R-Squared Energy Blog

Pure Energy

Electric Vehicle Update

In 2009 and 2010 we should see a lot of hybrids and fully electric cars hitting the roads. I spent a little time this weekend reviewing the potential offerings. Here is where some of the more frequently-mentioned offerings stand.

1. The Aptera 2e

The Aptera 2e

This is probably the most unusual offering. I first mentioned the Aptera in a story last year, and the roll-out is still on target for Q4 of this year. It is a 3-wheeled vehicle, made of light-weight composites. The shape is very aerodynamic to minimize wind resistance. The batteries recharge in 8 hours, and the car reportedly has a range of 100 miles. The cost is going to be in the range of $30,000, and the company reports that they already have deposits down for 4,000 vehicles.

The company has put together a veteran team, and by all appearances they are building an impressive car. Road and Track recently got an exclusive look:

Exclusive: Aptera 2e

Some excerpts:

The business model looks sound; nearly 4000 deposits have been placed (Robin Williams among the clientele), enthusiastic investors are locked in, and co-founders Steve Fambro and Chris Anthony have assembled a team that balances Detroit low-volume niche-production experience with California “anything is possible” attitude. Chief engineer Tom Reichenbach was formerly vehicle engineering manager for both Ford GT and Shelby GT500 programs; and CEO Paul Wilbur has a storied history at Ford, Chrysler and ASC. And Fambro, a biotech engineer and private pilot intrigued by his aircraft’s composite construction, and Anthony, a composites specialist with a background in boat design and fluid dynamics, seemed predestined for this partnership.

There’s a large hooded digital speedometer and bar-graph battery state-of-charge indicator, along with a central infotainment screen that offers mind-boggling possibilities. Leg- and head room were surprisingly generous for even my 6-foot-3 frame. And safety is preeminent in the Aptera’s design — the final version will have both frontal and side airbags. And if there was any doubt about the strength of the composite construction, it was quelled as eight Aptera employees stood on the roof of a development shell. And that was after the shell had gone through government roof-crush testing!

The car will initially be available only in California, but I will be watching closely to see how well it sells. Will it be accepted by the public? I have given thought to how I would feel about driving one around. I think the police would pull you over a lot, thinking the car isn’t street legal. Regardless, I am certainly rooting for it to be a success.

2. The Ford Fusion

The big news over the past week is that the Ford Fusion has been put to the test, and three major publications concluded that it was the best hybrid yet built. Yes, better than the Toyota Prius, which has been the most popular hybrid for many years. USA Today writes:

The 2010 Ford Fusion hybrid is the best gasoline-electric hybrid yet. What makes it best is a top-drawer blend of an already very good midsize sedan with the industry’s smoothest, best-integrated gas-electric power system. It’s so well-done that you have to look to the $107,000 Lexus LS 600h hybrid to come close.

U.S. News and World Reports says:

If you’re in the market for an ultra fuel-efficient hybrid that makes a convincing family sedan, your best choice has always been a Toyota — until now. Toyota’s Camry Hybrid and Prius have been the only realistic alternatives for many. Most American-built hybrids simply haven’t matched their fuel economy, and the Nissan Altima Hybrid remains rare and hard to find.

The Fusion Hybrid qualifies for a federal tax credit of $3,400 until the end of March, but few of the cars will reach dealerships by then – if you’re in the market, you might want to consider ordering yours before the credit disappears. If any Ford product has your eye, you should be aware that Ford is offering some of the deepest discounts we’ve seen in years this month.

Finally, Car and Driver had this to say:

Ford has pulled off a game changer with this 2010 model, creating a high-mpg family hauler that’s fun to drive. That achievement has two components: First, the machinery is unexpectedly refined—call it Toyota slickness expressed with car-guy soul. Second, the electronic instrument cluster involves the driver, invites you into the hybrid game, and gives you the feedback needed to keep increasing your personal-best mpg number.

