

Ford Transit Connect Electric  (Source: Ford Motor Company)










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RE: Luddites
By Yawgm0th on 2/10/2010 1:50:21 AM , Rating: 2
Its a ridiculous benchmark because hundred of thousands if not millions of cars are already selling for more then $37,500. I hope your not trying to claim that you can't sell a car for $37,500.
It's not ridiculous because tens of millions of cars sell in the $15K to $25K price range, compared to hundreds of thousands, maybe a few million in the $30K to $40K range.

Regardless, the cars in those range sell for luxury. Not frequently as fleet vehicles (not in the market for this article or cab companies or most sedan fleets). Even as fleet vehicles, 30% to 60% cost increase is not justifiable, period. For the consumer market, the $32,750 Volt is the only practical plug-in, but is out of the price range for the vast majority of consumers, and that's after a $7,500 tax incentive. It won't sell well because only rich environmentalists can buy it.

Your doctor friend is a good anecdote, but proves the pointlessness of anecdotes. He's one rather well-to-do person who doesn't represent a substantial portion of the country. Even if everyone making $100,000 went out and got a volt, we would be better off if everyone making less than $80,000 could go buy a hybrid. More fuel is saved. We're talking about 20-50% fuel savings for tens of millions of vehicles instead of the same percentage for a million or two. I don't feel the need to do any deep research on the exact numbers, because we're talking a whole order of magnitude here.

I am speaking in general terms, with this article as the catalyst for the conversation. I'm not trying to create a straw man at all. The vehicle described in this article will probably cost in the low 30s after a tax incentive. If the ICE alternative is in the low 20s, then it's not viable for fleet use or consumer use. End of story. This is true with the Volt as well, with some hybrids (Fusion), every Tesla, and will probably be true with Leaf.

I won't argue the principal that sometimes the government must create an artificial demand for a technology to get it developed, or even finance it directly. Obviously there are some great examples. The problem is that I DO believe plug-ins are a viable technology on their own with far less government financing than what we're seeing now. I don't believe throwing more money at this particular technology is going to make it viable any faster. Battery and plug-in technology is going to progress on a slow, almost predictable cycle, much like processors. Much like processors, throwing money at the research is going to have greatly diminishing returns past a certain point, and we're way past that point. The tech needs five or ten years to advance, and subsidizing relatively wealthy companies and individuals is not going to change that. It's not going to help the economy, and I've already pointed out how much more we could reduce fuel consumption and help the environment in doing so.

I don't know about others, but I would claim the technology isn't "ready" only in the sense of economic viability. If Ford can sell this thing en masse without a subsidy than I will eat my words. Chances are, though, that even with an outrageous subsidy it will get relatively small market share.


Also the government certainly has an interest in the development of transportation technologies and a reduction in the use of gasoline. There is already significant subsidy towards gasoline, such as tax breaks for oil companies, "defense" spending directed at the middle east and externalities like air pollution.
I agree with you. From an economics and environmental standpoint, the pollution from cars must be dealt with. But any economist will tell you there is a limit to how much you can spend on pollution control. To quote my professor from college, "Some pollution is good. You need to have some pollution". The amount we're spending now is getting to be too much, or at least it isn't spend effectively. We're trying to force a 2020 solution in 2010. Instead, this money could be used to subsidy hybrid cars and efficient diesels. If every middle class urban/suburban resident switches out their sedan, coupe, or SUV for a similar hybrid over then next ten years, the reduction in fuel consumption will be huge. Air quality would increase noticeably, and as some of those hybrids slowly transitioned into to plug-ins, we would be making an affordable, mass market, incremental change to electric vehicles. Forcing electric now is expensive and ineffective, and we'll see hybrid adoption rates suffer because of it.

