An OpEd
The real culprit in the emissions debate continues to be consumer
apathy.
https://www.designnews.com/electronics-test/op-ed-build-it-and-they-will-come-doesn-t-apply-evs/99265535458645
-----
Op-Ed: "Build It and They Will Come" Doesn’t Apply to EVs
The real culprit in the emissions debate continues to be consumer
apathy.
By:
Charles Murray
Electronics & Test
Automotive
April 27, 2018
The Trump Administration’s rollback of emission regulations may be the
auto industry’s raging debate of the moment, but the economic forces
underlying it are as old as the electric car itself.
If, by now, electric vehicles were selling the way they were supposed
to, Barack Obama’s 2009 mandate would look like pure genius. And Donald
Trump wouldn’t need to talk rollbacks.
You won’t hear that, of course, in any of the mountain of newspaper
editorials urging automakers to ignore the EPA’s new direction (here and
here and here). Most of the editorialists contend that the automakers
want the regulations. And they quote them as saying so. “We continue to
support increasing car standards through 2025 and we have not asked for
a rollback,” Ford Motor Co. is quoted as saying in numerous articles.
“Regardless of the standards, we remain committed to improving fuel
economy, reducing emissions, and an all-electric future,” General Motors
says.
Strange, then, that the Alliance of Automobile Manufacturers, which
represents Ford, General Motors, Toyota, Volkswagen, and eight more of
the world’s biggest automakers, takes such a contrary stance. On the day
of the EPA’s announcement, the Alliance called it “the right decision.”
“We appreciate that the Administration is working to find a way to both
increase fuel economy standards and keep new vehicles affordable to more
Americans,” the Alliance wrote in a press release.
To know what automakers are really thinking, it’s best to examine some
of the federal documentation. In the Mid-Term Evaluation Final
Determination, commenters referred to “flagging consumer demand” for
electric vehicles. The group Global Automakers—which includes such
members as Honda, Nissan, Kia, Hyundai, and Toyota—referred to a
“misalignment between the increasing stringency of the standards and the
decreasing demand for fuel efficiency.”
The looming 54.5 mpg goal
The crux of the argument lies in the estimates of what it will take to
reach the 54.5 mpg target. Under the Obama Administration, government
regulators estimated that manufacturers could hit the 2025 targets with
fleets that included 3% hybrids and 4% plug-ins. Automakers argued they
would need about five times that many. Even Nissan, which bravely rolled
out the Leaf EV in 2011, has challenged the government numbers. In a
comment, Nissan wrote, “Higher penetration of advanced technology
vehicles than originally estimated by EPA and NHTSA is needed to achieve
GHG (greenhouse gas) and CAFE (corporate average fuel economy) goals.”
The thought of building 35% electric strikes terror in the hearts of
automakers—especially now. In 2017, approximately 1% of the vehicles
sold in the US were plug-ins. About half of those were pure electric.
Building a high percentage of electrics and then having them sit unsold
is, understandably, a nightmare for manufacturers.
GM plans to roll out 20 new electric vehicles by 2023. (Image source:
General Motors)
None of this, of course, is taken into account when editorialists weigh
in. Absent from the newspaper discussions is any mention of cost-benefit
analysis. How, for example, does a 54.5-mpg mandate differ from, say, a
40-mpg mandate in tons of atmospheric CO2 emitted? Does 54.5 differ from
40-mpg in the effect on vehicle cost for the average consumer? Or from
45 mpg? We’re not told that.
In truth, most such editorial conclusions are reached on the basis of a
simple premise: Gasoline, dirty; electricity, clean. By logical
extension then, any and all proposals would seem eligible to solve the
problem—75 mpg, 100 mpg, or even a sweeping all-electric mandate.
But what automakers really want right now is help from the government in
selling electrified cars. They like the $7,500 federal tax credit. And
they like state support. As Nissan writes, “Continued governmental
efforts to expand the EV market are, thus, essential to complement the
efforts already in place by EV industry leaders such as Nissan.”
What they don’t want is a mandate to mass produce cars that consumers
still find too costly.
And, yes, cost matters hugely in this discussion. A case in point: A
recent Chicago Tribune review praised the Tesla Model 3, while
acknowledging that it cost $51,500, as tested. Fair enough. But would
the average American (household income of $59,000 a year) choose that
Model 3 over a Honda Accord, Toyota Camry, or Chevy Malibu that cost
$25,000? Even if you removed the frills, applied the tax credit, and
changed the differential to $7,000, would they buy the Model 3? Would
you?
“You can get people to pay more for more,” noted Brett Smith of the
Center for Automotive Research in a keynote speech at the recent
Advanced Design & Manufacturing Show. “But it’s hard to get people to
pay more for less.”
Automakers are nevertheless committed to electric cars. GM has said it
will roll out 20 new electric cars by 2023. Ford is investing $11
billion in 40 new electrified vehicles by 2022. Virtually every
manufacturer has made a major announcement about EVs in the past year.
But if statements from automotive umbrella organizations are an
indicator, manufacturers also want to see some consumer uptake. They
want demand to be more in sync with regulations. They want better
alignment.
In truth, this is as much a consumer problem as it is a political
dilemma. If electric cars were selling, this wild emotional argument
wouldn’t be happening.
-----
Len Moskowitz
_______________________________________________
UNSUBSCRIBE: http://www.evdl.org/help/index.html#usub
http://lists.evdl.org/listinfo.cgi/ev-evdl.org
Please discuss EV drag racing at NEDRA (http://groups.yahoo.com/group/NEDRA)