I have to say this is quite an exciting development. I am now in my 12th month without a car, but it may be time to go ahead and purchase one. Given that I could get the tax credit if I order by the end of March, I may go ahead and pull the trigger.

3. The Chevy Volt

GM’s Chevy Volt

First announced in 2007, the Chevy Volt looks to finally make an appearance in late 2010 (although 2011 won’t be a surprise). Per GM’s website:

The Extended-Range Electric Vehicle that is redefining the automotive world is no longer just a rumor. In fact, its propulsion system is so revolutionary, it’s unlike any other vehicle or electric car that’s ever been introduced. And we’re making this remarkable vision a reality, so that one day you’ll have the freedom to drive gas-free.

Chevy Volt is designed to move more than 75 percent of America’s daily commuters without a single drop of gas.(2) That means for someone who drives less than 40 miles a day, Chevy Volt will use zero gasoline and produce zero emissions.(1)

Unlike traditional electric cars, Chevy Volt has a revolutionary propulsion system that takes you beyond the power of the battery. It will use a lithium-ion battery with a gasoline-powered, range-extending engine that drives a generator to provide electric power when you drive beyond the 40-mile battery range.

So it isn’t a purely electric car, but does have a pretty good battery range for a full-sized car. Plus, there are apparently provisions in the auto bailout that make the Volt eligible for a $7,500 tax credit. But there are certainly skeptics that the Volt will ever live up to the hype.

4. The Tesla Roadster

Speaking of hype, the all-electric Tesla Roadster reminds me of some of the more exotic and overhyped biofuels. We have heard about it forever, but the costs keep going up and the roll-out date for mass production keeps getting pushed out. The price is now up to $109,000, and even though performance reports of the handful that have been built are very impressive, there are serious questions as to whether this experiment will ultimately be successful.

Based on a Lotus platform, and assembled at the Lotus factory in Hethel, England, the Tesla has been mired in controversy throughout its short history. The latest setback was that Tesla lost a legal ruling to up and coming competitor Fisker Automotive, themselves creating a worthy competitor to the Roadster in the Fisker Karma. The Karma is an extended range hybrid that can go 50 miles before the gasoline engine has to kick in. (The Karma is expected to hit the road in 2010).

By all accounts Tesla is building a car with impressive specifications, and they plan to follow the Roadster up with the Tesla Model S that will be quite a bit cheaper than the Roadster. But Tesla has had cash flow problems and has been forced to lay off people. From the various accounts I have read, I don’t expect the Tesla to be in the race in the long run. One website got so tired of the hype that they turned their ‘Tesla birth watch’ into a ‘Tesla death watch.’ Still, I think the company is to be commended for their innovation, and I hope they get the problems worked out. (On an amusing personal note, former CEO Martin Eberhard has reportedly read this blog, and got a kick out of my tangles with Vinod Khosla).

5. Plug-in Toyota Prius

I wanted to limit this list to 5 cars, and there were a number of contenders worth a mention. But I would be remiss not to include the next generation Prius among the list of offerings. While at least one private company has already been modifying the Prius to be a plug-in hybrid, Toyota is working furiously to be the first to put large numbers of plug-in hybrids on U.S. roads. Initially announced for 2010, Toyota has moved up the schedule for the plug-in Prius and plans to have the first 500 on the road by the end of 2009 (150 in the U.S.). The downside is that the first prototypes can only go about 7 miles on battery power alone, which is well-short of the average person’s commute. So you can expect the plug-in Prius to run on gasoline most of the time.

Other Contenders

There are a number of other electric offerings worth a mention. Nissan has announced plans to put electric cars on U.S. roads by 2010. BMW has begun producing all-electric versions of their popular Mini Cooper, and so far can’t keep up with demand. ZAP is putting a sporty 3-wheeled electric car out (the Alias), along with offerings such as an electric truck and sedan. The Alias can reportedly go 100 miles on a charge.

