Government Give-and-Take Needed to Make Advanced Technology Fly, GM Says

[T-Type]

By Eric Mayne and David E. Zoia
WardsAuto.com, Jan 4, 2008 12:40 PM


Governments can’t expect auto makers to meet increasingly stringent fuel-economy standards without a little give-and-take, says a key General Motors Corp. executive.


Bob Babik, GM’s director of vehicle emissions issues, says auto makers need a helping hand to guarantee the successful rollout of advanced, fuel-efficient technologies.


Consumers “definitely support cleaner and more efficient vehicles,” Babik writes in the first session of a GM-sponsored, ‘round-the-clock global online chat session to mark the auto maker’s centennial.


“But the key is offering technology at a cost-effective level so that the consumer values it and makes that choice,” Babik says. “This is why in the early years of a certain technology, GM supports government incentives when the technology may be more costly to help consumers make that choice.”


Auto makers were united in support of a sweeping energy bill passed last month that raises car and truck fuel economy to 35 mpg (6.7 L/100 km) by 2020. But the legislation also features a mandate to increase the use of renewable fuels and offers a $3,000 tax credit for plug-in hybrid vehicles.


GM has announced it will put a plug-in hybrid, the Chevrolet Volt, on the road by 2010. But Chairman and CEO Rick Wagoner says in another online forum that its launch date is not firm because of the rapidly changing market.


Says Babik: “We have put out technologies such as flex-fuel vehicles where we have the cost low enough not to need consumer incentives, however with hybrids we will continue to work to lower the cost to make them more and more competitive.”


While the market penetration of higher-concentration ethanol fuel blends is far below that of flex-fuel vehicles, Babik stops short of blaming oil companies.


“With E85 availability, we need for all parties concerned, the producers, distributors, the government, to really focus on getting the fuel more available to provide consumers choice and to get the benefit of the fuels,” he says.



http://wardsauto.com/ar/government_g...ke_technology/

[uvaeeman]

Seems like certain advanced/new technologies would need more govt aid/incentive. Hydrogen, for example, requires major infrastructure unless some kind of home generator is developed.

It's good to have a goal of moving toward energy independence (or less dependence) but it makes sense the govt can't just legislate rules and expect magic to happen.

[ctaylorzl1]

Here is one of the key parts all the CAFE supporting idiots dont realize, they think its all about getting high mileage with no real effect to them.

GM Vice Chairman Bob Lutz has put the cost of meeting CAFE at $5,000-$7,000 per vehicle

Not to mention the loss of excitement in the auto industry! These topics really put me in a bad mood!

[Ytriox]

Auto makers were united in support of a sweeping energy bill passed last month that raises car and truck fuel economy to 35 mpg (6.7 L/100 km) by 2020.

Say what?!

[jbernie]

Originally Posted by uvaeeman

Seems like certain advanced/new technologies would need more govt aid/incentive. Hydrogen, for example, requires major infrastructure unless some kind of home generator is developed.

It's good to have a goal of moving toward energy independence (or less dependence) but it makes sense the govt can't just legislate rules and expect magic to happen.

And even then you still need the infrastructure as refuelling from home is not practical. Your driving distance is restricted to about 40-45% of the range of the vehicle. Still if it starts a small commuter type vehicle then the interstate fuel stop demand will be small to begin with.

GM is correct though, it is easy for the government to legislate magic numbers, and then drop the blame on the Auto manufacturers when they can't make it work.

GM and all manufacturers right now do need help to get the new technology rolling, dual mode hybrids at about at a $10k premium? Even if the money does not go direct to GM or Toyota or Ford or whoever, give the consumer the tax break to offset the cost. The more these technologies are picked up the cheaper they become the more they can be put into lower priced vehicles.

I don't doubt that the companies will make the numbers eventually, but you don't want to have companies risk financial viability to get there, ie the cure is worse than the problem.

[PhishPhood]

It's interesting that the legislation includes a $3000 tax credit for PHEVs in the future. This is a big advantage for the manufacturers and for society as a whole. The manufacturers can benefit by being able to recoup their development costs more easily by receiving government tax money via the consumers. Those that make the best products will get the most money and recover their costs faster.

ctaylor:

Here is one of the key parts all the CAFE supporting idiots dont realize, they think its all about getting high mileage with no real effect to them.

Quote:
GM Vice Chairman Bob Lutz has put the cost of meeting CAFE at $5,000-$7,000 per vehicle
Unquote

Not to mention the loss of excitement in the auto industry! These topics really put me in a bad mood!

Please don't believe everything Lutz says in public. He does a good job of being GM's No 1 sales person by giving you the rationale why you must pay 'x' amount extra to own a new vehicle. In fact it 'might' cost $5000-$7000 extra initially if all costs are amortized but as volume increases and the initial development costs are recovered the actual 'extra' cost is maybe $1000-$2000.

For that $1000-$2000 extra cost you get the opportunity to save $500-$1000 annually for the entire life of the vehicle.

So what happened to the difference between $7000 and $2000? After the initial costs are fully amortized that $5000 is pure pretax profit to the manufacturer. Wonder why he's so interested to put out these outrageously high figures. Helloooo... he's a business man with GM's bottom line and profitability foremost in his heart - and bonus package.

