Are Hybrid Cars Worth It?

Milton Copulos presents his argument against learning from Chinese example.

Like the U.S., China Favors Fuel Standards, Not Taxes By KEITH BRADSHER.

Motor Trend Announces 2004 Car of the Year
Toyota Prius is the first hybrid vehicle to Receive the Coveted Golden Calipers Award

Pardon me if this feels a little off topic, but this Salon interview about the new chinese fuel economy regulations also brings out a very important issue i.e. China's greenhouse gas emissions. Read On.

At its current rate of growth, how long would it take China to replace the U.S. as the biggest producer of greenhouse gases?

JS: Are you talking in terms of current emissions or total historic emissions?

China would have to emit greenhouse gases at the same rate as the U.S. for many more decades before ever coming close to catching up to the U.S. in terms of total emissions of carbon now in the atmosphere.

But what about going forward in terms of current emissions?
JS: At least 30 years, in most of the reasonable projections that I've seen. Some say closer to 20 years, but that's fairly implausible, I think. Anyone you hear saying that China is going to surpass the U.S. in terms of energy use by 2020 is basically working from outdated projections.

And that 2020 figure often gets thrown around?
LP.: And 2010 gets thrown around. Those figures are based on old projections.

JS: You have to make assumptions that are at the very least physically improbable.

How so?
JS: You would have to completely halt any improvements in energy efficiency that are going to occur anyway as capital stock turns over.

You would have to posit that the evolution of the economic structure in China from one based very much on industry to one based a lot more on services is going to stop -- a very unrealistic assumption.

You have to assume that an increasingly wealthy population is going to put up with current levels of pollution. It already is not. And one of the main ways of mitigating pollution is to use energy more efficiently, and to switch to forms of energy that are inherently less polluting -- natural gas for coal.

And also you would have to assume that energy use in the U.S. would start to fall. You'd have to assume a pretty rapid leveling off and shrinking of U.S. energy use. Or, as some people have done, you would have to assume really high rates of economic growth in China.

In case you can not get in to Salon, try this (however the link will expire in 90 days).

Elsewhere, How about America following (not leading) into China's footsteps?

This story in IHT on Chinese fuel economy standards, although written by the same reporter is more complete than the NYT story from yesterday! For example, the following important paragraphs are missing in the NYT story.
The new standards would, in general, call for new cars to go as much as two more miles on each gallon of fuel than the average set in America; for sport utility vehicles, the minimums would be 1.7 to 2.7 miles a gallon higher than U.S. averages. Large cars, for example, would be required to get 27.4 miles a gallon in 2005 and 30.4 miles a gallon in 2008, compared with the current U.S. average of 27.2 miles a gallon. Thirty miles to the gallon is the equivalent of 100 kilometers to about 7.84 liters.

In the European Union, the European, Japanese and South Korean automobile manufacturers associations have signed a voluntary agreement to increase the average fuel efficiency of their vehicles to 40 miles to the gallon in 2008 and about 50 miles in 2012 from about 35 now.

I am inclined to refer you to this, while noting that China is all set to impose tougher fuel economy standards than US!

The approach taken in the US for now seems to give tax credits for puchase of hybrid as well as diesel vehicles. While this does sound like a good step, the financial burdens associated with the tax credits as the sales of more fuel efficient vehicles sour will be significant.

In case you were curious as to how the new energy bill affects the fuel economy standards provision in the US, look here, and skip to page 60.

Matthew Wald at NYT continues to question whether all Hydrogen is created equal.

Automakers think outside the hybrid?
GM's adoption of displacement-on-demand (DOD) is a good example. It's designed so you don't notice it, even though it should save more fuel than the current Toyota and Honda hybrids do on a fleetwide basis (?). Phil Martens, head of vehicle development at Ford, believes consumers will prefer "clean diesel" tech to hybrids, and he hopes to phase such an engine into Ford's SUVs and F-150 pickup line in a few years. Chrysler plans to sell 5,000 "clean diesel" 2005 Jeep Liberty SUVs next year. That Liberty will get about 25 to 27 mpg vs. 20 mpg for the gas-engine Liberty.


More on why Toyota is beating Ford.
Toyota now outsells and out-earns Ford in passenger cars. American automakers are shifting their attention to trucks, perhaps because they are beginning to throw in the towel on passenger cars in favor of the Japanese.
"In cars, Toyota owns the place," says Brian Lund, equity analyst for Morningstar. "GM and Ford and Chrysler have, in many ways, given up on cars. They have retained interest in luxury vehicles and light trucks, because they are high margin. In terms of cars, they maintain what they do because of fuel efficiency requirements."
Indeed, the Corporate Average Fuel Economy standard, which is regulated by the National Highway Traffic Safety Administration and the Environmental Protection Agency, applies to a company's aggregate fuel economy. Having small cars with good gas mileage in the fleet helps offset the damage done by increasing numbers of SUVs.

No Home Runs in Energy Bill
The bill does not require improvements in the fuel efficiency of cars and trucks, the main guzzlers of gasoline made from imported oil. The current 27.5 miles per gallon average for cars could even decrease in the next decade because of several provisions in the bill, according to some analysts. Federal officials in the future would have to consider new factors, such as the impact on auto industry jobs, before demanding a higher performance standard, and the bill would extend a loophole that allows automakers credit for producing higher-mileage, ethanol-fueled hybrid cars even though those cars still overwhelmingly use gasoline.

Old U.S. tax law encourages buying of luxury SUVs: In all, more than 30 luxury SUVs qualify for the tax break. Business owners who use their car for work can deduct up to 100 per cent of the cost of any vehicle that weighs at least 6,000 pounds. In this weight class are the Hummer, Cadillac Escalade, Mercedes-Benz M-Class, Lincoln Navigator, Porsche Cayenne and Volkswagen Touareg. Anything lighter and more fuel efficient doesn't qualify.


Elsewhere, Not all hydrogen is created equal. This is important, and should receive more attention.

Can Anything Stop Toyota?
OK, I am really not getting paid by Toyota to do this, but in the light of the recent news and studies, it is a worthwhile question.

BTW, if you came here looking for news about the CAFE Standards, then keep your eyes and ears open. Expect lots of activity in the next month!

GM's New Hybrid Plan to Focus on Big Cars
Tom Stephens, GM's group vice president for powertrains, said the company has opted to use its most fuel-efficient hybrid systems on high-volume vehicles that consume the most fuel - the Chevrolet Tahoe and GMC Yukon SUVs and Chevy Silverado and GMC Sierra pickups.
The first of the automaker's advanced hybrids - those that can achieve a fuel-economy improvement of up to 35 percent, compared to one-third that amount with mild systems - is not scheduled to reach showrooms until 2007.


Don't you think that this has something to do with the CAFE standards for light-trucks being revised upwards starting 2007?

Big 3 win with new fuel rules:

The energy bill does not mandate a specific oil savings goal and doesn't require the National Highway Traffic Safety Administration to write new fuel economy rules for cars in addition to SUVs and other light trucks. It also does not set a deadline for NHTSA to issue its fuel economy rules, a change from an earlier version of the bill.

The bill, if it becomes law, also creates more administrative hurdles for NHTSA to clear to increase fuel economy standards in the future.

I wonder why Prius 2004 is getting such rave reviews? May be Detroit knows the answer?