Finally, Toronto-based Zenn Motor Company says they will put an electric car on the roads in 2009. This one is particularly noteworthy because of their intention to use EEStor’s ultracapacitor to power the vehicle. EEStor claims that their ultracapacitor is 1/10th the weight and volume of conventional battery technology. While potentially a game-changer, many feel that EEStor is a classic case of vaporware, and many capacitor experts say that it will never see the light of day. In response, Zenn says that their electric vehicles are not contingent upon the success of the ultracapacitor. And in fact, according to their website I can buy an all-electric Zenn vehicle here in the Dallas area right now. There are two dealers to choose from in the Dallas-Fort Worth area, and one of the dealers claims a 260 mile range on a single charge. I think I will try to make a trip down to see if they really have something in stock.

Conclusion

Based on the large number of electric offerings to be rolled out over the next two years, I would be surprised if some don’t stick around for the long run. A return to $4.00 gasoline should accelerate public acceptance of electric vehicles. The Aptera looks like a winner, provided buyers embrace the futuristic design. The Ford Fusion hybrid also looks like it is ready to make major inroads into the market share of the Toyota Prius. And don’t be surprised to see lots of electric Mini Coopers showing up on the roads soon. Now I just need to figure out if I am ready to be a part of the experiment and buy one of these vehicles.

February 16, 2009 Posted by | Aptera, Chevy Volt, Ford, General Motors, Nissan, Prius, Tesla Motors | 36 Comments

Electric Vehicle Update

In 2009 and 2010 we should see a lot of hybrids and fully electric cars hitting the roads. I spent a little time this weekend reviewing the potential offerings. Here is where some of the more frequently-mentioned offerings stand.

1. The Aptera 2e

The Aptera 2e

This is probably the most unusual offering. I first mentioned the Aptera in a story last year, and the roll-out is still on target for Q4 of this year. It is a 3-wheeled vehicle, made of light-weight composites. The shape is very aerodynamic to minimize wind resistance. The batteries recharge in 8 hours, and the car reportedly has a range of 100 miles. The cost is going to be in the range of $30,000, and the company reports that they already have deposits down for 4,000 vehicles.

The company has put together a veteran team, and by all appearances they are building an impressive car. Road and Track recently got an exclusive look:

Exclusive: Aptera 2e

Some excerpts:

The business model looks sound; nearly 4000 deposits have been placed (Robin Williams among the clientele), enthusiastic investors are locked in, and co-founders Steve Fambro and Chris Anthony have assembled a team that balances Detroit low-volume niche-production experience with California “anything is possible” attitude. Chief engineer Tom Reichenbach was formerly vehicle engineering manager for both Ford GT and Shelby GT500 programs; and CEO Paul Wilbur has a storied history at Ford, Chrysler and ASC. And Fambro, a biotech engineer and private pilot intrigued by his aircraft’s composite construction, and Anthony, a composites specialist with a background in boat design and fluid dynamics, seemed predestined for this partnership.

There’s a large hooded digital speedometer and bar-graph battery state-of-charge indicator, along with a central infotainment screen that offers mind-boggling possibilities. Leg- and head room were surprisingly generous for even my 6-foot-3 frame. And safety is preeminent in the Aptera’s design — the final version will have both frontal and side airbags. And if there was any doubt about the strength of the composite construction, it was quelled as eight Aptera employees stood on the roof of a development shell. And that was after the shell had gone through government roof-crush testing!

The car will initially be available only in California, but I will be watching closely to see how well it sells. Will it be accepted by the public? I have given thought to how I would feel about driving one around. I think the police would pull you over a lot, thinking the car isn’t street legal. Regardless, I am certainly rooting for it to be a success.

