$5.00 gas: America’s downfall? I’m not a big fan of the new CAFE rules put forth by the Obama administration. First, I’m not quite sure that US automakers are capable of profitability in achieving these new rules. Second, I don’t think this CAFE rewrite goes far enough. For years I’ve asked numerous major auto executives from the Big 3, especially GM, why aren’t there more hybrid cars from US automakers? Why can’t US automakers sell such vehicles as foreign oil dependency fighters? Cheap gas and lack of profits has always been the answer. So, what’s changed? Will UAW concessions really make these vehicles suddenly much more profitable? Will CAFE force Americans to accept higher prices for achieving better fuel economy, especially if gas prices don’t rise significantly? I don’t know, but I’d place my bets on a much smaller US auto industry struggling for profitability for many, many years. And, that’s my optimistic scenario. I mean, what happens if gas spikes significantly in the next couple of years? They’ll have nothing to sell that offers any profitability. And, over the last few weeks, and especially the last few days, oil has again become a very interesting story. Whether its geopolitical worries, such as new Nigerian rebel action against oil interests, growing Chinese demand, or even something as simple as a US oil refinery fire, the volatility around oil prices is explosive. Yet, most of the world is in recession. Even without an economic recovery in much of the world’s economic powers, including the US, drastically rising oil prices are still a threat. Thus, America’s economic recovery is almost certain to coincide with a significant increase in energy prices, especially gas prices. The sooner gas prices force automakers, and American auto consumers, to realize that Obama’s CAFE rules should be viewed as child’s play – which is not Obama’s fault and he should be commended for his leadership – the sooner US automakers will realize that meeting CAFE won’t be enough. If America’s automakers are to lead the world into the future, they better blow these new CAFE rules away as soon as possible. Otherwise, let’s stop...

A mini minivan: As big as a Chinese hybrid gets? A blogger from China sent me his list of top ten Chinese EVs and hybrid vehicles, and the size of these vehicles really caught my attention. Most are very small, unlike most American hybrids – most of which are SUVs. Thus far, not one US automaker has yet taken on the Toyota Prius , or even the Honda Insight , and doing so might still be several years away. In fact, the Chinese might be just as close as the Big 3 to a quality Prius-contender. Soon, I have no doubt that Chinese automakers will be rolling out hundreds of thousands of hybrid cars for China, but refining these vehicles for the American market will take more time. Nonetheless, China seems quite primed to quickly enter the US market. And, since CAFE will require small, efficient, but expensive vehicles, China’s cheap manufacturing capabilities might be the key to success, as well as another major threat to US automaker viability. Here is the original post:  Chinese hybrids a big threat to America?

Larry Kudlow wonders, can hybrids drive profits to Detroit? “Gangster government gone green” stated CNBC host Larry Kudlow, a proud conservative capitalist and a Cadillac Escalade hybrid driver, about yesterday’s CAFE rule rewrite. Kudlow claimed that all of the bailout money spent on GM and Chrysler thus far will be eaten by taxpayers. Moreover despite UAW concessions, Kudlow wonders can small cars, clean diesels and hybrid vehicles return US automakers to North American profitability? I guess I doubt it. Americans have become so accustomed to buying not just more cars, but more car, than is actually needed thanks to cheap gas prices. More expensive, smaller and clean vehicles will just result in Americans buying less vehicles, won’t they? That will probably mean even more downsizing in the long run and more glut in the short term. Nonetheless, now that tax payers are part owners of Chrysler, GM, etc. shouldn’t we know where our money is going? Is hiding green taxes the same way we hide military taxes really the best answer? Inevitably, it doesn’t matter, but I still think that a gas tax was the most transparent, honest way to have approached this problem. Unfortunately, a “gangster government” does run America. But, that’s because we, the people, can’t handle the truth. Fortunately, however, at least this new government gang is a green gang. Continued here:  Gangster government gone green

The hybrid for all of us As I was watching the Lakers go down last night, commercials for both the Honda Insight and the new 2010 Toyota Prius aired within just a few minutes of each other. I don’t really like either commercial, but if I had to pick a winner, it would easily be the Prius commercial. Still, neither of these commercials entices much in terms of sizzle or steak. Perhaps these commercials resonate well with those already contemplating a hybrid vehicle purchase, but I seriously doubt either commercial will help convert new buyers towards these excellent hybrid vehicles . Obviously, both commercials are skewed towards the stereotypical treehugging crowd, but isn’t there also an opportunity for marketing these vehicles to those concerned about energy independence? Or is that too much of a stretch for foreign automakers? Original post:  Insight versus Prius: Commercials

Is China GM’s future The Chinese automarket is growing, fast. This year more cars might be sold in China than in America, yet the auto sales potential in China has barely been scratched. Today, GM is a strong player in China and its Buick brand is probably the hottest name in the Chinese auto market. Consequently, GM will eventually produce quite a few cars in China for the Chinese market, but they might also export some of those cars back to America. If GM made a top quality hybrid in China and exported it back to America, would it sell if priced competitively? Read the original: Would you buy a GM hybrid made in China?

