7/5/2013 9:45 PM ET|
Alt-fuel cars hit America's on-ramp
The number of vehicles in the US powered by something other than plain-old gasoline is still small, but growing steadily.
American drivers, meet the 4.2%.
That's the share of the 14.44 million cars sold in 2012 that had either hybrid, pure electric or clean-burning diesel engines, according to HybridCars.com and Baum & Associates. Yes, it's still fewer than one in every 20 cars -- which makes the furor over The New York Times' Tesla (TSLA) test drive all the more puzzling.
But make no mistake -- that number is steadily rising, with help from both automakers and government incentives.
The Energy Information Administration at the Department of Energy notes that more than 12 million alternative-fuel vehicles were on American roads in 2011. That includes 10 million ethanol/flex-fuel vehicles and 2.1 million gas/diesel-electric hybrids. This alt-fuel fleet is part of the reason the U.S. imported just 41% of its oil in the first five months of 2013, according to DOE, down from 65% in 2005. Alt-fuel cars alone can't drive America to its long-sought goal of energy independence, but they can bring it closer.
Overall, they're still a pittance compared to the 210 million conventional-fuel vehicles driving around, but the EIA expects the alt-fuel contingent to grow to 15 million by year-end. While cars that, theoretically, can handle an E85 ethanol blend (15% gasoline, 85% ethanol) still make up the majority of those gains, the number of electric-gas hybrid cars is set to double by 2017, with the number of plug-in hybrids and plug-in electric cars also expected to rise dramatically.
Longer-term, the number of hybrids and plug-ins traversing the U.S. is expected to rise 23.2% and 17.9%, respectively, by 2040.
But the current class of alternatives to straight gas-powered engines is likely to get a lot larger. The EIA envisions a future in which vehicles using gasoline, methanol and hydrogen fuel cells share the road with vehicles that run on natural gas and propane fuel blends. That means the ranks of gasoline-powered cars will increase only 0.5% by 2040, with conventional light truck sales stagnating over the same period.
However, this also supposes a future in which the average mileage for a gas-powered car surges to 39 miles per gallon for hulking utility vehicles and 54 mpg for subcompacts, while hybrids range from 52-75 mpg (gas-electric) and 61-98 mpg (plug-ins). For the sake of comparison, the most efficient gas-electric hybrid on the road today -- Toyota's (TM) Prius C -- currently manages the 51 miles per gallon that the EIA expects of large hybrid SUVs and vans in 2040.
This also assumes U.S. car buyers will stop freaking out long enough to buy in. Although marketing firm Mintel says alt-fuel vehicle sales grew more than 70% last year and it expects hybrid and electric car sales alone to increase 14% in 2013, buyers' fears are still stifling sales.
A Mintel survey found that 34% consumers ages 25 to 34 think that "it is easy to make back the extra money spent on a hybrid car in savings at the pump," despite evidence to the contrary. But "the 'live for today' mentality that prompted the rise of SUVs has disappeared," says Mintel analyst Colin Bird. "Consumers today demand products that promise protection and durability." When Americans prize longevity and efficiency over sheer size and brute force, that favors alternative-fuel vehicles.
The electric sockets on a Ford (F) Fusion Energi, General Motors (GM) Chevy Volt and Prius plug-in still make consumers nervous, however, with 87% worrying how long their battery will hold a charge, 86% fearing they won't be able to find a charging station once they leave home and 85% nervous that their car will take too long to recharge, according to Mintel.
Most people still have one key issue with alt-fuel vehicles even though they've been around for more than a decade: price. Mintel found that the average consumer is willing to spend $2,000 more to upgrade from a conventional car to an electric-only version of the same car. The problem is that plug-in hybrids and electric cars cost between $10,000 and $20,000 more than their conventional counterparts, and so far the plug-in hybrids don't offer enough nonelectric mpg, while the electric cars don't offer enough range or speedy recharging options to make the switch worthwhile.
Although enough Americans have made the jump to alt-fuel vehicles in the last decade to raise the category's market share from less than 0.5% to 4.2%, the cost of that change is proving prohibitive for all but a few automakers. Toyota, for example, still holds a 67% share of the U.S. hybrid market largely because it can keep a Prius' base price below $25,000. Ford, whose hybrid share is little more than 15%, is starting to get the picture and offering its C-Max and Fusion hybrids at around the same price.
Both federal and state agencies are trying to goose the market by pointing buyers toward laws and incentives that cut the cost a bit, but government investment in the auto industry has been a sore spot of late. As Chrysler introduces a diesel-powered Jeep Cherokee this year and GM offers a diesel Chevrolet Cruze, some car buyers are still irate about the government bailout money they received a few years back to keep afloat. While some of Tesla's New York Times controversy was tied to the electric car company's own government backing, electric carmakers like Fisker and Coda that have sputtered despite receiving federal funds are also coming under scrutiny.
Is it still energy "independence" if that new energy source is being subsidized? Considering how much cash the federal government has thrown at the automakers regardless of the fuel source they use, maybe it is. And if alt-fuel cars can just maintain their momentum, they'll earn their independence from Uncle Sam's allowance.
This article is part of an MSN Money special report on America's quest for energy independence. Up next: 12 weird energy sources that could change the world.
More from MSN Money:
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Just once, I'd like to see an article that looks at the "big picture". There is a big push toward pure electric cars without considering the long term consequences. These cars use about one-third the electricity of a typical household. If just 20% of the new cars produced in the future were to be electric, that would be the equivalent of more than one million new houses every year. We do not currently, nor are we planning, new generating capacity to cover this.