2. The Ford Fusion

The big news over the past week is that the Ford Fusion has been put to the test, and three major publications concluded that it was the best hybrid yet built. Yes, better than the Toyota Prius, which has been the most popular hybrid for many years. USA Today writes:

The 2010 Ford Fusion hybrid is the best gasoline-electric hybrid yet. What makes it best is a top-drawer blend of an already very good midsize sedan with the industry’s smoothest, best-integrated gas-electric power system. It’s so well-done that you have to look to the $107,000 Lexus LS 600h hybrid to come close.

U.S. News and World Reports says:

If you’re in the market for an ultra fuel-efficient hybrid that makes a convincing family sedan, your best choice has always been a Toyota — until now. Toyota’s Camry Hybrid and Prius have been the only realistic alternatives for many. Most American-built hybrids simply haven’t matched their fuel economy, and the Nissan Altima Hybrid remains rare and hard to find.

The Fusion Hybrid qualifies for a federal tax credit of $3,400 until the end of March, but few of the cars will reach dealerships by then – if you’re in the market, you might want to consider ordering yours before the credit disappears. If any Ford product has your eye, you should be aware that Ford is offering some of the deepest discounts we’ve seen in years this month.

Finally, Car and Driver had this to say:

Ford has pulled off a game changer with this 2010 model, creating a high-mpg family hauler that’s fun to drive. That achievement has two components: First, the machinery is unexpectedly refined—call it Toyota slickness expressed with car-guy soul. Second, the electronic instrument cluster involves the driver, invites you into the hybrid game, and gives you the feedback needed to keep increasing your personal-best mpg number.

I have to say this is quite an exciting development. I am now in my 12th month without a car, but it may be time to go ahead and purchase one. Given that I could get the tax credit if I order by the end of March, I may go ahead and pull the trigger.

3. The Chevy Volt

GM’s Chevy Volt

First announced in 2007, the Chevy Volt looks to finally make an appearance in late 2010 (although 2011 won’t be a surprise). Per GM’s website:

The Extended-Range Electric Vehicle that is redefining the automotive world is no longer just a rumor. In fact, its propulsion system is so revolutionary, it’s unlike any other vehicle or electric car that’s ever been introduced. And we’re making this remarkable vision a reality, so that one day you’ll have the freedom to drive gas-free.

Chevy Volt is designed to move more than 75 percent of America’s daily commuters without a single drop of gas.(2) That means for someone who drives less than 40 miles a day, Chevy Volt will use zero gasoline and produce zero emissions.(1)

Unlike traditional electric cars, Chevy Volt has a revolutionary propulsion system that takes you beyond the power of the battery. It will use a lithium-ion battery with a gasoline-powered, range-extending engine that drives a generator to provide electric power when you drive beyond the 40-mile battery range.

So it isn’t a purely electric car, but does have a pretty good battery range for a full-sized car. Plus, there are apparently provisions in the auto bailout that make the Volt eligible for a $7,500 tax credit. But there are certainly skeptics that the Volt will ever live up to the hype.

4. The Tesla Roadster

Speaking of hype, the all-electric Tesla Roadster reminds me of some of the more exotic and overhyped biofuels. We have heard about it forever, but the costs keep going up and the roll-out date for mass production keeps getting pushed out. The price is now up to $109,000, and even though performance reports of the handful that have been built are very impressive, there are serious questions as to whether this experiment will ultimately be successful.

Based on a Lotus platform, and assembled at the Lotus factory in Hethel, England, the Tesla has been mired in controversy throughout its short history. The latest setback was that Tesla lost a legal ruling to up and coming competitor Fisker Automotive, themselves creating a worthy competitor to the Roadster in the Fisker Karma. The Karma is an extended range hybrid that can go 50 miles before the gasoline engine has to kick in. (The Karma is expected to hit the road in 2010).

