Tuesday morning's news stories indicate the likelihood of legislative
action to provide loans to carmakers as their position continues to
worsen. It's not surprising that the day begins with an
extraordinarily uninformed and misdirected attack on the Chevy Volt
in the nation's most influential financial publication, The Wall
Street Journal. We'll talk about that below, and we offer our
response to a NY Times column by Thomas Friedman, and a pointer to a
column by Joseph Romm on the car companies. Before those, we start
with a short discussion about the impact of falling oil prices and
news about GM's planned Saturn Vue PHEV.

(Shortly after it goes out on email, this posting will also be
viewable at http://www.calcars.org/news-archive.html -- there you can
add CalCars-News to your RSS feed.)

IMPACT OF $60/BARREL OIL: While high fuel prices motivate consumer
buying patterns and interest in high-MPG cars, the transition to
electrified transportation is more broadly driven by the three
characteristics of electricity: compared to oil, it's
"cleaner/cheaper/domestic." Of course, 2-4 cents/electric miles
compare favorably to 8-40 cent gasoline miles. But the global and
social benefits of plug-in cars derive from their contribution to
lower CO2 and improved energy security, and from their ability to
enable automakers to evolve to produce more efficient, reliable and
modern vehicles -- irrespective of oil price fluctuations. We have
every reason to believe, as does even the very cautious International
Energy Agency, that our future is $200/barrel oil
http://ap.google.com/article/ALeqM5h4ZGTUrYhzzLOhFASpNhny3b_mmgD94DCFO80
. (Let's hope we don't remain stuck in a global recession that causes
oil prices to sink.) We don't need to rely on predictions about the
price of oil or the timetable for "peak oil." And we see validation
in a new British study that confirms at least a 40% reduction in CO2
from plug-in cars even with today's power grid, and projects an
"extreme update" scenario that would have 60% of all vehicles plug in
by 2030. http://www.greencarcongress.com/2008/11/uk-report-on-po.html


GM'S SATURN VUE PHEV POSTPONED: This vehicle is a "line extension."
The plug-in version of the Saturn Vue crossover SUV, expanding on the
"dual-mode hybrid" version that will be introduced shortly, had been
expected "as soon as 2010." But along with most other new GM products
except the Chevy Volt, it's now been pushed back to 2011.
http://money.cnn.com/galleries/2008/autos/0811/gallery.gm__product_plans/7.html


WALL STREET JOURNAL'S FULL-OUT ATTACK ON CHEVY VOLT: Now we come to
the main reason for this posting. It's the latest from Holman
Jenkins, Jr., who writes the WSJ's weekly "Business World" column.
Back in 2005, Jenkins unleashed "Prius Follies," a broad attack on
hybrids, to which the Union of Concerned Scientists
http://hybridblog.typepad.com/my_weblog/2005/12/government_econ.html
and others ably responded. Today Jenkins basically re-publishes his
story from July, "What Is GM Thinking," which we posted
at http://www.calcars.org/calcars-news/969.html along with an able
response, "WSJ Attack on Chevy Volt--Shocking" by Business Week's
David Kiley. Because we expect that GM's spokespeople may have more
urgent priorities right now, we'll step in with our comments. Below
is the first half of his column, about the Volt, with [our comments].

Obama's Car Puzzle by Holman Jenkins, Jr.
http://online.wsj.com/article/SB122645159441719325.html

You have in GM's Volt a perfect car of the Age of Obama -- or at
least the Honeymoon of Obama, before the reality principle kicks in.

Even as GM teeters toward bankruptcy and wheedles for billions in
public aid, its forthcoming plug-in hybrid continues to absorb a big
chunk of the company's product development budget. This is a car
that, by GM's own admission, won't make money. It's a car that can't
possibly provide a buyer with value commensurate with the resources
and labor needed to build it. It's a car that will be unsalable
without multiple handouts from government. [COMMENT: even before
federal tax credits were announced, 40,000 buyers signed up at
http://www.gm-volt.com, in addition to the 400,000 who signaled their
interest when the car was announced.]

The first subsidy has already been written into law, with a $7,500
tax handout for every buyer. Another subsidy is in the works, in the
form of a mileage rating of 100 mpg -- allowing GM to make and sell
that many more low-mileage SUVs under the cockamamie "fleet average"
mileage rules. [COMMENT: cars and trucks still have separate MPG standards.]

Even so, the Volt will still lose money for GM, which expects to
price the car at up to $40,000. [COMMENT: most new cars lose money
when they're first produced. GM's modular Volt design is a platform
for multiple cars (starting with the Opel Flextreme diesel version of
the Volt).]

