Escape from Automotive Reality

September 4, 2001 • Commentary

In his bestseller, Earth in the Balance, Al Gore proposed a “Global Marshall Plan” of environmental initiatives. He got his way with one, ultimately called the “Partnership for a New Generation of Vehicles” (PNGV), which began in 1993. That “plan” has chewed up $1.5 billion of taxpayer dollars, mainly in pursuit of a hybrid gas‐​electric 80mpg family car. In mid‐​August, the National Academy of Sciences announced that the 80mpg car isn’t economically viable.

But that apparently hasn’t killed the PNGV, which was designed as a financial and technological assistance program for Ford, GM, and Chrysler (now Daimler‐​Chrysler). Now, despite the facts, the Bush administration is pushing the PNGV boondoggle even further down the road to nowhere.

Some people saw this coming. Last year, Rep. John Sununu (R-NH) tried to kill PNGV. For his efforts, he is now the target of a TV campaign sponsored by the Sierra Club and the other fat cats of Big Enviro.

What the Academy found — — which they could have learned by reading Consumer Reports — — is that the much‐​vaunted hybrid automobile technology, which cleverly combines gas and electric motors with “regenerative” braking (turning the electric motors into generators and recharging their batteries), really doesn’t buy that many mpgs unless the car is unusually driven.

Consumer Reports compared Toyota’s hybrid Prius with its conventional Echo. Prius has been around (in Japan) since 1997, and Echo is an economized version. A base Echo sells for $10,525, and a Prius for $20,520. The difference in miles per gallon found by CR’s drivers? Three miles per gallon (41 vs. 38).

Is that all you get for your money? CR also tested the Honda’s hybrid Insight, another $20,000 machine, and got 51mpg. It seats two and weighs 1820 lbs. Testers at Edmunds​.com got the same, after over a year of ownership. Total U.S. sales in its 18‐​month history are a miserable 7,500 units.

These “mass market” mpgs are lower than what you find on “enthusiast” Web sites. That’s because those intrigued by the technology (like this driver) do their best to see what it can get. In fact, you can get much more mpg out of both conventional and hybrid cars if you try. When we look at this subset, Prius owners average around 45mpg and Insighters around 62 (mine shows 69.7). But this group is much more obsessive about mileage than, say, SUV owners.

So if you’re an average Joe driver, it’s pretty simple. Would you pay twice as much for a car that gets you three more miles per gallon?

Of course not. But the hybrids are chic and politically correct. And no American auto company needs a bit of PC more than Ford. So, after helping to spend our $1.5 billion in the PNGV, they announced last week that they’re going to stuff hybrid technology made by Toyota (!) in their Escape SUV. That’s gratitude to us taxpayers for you.

How much gas will this save? Consumer Reports got 17 mpg out of their Escape. Analogizing to the Echo‐​Prius comparison, expect an 8 percent increase in fuel economy for average Joes, or about 1.4 mpg. For this saving of about $100 in gas a year, you’ll pay a premium of several thousand dollars, because Toyota’s not going to give away this technology to Ford. In fact, this is where they will recoup some of their substantial Prius losses.

Ford’s position is all emissions and mirrors. They know it’s not going to sell well in the United States, just like the other hybrids. According to Aisin AW, of Takefu, Japan — — 40 percent owned by Toyota and the supplier of Toyota’s (and now Ford’s) hybrid technology — — they expect to produce about 15,000 units for Ford. Given that not all of these are going to be sold in the United States, that looks like about 12,000 vehicles. This equals the total annual sales for the Prius is about 2.5 times the annual sales of the Insight, and is about what Honda expects when it puts its hybrid technology in the four‐​passenger Civic next spring. Don’t expect a lot of advertising, either; the more hybrids that each of these companies sell, the more they lose. A reasonable guess is that Honda has dropped $80 million on the Insight, and Toyota even more on the Prius. Ford won’t make money either using Toyota technology.

So there’s little demand for the hybrids and the PNGV pie‐​in‐​the‐​sky doesn’t work. This is why Congressman Sununu did what he did; it seems that logic and political incorrectness run in his family. Meanwhile, the Bush administration now proposes that PNGV live on, by cramming taxpayer‐​subsidized hybrid technology into — — you guessed it — — SUV’s like the Escape.

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