By all accounts Tesla is building a car with impressive specifications, and they plan to follow the Roadster up with the Tesla Model S that will be quite a bit cheaper than the Roadster. But Tesla has had cash flow problems and has been forced to lay off people. From the various accounts I have read, I don’t expect the Tesla to be in the race in the long run. One website got so tired of the hype that they turned their ‘Tesla birth watch’ into a ‘Tesla death watch.’ Still, I think the company is to be commended for their innovation, and I hope they get the problems worked out. (On an amusing personal note, former CEO Martin Eberhard has reportedly read this blog, and got a kick out of my tangles with Vinod Khosla).

5. Plug-in Toyota Prius

I wanted to limit this list to 5 cars, and there were a number of contenders worth a mention. But I would be remiss not to include the next generation Prius among the list of offerings. While at least one private company has already been modifying the Prius to be a plug-in hybrid, Toyota is working furiously to be the first to put large numbers of plug-in hybrids on U.S. roads. Initially announced for 2010, Toyota has moved up the schedule for the plug-in Prius and plans to have the first 500 on the road by the end of 2009 (150 in the U.S.). The downside is that the first prototypes can only go about 7 miles on battery power alone, which is well-short of the average person’s commute. So you can expect the plug-in Prius to run on gasoline most of the time.

Other Contenders

There are a number of other electric offerings worth a mention. Nissan has announced plans to put electric cars on U.S. roads by 2010. BMW has begun producing all-electric versions of their popular Mini Cooper, and so far can’t keep up with demand. ZAP is putting a sporty 3-wheeled electric car out (the Alias), along with offerings such as an electric truck and sedan. The Alias can reportedly go 100 miles on a charge.

Finally, Toronto-based Zenn Motor Company says they will put an electric car on the roads in 2009. This one is particularly noteworthy because of their intention to use EEStor’s ultracapacitor to power the vehicle. EEStor claims that their ultracapacitor is 1/10th the weight and volume of conventional battery technology. While potentially a game-changer, many feel that EEStor is a classic case of vaporware, and many capacitor experts say that it will never see the light of day. In response, Zenn says that their electric vehicles are not contingent upon the success of the ultracapacitor. And in fact, according to their website I can buy an all-electric Zenn vehicle here in the Dallas area right now. There are two dealers to choose from in the Dallas-Fort Worth area, and one of the dealers claims a 260 mile range on a single charge. I think I will try to make a trip down to see if they really have something in stock.

Conclusion

Based on the large number of electric offerings to be rolled out over the next two years, I would be surprised if some don’t stick around for the long run. A return to $4.00 gasoline should accelerate public acceptance of electric vehicles. The Aptera looks like a winner, provided buyers embrace the futuristic design. The Ford Fusion hybrid also looks like it is ready to make major inroads into the market share of the Toyota Prius. And don’t be surprised to see lots of electric Mini Coopers showing up on the roads soon. Now I just need to figure out if I am ready to be a part of the experiment and buy one of these vehicles.

February 16, 2009 Posted by | Aptera, Chevy Volt, Ford, General Motors, Nissan, Prius, Tesla Motors | 36 Comments

Detroit Gearing Up for Electric Cars

The Dodge Circuit Electric Vehicle

Regular readers know that I am hopeful that electric cars can start to become one of our transportation options in the next few years. There are several reasons for this. First and foremost, it is because there are so many different options for making electricity. We currently make it primarily from coal and nuclear power, but over time renewable electricity production is expected to grow sharply. The car performs the same way whether the electricity comes from coal, natural gas, wind, geothermal, or solar power.

The second major factor behind my desire to see us move toward electric transportation is that the efficiencies of electric motors are much higher than for gasoline engines. In an essay that I wrote last year, I linked to an analysis that showed that the overall efficiency of an electric vehicle is about double that of the internal combustion engine.

The final reason I favor a move toward electric vehicles is that it simply diversifies our transportation options. I want to see us develop expertise in that area, but also in the areas of improving diesel hybrids, CNG vehicles, etc. In an age of limited fossil fuel supplies, diversification provides more protection against supply disruptions.

