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Further, the three Detroit automakers were outsold for the first time ever by their Asian rivals, and the hybrid models are now in great demand. The Toyota Prius is selling as quickly as they can be built. “Dealer stock for Prius is best measured in hours rather than days,” says the head of Toyota Motor Sales, Bob Carter.
In contrast, General Motors CEO Richard Wagoner announced this week that the company will shut down four North American plants in a move designed to shift production away from pickups and SUVs, toward smaller, more fuel-efficient vehicles. Wagoner said that the plan comes in response to a rapid change in consumer behavior tied to rising fuel costs, a trend that he did not expect to reverse soon.
As a result, GM’s overall production capacity will drop by 500,000 vehicles, with cuts of 700,000 trucks to be supplanted by a 200,000-unit increase in more fuel-efficient cars. “We believe this is the biggest step yet in our industry’s move away from our historic, virtually complete reliance on petroleum to power vehicles,” he said. The centerpiece of this move is the Chevy Volt, an extended-range plug-in automobile that will not be in dealer showrooms until 2010.
This sudden change in consumer demand for more environmentally responsible vehicles is a traumatic reversal of fortune for Detroit, which has relied on larger vehicles for most of its profits. To date, GM has sold only a few thousand hybrid vehicles, while sales of the Toyota Prius recently passed the one million mark. GM’s announcement leaves no doubt that Detroit has received the message, with the company even considering the sale of its biggest vehicle division of all, the Hummer.
While Detroit is still years away from having a decent hybrid car to compete with the Prius, many American drivers find the Prius severely lacking in driving performance. The Prius has a 10.5 second 0-60 time, which is slower than 95 percent of the cars on the road.
The Chevy Volt plug-in will blow the doors off the Prius, with a full 2-second advantage off the line. It will be able to operate in all-electric mode for up to 40 miles, with an equivalent of 100 mpg. This would cost about one-half what the current Prius does to operate. For those who typically drive less than 40 miles a day, this is a significant savings, providing the Volt has the same sticker price as the Prius, which currently has a manufacturer’s suggested retail price of $21,500. That will depend on the availability of mass-produced affordable ion batteries, which now cost more than $40,000 apiece. The long development time is a big gamble for GM. In theory, by 2010, gas prices could be back down to $2 a gallon, since the current high prices are caused by speculation and not real shortages. While refineries are cutting their production due to lack of demand for expensive gasoline, there is no corresponding lack of demand for electricity, whose cost continues to soar in our area due to a severe lack of generating capacity. New electric plants burn fossil fuels such as coal and gas and, yes, costly oil, causing even more environmental problems.
The only other serious contender is hydrogen-powered vehicles, which are the cleanest alternative. While many manufacturers are currently testing hydrogen cars, they are even further away from becoming practical due to the lack of hydrogen fueling stations. There is also a need to invent cheaper methods of making large quantities of hydrogen without also burning carbon fuels.
In the meantime, the HOV lane on the LIE will continue to switch from big SUVs to hybrids, while the other lanes will be full of ever-smaller imports scooting between the semi trucks while trying to avoid those expensive filling stations.
