Adam Smith Killed The Electric Car

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Adam Smith Killed The Electric Car

Post by blood_donor » Mon Dec 31, 2007 12:13 am

I am an actual automotive engineer, and I have actually been involved in powertrain development.

There is no conspiracy. The oil companies are not bribing GM and Ford to avoid electric cars.

What keeps electric cars from being made is simple economics. People won't pay a price for an electric car which will generate a profit for the auto companies. Auto companies are in business to pay dividends, or in this day and age, to pay off their debts to their private equity masters.

People do not want to pay $30,000 for a tiny car which must be recharged for many hours after driving a mere 100 miles, at best.

People do not want to pay $30,000 for a car which has been optimized so brutally for efficiency that it has sub-par braking, cornering, and acceleration (see: Prius, Insight)

People especially don't want to pay $30,000 for a car which may be worthless in 10 years because the battery pack may cost $10,000 to replace.

The truth is, there will not be popular acceptance of all-electric vehicles, or even strong hybrid vehicles, until very powerful batteries get very light and very cheap. Unless there is a major cultural change, I don't expect there to be any high-volume demand for all electric cars for quite some time--say, 10 years or more.

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Post by Index Fan » Mon Dec 31, 2007 1:07 am

But conspiracy theories are so interesting ;)

It's similar thinking that leads some to blame auto makers for selling big vehicles such as SUVs. Americans tend to be bigger these days and like comfortable / more roomy vehicles and vote with their dollars and buy said vehicles. Blame them, not another conspiracy.
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Post by nisiprius » Mon Dec 31, 2007 7:58 am

It's not conspiracy, it's an example of "The Innovator's Dilemma," as in Christensen's book of the title.

People do want to buy cars like the EV-1. In fact there were waiting lists for them, and the people that leased them wanted to buy them, and GM refused to sell them to them. What would Adam Smith have thought of that?

If you read Christensen's book, he gives example after example of a repeating pattern... the best being his story of how five or six entire generations of disk drive manufacturers failed, always in the same way.

What happened each time was that the company had an established market. For that market, the new technology was unsuitable, because it initially could produce products that were overpriced and undercapacity. When people were making 8" disk drives, the company's big and most important customers were clamoring for bigger and bigger drives and lower and lower costs per megabyte.

Each time, there were engineers in the company that wanted to build smaller drives, and were shouted down. The smaller drives had lower capacity when the market seemed to be demanding higher capacity, and cost much more per megabyte.

Each time, engineers broke off from the company and started their own company making smaller disk drives, and not having any idea what the market was. And each time, once the drives were available, it turned out there was enough of a market to sustain a small company. 5-1/4" drives found a market in desktop PCs, 2-1/2" drives found a market in laptops, and so forth.

And, each time, as the technology found a market and matured over time and climbed the learning curve, the speeds and capacities of the smaller drives increased to the point where they started to eat more and more of the big-drive-companies' lunch.

You have an exactly similar situation with electric cars and Detroit is in the process of fumbling it in exactly the same kind of way. Electric cars do not have the same market as gasoline cars. The market is very speculative right now. Nobody knows who will buy these cars or how they will be used until there are a few on the market.

Once they exists and are being manufactured in reasonable quantity, you will see them all over the place... being used in obvious and nonobvious ways. For example, one can easily imagine a future in which the "average" family uses an electric car with a 100-mile range for most daily activity, and rents big gasoline cars for vacations and trips. You can't do this today because there isn't an appropriate rental market: the car rental companies are, surprise, oriented toward serving businesspeople on businesstrips and replacement transportation for people whose cars are in the shop, not for families who just need a big long-range car occasionally.

And once they exist they will improve and eat more and more of the gasoline-cars' lunch. Battery ranges will increase, charging stations will become ubiquitous. It's certainly no stretch to imagine outdoor AC outlets at each parking space in a Holiday Inn, or in a downtown parking lot, or anywhere where businessmen are willing to a make a fairly small investment to attracted customers with electric cars.

Adam Smith says this is all going to happen.

If you artificially define an electric car as being just like today's gasoline cars, then it can't happen, of course. If you declare that there's no market for an electric car that isn't just like today's gasoline cars, ditto. But there is a market already, it's just a small one.

As with the Toyota Prius, it certainly may take ten years for electric cars to become mainstream (i.e. start to eat noticeably into the sales of gasoline cars). The problem is that the companies that stand by the wayside and say "people don't want to buy these cars" instead of just building the things anyway and finding out how to design and build them and finding the market are going to experience terrible problems down the line.

I think that Ford, GM, and Chrysler may go the way of Control Data and Micropolis and Diablo.

Companies need to worry about profits and dividends, but they also need to worry about future profits and dividends.
Last edited by nisiprius on Mon Dec 31, 2007 8:07 am, edited 1 time in total.
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Post by grumel » Mon Dec 31, 2007 8:07 am

Whats the point of electric cars anyway - the electricity for them has to be produced somewhere, so overall the environmental balance is rather worse then better.