Over the weekend, the New York Times published a story on the electric vehicles in the pipeline:

Detroit Goes for Electric Cars, but Will Drivers?

Some excerpts summarizing what we should expect:

DEARBORN, Mich. — Inside the Ford Motor Company, it was called Project M — to build a prototype of a totally electric, battery-powered car in just six months. When it was started last summer, the effort was considered a tall order by the small team of executives and engineers assigned to it. After all, the auto industry can take years to develop vehicles.

But Ford was feeling pressure from competitors, and decided it could not afford to fall behind in the rapidly expanding race to put electric cars in dealer showrooms. Ford plans to make only 10,000 of the electric vehicles a year at first — very few by Detroit standards — to test the market cautiously.

The competition over electrics is picking up speed and players. Toyota, which has so far focused its efforts on hybrid models, will display a battery-powered concept car at the Detroit show. Nissan’s chief executive, Carlos Ghosn, has promised to sell an electric car in the United States and Japan as early as next year.

Two Japanese automakers, Mitsubishi and Fuji Heavy Industries, the parent company of Subaru, are also testing electric cars. And Chrysler, the most troubled of Detroit’s three auto companies, has vowed to produce its first electric car by 2010.

Of course one of the major limitation is the energy density of the batteries, which by fossil fuel standards is quite low. However, the push by the auto industry has boosted investments into storage technologies:

The surge toward electric vehicles also appears to be jump-starting investments in advanced-battery production in the United States. General Motors will announce plans at the auto show to build a factory in the United States to assemble advanced batteries for its Chevrolet Volt model, which it expects to start selling next year.

Ultimately, though, whether consumers will embrace these vehicles will come down to cost and convenience. At the $40,000 price tag that was mentioned in the story for the Chevy Volt, consumers aren’t going to embrace them. There is also the matter of convenience. Ford indicates that it will take six hours to put a charge on that will give the vehicle a range of 100 miles. While that’s a pretty good range, what if I forget to plug my car in? Running out of gas is preferable to that. But as the article goes on to point out, the average American drives less than 35 miles a day, so even if I forgot to plug in overnight, I still have a 2nd (and maybe 3rd) chance to get the vehicle charged overnight.

We will always need liquid fuels, though, as long-haul trucking and airline transportation are well-suited for the high energy density of liquid fuels. Here’s hoping, though, that the electric vehicle can finally make some inroads.

January 12, 2009 Posted by | Chevy Volt, electric cars, electricity, Ford | 46 Comments

Detroit Gearing Up for Electric Cars

The Dodge Circuit Electric Vehicle

Regular readers know that I am hopeful that electric cars can start to become one of our transportation options in the next few years. There are several reasons for this. First and foremost, it is because there are so many different options for making electricity. We currently make it primarily from coal and nuclear power, but over time renewable electricity production is expected to grow sharply. The car performs the same way whether the electricity comes from coal, natural gas, wind, geothermal, or solar power.

The second major factor behind my desire to see us move toward electric transportation is that the efficiencies of electric motors are much higher than for gasoline engines. In an essay that I wrote last year, I linked to an analysis that showed that the overall efficiency of an electric vehicle is about double that of the internal combustion engine.

The final reason I favor a move toward electric vehicles is that it simply diversifies our transportation options. I want to see us develop expertise in that area, but also in the areas of improving diesel hybrids, CNG vehicles, etc. In an age of limited fossil fuel supplies, diversification provides more protection against supply disruptions.

Over the weekend, the New York Times published a story on the electric vehicles in the pipeline:

Detroit Goes for Electric Cars, but Will Drivers?

Some excerpts summarizing what we should expect:

DEARBORN, Mich. — Inside the Ford Motor Company, it was called Project M — to build a prototype of a totally electric, battery-powered car in just six months. When it was started last summer, the effort was considered a tall order by the small team of executives and engineers assigned to it. After all, the auto industry can take years to develop vehicles.

