Archive for Car and Fuel
Eco-grading for cars has dealers crying foul immediately
Posted by: | CommentsFollowing on from yesterday’s story about the proposed environmental grading stickers that may be added to new vehicles in 2012, the first complaints from the automobile industry are already being registered. As I wrote yesterday the proposal is for a grading system based upon emissions, vehicle range, fuel economy and annual cost of operations. At this point the idea remains a joint proposal from the Environmental Protection Agency and the Department of Transport, although not confirmed dealers have been quick to respond in a negative fashion. The grading system would simply bring the US auto industry in line with what is already happening in Japan and Europe and yet the response to the proposed change has caused some immediate panic from car dealerships .
The knee-jerk reaction appears to be driven by the fact that only a few cars (typically electric or hybrid vehicles) would receive a grade above a ‘B’ with the A+ designation reserved exclusively for electric vehicles. A dealer in Massachusetts feels the information will cause confusion and lost sales for his dealership:
“Anything that’s not an A is bad, right? It’s misleading to the consumer. I could be so customer a D (rated vehicle) but if you are driving mostly on the highway it could be an A”
A second dealer agreed and suggested that the car industry should receive support from the government in terms of stimulating sales as opposed to devising new environmental labels:
“I think it’s foolish and more government intervention where it doesn’t need to be, people aren’t idiots”
While I do understand car dealers may not be very responsive to change, I think the key message is being entirely missed. The idea and value of the labeling (which admittedly is very large and bold) is to heighten public awareness about fuel economy and environmental impact, the playing field will be level in terms of evaluation for each individual vehicle and the final decision naturally will rest with the consumer. What I feel is probably causing the reaction is the perceived stringency of the grading system, where previously miles per gallon or kilometers per litre were the only shared information in an immediate fashion now a consumer will see an overall environmental rating based upon emissions, vehicle range and running costs. If anything it will move the understanding of vehicle impact to a better place in the public forum, consumers will still shop for specific vehicles based upon their needs but when the final comparison is made between cars the relative eco-friendly aspects will be considered in the buyer’s equation. Surely that is a good thing?
Perhaps car dealers should be looking internally as to how the manufacturers themselves can develop vehicles which receive higher grades rather than immediately crying foul and saying sales will be impacted. If sales are indeed impacted it will primarily be for vehicles that perhaps need a full redesign.
Eco-grading labels for new cars in 2012?
Posted by: | CommentsIt might seem too obvious to even be necessary or you may argue that anybody who watches the news or reads it occasionally is more than aware of the need for more environmentally friendly cars. In essence that’s true but nevertheless the US government might be adding an eco-grading system for all new vehicles that are placed on the market starting in 2012. It’s not a bad idea and at least takes away from the dealer hype or any risk of misinformation. All consumers should know the overall environmental rating for a new car purchase via a scale that is not biased toward a particular manufacturer or vehicle type but will truly be able to compare apples with apples or if the mileage is really bad lemons with lemons.
The Chevy Volt which we’ve discussed at some length looks set to corner the electric market in 2012 and from their website I wanted to share the proposed new vehicle credentials that will appear on all new cars in showrooms and lots throughout the country, however I don’t see a grade on this example but I assume it to be an A+. I think the idea looks pretty useful and really does focus on a few critical areas; annual fuel costs, range of the vehicle, emissions from the vehicle. The combination of these three factors will allow the buyer to make more rational and informed decisions when shopping for cars especially when considering the lifespan of the vehicle and the environmental impact of owning it. There is also something to be said for seeing in black and white (and green) the annual fuel cost savings which when married to the emissions statistics should add even more heightened appeal to certain specific cars.
The labeling system is being proposed as a joint collaboration between the Transportation Department and the Environmental Protection Agency. Each passenger car would receive a grade between an A+ and a D with the grading based upon the factors I’ve outlined above. The initial reports state that only electric cars would be eligible for an A+ rating while certain plug-in hybrid cars could receive a classification as high as and A. The information is certainly more useful than the current MPG designations for urban and highway driving which only allow a certain level of insight to the vehicles green performance. It is expected that the traditional family car would receive a grade of B or C under the proposed standards, according to the EPA the primary goal is to simplify the evaluation process for environmental standards so that consumers can readily acquire the information they need to make an easier and more informed decision about their new car.
Hopefully the market itself will pay as much attention to this labeling system if it becomes a reality as they do when looking at video screens, stereo systems and trunk space when they go shopping for a new car. I also think the idea is long overdue and can only enhance the appeal of the more fuel-efficient vehicles that the market so desperately needs. I’m tempted to speak about the anticipated spike in fuel prices that experts are forecasting for 2013 but I’ll save that for another post. We’ll be watching to see if this gets approved as ideally it shall.
The ‘Nissan Leaf’ is creating a charge in the electric car market
Posted by: | CommentsI’m always keen to learn the latest developments in electric vehicles and as we’ve spotlighted in the past the auto industry seems to be setting their initial sights on lower range urban commuter designated vehicles. Until the technology is both further refined and more cost effective, the opportunity for a car with the range for a days long distance driving (300 miles / 500 km) may still be 5-10 years down the road. While such designs are apparently plausible at present the cost of the fuel cells and related technology would make purchase prices too high to launch on a competitive market. Hence hybrid vehicles look set to fill the transitional phase of a gas/fuel cell alternative.