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Post by nisiprius » Mon Dec 31, 2007 8:14 am

grumel wrote:Whats the point of electric cars anyway - the electricity for them has to be produced somewhere, so overall the environmental balance is rather worse then better.
It's a marginal, incremental improvement, but overall an improvement, or so I've read. For one thing, electricity is a good "medium of exchange." You can't build a car with a fuel tank that will accept gasoline, natural gas, lumps of coal, or pellets of U-235, but you can build a car that will run off electricity generated in any of these ways.

You can't build a practical car that will run off a solar panel small enough to fit on the car, but you can have a big solar or wind or geothermal facility that generates electricity that cars can use.

Electric motors are cheap, powerful, and efficient, and it's possible that the environmental footprint needed to build such a car might be lower than that of a gasoline car.

Pollution control is expensive and complex, and it's possible that there may be environmental advantages in centralizing power generation instead of putting a complex powerplant into every vehicle. For example, there's no way a car can have a pipe running underground to sequester CO2.
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Post by Valuethinker » Mon Dec 31, 2007 9:52 am

grumel wrote:Whats the point of electric cars anyway - the electricity for them has to be produced somewhere, so overall the environmental balance is rather worse then better.
As Nisiprius points out, that is not necessarily true.

An Internal Combustion Engine is c. 28% efficient (from memory). And there is the cost of extracting and refining the oil, and getting into the gas tank*. It it's oil from Alberta Tar Sands, it is at least as dirty as coal (maybe more so) in terms of pollution.

A coal fired power plant is c. 32% efficient (some of the latest European and Japanese plants are nearly 40% efficient). Coal has to be extracted and transported, though. 8% is the usual assumption for transmission power loss. Coal is about twice as dirty as oil as a fuel. A gas fired power station is 57-58% efficient (in combined cycle operation) and gas is only about 2/3rds as dirty as oil.

A battery powered car will be more efficient than an ICE car, due to regenerative braking and better torque at low speeds and when accelerating (higher acceleration than an ICE car).

Now only about half of US electricity consumption comes from coal. That from gas or hydro or nuclear or wind is much much less polluting (down to zero).

In practice, if electric cars are recharged at night, they are radically less pollution creating than gasoline powered cars. This would also be true if there were widespread solar arrays, and cars recharged during the day.

The main problems are battery life and the ability to stand several thousand charging/ discharging cycles. There are not economical batteries capable of doing that, yet.

The other problem is performance at high speeds, but that is a relatively small amount of Vehicle Miles Travelled, and the US is the land of the 2+ cars/ household.

In practice, the next step will be plug in hybrid vehicles (PHBV) which can do 70+ mpg. Peugeot Citroen has a testbed 205 with diesel-electric, that can do 80mpg+.

* most petrol gets to petrol stations by truck. Which further complicates the picture.

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Post by Valuethinker » Mon Dec 31, 2007 9:55 am

nisiprius wrote:It's not conspiracy, it's an example of "The Innovator's Dilemma," as in Christensen's book of the title.
I wanted to congratulate you on such a simple and succinct post expressing such a powerful idea.

The Big 3 have been tenacious in their efforts to prevent change in automotive technology via more efficient power plants: the whole hydrogen thing was a complete distraction tactic, for example. By contrast, the Japanese, who are more forward thinking, have embraced a wave of change they can see coming. In a very European fashion, the European car makers have been reluctantly herded towards highly efficient diesel powerplants by government taxation policies.

Christensen is, interestingly enough, probably a friend of US politician Mitt Romney: Christensen taught at Harvard, and they are both Mormons, they both lived in Boston-- pretty sure they would have crossed paths.

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Post by blood_donor » Mon Dec 31, 2007 11:10 am

nisiprius wrote:
People do want to buy cars like the EV-1. In fact there were waiting lists for them, and the people that leased them wanted to buy them, and GM refused to sell them to them. What would Adam Smith have thought of that?
A *few* people want to by short range electric cars, and very few of them would pay the actual cost of the vehicle. The auto business is a volume driven business. To pay back the capital costs (in the billions of dollars) required to develop, certify, tool, manufacture, and distribute a new vehicle, you need a predictable volume at a predictable price. Anything less than about 50,000 units a year of a given model is iffy.

The #1 best selling vehicle in the U.S. is probably still the Ford F-150. 16MPG. The Chevrolet pickup and Dodge ram are also in the top 10.
Yes, Accord and Camry are on the list--and a large proportion of those are the thirstier V6's.

If people wanted higher fuel economy and lower carbon emissions, they could do it today. They could switch from large pickups to smaller cars, and V6 buyers could switch to I4s.