Finally, imagine the excitement all of us will have with fuel at $6 or $8 or $10 a gallon by 2020... or having petrol-fuel rationed to 15 gal per week per driver.

[PhishPhood]

Originally Posted by jbernie

And even then you still need the infrastructure as refuelling from home is not practical. Your driving distance is restricted to about 40-45% of the range of the vehicle. Still if it starts a small commuter type vehicle then the interstate fuel stop demand will be small to begin with.

GM is correct though, it is easy for the government to legislate magic numbers, and then drop the blame on the Auto manufacturers when they can't make it work.

GM and all manufacturers right now do need help to get the new technology rolling, dual mode hybrids at about at a $10k premium? Even if the money does not go direct to GM or Toyota or Ford or whoever, give the consumer the tax break to offset the cost. The more these technologies are picked up the cheaper they become the more they can be put into lower priced vehicles.

I don't doubt that the companies will make the numbers eventually, but you don't want to have companies risk financial viability to get there, ie the cure is worse than the problem.

There is a mechanism in place right now today to do this. At present any new vehicle that is significantly more fuel efficient than the rest of the vehicle in a given segment qualifies for a Tax Credit of up to $3500 ( subject to AMT limitations).

It took effect in Jan 2006. It is limited to 60,000 units per manufacturer and then 4 quarters of sales after the 60,000th unit is reached. effectively it means that each manufacturer can produce 100,000-150,000 units where the IRS will reward the buyer with a tax credit on that year's taxes. For example this year's Ford Escape Hybrid ( FEH ) qualifies for a $3000 Tax Credit on this year's taxes ( filed 4-15-09 ). The new 2-Modes will also qualify for this credit but the IRS has to determine the amount.

The benefit to the manufacturer is that they can charge the consumer a fully-costed price including preproduction R&D costs because the consumer will be reimbursed a few months later by the IRS. The problem is that this program is going to expire. It needs to be extended - indefinitely.

The $3000 Tax Credit for PHEVs seems to be a step in this direction but it needs to be expanded to ALL technologies.

[jmsjags]

I guess the whole e85 revolution is dead before it even began? I just checked http://www.neare85.com/ for e85 stations near me and it turns out there's only 1 in the whole state of Virginia, 2 hours away from where I live.

It looks like e85 is getting bypassed by all this newer technology.

[HoosierRon]

Originally Posted by jmsjags

I guess the whole e85 revolution is dead before it even began? I just checked http://www.neare85.com/ for e85 stations near me and it turns out there's only 1 in the whole state of Virginia, 2 hours away from where I live.

It looks like e85 is getting bypassed by all this newer technology.

There are 1,443 E85 stations in the country. There are E85 stations in Arlington, Hampton, Quantico and Richmond. http://www.e85refueling.com/location...ate=vaVirginia

In 2000, the U.S. produced 1.6 billion gallons of ethanol. In 2003, that number was up to 2.8 billion gallons. In 2006, it was 4.8 billion gallons. All estimates are that it will be over 6 billion gallons this year. As the price of oil goes up and up and up, more people will buy ethanol and E85.

[jbernie]

Originally Posted by jmsjags

I guess the whole e85 revolution is dead before it even began? I just checked http://www.neare85.com/ for e85 stations near me and it turns out there's only 1 in the whole state of Virginia, 2 hours away from where I live.

It looks like e85 is getting bypassed by all this newer technology.

Not necessarily, E85 is pretty much corn based in the USA but as shown on here in multiple reports corn is just one way to produce ethanol fuel, there were reports out yesterday about making it from a particular grass which produces a much better fuel, the grass is natural in many parts of the US, it requires less water than other grasses to grow, and the energy cost per gallon is much lower than corn.

Obviously not every technology will succeed, E85 has a good chance though, some minor costs to produce an e85 compatible vehicle over a non compatible one (during initial production) and overall has a common delivery system to regular gas. Nothing too exotic like hydrogen etc.

[wildgoosechase]

At an additional 5000-7000 GM will not be competitive for the average high volume car. GM will begin importing all non-"advanced technology" vehicles from lower cost countrys; India and China. These will be nearly all Chevrolets and Saturns. Large vehicles will be made in the US but will be hybrid or fuel cell. People will pay the $7000 because the car fits their needs, or just keep their old car longer. Luxury cars and trucks will continue on as is, buyers will just pay the tax.

Welcome to the '70s all over again....

[PA Dweller]

Originally Posted by ctaylorzl1

Here is one of the key parts all the CAFE supporting idiots dont realize, they think its all about getting high mileage with no real effect to them.

Not to mention the loss of excitement in the auto industry! These topics really put me in a bad mood!

I wonder at that price will you save that much money in fuel over the lifetime of the vehicle?

Originally Posted by jbernie

GM and all manufacturers right now do need help to get the new technology rolling, dual mode hybrids at about at a $10k premium? Even if the money does not go direct to GM or Toyota or Ford or whoever, give the consumer the tax break to offset the cost. The more these technologies are picked up the cheaper they become the more they can be put into lower priced vehicles.

