America has a new President, Barack Obama, who has a very different set of ideals and views than those that have come before him. Weather you agree or disagree with him, he is our President, and as was his mantra throughout his election, change is on his agenda.
That change may extend into all facets of your life, including what you drive. President elect Obama has some very ambitious targets. His programs are, to date, a bit short on specifics, yet long on promise. One thing is for sure, the old wheels will undergo a bit of transformation in the coming 4 years if our new President has his way. Just how will those changes affect what you drive to work every day?
A brief glimpse at his agenda sheds some light on the subject (President Obama’s proposals in bold)–
• Increase Fuel Economy Standards.
Questions – Fuel economy standards are already set to increase substantially in the next revision of the CAFÉ standards that are due to phase in completely by 2020. The revised CAFÉ standards provide for an increase from the current 27.5 mpg to 35mpg. Is Obama proposing an acceleration, a further increase, or is he just referencing those standards already set to take affect?
Development lead times on vehicles currently 2 – 5 years. That is for vehicles using current technologies. A radical revision of fuel economy standards would require advanced technologies, and subsequently longer development times for vehicles using them.
Americans have shown a propensity to desire larger, safer, more practical (until you have to park them) vehicles. They have also demonstrated a willingness to pay the extra in fuel costs is takes to drive them up to a point. The point was exceeded about late June of this year as drivers fled large SUVs and pickups like voters running away from the Republican Party in November.
This increase in fuel economy will have a negative effect on tax revenue, as I discuss further below.
• Get 1 Million Plug-In Hybrid Cars on the Road by 2015.
This is an extremely ambitious target, especially given the current state of the automotive landscape. The first plug in hybrid on the horizon is the Chevy Volt, set to debut in 12 – 18 months. This should be followed in short order by the Toyota Prius plug in. If you’ve looked at these vehicles, you’ve found they are not inexpensive.
The Volt in particular is far out of reach of the average car buyer, who stands to never recover the $18,000 difference between that and the 4-cylinder Chevy Malibu (by most accounts a pretty nice car). The Malibu gets 25 mpg, so it isn’t really a gas guzzler for a car that comfortably seats 5 adults.
One will note that vehicles rushed through the engineering stage tend to exhibit more flaws, technological glitches and malfunctions than those that have a longer technological gestation period. That’s something to think about when having a target of 1 million such vehicles on the road in only 6 years.
• Create a New $7,000 Tax Credit for Purchasing Advanced Vehicles.
This would doubtlessly offset some of the budget crunch Americans will feel when purchasing the much more expensive advanced technology vehicles. It also brings up another question, to whit – where is the money for this going to come from? There are currently generous tax incentives for such purchases put into place by President Bush. These new ones proposed by Obama are about 90% higher that the existing tax credits. This will cost taxpayers quite a sum of money.
It will assist the development of some new technologies by increasing consumer demand, but at what cost? You could watch for a healthy Federal gas tax increase to both make advanced technology vehicles more attractive to drivers by increasing the price of fuel, and help fund the tax credits. Fuel has a relatively inelastic demand, so revenue tends to rise as tax levels increase.
Hybrid and other advanced, fuel efficient cars will also drain from the nations coffers in another way. Currently, roads are largely financed by users in the form of motor vehicle fuel taxes. That is basically fair. The more you drive, the more you pay, and the heavier and harder on the road your vehicle, the lower its fuel economy, and the more you pay.
President Obama will probably have to push for Congress to increase the Federal fuel tax rate in order to avoid a drop in aggregate motor fuel tax revenues. Many politicians are loathe to do this, especially after the high fuel prices the nation endured this summer. No matter how they feel, the politically astute among them are well aware how raising gas taxes looks when the next election rolls around.
High motor fuel taxes are not conducive to rebuilding the economy, as it costs businesses, and thus consumers, dearly. It will also cost jobs, because when they are confronted by price increases in one area, businesses look to cut costs in others. The largest cost component of almost every business is labor. That means it is also the most likely to be cut when other costs increase.
• Establish a National Low Carbon Fuel Standard.
• A “Use it or Lose It” Approach to Existing Oil and Gas Leases.
• Promote the Responsible Domestic Production of Oil and Natural Gas.
The extent of which this occurs will go a long way to determining three things; maintaining low fuel prices, national security due to increased supply reliability, and the reduction of our dependence on foreign oil.
In addition, does anyone think other areas of the world are actually more environmentally conscious than we are in the US when exploring for and extracting oil? That would mean that the more oil we pull out of the ground here at home, the better off the world is environmentally. In addition to the lower environmental cost of production, there is a lower environmental cost of transporting locally produced oil.
One more thing to examine is the tremendous number of different environmentally required gasoline blends currently in use throughout different areas of the United States. That incurs increased transportation costs, poses a greater environmental impact, and lowers delivery efficiency. It also drives up fuel prices and causes localized availability problems. This is one area that stands to be looked at and in the spirit of the new Obama administration, changed.
So, how will President Obama change what you drive? Who can tell for sure, but here’s what it could be like:
It will get much better fuel economy, possibly through much more advanced hybrid technology.
Power plant for the Obama car – A very small, algae-biodiesel fueled (this would help meet his targets for lower carbon emissions) turbo diesel that would run constantly at its most efficient RPM and be used only to charge batteries. In many cases it wouldn’t run at all and the car would be driven solely by its advanced electric motors. They would be used for greater efficiency and lower weight. Advanced technology batteries could be charged from a standard 220 or 110 volt wall socket if needed.
Weight is the enemy of fuel economy so look for advanced materials in everything from power window motors (rare earth magnets) to body panels (fiber composites). In addition, you’ll be leaving your boat at home, since vehicles large enough to tow them may be levied a special tax in order to help consumers decide not to drive them. Such a tax exists now, but isn’t applied to trucks and SUVs, only cars. This policy could change.
Look for tires and wheels to get lighter in an attempt to reduce rolling resistance and rotational inertia. This will help increase fuel economy, vehicle performance, and ride quality.
Cars will get smaller, but safety targets won’t, so look for advanced safety technologies to be used, as long they don’t substantially increase the weight of the vehicle. Radar and Lidar proximity sensors will be coupled with stability control, inertial sensors, and GPS systems to help avoid crashes.
Advanced materials will be required to maintain the structural integrity of the passenger safety cage, while reducing the size of heavy, energy absorbing crumple zones. The crash energy will still have to absorbed and dissipated before reaching the hapless passengers trapped inside the vehicle, or deaths and injuries will rise.
The light weight vehicles and high torque electric motors could give us greatly enhanced fuel economy with pretty spritely 0-40 times. This will be great fun around town, but it’s possible that the heavy hand of government knowing what’s good for us may step in to limit our fun – in the name of fuel economy, environmental responsibility, and safety, of course.
We will drive some advanced vehicles, but we’ll probably live in interesting times.