But the American car buying public does not want to drive mid-size cars powered by I4 engines. Even when gas costs $3/gallon.
You have an exactly similar situation with electric cars and Detroit is in the process of fumbling it in exactly the same kind of way. Electric cars do not have the same market as gasoline cars. The market is very speculative right now. Nobody knows who will buy these cars or how they will be used until there are a few on the market.
The automakers know what the consumer wants. They do lots of market research. Consumers want cars that are large, have strong acceleration,
are crash-proof, and have huge fuel economy. Historically, when asked to trade off, fuel economy gets traded first!

Automakers are large, hugely capital intensive enterprises. They have unions and retirees to feed. So it is no wonder that they are conservative--they need to invest in products that make money soon. Or else.

The problem with "build it and they will come" is that sometimes they don't come, and if you are wrong, you are in deep trouble. Toyota was able to sink billions of dollars into the Prius because they are making money all over the world, even by selling trucks and SUVs of their own. GM and Ford are not able to gamble too much as they are not in a financial position to do so easily.

Eventually, when the technology is there to make electric cars long range and affordable, and when the buying public is ready for the change, there will be high-volume development of electric cars.

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Post by Valuethinker » Mon Dec 31, 2007 11:20 am

blood_donor wrote:
nisiprius wrote:
People do want to buy cars like the EV-1. In fact there were waiting lists for them, and the people that leased them wanted to buy them, and GM refused to sell them to them. What would Adam Smith have thought of that?
A *few* people want to by short range electric cars, and very few of them would pay the actual cost of the vehicle. The auto business is a volume driven business. To pay back the capital costs (in the billions of dollars) required to develop, certify, tool, manufacture, and distribute a new vehicle, you need a predictable volume at a predictable price. Anything less than about 50,000 units a year of a given model is iffy.
I would have said it is much more than 50k a year.

Electric cars are all over London. They receive help from the City government (exemption from the 'congestion charge' the £10/day charge to drive into Central London). They cost about £8000.

However technically they are 'enclosed motorbikes' so the build cost is lower than otherwise (crash safety requirement is lessened, although to be fair, the possibility of a crash at greater than 30mph in Central London is very low, even 20mph isn't high during the working day).

The Innovator's Dilemma is key, though.

In 1978, you and I would have argued that given the costs of a mainframe computer ($5-10m) and the mission critical nature of the tasks they performed, the idea of a 'personal computer' that someone would use at home and would become critical to business was, quite frankly, silly. And what would people do with these alleged 'home computers'? Keep recipes (a serious suggestion at the time)?

Of course we, as the incumbent computer manufacturers, would have completely missed the plot. DEC did, in a board meeting when one was proposed.

Similarly in 1958 we would have noticed that the US consumer wanted ever bigger and faster and safer motor cars. Not small economical ones. Small cars would at most be 1-2% of the market. Datsun and Toyota made quirky, mechanically unreliable cars *with the steering wheels on the wrong side*. I mean, come on. Toyota's junk as the world's best selling car? Who did you think you were kidding?

There is a classic business school case study of how Honda decisively lost in competition with Harley and Triumph in the US motorcycle market. The company was on the point of pulling out. Then someone noticed that the small bikes they used around the warehouse in California kept getting 'borrowed' and never returned by employees, customers etc....

Coming out of the Emerging Markets are ever smaller and cheaper motor vehicles.

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Post by craigr » Mon Dec 31, 2007 11:25 am

I've always found that if you ask customers what they want today it won't be what they want in a year or two when you finally deliver the product.

Innovation comes from creating products nobody expects to work from people who are thinking about the future and not what a marketing focus group is telling them.

The american auto makers are a very strange lot. They'll spend millions designing and producing an ugly car like the Aztec but won't aggresively pursue alternatives with any vigor.

I don't think it's a conspiracy. I think it's just what happens in any large company.

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Post by nisiprius » Mon Dec 31, 2007 11:40 am

blood_donor wrote:
nisiprius wrote: People do want to buy cars like the EV-1. In fact there were waiting lists for them, and the people that leased them wanted to buy them, and GM refused to sell them to them. What would Adam Smith have thought of that?
A *few* people want to by short range electric cars, and very few of them would pay the actual cost of the vehicle.
Then GM should build a few of them and sell them to the few people that are willing to pay the actual cost of the vehicle. What's so hard about that?

Just how many Ford Shelby GT500s does Ford produce?
The auto business is a volume driven business. To pay back the capital costs (in the billions of dollars) required to develop, certify, tool, manufacture, and distribute a new vehicle, you need a predictable volume at a predictable price. Anything less than about 50,000 units a year of a given model is iffy.
According to that reasoning, Henry Ford should never have built the first Model T's, which were not initially a volume business (and came in all colors).
GM and Ford are not able to gamble too much as they are not in a financial position to do so easily.
Poor GM, only $200 billion in revenue.

Focussing only on what was making them the biggest profit today is what got them into that situation.