Not cost-effective or profitable? Many years ago I wrote the best hybrid car was a plug-in hybrid car. Today, I’m not so sure. Without significantly higher gas prices Americans will not buy hybrid cars in numbers that finally revolutionize the US auto industry. If Americans won’t make the investment into today’s hybrid technology, why would anyone assume that Americans will invest in even more expensive plug-in hybrids and electric vehicles? Without much higher gas prices, Americans will not buy these vehicles, at least not enough of them to make these vehicles profitable for US automakers in the next decade, maybe even two. And, if American automakers cannot survive in much of North America making internal combustion vehicles, how are they going to survive making less profitable – if profitable at all – and significantly more expensive plug-in vehicles? Without $4.00 or $5.00 gas they won’t. They can’t. Ironically, if gas suddenly goes from $2.50 to $5.00, American consumers might still not buy these cars as the economy would be so devastated they probably couldn’t afford them regardless of gas prices. Even if they would buy them, American automakers are many, many years from selling such vehicles in numbers that would have any effect. Our pace towards change is simply too slow. So why not a smart gas tax that covers the costs of hybridization via tax credits from gas tax revenue, while making alternative fuels more cost-effective? Besides, if we’re going to save the US auto industry, shouldn’t we try to save it in a way that has some legs, some long term viability? Next quarters balance sheet can no longer be the metric for determining success. Nonetheless, is long term viability of the US auto industry possible without higher fuel prices? Otherwise, aren’t we just throwing good money after bad to delay the inevitable collapse? More:  Catch 22: Plug-ins and cheap gas

22 percent of Americans would buy a hybrid to help the environment Talk to most auto executives about fuel economy and most of them say the same thing. Without higher gas prices most Americans just don’t care. Cupholders are more important. Thus, many of these executives have claimed that without a gas tax, the idea of significantly increasing American fuel economy is a far-fetched idea. Unfortunately, a new Rasmussen poll has found that 81 percent of Americans are completely opposed to the idea of a gas tax. In fact, only 8 percent of Americans would support a gas tax and the rest are undecided. The poll also seems to suggest that most Americans will not buy hybrid cars until prices come down much further or gas prices rise significantly. More here: Americans overwhelmingly against gas tax

Buy American or eat your import? My father is a retired union worker. His entire life he’s bought nothing but Fords and he would never consider buying a foreign car. Thus, he doesn’t think much of my Toyota hybrid. However, despite the endless problems we had with almost every single Ford my father bought – although his recent Ford purchases have been significantly more reliable – I still considered a Ford for my last auto purchase. Unfortunately, other than SUVs that I don’t care for, Ford didn’t have an offering for my fuel efficient motives. Thus, I went with Toyota, again. In fact, I’ve never bought an American car, but I would. Today, “The Made In America” bus tour will kick off in Michigan to bring awareness to the plight of the US auto industry. Yet, I cannot help but wonder, how much FOREIGN oil will this American bus tour consume? Also, I can’t help but wonder why so many of these “Made in America” folks seem so indifferent to the foreign oil they guzzle in their American autos. Moreover, why can’t these “Made in America” people converge these two fronts of domestic autos and foreign oil? To me “Made in America to end Foreign Oil Dependency” could sell. Is it just me? Continued here:  Made in America to suck foreign oil

BYD Automotive is a favorite of Warren Buffett In April China sold 1.15 million autos, up some 25 percent from last April. Unbelievably, more cars might be sold in China this year than will be sold in America. Fortunately, for US automakers, brands like GM’s Buick are top sellers in this barely emerging automotive market, so China represents a huge opportunity for US automakers. Unfortunately, China also represents not just danger for America, but the Chinese automotive market could end being an outright threat to the US economy and its national security. For instance, last summer’s run up in gas prices was helped by Chinese demand for oil, which is obviously only going to grow, significantly. As America comes out of this recession, US demand for oil will increase. Eventually this demand will again squeeze the margins and guarantee that higher gas prices will be coupled with our economic recovery. Yet, higher gas prices might not even be the real threat. Recently, Warren Buffett became a significant investor in Chinese automaker BYD. Actually, BYD isn’t much of an automaker, it’s a battery maker. That is quickly changing, however, as the company is now building its future on battery powered vehicles: hybrid cars and other plug-in vehicles. In fact, Buffett believes that in just a decade or two BYD could be even bigger than Toyota. Certainly it is too early to predict how China will affect the world’s automotive market. Will China be America’s greatest automotive opportunity in decades, or a threat even far bigger than Japan ever presented? I guess we’ll see, but Buffett’s investments indicate that US automakers will soon be facing serious Chinese competition that will forever change the world’s automotive landscape. Read the original here:  Chinese auto sales: Opportunity, Danger or Threat?