The better news is that lower range urban cars can be cost effective and mass produced in the very near future and the Nissan Leaf looks set to be one of the forerunners in this market. Nissan have debuted the car via their website and are now taking advance orders for delivery in 2011 and 2012. While the cost seems a little high you really need to look at the longer term environmental and fuel cost savings. The car is set to retail at around $33,000 but alternate fuel tax rebates will bring the costs down to nearer $26,000. That would still be $7,000-8,000 above what you might expect to pay for a similar vehicle with the same specs, manufacturer and ‘rating’. At that point a little math is worthwhile, the average driver in the US is estimated to drive 12,000 miles per year. Over the course of 4 years (a typical vehicle loan) those 48,000 miles might require 1846 gallons of gas based on 26mpg. Fuel prices in the US have ranged betweeen $2.40 and $4.50 per gallon the last three years but we’ll take an aggregate cost of $3.40 - fuel savings alone over the four years would be in the vicinity $6,000 which essentially covers the additional cost for the vehicle initially. Of course there are the environmental benefits which in my mind are impossible to associate a cost with but removing traditional vehicles from the roads over the coming years is of paramount importance.
The Nissan Leaf, full roll out by 2012
As for the Nissan Leaf, its a functional urban/suburban car with a limited range. If your daily commute is 8 miles each way it still leaves you plenty of room for evening events, shopping and local trips. The vehicle is driven by an electric motor which is powered by a lithium-ion battery pack which will raise 107 horsepower. The car has a listed range of 100 miles per full recharge. Nissan make it clear that the range will change plus/minus up to 35% based on many variables. The traffic you encounter, the loaded weight of the vehicle , weather and the way you drive will each impact the range of the Leaf. The dashboard is packed with information providing readouts that will assist the driver in getting maximum range and performance from the current charge of the vehicle. While that sounds like a lot of extra work I’m sure after a week or two of driving it would all become second nature. The car offers eco-mode which will improve the range of the car but limit some of the performance (standard performance is 0-60mph in 6 seconds).
Nissan advise that a potential buyer should know that frequent adverse weather conditions such as extreme heat or cold and wind will impact the car’s range to a notable extent, naturally this is a consideration that also should be made. Estimated costs for a full home recharging are around $2.50-$3.00 per session which seems reasonable. We may still be 5-10 years away from public recharging stations being available on a widespread basis although states such as California are looking to speed up that process significantly. At present over 15,000 pre-orders have been made for the Nissan Leaf and I’d bank that many more to follow.
Fleet vehicles only making gradual moves toward renewable energy
Posted by: | CommentsWhen looking at the changing face of the automobile industry and designs to move drivers toward a greater ratio of hybrid or electric vehicles we tend to consider what consumers will purchase and select. While naturally consumer purchases of cars and trucks dominates the market, fleet vehicles for government, businesses, car rental companies and service/delivery trucks and vans also corner a sizable portion of what is on our roads. In the US and Canada around 20% of all vehicles on the road fall into the ‘fleet’ category, estimates would place that total at somewhere around 60 million cars and trucks in total.
With that in mind a recent poll amongst decision makers at fleet operations makes for rather grim reading. Over 60% of 100 private and government fleets answered that they were ‘not likely’ to be purchasing a vehicle that fell into the categories of ‘plug-in hybrid or all electric’. The reasons given were incomplete data to assess operating costs, pricing, resale and fuel efficiency. The message I take from that is two fold, the industry needs to make rapid improvements in terms of educating their potential buyers and providing the specifications that address these concerns; and companies/government need to be making a more positive step in helping to demonstrate more environmental commitments with regards to their vehicle programs. Fleet vehicles are important purchases, the cars are in high demand and use and need replacing and maintenance on a consistent basis. The automobile industry needs to take an active role with government and fleet management to increase the market share of alternate fuel vehicles in a way that makes sense for both manufacturer and fleets. Chelsea Mathis, an environmental consultant within the strategic consulting services group of Northbrook, IL-based fleet leasing and management firm Donlen added more insight:
“Without the specifics, fleets are concerned about the potential for these vehicles to meet application demands, including driving range, battery and fuel efficiency, Companies would have to establish a policy around vehicle charging including identifying charging locations, potentially investing in the construction of charging stations on location, determining after-hour charging policies, and the charging level of stations available—i.e. will it take 20 minutes or one hour to complete?”
When a survey such as this does actually pinpoint the reasons why these purchases are not likely it gives car makers the advantage of knowing what needs to be addressed. Changing a way of thinking and thus purchasing will take a lot of added information to eliminate the unknowns for those who make the purchasing decisions. Production also needs to increase, if a hypothetical delivery company such as Fedex were to make a four year commitment to change all of their vehicles to electric there is no evidence that the industry is ready to support such demand. Fedex for example currently operate 71,000 vehicles within the international fleet.
Electric vehicles seems to be the most likely to gain long term support - if the vehicle range and performance can meet the needs of a business it
becomes an ideal fit as each vehicle could then be recharged at the end of each session at the main garage/depot location. Ideally we would be further along the path to fleet vehicles becoming electric but we are now at the point where evaluation and sample testing is the most likely next step to be considered by fleet management companies. I think one of the major automakers has the potential to gain a huge advantage in being the most ambitious in creating plans that lend themselves to real market enivoronments and testing as soon as possible. Purpose built or modified vehicles such as mail trucks, delivery vans and taxis all stand to be huge markets and opportunities for an industry that states it is in the process of reinventing itself. The proof may be in what changes can be made to fleet operations over the next few years. One fleet I routinely find fascination with due to the immense size of the operation is the US Postal Service who are actually making healthy progress. Of the 215,000 USPS vehicles in operation some 44,000 are currently designated as alternate fuel vehicles - that constitutes 20% at present, which is above the industry norm.