Yes, they have to "gamble" and they have to be right. A tall order, but that's supposed to be why CEO's like Rick Wagoner get the $8 million salaries.
Eventually, when the technology is there to make electric cars long range and affordable, and when the buying public is ready for the change, there will be high-volume development of electric cars.
Darn straight, and it looks to me as if it will be companies other than GM and Ford that will be doing it.

GM and Ford will make a half-hearted effort to catch up when that happens, but it will be other companies that know how to build them, will have gotten through the teething pains, have figured out who buys them and what they use them for, knows the market, has the lock on the production capacity of the companies that know how to build good batteries, has deals with the Holiday Inns of the world to install the patented electric sockets that only their cars can plug into etc. etc.
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Post by MossySF » Mon Dec 31, 2007 1:25 pm

My personal opinion is auto manufacturers set in their ways are in for a huge shock in the coming decade. The core of the electric car is the battery -- hell you might say it's just one big battery connected to wheels -- and battery development has been moving at Moore's Law speed ever since it got coupled up with laptops. 5 years ago, did anybody imagine something like the Tesla Roadster could be possible? Now think 5 years from now after the semi-conductor industry has new battery cells that hold 3 times more juice. Yank out the current battery in an EV and pop in a new one -- either a lighter one that's 1/3rd the size/weight/cost or something with 3x the charge. It's almost like buying a new car since the battery is the car!

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Post by Valuethinker » Mon Dec 31, 2007 1:33 pm

craigr wrote:I've always found that if you ask customers what they want today it won't be what they want in a year or two when you finally deliver the product.

Innovation comes from creating products nobody expects to work from people who are thinking about the future and not what a marketing focus group is telling them.
Good analysis.

I doubt any customer survey produced the iPod ('there are lots of MP3 players out there, who needs another?') let alone the Blackberry (it's a lousy phone, and it's a pain to type in your emails).
The american auto makers are a very strange lot. They'll spend millions designing and producing an ugly car like the Aztec but won't aggresively pursue alternatives with any vigor.

I don't think it's a conspiracy. I think it's just what happens in any large company.
The Japanese excel at incremental innovation both in production and product. Particularly Toyota, and to an extent Honda.

This means if there is a blinding leap, they might well miss it. For example they were caught out by some of the increased demand for customer safety in the 1990s. The world's leading high tech companies are still primarily American. But if it's something like cars, then they keep innovating towards a good mass market product.

First Generation Hybrids weren't great cars and sold badly. Second Generation Hybrids (now) are acceptable cars that are expensive but have conquered a sizeable niche. However in Europe they are not really competitive with lean diesel engines.

3rd Gen Hybrids, plug in hybrids, who knows?

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Post by craigr » Mon Dec 31, 2007 2:38 pm

Valuethinker wrote:
craigr wrote:I've always found that if you ask customers what they want today it won't be what they want in a year or two when you finally deliver the product.

Innovation comes from creating products nobody expects to work from people who are thinking about the future and not what a marketing focus group is telling them.
Good analysis.

I doubt any customer survey produced the iPod ('there are lots of MP3 players out there, who needs another?') let alone the Blackberry (it's a lousy phone, and it's a pain to type in your emails).
The problem is that consumers aren't good visionaries. If they were good visionaries they'd be running their own company making the product and not sitting around taking marketing surveys. :)

Most of the innovation you see around you are from people who were constantly shot down by the critics who didn't have the vision to see what the idea would do. Then again there are many flops that vanished without a trace too. If you don't try though then nothing is ever done. The issue is to let the market decide what to do.

Getting back to the car example. I just find it incredibly short-sighted to spend so much time and money delivering the same product year after year after year with only negligible technological innovation. The car you drive today was largely the same car from 20 years ago with a different paint job and tweaking of some body panels.

It seems that these companies can spend all this time and money doing the same thing over and over and over and over and over again and not try something more daring to see if it will fly. Is it really asking too much for a major auto company to spend, I don't know, 5% of their budget on truly ground breaking stuff and putting it out on the market to see if it works? Sure, some of the ideas will fail. But when you find one that sticks it's going to be a huge money maker. It's frustrating to see so many of these concept cars that seem to have some very good ideas never make it into the light of day.

Electic cars are coming. The battery technology is moving along very rapidly. I'd like to see a diesel/electric plug-in hybrid myself. For typical commutes the engine wouldn't even run. I could then charge the car using off-peak electrical rates for much less than you can buy gas.

EDIT: One thing to answer another poster about electric cars and pollution:

Electric cars are always going to be cleaner even if they use a dirty fuel like coal or gas. That's because you can implement pollution controls at a relatively small number of power plants instead of worrying about millions of individual tail pipes. Think of all the poorly maintained cars on the road and the pollution they generate. All of that goes out the window if you're using electric cars. You can put scrubbers and emissions controls right at the power plant and not worry about every yahoo yanking out their catalytic converter, burning oil, engine tweaking, not caring, etc. after the emissions inspection is passed.