Love it or hate it I’m a big fan of hybrid cars , obviously. Still, I think it is very important to address hybrid vehicle problems. Typically, most hybrid problems are not endemic to hybrids, per say, but shoddy manufacturing. Certainly, the weight of hybrid batteries coupled with low resistance tires has led to increased tire wire and decreased tire life for some hybrid owners. However, most hybrids, especially those built on second generation technology, have performed exceptionally reliably. Nonetheless, the Nissan Altima hybrid continues to surface as one hybrid that causes more problems than would seem normal. Revving, poor battery charging cycles, etc. continue to pop up. Today, an unhappy Altima hybrid owner complained about his Altima hybrid lemon . Dead battery, revving, engine replacements and poor dealer servicing – many of the normal Altima hybrid suspects. Why? Other Altima hybrid owners have been extremely happy with their hybrids, but the significant percentage of Altima hybrid owners with complaints seems to demonstrate that Nissan failed its Altima hybrid Q&A program – if it actually had one. While it’s bad enough that Nissan half-assed their Altima hybrid efforts, the dealer servicing complaints coupled with these problems are completely unacceptable. Perhaps not so ironically, Nissan has been a pooh-pooher of hybrids, but if Nissan cannot make consistently reliable hybrids, why should anyone believe they can make reliable electric vehicles? More hybrid reviews and testimonials . Read more from the original source:  Revving up anger: Nissan Altima hybrid problems

Why wasn’t it lithium? In 2010 Ford will roll out its all electric transit van. The next year a small EV will follow. However, less battery intensive lithium hybrids and plug-in hybrids won’t hit the market until 2012 under Ford’s current plans. Why? Ford claims their new lithium battery technology will offer 5 percent more power than NiMH. More important, however, their lithium batteries will be 30 percent smaller, 50 percent lighter and about 30 percent cheaper to manufacture than NiMH. Really? When? Because it’s obviously not today, otherwise Ford would have added this technology to the Fusion hybrid , especially since the Fusion hybrid is less battery intensive than an EV. Moreover, Ford is only going to make 25,000 of these hybrids per year. So, such an implementation would have been minor compared to 25,000 EVs per year. Yet, today, Ford doesn’t plan to roll out a lithium hybrid until 2012, even though it would make such hybrid vehicles more powerful and cheaper? Why? Many lithium experts have pointed out that hand producing lithium batteries for a handful of autos isn’t a problem, it’s cost-effectively mass-producing them in a way that guarantees absolute reliability for hundreds of thousands of vehicles that’s the real concern. If Ford couldn’t safely and cost-effectively mass manufacture its new lithium technology for just 25,000 hybrids – about 2,000 battery packs per month – how close can we really be to the lithium revolution? Read more:  Focus on Ford: What’s the real state of lithium?

Already a dead car walking? Wow. I guess headlines are the only thing that matters these days. Today, Newsweek has an article Why traditional hybrid cars are becoming obsolete . Why? The $80, 000 Fisker Karma plug-in hybrid and the $100,000 Tesla Roadster of course. Yet, according to the same article, without higher fuel prices, the gasoline engine might be around much longer than most would like. Huh? So that’s why traditional hybrid cars are going to become obsolete? OK. Newsweek also cites declining Toyota Prius sales. While true, before the 2010 Prius launches, about 60,000 – 70,000 of these vehicles will already have been presold. In fact, based on early demand, Toyota has already put plans in motion to increase yearly production to 500,000 cars per year. By 2015, GM – if all goes well – might be producing 100,000 Chevy Volts per year. Similarly, Nissan is hoping to produce 100,000 Cube EVs per year several years from now. Fisker is hoping to eventually produce 15,000 plug-in hybrids per year. In reality, by 2015, there might not be enough EVs produced yearly to replace even today’s Prius demand. Considering that Toyota and Honda are now betting big on hybrids, I guess they’ll be next in bankruptcy court? Continued here:  Traditional hybrids are becoming obsolete?

How much money does Honda lose on each hybrid? $0.00. That’s how much Honda loses on each hybrid it sells. In fact, the other day I read that both Honda and Toyota make about a $3,000 profit on each hybrid sold. Of course, that doesn’t include all R&D costs, especially on Honda’s hybrids since Honda hasn’t sold nearly as many hybrid cars as Toyota. Now that Toyota has sold well over a million hybrids, however, development costs have probably been recovered. Yet, not one US automaker has a solid Insight or Prius contender. When will they? Ever? Within the next five years I’d bet gas prices will be about $3.00 – $4.00 per gallon, a price that could make hybrid cars like the Insight and Prius two of the top selling vehicles in America. What will the Big 3 have? Original post: But hybrids aren’t profitable……

Do you have a 2008 Highlander hybrid? 39,100 Toyota Highlanders, including some hybrids, need to have an exhaust clamp repaired. Notices should be arriving in May, but if you bought your Highlander hybrid in 2008, you might want to give Toyota a buzz. Owners can call Toyota at 800-331-4331 or the NHTSA Vehicle Safety Hotline at 888-327-4236. See more here: Toyota Highlander hybrid recall