I concur, if its going to cost this much more to make fuel efficient vehicles the government should absorb most if not all the extra cost involved. It will give people an incentive to get into more fuel efficient vehicles.

[stevecmh]

Originally Posted by ctaylorzl1

Here is one of the key parts all the CAFE supporting idiots dont realize, they think its all about getting high mileage with no real effect to them.

Not to mention the loss of excitement in the auto industry! These topics really put me in a bad mood!

yes. i still say the pruis was the death of the auto industry as we know it.. lol

but that is some serious money.. Americans will not want to pay that.. and will say screw the higher MPGs

[PhishPhood]

Originally Posted by PA Dweller

I wonder at that price will you save that much money in fuel over the lifetime of the vehicle?



I concur, if its going to cost this much more to make fuel efficient vehicles the government should absorb most if not all the extra cost involved. It will give people an incentive to get into more fuel efficient vehicles.

Gosh I've explained it a dozen times on these threads.

It does not cost $10000 to make these advanced technologies. It might cost $4000 - initially. If you listen to B Lutz you'll become very frustrated and end up doing nothing.

His job is to pump up the price - and the hype - to show all the GM faithful what a wonderful effort GM is making and why you should pay as much as he'd like you to pay to increase GM's profits. In auto sales it's called 'sending the buyer to the roof'.

"So if I can keep your payment on your new [ midsized sedan ] under $700 a month with just your trade and $2000 down you'd be OK with that?"
Blank stare....'HUH??"

BTW go over to the GM Truck Talk Forum and look over the thread I posted about a first evaluation of the Tahoe 2-Mode by an experienced hybrid driver. It will shock you. Then recalculate what your savings might be. It will shock you.

[AMERICA 123]

1.) Incentives (if any) should be 'results based' and not technology specific .

2.) And , regardless of everything else involved , I'm going to insist ON A CRADLE TO GRAVE environmental footprint number , you know , the one the state of CA., Toyota , and Honda haven't 'done' or published .

3.) Each OEM needs to be held liable and fully accountable for each battery at end of life , so if you want some help on funding an accountability system that provides at least a 10,000$ fine for improper non documented disposal - I'm in , although on that too , you should pay your own way .


That way , all of the efficiency of the free market solution comes into play and we don't completely destroy mother nature - like every other battery program is doing .

Incentives more specifically in this case should not be used to continue the life support system that hybrids have required since before product inception .

What the baa baattery sheeple don't realize is all this hybrid garbage (worldwide) is ALSO about artificially creating a 12 -20 billion$ hybrid battery industry and keeping the American/UK oil patch-big money- 'and friends' of both 'happy' .

This is to be built on the wallets and shoulders of everybody else .

Thats where the real money is and thats where a bunch of really 'creative' money has gone . They're lining up again at the trough , its feeding time .

If you don't like all the above well then fine , lets fund your dammed battery welfare program but we should also insist that everything else from bicycle tires ,sailboats , mechanical flywheels , and every single alternative engine/fuel combination as well as (bio)diesel gets equal opportunity and funding .

Most especially we should fund real hard every single renewable , domestically sourced and decentralized clean energy solution that you can find a promoter for .

Put it another way , as a biofuel/diesel/smart ethanol kinda guy , I don't expect you to pay for my fuel and I'll be dammed if I going to pay for your dammed battery 'experiments' and the aftermath .
I also do not want to pay for Toyotas escape from possible destruction based on their ignorant power train investment strategy which is going to bite them and bite hard somewhere between 2010 -2020 .

Fair enough ?

If you want to help our domestic producers out (I SURE DO ) , go defund the Yen subsidy, give them any and all possible tax breaks and grants for all the economic warfare our own Government has conducted against them or just drop the one world currency program we are going to have to have shortly anyway .

Its also become apparent that we are now in a period of time which in all the ways that matter mirrors the period between 1880-1921 .

Its pretty much the same **** just like when ethanol got cold cocked by lead for octane boost in '21 ( boy, that was a beauty) and petroleum oil , their 'banks' and friends knocked everything else out of the way .

This whole hybrid battery mess ( right up there with Project Pluto) is what you get when the most non qualified OEM on the planet to decide and influence world energy/environmental issues - while lying in bed real cozy like with their own centralized energy/banking/chemical interests has a little romantic marketing success with a throw away Japanese commuter car and hits the GREEN SPOT. (And yes , its no surprise that Toyota lying that way in ...... needed a 'battery device' ..... to make ..... everybody else 'satisfied' .

Anyway ,this Greenspot was something which every other OEMs strategic marketing research programs should have found at around the same time or before and that they should have already been or preparing to , have product for .

IF present trends continue , Hondas poised to jump in and jump ahead with more intelligent use of all their options . Notice the 'evolution' of the hybrid over there.

Congratulations Honda , on being the first to realize the best way to beat Toyota on power train is to not follow them - like everybody else .

By the time you do get a Hybrid that makes sense all the way around , you will have fuels cells and the necc. smart H2 that TOGETHER , are even better .

Use the damn hybrids in the interim for image making (and image destroying) and let the market decide their utility .