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Post by nisiprius » Mon Dec 31, 2007 3:43 pm

blood_donor wrote:The problem with "build it and they will come" is that sometimes they don't come, and if you are wrong, you are in deep trouble.
You're not in deep trouble if your revenues are $200 billion and you spent $100 million building it.
craigr wrote:There's no getting around it that GM screwed up big time with the electric car. They could have locked up the entire market with their intellectual property by this point. The amount of capital it would have required for them to maintain a single line of electric vehicles would have been a pittance compared to what they could have brought in going forward.
The big question is whether GM is serious about the Chevy Volt or not.

It bothers me terribly that they are still calling it a "concept car." Nevertheless, they have set a very firm expectation for it to be on the market by 2010.

I am cynical enough to think that it is empty smoke and mirrors and that the launch date will recede at a rate of about one year per year.

But I hope I'm wrong, and if I'm wrong I'll certainly have to take back my words. And probably buy a Chevy Volt as my next car, assuming that Consumer Reports doesn't find anything terribly wrong with it.
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Post by craigr » Mon Dec 31, 2007 3:59 pm

Nisiprius,

I deleted my post as you were responding. I agree with you that the american car companies have made some serious blunders by not being more aggressive in their innovation. You can go bust just as fast by not improving as you can by trying something new.

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Post by gkaplan » Mon Dec 31, 2007 4:06 pm

Don't be so down on American automobile manufacturers. After all, they gave us cars with big fins.
Gordon

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Post by Valuethinker » Mon Dec 31, 2007 6:31 pm

gkaplan wrote:Don't be so down on American automobile manufacturers. After all, they gave us cars with big fins.
It's an extraordinary story of 'going wrong'.

From market dominance to near collapse in 40 years.

It's not as if they can't run good car companies: Ford of Europe and GM of Europe both make good cars and have credible market shares.

I suspect some deadly combination of arrogance, management incompetence, lack of vision (perhaps compounded by the fact that they were situated in the heart of middle America, selling the same cars to the same people), union issues, and the diabolical nature of the American healthcare system.

http://www.gladwell.com/2006/2006_08_28_a_risk.html
General Motors, by American standards, has an old workforce: its average worker is much older than, say, the average worker at Google. That has an immediate effect: health-care costs are a linear function of age. The average cost of health insurance for an employee between the ages of thirty-five and thirty-nine is $3,759 a year, and for someone between the ages of sixty and sixty-four it is $7,622. This goes a long way toward explaining why G.M. has an estimated sixty-two billion dollars in health-care liabilities. The current arrangement discourages employers from hiring or retaining older workers.
Last year, G.M. covered the costs of its four hundred and fifty-three thousand retirees and their dependents with the revenue from 4.5 million cars and trucks. How is G.M. better off covering the costs of four hundred and eighty-eighty thousand dependents with the revenue from, say, 4.2 million cars and trucks?
Wilbur Ross, who made a fortune restructuring the steel industry, has opined that American car companies are competitive, once shed of their pension and healthcare liabilities.
When Bethlehem Steel filed for bankruptcy, it owed about four billion dollars to its pension plan, and had another three billion dollars in unmet health-care obligations. Two years later, in 2003, the pension fund was terminated and handed over to the federal government's Pension Benefit Guaranty Corporation. The assets of the company—Sparrows Point and a handful of other steel mills in the Midwest—were sold to the New York-based investor Wilbur Ross.

Ross acted quickly. He set up a small trust fund to help defray Bethlehem's unmet retiree health-care costs, cut a deal with the union to streamline work rules, put in place a new 401(k) savings plan—and then started over. The new Bethlehem Steel had a dependency ratio of 0 to 1. Within about six months, it was profitable. The main problem with the American steel business wasn't the steel business, Ross showed. It was all the things that had nothing to do with the steel business.

Not long ago, Ross sat in his sparse midtown office and explained what he had learned from his rescue of Bethlehem....

Ross isn't a fan of old-style pensions, because they make it impossible to run a company efficiently. "When a company gets in trouble and restructures," he said, those underfunded pension funds "will eat it alive." And how much sense does employer-provided health insurance make? Bethlehem made promises to its employees, years ago, to give them medical insurance in exchange for their labor, and when the company ran into trouble those promises simply evaporated. "Every country against which we compete has universal health care," he said. "That means we probably face a fifteen-per-cent cost disadvantage versus foreigners for no other reason than historical accident. . . . The randomness of our system is just not going to work."
Government policy also probably played a role. In other countries, reducing petrol consumption has been an explicit national goal: hence more efficient car designs and engines had to be developed to respond to high gasoline prices.

