Cars for the future

In my engineering communications class I recently saw a presentation about hybrid cars. As the owner of a gas guzzling V8 SUV I will not try to convince anyone that I am overly worried about the environmental impact of our cars. However, I do find these hybrid cars very interesting from an engineering and economic perspective and I do believe that alternative energy cars are the future of the automotive industry.

His presentation was more concerned with the environmental impact of our increasing energy demands in the transportation sector. One of his solutions was to create a gas tax similar to those already in place in Europe that would double or triple the price of gas. At the price gas is currently at there is not an economic incentive to buy hybrid cars. Sure you get more miles to the gallon but hybrids on the average cost $3,000 more. Even if you drive 100,000 miles you will not make that back in saved gas money. However, if pump prices go up that closes the gap on the time it takes to recover that $3,000 investment.

This all sounds good in theory and my Business Law professor sent us an email earlier in the semester with a very similar solution. This plan is of good intentions but I don't believe it would work for practical purposes.

First, this administration could never implement a policy like this for two reasons. One, they are committed to providing people tax relief and this would be a hypocritical step backwards. Two, Bush is already viewed as not being sensitive enough to the needs of low to middle income families and doubling or tripling the price of gas would cream them. Not all people have the ability to go out and buy a new hybrid car just because legislation passed to make it nearly impossible to drive their current car. Yea, sure, they could take the bus but many cities in this country, and nearly all rural areas, do not have the setup to make this practical. There is a certain amount of freedom in owning a car and forcing people to ride the bus rids them of that.

Second, how would you implement this tax increase? Would it be a one time jump from currently around $2 to $4 or $6? Or would it be a gradual increase that would occur over time?

Again, the sudden jump would not only cream the low to middle income families but also the Automotive and Oil companies. Yes, car companies are slowly making the move to hybrid but the key word there is SLOWLY. The sudden jump would cause the small supply of hybrids out there to cost through the roof. The demand for regular cars currently in the development stages, release stages, and the thousands sitting around in lots waiting to be sold would take a huge hit. The tax increase on gas would most obviously hit oil companies the hardest. Two thirds of petroleum use is in transportation. The oil industry is the biggest industry in this country and in a recovering economy a hard hit to needy area is the last thing we need. Cutting jobs and revenues in oil and gas companies is not the answer.

So the best solution is a gradual tax increase on the price of gas, right? According to the presentation the average fuel economy of cars increased from 14.1 mpg in 1979 to 21.5 mpg in 1997. Since 1997 fuel economy has slowly declined to 20.8 mpg. From 1997 the average gas price increased from $1.16 to $1.89 in 2003 and on to the over two dollars now. Car companies are smart and they have been in business for a long time. They are going to give the consumers what they want. Since gas prices began skyrocketing the fuel efficiency of cars has gradually decreased and demand for inefficient SUV's has gone through the roof. Half of new cars bought now are SUV's. What this means to me is that slowly increasing prices at the pump do not make gas efficiency the determining factor in what car they buy. I don't see a slow tax increase changing buying habits unless they came out and said we will be gradually taxing gas until the cost is X by Y year. In this case people would have a time frame and could see where the prices were going. But, similar to the sudden increase, there would be a lot of public outcry against this and it would be political suicide for the politicians involved.

At the beginning I said I believed hybrid cars were the future. This conclusion is not as a result of the threat of a hands-on taxing program that expands the role of government in our every day lives. I believe this because hybrid cars are getting smarter. Honda did a disservice to all proponents of alternative fuel cars. They came out with the Honda Insight, which was one of the first hybrids on the road. The reason I call it a disservice: the car was WEIRD ( When people envisioned hybrid cars they envisioned people driving ugly tiny spaceship looking cars with the rear wheel half covered.

I read in Car and Driver that last year 40,000 hybrids sold and next year it will be around 90,000. The reason… hybrids are cool now. Not the hybrid under-the-hood part, but the looks part. They are coming out with normal looking cool cars in hybrid version. The Accord and many other sedans have hybrids. More importantly to me and many other car consumers, they now have hybrid SUVs. The Ford Escape, Lexus RX, even Chevy's Silverado have hybrids. The hybrid Tahoe comes out in 2007 and two other SUV hybrids are coming out next year. These hybrids will sell not because of gas prices but because they are cool cars that perform better. These hybrids provide better horsepower, better 0-60, better handling because of the weight of the battery in the floor board, better range(read less frequent fill ups), and most obviously better miles per gallon. A friend of mine, Mechanical Engineer, who graduated last May helped develop regenerative braking as part of his senior design project. This system uses the resistance provided by coiling the motor to brake and in turn braking charges the battery. Capturing this energy to use later is much more efficient than just lossing it to heat loss. Oh yea, one other tidbit about hybrids, they have better city mpg than highway.

Hold off on your tax hikes the revolution of the automotive industry will be here soon enough.



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