The auto companies thought they were really helping themselves by resisting an increase in CAFE standards. Be careful what you wish for:
The latest automobile sales figures show that Americans are increasingly wary of gas-thirsty sport utility vehicles. That was particularly bad news for General Motors and the Ford Motor Company, which both saw their sales slip last month as consumers continued their steady march into Asian car companies’ dealerships.
Both Toyota and Nissan posted record sales gains in April, which helped push overall auto sales in North America up 1.8 percent.
Of course, reality always hits hardest for those who have worked so hard to fool themselves:
General Motors has long maintained that gas prices do not affect how consumers approach buying a car or truck. But on Tuesday, G.M.’s chief industry sales analyst, Paul Ballew, appeared to retreat somewhat from that position, saying that record gas prices were likely playing some role in falling S.U.V. sales.
“It’s probably impacting a bit on the margin,” Mr. Ballew said. Pointing to G.M.’s improved large truck sales, he added a caveat: “People want to quickly say large utility sales are down because of gas prices, and that is just not the cause-and-effect relationship that we can find.”
In other news, tobacco executives maintain their product is not addictive.
The glory days of unfettered gas consumption are over, and their addiction to the profits from behemoths is coming home to roost. It would be funny if a failing and waning auto industry were not going to be so devastating to our economy.
Mike Jones
You’d think they’d have learned this lesson back in ’73 or so. Sigh.
Jon H
And there’s been mutterings about instituting “voluntary” reductions on auto imports, in order to bolster the domestic companies.
Great. Cut off the supply of the most desired, fuel-efficent vehicles, in order to prop up the slackers of detroit and their gas-guzzling vehicles, right when we need far more of the former, and far fewer of the latter.
Actually, though, I might support it if there were limits on everything *but* hybrids.
If foreign automakers could sell as many hybrids as they want, but had limits on other models, they might be a big incentive to ramp up production of hybrids faster than planned, so that they could try to make up for the lost sales.
(Granted, this might not work, since I think some hybrids are selling at a loss, but that might just be added incentive to figure out how to make hybrids more cheaply.)
Randolph Fritz
Pick up gun. Point at foot. Pull trigger.
TM Lutas
Since we’re likely to hit break even on hydrogen vehicles (price, power density, cold weather performance) in about 5 years, I expect that the next round of Detroit recovery is going to come faster than the recovery from the ’70s debacle.
GM is one of the most aggressive auto firms in the world with their hydrogen use roadmap.
Halffasthero
I think hydrogen will likely save Detroit in the long run. They made a lot of money on the SUV profit margin so I put this at a correction that was due to happen sooner or later. That Detroit did not plan for it is their problem but they will survive.
Dave Schuler
The internal politics of Ford and GM (and large companies generally) does not encourage minimizing risk. No one there ever got promoted for encouraging product diversification. Makes for a bumpy ride.
Mason
Man, what a load of crap. I’m the proud happy owner of a gas guzzling Nissan Pathfinder and can well afford the price increase in gas, but even I went out of my way to get a very efficient Pontiac Vibe as the getting-around-town car.
Shinobi
For Sale:
2001 Ford Explorer
4WD
Fully Loaded
I’m glad they are finally feeling this. I hope it will push for more eco friendly vehicles. Sucks about the economy though, looks like I wont be able to afford that hybrid after all.
Stormy70
When we purchased our Sequoiya (sp?), my husband and I discussed the price of gas and who would get to drive it based on who drove the most miles. Since he drives less than 10 minutes to work, he drives the SUV. We knew the pros and cons of purchasing a SUV, and we assumed the price of gas would go up. We like the comfort of our SUV on long trips, and don’t find the price prohibitive. I drive all over the Dallas/Fort Worth area, so I do not drive an SUV, I drive a fuel effecient vehicle. Amazing, the people who don’t consider a rise in gas prices will effect their bottom line.
Stormy70
Affect, effect. Let’s call the whole thing off. Sorry about that.
Randolph Fritz
Just by the way–hydrogen is not a source of energy; it is medium of energy storage and transport, and a very difficult one.
JG
Are people buying foreign cars because of fuel costs or because there are no good american cars? Front wheel drive muscle cars? A four door Charger? Is Willy wonka running the industry?
TJ Jackson
Boy I’ve heard this so many times that this is just laughable. Remember the Yugo, does anyone believe Americans are willing to ride around in rattletraps like that again or ever?
What Detroit doesn’t get is that the public wants reliable, safe, and comfortable transport. Treehuggers want the Yugo.
James
Tree-huggers *and* Yugos! A straw-man two-fer!
The reality is that perfectly reliable, safe, comfortable, and yes – attractive – fuel-efficient cars exist today. They’re just not coming out of Detroit in great numbers. Look at the Honda Accord and Civic hybrids. Each is consistently highly rated in terms of safety, as is the Toyota Prius. Add to that the coming breed of hybrid SUV’s (yes, some from Detroit…), and we’re talking about a real choice for the American consumer who *doesn’t* want a death-trap matchbox car.
It’s counterproductive to assume that the only people who care about pollution and efficiency are hippies. Vast numbers care a great deal about their children’s health and the quality of the world they’ll inherit, not to mention their fuel expenses. Right now the smart choices are coming from Asia, and here we are…
Halffasthero
“Just by the way–hydrogen is not a source of energy; it is medium of energy storage and transport, and a very difficult one.”
Technically correct – the reaction that converts hydrogen to H2O is the actual source of energy. Hydrogen could be referred to as “potential” energy but that doesn’t quite fit either. Close enough though.