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Post by Valuethinker » Mon Dec 31, 2007 6:34 pm

gkaplan wrote:Don't be so down on American automobile manufacturers. After all, they gave us cars with big fins.
Another argument I have heard, which ties in with what Nisiprius is saying about 'The Innovator's Dilemma' runs like this:

- GM's real customers are its dealer network. Now GM dealers are selling to the people they have always sold to-- for want of a better expression, middle Americans. If they weren't seeing young customers, or not winning new customers, they weren't seeing it: there were always lots of eager Chevy Suburban buyers on the doorstep, anxious to take the car lease (which was always more profitable for the dealer than the car itself).

So if your customer is your dealer network, then you are also captive to that network, which won't push new, smaller cars or 'conquest' cars, or sell cars to people who pay cash, or who buy economical Japanese cars.

They had to build Saturn as an entirely separate entity. It had fantastic customer loyalty. But it never really took off.

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Post by Valuethinker » Mon Dec 31, 2007 6:41 pm

nisiprius wrote: The big question is whether GM is serious about the Chevy Volt or not.

It bothers me terribly that they are still calling it a "concept car." Nevertheless, they have set a very firm expectation for it to be on the market by 2010.
.
What Toyota says is that it cannot source batteries that are robust enough to take the several thousand recharging cycles. ie Toyota is sceptical that a Volt is possible.

I remember that Studebaker - Packard came out with the Lark in 1960, I think. It was in many ways years ahead of its time: an economical compact car of the kind the American car industry was dying for in the 1970s.

http://en.wikipedia.org/wiki/Studebaker_Lark

(they launched a leading edge sports car, the Avanti, with a fibreglass body

http://en.wikipedia.org/wiki/Studebaker_Avanti )

The Lark became the best selling compact car (from memory) in the year it was launched.

But it wasn't enough to save Studebaker: they ceased car production at South Bend Indiana in 1964. In many ways, their cars were, even 15 years later, as good as or superior to what the Big 3 (+AMC) were producing then.

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Murray Boyd
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poor Adam Smith

Post by Murray Boyd » Mon Dec 31, 2007 7:05 pm

Poor Adam Smith! He's been reduced to a mere symbol. Best to leave him out of it.

PS: there's a whole blog devoted to rescuing him from that sad fate:

http://www.adamsmithslostlegacy.com/BlogBlog.htm

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Post by grumel » Mon Dec 31, 2007 7:08 pm

It's not as if they can't run good car companies: Ford of Europe and GM of Europe both make good cars and have credible market shares.
And credible losses since 10 years :lol:. Ford and Opel are doing pretty bad.

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Post by Raybo » Mon Dec 31, 2007 9:47 pm

I can't tell you how tired I am of hearing lumbering dino-corporations tell me that what I want is not feasible. I've heard this about solar energy, organic farming, recycling, and, now, electric cars. I'm sure you all can name a few as well.

I also love the way that this pronouncement is phrased. "People won't pay a price for an electric car which will generate a profit for the auto companies." This then gets qualified with "The truth is, there will not be popular acceptance of <b>all-electric</b> vehicles" (my emphasis). Which is it or are these conflated in your mind.

If GM doesn't believe that Americans want to buy electric cars, then they can leave the market to those "foolish" foreigners who will "lose their shirts" by developing cars people don't want. In fact, this strategy worked so well when GM tried it in the 70s (when Americans wouldn't buy high-mileage compact cars) I am not surprised that they are betting the company on it again.

GM and its American brethren haven't been innovators for a long time. They only made airbags standard when it became clear that everyone wanted one. I would bet that GM fought that law, too, on the idea that people wouldn't pay for airbags. Further, I would guess that GM now makes a tidy profit on it's airbag equipped cars.

I don't want to see GM close down and its attendant loss of thousands (it not millions) of jobs. However, I won't hold my breath waiting for innovation from those crack GM engineers who keep telling me what isn't possible while, at the same time, licensing technology from others who seem able to produce those same innovations.

What's more, the next time I buy a car (next 5 years, I would guess), you can rest assured that I won't start at my local GM dealer who won't be able to show me a car that goes 20 (electric) miles before needing to burn gas.

Ray
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Post by Index Fan » Tue Jan 01, 2008 1:06 am

We have no shortage of experts on this board- by all means, invent a better mousetrap and go at it :)
"Optimum est pati quod emendare non possis." | -Seneca

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Post by MossySF » Tue Jan 01, 2008 1:42 pm

Index Fan wrote:We have no shortage of experts on this board- by all means, invent a better mousetrap and go at it :)
Who says we can't? I've been looking at buying a Prius and getting the plugin modification done. From the pricing and specs, an 8K upgrade (done by a pro) will let me drive under 35mph driving using only the electric motor. This would entirely eliminate my gas bill since my commute is all urban stop-and-go traffic. My rough estimates say the electric bill for charging this up at night is about $100/yr. Add 1 or 2 fillups per year for the occasional highway jaunt produces a total gas+energy bill of $200/yr.