We're talking about a headache of a car that will have to be
recharged for six hours to give 40 miles of gasoline-free driving.
What if you park on the street or in a public garage? Tough luck.
[COMMENT: The first buyers will be among the many tens of millions of
households with garages.] The Volt also will have a small gas engine
onboard to recharge the battery for trips of more than 40 miles.
Don't believe press blather that it will get 50 mpg in this mode.
[COMMENT: That's what well-designed hybrid cars get.] Submarines and
locomotives have operated on the same principle for a century. If it
were so efficient in cars, they'd clog the roads by now. [COMMENT:
That's why the Prius and the Honda Civic sell well.] (That GM allows
the 50 mpg myth to persist in the press, and even abets it, only
testifies to the company's desperation.)

Hardly mentioned is the fact that gasoline goes bad after a few
months. If the Volt is used as intended, for daily trips of 40 miles
or less, the car's tank will have to be drained periodically and the
gas disposed of. [COMMENT: In a well-designed system, "stale gas"
doesn't become an issue for a long time--not having been to a gas
station for that six months to a year be a problem I'd love to have!]


"HOW TO FIX A FLAT:" Also today, Thomas Friedman devotes his NY Times
column http://www.nytimes.com/2008/11/12/opinion/12friedman.html to a
broad critique of the auto industry's failure to innovate for
decades. He focuses especially on GM for throwing "too much energy
into lobbying and maneuvering to protect its gas guzzlers;" for
ignoring national health insurance proposals that would have reduced
its benefits burdens. He notes that Vice Chairman Bob Lutz questioned
the value of hybrids for years and still doubts the reality of
climate change. He approvingly cites a proposal by former Wall Street
Journal Detroit Bureau Chief Paul Ingrassia for a government rescue
that would replace management, devalue the company's shares, and
renegotiate union and supplier contracts.
http://online.wsj.com/article/SB122628230122212449.html . Finally, he
says "Any car company that gets taxpayer money must demonstrate a
plan for transforming every vehicle in its fleet to a hybrid-electric
engine with flex-fuel capability, so its entire fleet can also run on
next generation cellulosic ethanol."

OUR RESPONSE TO FRIEDMAN'S LAST PROPOSAL: First, Toyota has already
said that it intends to offer hybrid versions of all of its cars.
Friedman taking that one big step further is well-justified, since
hybrid technologies have proven their value for every type of vehicle
-- who wouldn't want to eliminate idling, recapture braking energy
and use a more efficient electric motor rather than an engine poorly
sized for low-speed travel? And Toyota and Honda have already said
they've halved the incremental cost of hybrids and see cost parity in
the future (even without incentives).

Second, we're disappointed that Friedman didn't extend his ambitious
and worthy idea to include plug-in cars. We can forgive the omission,
given his long-time support for them. Back in June 2005, we posted,
"NYTimes: Thomas Friedman endorses plug-in hybrids." You'll find two
dozen Friedman clips at http://www.calcars.org/news-archive.html .
His passionate columns helped spur the Bush Administration's
recognition of PHEVS. You can see where he stands if you watch a
two-minute video at
<http://www.calcars.org/audio-video/doerr-friedman-22may06.html>http://www.calca\
rs.org/audio-video/doerr-friedman-22may06.html
from the May 2006 Charlie Rose show. His response when asked by
venture capitalist John Doerr to imagine a future world: "that would
be my dream for America. That will not only be a cleaner world, I
guarantee you, John: it will be a safer world -- if everyone is
driving a plug-in hybrid car that runs on flex-fuels." And finally,
he just gave a full-out endorsement in his new bestseller, "Hot, Flat
and Crowded," saying, "to get the most efficiency gains and to make
the Energy Internet-smart grid complete requires that one more big
piece of the puzzle be put into place -- electrifying transportation,
and moving as many cars, trucks, buses and trains away from
exclusively combustion engines and into plug-in electric hybrids or
plug-in all-electric cars." http://www.calcars.org/calcars-news/996.html


JOSEPH ROMM SUGGESTS AUTOMAKERS DROP 4-YEAR LAWSUITS ON EMISSIONS
RULES: Finally, at his Climate Progress Blog, Joseph Romm asks "Why
bail out the car companies when they bailed out on us?"
http://climateprogress.org/2008/11/12/why-bail-out-the-car-companies-when-they-b\
ailed-out-on-us/
and suggests readers sign the petition at "Bailout should end
Detroit's assault on state emission laws"
http://action.40mpg.org/campaign/bailout . In his piece today at
Salon, "Is Detroit worth saving? The U.S. is gung-ho on rescuing the
automakers. But the bailout better have major strings attached"
http://www.salon.com/env/feature/2008/11/12/barack_obama_detroit/
Romm endorses a transition "the car of the near-future:" the PHEV.

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Felix Kramer fkramer@...
Founder California Cars Initiative
http://www.calcars.org
http://www.calcars.org/news-archive.html
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