Slartibartfast
Not quite. A hydrogen fuel cell is a battery that you have to charge up; fossil fuels are batteries that come already charged up.
Joel B.
Re: Fossil fuels vs. hydrogen
Of course, the important difference is that we know how to “recharge” the hydrogen battery, we’re quite a ways away from sythetic crude oil. The big trick has to be combining hydrogen with solar power. The only really good source of energy is the sun.
Halffasthero
Hydrogen as an element is identical to fossil fuels in that another element has to be introduced to create a reaction releasing energy. “Potential” to “kinetic” energy. My comment refers to the generic science of it. HOW it is done is what you appear to be referring to – implementation.
Jon H
“Technically correct – the reaction that converts hydrogen to H2O is the actual source of energy.”
Well, no, most likely the *actual* source of the energy will be the fossil fuel from which the hydrogen will be obtained.
There’s no such thing as a hydrogen well.
Theoretically, solar or nuclear could provide energy to strip the hydrogen from water, but I’m betting the oil companies will make sure they’re first in line for that business.
Slartibartfast
True, but irrelevant. Because it’d take more energy to synthesize the oil than you’d get back from combustion. The problem with hydrogen fuel cells is, once more, that if you’re using them to replace fossil fuels, you’re going to have to find another source of energy to charge them up with. Not saying it’s impossible, just that it’s on the hard side of nontrivial. For instance, how well is the solar approach going to work at high latitudes in the winter? Answer: not well. How well is it going to work in cloudy climates? Not well. Where are you going to put the solar panels?
Here’s how to scope it out. Go research some things like power density of solar cells (~115 W/m^2), average insolation (you’ve got to design to worst case OR put in tracking mechanisms AND some long-term storage mechanism to get you through the winter), and then figure how much energy your car uses in, say, a week. If you use 15 gallons of gas in a week, you’re looking at about 2GJ per week. The number of panels you’re going to have to come up with might surprise you. If you live in the Pacific Northwest, be prepared for shock.
Slartibartfast
Oh, and I’m thinking that if you were going to synthesize anything at all, you’d synthesize gasoline. We already have synthetic oils; they’re just not much good for use as motive fuel.
Ken
I don’t see how failure to pass new CAFE standards would hurt Detroit.
CAFE is either redundant or disastrous. If customers want fuel efficient cars, Detroit can make money selling them without CAFE. If customers want gas guzzlers and CAFE forbids it, Detroit is screwed.
Either way, there’s no benefit to Detroit to having it in place. So they ain’t shooting themselves in the foot.
Kimmitt
CAFE is either redundant or disastrous.
…or a Common Resource problem!
Randolph Fritz
“Technically correct – the reaction that converts hydrogen to H2O is the actual source of energy. Hydrogen could be referred to as “potential” energy but that doesn’t quite fit either.”
But to produce the hydrogen, you have to expend energy, you see? That energy ultimately has to come from some other source. First law of thermodynamics: energy can neither be created or destroyed. And the Second Law: it takes energy to concentrate energy, so that going from a diffuse form of energy, like sunlight on the earth’s surface, to a concentrated form, like pure hydrogen, is an inherently inefficient process. I suspect that when all costs and efficiencies are considered biologically produced methane might actually be a preferable to hydrogen for operating mobile fuel-cell vehicles. I hope whatever decision is made is made on a careful engineering analysis; mistakes in this area would be very expensive. I also think the real savings here are going to come over time, as we begin to reshape our cities in more efficient forms.
The USA has a heritage of some of the most isolated farmsteads in history, and this is part of what has led us into building some of the least dense cities in the world; in four generations, the USA has gone from rural to urban. But those low-density forms are new in history, and turning out to have very serious problems. Above all, they are energy-inefficient. So I think that US land use at the beginning of the 22nd century is likely to be as different from current use as current use is from the beginning of the 20th century.
Halffasthero
“But to produce the hydrogen, you have to expend energy, you see? That energy ultimately has to come from some other source. First law of thermodynamics: energy can neither be created or destroyed. And the Second Law: it takes energy to concentrate energy, so that going from a diffuse form of energy, like sunlight on the earth’s surface, to a concentrated form, like pure hydrogen, is an inherently inefficient process.”
Absolutely correct again. Based on what we know it is inefficient. Since we are dapping the sun very little anyway, we have not realized much of anything up to this point. You may be exactly right about methane because there are several naturally occurring biological sources that can be tapped without a great deal of engineering. The issue is that they are attempting to go to hydrogen. For what reasons I don’t know, I am simply analyzing what they are targeting. To do that, they need to create it – sunlight is free but inefficient. The key word here is “free”. It does not necessarily have to be efficient. Just be cost effective enough to create the source engergy.
Halffasthero
grr – typo.
dapping should be tapping…..
Randolph Fritz
By the way, just noticed that S&P has downgraded Ford and GM bonds to “junk” status. I believe the appropriate response is “oh, shit.”
Some details, however, are worthy of attention: falling SUV sales, a response to rising fuel prices, are part of the story, but so are losses of market share, unfunded pension and, especially, unfunded retiree medical care liabilities (nearly three times the pension liabilities). It is striking to me how this combination of problems of the GM & Ford pension systems mirrors the national problem of Medicare.
S&P, being S&P, does not point out that the retiree medical liability problem would be solved by a well-designed national health care system and suggests instead the companies seek give-backs from the UAW.
Perhaps, perhaps, national health care systems actually enhance the health of a manufacturing economy?