Now I will admit the ROI for this modification isn't so hot when you consider the marginal change over the initial hybrid choice. For my driving patterns, just picking a hybrid over a similar-sized, similar-equipted car is about a 25% ROI. The 8K plugin mod taken alone returns 3.5%. Waiting for Moore's Law to decrease the cost to 4K by the time the warranty on the car runs out is the more optimal plan.

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Post by nisiprius » Tue Jan 01, 2008 3:10 pm

Raybo wrote:I can't tell you how tired I am of hearing lumbering dino-corporations tell me that what I want is not feasible. I've heard this about solar energy, organic farming, recycling, and, now, electric cars. I'm sure you all can name a few as well.
We bought a Honda Civic in the late 1970s. The name "Civic" is, I believe, a play on CVCC engine technology which promotes more complete combustion.

At the time, Congress was working on proposed emissions standards, and U. S. automakers were testifying under oath that there was no available technology that could meet those standards... even though we had just purchased a car that actually met them!
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Post by Valuethinker » Tue Jan 01, 2008 4:04 pm

grumel wrote:
It's not as if they can't run good car companies: Ford of Europe and GM of Europe both make good cars and have credible market shares.
And credible losses since 10 years :lol:. Ford and Opel are doing pretty bad.
I think they are both profitable?

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Post by ataloss » Tue Jan 01, 2008 5:18 pm

actually the first civic was built in 1972 and the cvcc came along in 1975. I could use an electric car. I live close to work (5 miles) and can go < 7000 miles per year (using wife's car for longer distances) I'd be interested in a Volt if it is ever made.

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Post by nisiprius » Tue Jan 01, 2008 6:34 pm

MossySF wrote:
Index Fan wrote:We have no shortage of experts on this board- by all means, invent a better mousetrap and go at it :)
Who says we can't? I've been looking at buying a Prius and getting the plugin modification done.
I can't think of any reason at all why Toyota wouldn't offer a plug-in option for a Prius other than safety concerns.

What kind of battery technology does this modification use? Just yesterday, I think it was, the TSA announced that they won't allow people to put lithium-ion batteries in checked baggage for fear of their catching fire while in the cargo hold. I've seen very impressive videos online of just what it looks like when a laptop battery catches fire.
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Post by blood_donor » Tue Jan 01, 2008 6:54 pm

As you guys can imagine, the liability exposure of auto companies is huge. Also, consumers expect a level of reliability from cars that is extreme compared to other household gadgets.

Whatever modifications are desired, the results have to be reliable in all kinds of environments (-20F to 120F, for example) over a large number of miles and warmup-cooldown cycles.

It isn't trivial. That's why the aftermarket skunksworks that are working on plug-in-ifying the Priuses are on their own, with no warranty from Toyota.
nisiprius wrote:
MossySF wrote:
Index Fan wrote:We have no shortage of experts on this board- by all means, invent a better mousetrap and go at it :)
Who says we can't? I've been looking at buying a Prius and getting the plugin modification done.
I can't think of any reason at all why Toyota wouldn't offer a plug-in option for a Prius other than safety concerns.

What kind of battery technology does this modification use? Just yesterday, I think it was, the TSA announced that they won't allow people to put lithium-ion batteries in checked baggage for fear of their catching fire while in the cargo hold. I've seen very impressive videos online of just what it looks like when a laptop battery catches fire.

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Post by MossySF » Tue Jan 01, 2008 6:56 pm

nisiprius wrote:What kind of battery technology does this modification use?
Some of the plugin conversions use Li-ion -- others use NiMh and NiZn. The Li-ion conversions are the most expensive but also are the lightest, have most range. The 8K upgrade I'm considering uses NiMh and gives you a range of 8 miles running on just battery at under 35mph. For 15K, Plugin Conversions will triple the battery pack to a range of 24 miles -- while that's a bigger bang for the buck, I don't need 24 miles.

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Post by downshiftme » Tue Jan 01, 2008 8:23 pm

Just saw a Chevy Malibu ad. The tag line was "like the Accord.... But from GM"

With that kind of "me too" mindset, I would be surprised to see much innovation from a company that thinks that's a good image for them.

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Post by heyyou » Tue Jan 01, 2008 9:15 pm

The car market is not a monolith. Frequent new car buyers likely purchase different types of vehicles than we geezers who buy for durablility. Since the best selling new vehicles have been mentioned, consider the used vehicles that hold their value the best. Few of those are Detroit made. What about people who only trade every 5-10 years? They may want an electric car but won't be the first adaptors due to low frequency.

The electric market will not start big but will seldom shrink. Honda Civics are much larger now, but they still have a market segment. Electrics will too. From here out, Americans will follow the Japanese and European example of expensive fuel. We have been there before, in the 1970's. Fuel efficient cars will became more attractive. The American car market is changing whether Detroit does or not.
Joe

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Post by tetractys » Tue Jan 01, 2008 9:41 pm

Don't know about the rest of the country, but around Puget Sound electric cars and bikes are becoming pretty popular. Many people are building their own electric cars. Several old Beatles and Super Beatles in my neighborhood alone have been converted. You'd never know unless you looked under the hood or saw one silently swoosh by. Electric cars are here, and the numbers are increasing rapidly.