But Ford was feeling pressure from competitors, and decided it could not afford to fall behind in the rapidly expanding race to put electric cars in dealer showrooms. Ford plans to make only 10,000 of the electric vehicles a year at first — very few by Detroit standards — to test the market cautiously.

The competition over electrics is picking up speed and players. Toyota, which has so far focused its efforts on hybrid models, will display a battery-powered concept car at the Detroit show. Nissan’s chief executive, Carlos Ghosn, has promised to sell an electric car in the United States and Japan as early as next year.

Two Japanese automakers, Mitsubishi and Fuji Heavy Industries, the parent company of Subaru, are also testing electric cars. And Chrysler, the most troubled of Detroit’s three auto companies, has vowed to produce its first electric car by 2010.

Of course one of the major limitation is the energy density of the batteries, which by fossil fuel standards is quite low. However, the push by the auto industry has boosted investments into storage technologies:

The surge toward electric vehicles also appears to be jump-starting investments in advanced-battery production in the United States. General Motors will announce plans at the auto show to build a factory in the United States to assemble advanced batteries for its Chevrolet Volt model, which it expects to start selling next year.

Ultimately, though, whether consumers will embrace these vehicles will come down to cost and convenience. At the $40,000 price tag that was mentioned in the story for the Chevy Volt, consumers aren’t going to embrace them. There is also the matter of convenience. Ford indicates that it will take six hours to put a charge on that will give the vehicle a range of 100 miles. While that’s a pretty good range, what if I forget to plug my car in? Running out of gas is preferable to that. But as the article goes on to point out, the average American drives less than 35 miles a day, so even if I forgot to plug in overnight, I still have a 2nd (and maybe 3rd) chance to get the vehicle charged overnight.

We will always need liquid fuels, though, as long-haul trucking and airline transportation are well-suited for the high energy density of liquid fuels. Here’s hoping, though, that the electric vehicle can finally make some inroads.

January 12, 2009 Posted by | Chevy Volt, electric cars, electricity, Ford | 46 Comments

Ford Awakens from a Slumber; Post Office Rejects Ethanol

It seems that the reality of our situation is sinking in at Ford:

Ford’s trouble: $4 gas is here to stay

NEW YORK (CNNMoney.com) — Ford Motor Co. executives say they believe that $4 gas is here to stay, resulting in a fundamental consumer shift away from gas-guzzling SUVs and pickups and causing continued losses at its core North American auto unit.

The company said it expects gas prices to remain in the range of $3.75 to $4.25 a gallon through the end of 2009. And that expectation prompted the nation’s No. 3 automaker to announce deep production cuts for what has been its best selling and most profitable vehicles for several decades and could lead to more plant closings and job cuts down the road.

The company plans to ramp up production of smaller cars and crossovers: Ford Focus, Fusion, Edge and Escape, the Mercury Milan and Mariner, as well as the Lincoln MKZ and Lincoln MKX. These models generally cost less and have lower profit margins than the light truck models for which Ford is cutting production, such as the F-Series pickup, still the nation’s best selling vehicle.

I think that’s good news for everyone, except Ford shareholders and some Ford employees.

And a feel-good story about the ethanol industry:

Ethanol Vehicles for Post Office Burn More Gas, Get Fewer Miles

May 21 (Bloomberg) — The U.S. Postal Service purchased more than 30,000 ethanol-capable trucks and minivans from 1999 to 2005, making it the biggest American buyer of alternative-fuel vehicles. Gasoline consumption jumped by more than 1.5 million gallons as a result.

The trucks, derived from Ford Motor Co.’s Explorer sport-utility vehicle, had bigger engines than Jeeps from the former Chrysler Corp. they replaced. A Postal Service study found the new vehicles got as much as 29 percent fewer miles to the gallon. Mail carriers used the corn-based fuel in just 1,000 of them because there weren’t enough places to buy it.