In other words, the same politicians pushing "green" cars are the same ones squashing new electrical generating plants. The end result will be rapidly rising electrical rates for everybody and a rapidly declining pump price for gasoline. Stick with your gas powered cars until America gets smart enough to elect competent politicians, including Presidents. I have nothing against alternate energy, but we do not now have the political leadership to manage a change of this magnitude.
Automotive writers are usually concerned about our choosing this model or that model of car.
Those of us living in the real world know that the cost of living is rising even if the federal government won't admit it (and keeps telling us how inflation is either non-existent, tame or good for us). It isn't just the price of gasoline. The cost of owning a car or truck includes the following:
4) annual registration
5) smog testing
It is possible to spend several thousands of dollars per year on vehicle ownership.
The price of a new vehicle is becoming prohibitive for more and more Americans. Even a tiny Smart For Two costs $18k. Used cars sold by new car dealerships start around $10k and go up from there.
If you are faced with cutting costs for yourself and/or your family, you may have to confront the issue of how many cars you can still afford to own or what quality of car you can afford to own, or even whether or not you can continue to own a car!
Some Americans have been encouraged by the government via General Motors to buy new vehicles that they cannot afford on variable interest rate loans. With interest rates rising, now, there is going to be widespread defaults by new car buyers.
Forget that hybrid! Forget that plug-in electric! You could be commuting on an old, overcrowded city bus!
In 2007, the U.S. consumed 20,680 thousand-barrels per day of total petroleum products including crude oil. By 2012, this had dropped to 18,555 thousand-barrels per day, about a 10% drop.
Imported crude oil was 10,031 thousand-barrels per day in 2007. By 2012, this was 8491 thousand-barrels per day, about a 15% drop.
However, in 2007, I remember paying $2.99.9/gal for gasoline. In 2012, it was more like $3.99.9/gal.
Lower demand did not bring us consistently lower prices. This is because the dollar has been losing value. Beware of the Consumer Price Index. Its formula is manipulated by the Commerce Dept to display consistently sunny-looking inflation figures. Anybody who does his/her own shopping knows that the cost of living is rising, in spite of what the government and so-called economists tell us!
While having less imported crude oil, and in general, lower trade deficit ought to be desirable, the Federal Reserve Bank has already poisoned the proverbial well. You see, when the trade deficit comes down, the excess dollars created by the Fed and dumped on other countries via the trade deficit COMES BACK to the U.S. to drive up prices here.
Expect to pay more for energy even as we use less of it.
In the 90s, I remember the local utility promoting natural gas as a motor fuel. The same convenience as LPG with the added benefit of being able to re-fuel from the natural gas supply at your house.
20 years later, gas prices still spike regularly due to lack of refinery capacity and we're building natural gas liquification facilities to export our natural gas. And don't get me started on how much cleaner natural gas would be while we're perfecting wind, solar and geothermal.
What idiots we are to put up with this kind of manipulation!
Including flex-fuel? That's absurd! E85 costs 80-90%of unleaded gasoline and produces 55% of the energy...like anybody actually uses it?? For a while E85 (corn/ethanol boondoggle) was even higher than gasoline, at least in Colorado.
If the demand for gasoline goes down, then not only do emissions go down, but the demand for crude oil imported from Evil Religion countries will go down as well. That's good for the USA, good for Israel and good for the human race. [Of course it's bad for the Evil Religion, but less oil revenue means less money to spend on weapons, terrorist training centres and terrorist activities, and that's good for everyone.]
I recently bought a Nissan Leaf (through my business) and it's fantastic. Now I can drive wherever I need to go, spend nothing on fuel, and smile thinking that my car isn't spewing out toxic emissions and less of my money is going to support terrorism. And before you go labeling me an elitist liberal, I'll have you know that I think veganism isn't healthy in the long term, I've never met a plate of Memphis style BBQ ribs I didn't like, I think global warming is backed by research of dubious scientific merit, I vote no on every pot legalisation measure that comes up, Fox News dominates my household, I was a Tory before I left England and I've voted Republican in every election since I became a US citizen.
The solution might be nuclear, but it's an unpopular option and it ignores the oil companies and the big money payoffs they have invested in our political system for long term protection.
Solar? Hard to tax the sun.
Alcohol? there goes the price of corn and sugar.
I got it. How about natural gas? We have plenty of it, and the greedy oil companies can still be in charge of it assuming they are not SO greedy as to spoil that option too.
I bought a Civic Hybrid new 10 years ago, and everybody claimed I was nuts for paying extra. Since that time, gasoline prices have more than doubled. If you're willing to hold your vehicle for a long period of time the numbers really do work out. If you're the type to want something different after a few years, you'll be unlikely to have made up the premium.
I'm just starting to consider making a change since plugin hybrids are hitting the market. Part of my delay in buying is knowing costs are still falling, and there are more options each model year. I'm thinking the C-max Energi, but would probably opt for a Fusion Energi if I could get it at the same price. What I really want is a plugin that uses CNG as the range extension fuel so I could avoid direct consumtion of fossil fuels using CNG from digester gas...
The current power grid can hold a complete change over to electric. Mostly because of charging at night. Electric cars are much more efficient at converting btu's to locomotion. Gasoline cars are abut 12.5% efficient while an electric car is 90% efficient and a coal powered power plant is 80%, so the overall efficiency is somewhere around 70% plus. And coal btu's are $1.5 per mmbtu, while gasoline btu's are $35.50 (at $3.70 per gallon) per mmbtu. So driving a gasoline care costs at least 20 times more per mile.
And only one moving part. In industry all you see is electric motors because of this energy cost difference.
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