency while GM appears to struggle to get a $40+K electric car to the market alongside hybrid full-size SUVs and mediocre BAS mild hybrids.

[uvaeeman]

Originally Posted by WishIhadatruck

The way your statistics are worded implies that the government intervention was what increased the average fuel economy to 22.0 mpg in 1987. It was more likely the price of fuel in the early 80's that caused the drastic shift in consumer preferences that actually made it happen. I recall many people buying tiny cars at the time as they sold their bigger cars because they WANTED to use less gas. As gas became cheaper and cheaper to buy we shifted the other way. Now we are starting to buy smaller cars again and I bet our average fuel economy of cars being bought now is much higher than it was 2 years ago. New CAFE rules haven't kicked it yet either so it is obviously just from consumer preference fueled by high gas prices. Same as before. The government really can't respond any faster than the consumer can react to prices.

Car and Driver had a couple of good editorials a few issues ago. One talked about how the auto industry (any manuf) cannot just switch gears overnight. Most products take 5 years to develop.

Another was about CAFE. :begin rant: In their opinion (and mine) the way to reduce demand is with increased prices, not through some cart-before-horse legislation on the manufacturers!! Look at the changing demand for fuel already over the last 6 months. No CAFE changes have really taken effect yet, but another article on GMI I think said that demand for fuel from May or June (I forget which) was down 4% from a year earlier. $4/gal gas will shift demand naturally. Promising people that gas would go up 50 cents a year (with taxes if not on it's own) would prompt people to plan for a more efficient purchase because they would know what would happen to the price of fuel. On the other hand, $2/gal gas while forcing the manufacturers to alter their fleet chemistry will confuse consumers who thought they could afford a truck or SUV at $2/gal. They will still buy a much heavier vehicle than they would if our government wasn't afraid their voters would be mad. It's a major conflict of interest. :end rant:

[WishIhadatruck]

Originally Posted by megeebee

No, it was the first CAFE standards set in the mid-70's. There would be even fewer "tiny cars" to buy if it weren't for that.

I believe what I stated was true but you are correct as well that it does encourage them to make smaller cars. But they wouldn't sell in many numbers if people don't want to buy them. CAFE does not encourage people to buy smaller more fuel efficient cars.

Another affect of CAFE is to encourage car companies and consumers to get around the rules. One more reason large cars and station wagons disappeared and SUV's and minivans took their places. With cheap gas people were more than willing to drive inefficient SUV's and car makers found it easy with the lower standards for trucks. It helped fuel the disappearance of cars that were more capable of hauling people and trailers.

Fuel prices have the biggest affect of all. Little else matters. High fuel prices will drive demand and auto makers will try and meet demand. Luckily congress never pushed 35 mpg. standards when gas was super cheap. It would be a disaster. Car makers trying to build vehicles nobody wants. It will work out fine this time because consumer preference (due to gas prices) is actually ahead of the CAFE curve.

[pinyon]

I think like others that the Volt will be a nice showpiece, but until production ramps up and development/battery costs get recovered, it just won't be a volume seller. I really think the Cruze is a much more important intro and if they can get BAS in there quickly we may see 35/45 figures for a sub 20K car. That's where the volume will be.

[zete]

Originally Posted by member12

I hate CAFE as much as the next guy, but it's a little funny how they all say that the 35 mpg mandate is too strict while they can't sell their own products now because they don't have enough fuel efficient options.

The problem is the product mix. You can't tell consumers they HAVE to buy the fuel efficient model. You have to have it in stock, but CAFE is a fleet average, so you have to somehow socially engineer things so that you sell the right quantity of each vehicle to meet the fleet average. Problem is, how do you do that? How do you ensure you sell vehicles in such a variety to ensure you get the required fuel economy?

You can't. Not if you're a full line producer, like GM or Toyota. If you only sell primarily fuel sippers -- like Honda -- it's easy, but if you sell gas guzzling luxury vehicles -- like BMW -- you're hosed. GM and Toyota have all kinds of vehicles to appeal to all kinds of buyers, but that means GM and Toyota either build a fixed number, with a constant eye on CAFE, or meet the market's demands. Sometimes the two will align, but often they won't. That is why both GM and Toyota complain about CAFE. It's a social engineering mechanism -- not a free market mechanism -- of trying to control product mix, something the companies need to respond to. With the way CAFE works and to not incur penalties companies would have to stop selling certain vehicles once a specific quota relative to their average fleet fuel economy was met. It'd be an ugly exercise in management, engineering, and accounting.

All I can say is "ugh". They should have just raised the price of fuel, as that's the best way to change people's habits.

[Chaz_23]

I'm all for regulation, as companies self-regulating is a myth, and I prefer government regulation of corporations over taxation of everyone, or regulation of every citizen. But within reason. Some of these number that these politicians, who by the way, if it isn't obvious yet, don't know anything about anything, are coming up with a re completely obscene and fantastic. How about some realistic average and after a couple of years increase it again. etc.

[Ed Arcuri]

I agree with Hoboken Tim. Price is the best, and often the only, way to affect consumer behavior.
People want big, heavy vehicles and they want station wagons. When the big, heavy cars were crimped by CAFE and when they would no longer admit to wanting a station wagon; they switched. They switched to big, heavy station wagons called SUV's!
I remember 1979. The import outfits were hip deep in cars and running out of places to park them when the Arab oil embargo hit. Then, just as now, people panicked and began looking for gas sippers. The Japanese were ready with a supply of simple, light weight cars. The Japanese hadn't foreseen the embargo; but they took full advantage of it.
My strongest beef with Congress' view of CAFE is that they continue to propagate the myth that we would be free of the yoke of energy costs if only GM and Ford hadn't conspired to force us to buy gas thirsty vehicles.
Rubbish.
If Congress is serious, and we know that they are not, they will allow market forces to work. Government can contribute to basic research for alternatives but ought not to be tinkering with forces that clearly work.
Exhibit A. The President announced the lifting of the Executive ban on offshore drilling ten days or so ago. The price of oil has dropped.
Exhibit B. Gasoline usage in this country has fallen in the last month. The price of oil has dropped.
Drill.
Make E85 available in more places and in more vehicles.
Continue to push for other alternatives, especially nuclear electricity generation.
Cheers,
Ed
I used Exhibit A and Exhibit Bto assist Congress. It's lawyer talk, you know.
Is there a mechanical engineer in the House of Representatives?

[vcs2600]

The CAFE "truck loophole" was well known about in Washington for years, and there was some political effort to close it in the early 1990s. Detroit lobbying effectively stopped it by cutting a deal with Clinton for government support for Hybrid R&D and a small increase in the gas tax.

Net result: the Big 3 produced even bigger trucks and never marketed a hybrid.

If the carrot don't work, try the stick. Holds true everywhere, even Washington.

[wildgoosechase]

As far as I'm concerned if the states want a higher CAFE then give them a menu of vehicles offered. You want 40mpg, Ok the vehicle fleet will be Aveo's and Volts, sold at full price of $50,000 MSRP plus any dealer upcharges. If you want to buy a pickup or a car large enough to hold more than 2 passengers in the back, buy out of state. I'd love to see all the police cruiser contracts go to out of state dealers.

[chakis24]

how about getting rid of the legislation and letting oil price itself and let people buy what they want, the consumer will show whats needed.

if im willing to pay for a 500 hp v8 that gets 15 mpg let me. if i want a flexfuel thing that gets 50 mpg, let me. theres no reason why i shouldnt be able to.