Also it could be that mass transit will evolve, at least in part, from large buses and trains carrying many people, into many little electrics, each carrying only a few people, having high flexibility in destination, and with little or no waiting time--thousands of public pods zipping all about.

I imagine the large auto and fossil fuel companies are in the business of slowing this down somewhat in order to control their profits, and their self proclaimed territory, for as long as possible. And of course their workforce would be the first in line to be bought. So as always, and as pointed out above, the grass roots must take the lead.

Tet

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Post by Valuethinker » Wed Jan 02, 2008 2:15 am

nisiprius wrote:
MossySF wrote:
Index Fan wrote:We have no shortage of experts on this board- by all means, invent a better mousetrap and go at it :)
Who says we can't? I've been looking at buying a Prius and getting the plugin modification done.
I can't think of any reason at all why Toyota wouldn't offer a plug-in option for a Prius other than safety concerns.
Toyota's official position is that they cannot guarantee the reliability of the battery pack over that many charge-discharge cycles ie that battery technology is not good enough.

What kind of battery technology does this modification use? Just yesterday, I think it was, the TSA announced that they won't allow people to put lithium-ion batteries in checked baggage for fear of their catching fire while in the cargo hold. I've seen very impressive videos online of just what it looks like when a laptop battery catches fire.
That was a Dell laptop, I think. But a number of manufacturers were affected.

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Post by nisiprius » Wed Jan 02, 2008 11:43 am

For what it's worth, The Register has a relevant article : The Electric Car Conspiracy That Never Was. For those not familiar with the Register, everything in it has an opinionated twist and it specializes in snarky but interesting/amusing critiques of tech topics.

Obviously, as you can tell from my postings above, I don't agree with the article, but I thought it was interesting nonetheless.
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Strange

Post by robertts12 » Wed Jan 02, 2008 1:37 pm

If the risk of lease or sell those electric cars to customers was too high, why didn't GM and other automakers allow the employees to use those cars free of cost instead of spend money to destroy them?

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Re: Strange

Post by tetractys » Wed Jan 02, 2008 11:15 pm

robertts12 wrote:If the risk of lease or sell those electric cars to customers was too high, why didn't GM and other automakers allow the employees to use those cars free of cost instead of spend money to destroy them?
Recall risk?

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Post by timid investor » Tue Feb 12, 2008 8:20 pm

How much lead is needed for electric car batteries?

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Post by prius04 » Wed Feb 13, 2008 2:52 am

timid investor wrote:How much lead is needed for electric car batteries?
The hybrid (traction) battery in the Prius is a Nickel Metal Hydride (NiMH) battery.

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Re: Adam Smith Killed The Electric Car

Post by prius04 » Wed Feb 13, 2008 3:07 am

blood_donor wrote:People do not want to pay $30,000 for a car which has been optimized so brutally for efficiency that it has sub-par braking, cornering, and acceleration (see: Prius, Insight)
Ignoring the other issues, people already have paid a premium for such a car and continue to do so. When the 04 MY Prius was introduced, waiting lists (even at full MSRP) were a mile long and delivery generally took 6 months or longer. At the time, a loaded 04 was around $25k yet some people were willing to pay anywhere from $2-4k **above** MSRP in order to circumvent the lengthy delivery time (a number of somewhat greedy dealers took advantage of the short supply).

With respect to the other issues, my Prius brakes and handles about as well as any vehicle I've ever driven and acceleration is more than adequate.
blood_donor wrote:People especially don't want to pay $30,000 for a car which may be worthless in 10 years because the battery pack may cost $10,000 to replace.
Your stated cost, in the case of the Prius, is probably about double the actual cost. Regardless, a number of owners have actually used their cars as taxicabs and have not had to replace their hybrid batteries even after 250k miles.

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Re: Adam Smith Killed The Electric Car

Post by timid investor » Wed Feb 13, 2008 8:10 am

prius04 wrote:
blood_donor wrote:People do not want to pay $30,000 for a car which has been optimized so brutally for efficiency that it has sub-par braking, cornering, and acceleration (see: Prius, Insight)
Ignoring the other issues, people already have paid a premium for such a car and continue to do so. When the 04 MY Prius was introduced, waiting lists (even at full MSRP) were a mile long and delivery generally took 6 months or longer. At the time, a loaded 04 was around $25k yet some people were willing to pay anywhere from $2-4k **above** MSRP in order to circumvent the lengthy delivery time (a number of somewhat greedy dealers took advantage of the short supply).
Greedy dealers :roll: , oh puhleeze that's how things are settled when supply is low and demand high.

My take is people just put a higher value on feeling good about the environment or fuel consumption savings.

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