“You’re getting fewer miles per gallon, and it’s costing us more,” Walt O’Tormey, the Postal Service’s Washington-based vice president of engineering, said in an interview. The agency may buy electric vehicles instead, he said.

Perhaps I should have said, “feel-good story for me.” After all, when corn-fueled cars are traded in for electric cars, that feels pretty good to me. In fairness though, I should point out that it does say that the ethanol-fueled vehicles they bought had bigger engines. Not sure why they went that route.

May 22, 2008 Posted by | auto industry, electric cars, ethanol, Ford, fuel efficiency | 7 Comments

SUV for Sale: Cheap!

Some of the consequences of very high oil prices are pretty predictable. Homes way out in the suburbs are likely to lose value. Prices will rise across the board for goods and services. Airlines will struggle. And gas guzzlers will be much less attractive:

Gas costs deflate prices on used SUVs

High fuel prices are causing the value of used SUVs to plummet, often below what’s listed in the buying guides many shoppers use to negotiate with dealers. “The dealer is going to offer a price, and the customer is going to be ticked off,” says Tom Webb, chief economist for Manheim, operators of auctions where car dealers buy their used-vehicle inventories. “The guidebooks have not caught up to the market,” he says.

Webb’s figures show wholesale prices on big SUVs such as Chevrolet Tahoes, Ford Expeditions and Toyota Sequoias are down 17% from a year ago. Full-size pickups have fallen as much as 15%, Webb says.

Even though plunging values should make used SUVs bargains for buyers less concerned about fuel prices, that doesn’t seem to be happening. Used SUVs languished unsold an average 66.4 days last month, up from 48.6 days the year before, says CNW Marketing Research. “There are far more truck-based SUVs being traded in than customers to buy them,” says Mike Jackson, CEO of AutoNation, the largest new-car dealer chain.

Your Prius or Jetta TDI on the other hand? I may start buying up some of those as speculative investments. If people are trading in their SUVs, there is going to be a run on more fuel efficient cars – and they should hold their value, if not trade at a premium.

People have asked me for several years what I thought was going to happen with gas prices. I always tell them that the long-term trend is much higher, and you should plan accordingly. I have warned friends and family to embrace fuel efficiency, and I have tried to preach that message here. Now that gas prices are really hitting people in the pocketbook, looks like they are finally getting the message. But like many caught in the housing bubble, they waited a little too long and lost a lot of money. The lesson here? Pay attention to what I am telling you. Do you hear that, Mom? 🙂

May 10, 2008 Posted by | auto industry, Ford, fuel efficiency, General Motors, Prius | 14 Comments

The Prius Tops the Explorer

Looks like people are beginning to respond to high gas prices:

Toyota Prius sales pass Ford Explorer

Americans bought more Toyota Prius hybrid gas-electric hatchbacks last year than Ford Explorer sport-utility vehicles, the top-selling SUV for more than a decade.

The change of fortune, buried in U.S. vehicle-sales data for 2007 and unthinkable a few years ago, will find an echo at this year’s Detroit auto show, which starts Sunday.

While Americans’ love for powerful gas guzzlers remains strong, a slowing economy and high gasoline prices are forcing buyers to lower their sights.

While Prius sales soared 69% last year, demand for the Explorer was less than a third of its 2000 peak.

As I have said before, we have fuel-efficient vehicles available now. Consumers just have to be convinced to buy them. High gas prices are starting to convince them. I think this is a more effective approach than forcing car makers to produce more fuel efficient vehicles via CAFE standards. I am not against higher CAFE standards, I just think addressing the demand side is more effective.

My current plan is to buy a Prius when I go back to the U.S. It doesn’t seem that any other option is even close. Is there anything else that can compete with the Prius on a fuel efficiency basis in the U.S. market?

January 13, 2008 Posted by | auto industry, CAFE, Ford, fuel efficiency, Toyota | 31 Comments