Diatribes of Jay

This is a blog of essays on public policy. It shuns ideology and applies facts, logic and math to economic, social and political problems. It has a subject-matter index, a list of recent posts, and permalinks at the ends of posts. Comments are moderated and may take time to appear. Note: Profile updated 4/7/12

22 October 2007

Why I’ll Buy a Volt

[Electric-car fanciers: Leaf or Volt? I’m now undecided. Here’s why.]

[For a discussion of how electric cars can help resolve our energy crisis and improve national security, click here.]

I am nearing retirement, and I’m a native-born American. But I’ve never owned a new American car.

During my student days, I bought used American cars because they were cheap and easy to fix. As soon as I had the money to buy a new car, I started buying Japanese. I never looked back.

Why didn’t I “buy American”? Because Japanese cars were better. They were not just a little better. Like Mary Poppins, they were demonstrably and substantially better in every way.

As readers of this blog can infer, I have very high standards. I care about excellence, and I care about details. The Japanese cars had better fit and finish. They had better performance, maneuverability and fuel economy. They had more modern styling. They even had shorter steering radii and better visibility from the cockpit. They were more comfortable to sit in, and their repair record was incomparably better. Enormous differences in engineering and quality lasted over decades and were consistent from year to year. American cars were clunkers in comparison.

In the early eighties, a colleague chastised me for failing to support American workers by buying American cars. I didn’t understand why I should. I work hard to earn my money. I’m not a person whose car is a statement of personality and status, eager to be seduced by crude size, weight and power. I wanted something that was engineered well, built well, designed to last and felt good to drive. Isn’t free and informed consumer choice what capitalism is all about?

I also have a weakness for innovation. Throughout my entire adult life American cars have been the antithesis of innovation. Our car companies resisted afterburners to reduce pollution. They ignored the trend toward smaller, lighter, more maneuverable cars. They missed the recent trend toward hybrids by most of a decade. The last significant American advance in engines that I can remember was Chrysler’s “hemi” cylinder head, which I believe dates back to the 1960s.

In contrast, Japanese car companies did what Yankee ingenuity was supposed to do. They took risks and actually brought new products to market. Mazda introduced the Wankel engine in the early seventies, and Toyota introduced the hybrid early in the twenty-first century. No American car company in my lifetime had introduced any innovation as radical. The nation that invented everything from the transistor to the laser and gene splicing, and that put men on the Moon, has a dud for an auto industry.

GM once developed prototypes for an electric car called the EV-1. But GM famously put the design on the shelf, bought up existing models, and sent them to the shredder. So much for innovation, American style.

So imagine my surprise recently when I read about GM’s new plans. It promises to build and sell a car with a small gasoline engine and big batteries that can commute to and from work on electricity alone. You could charge this car from the power grid through an ordinary electric outlet in your garage. GM plans to call it, appropriately, the Chevy “Volt.”

As I’ve hinted on this blog, I’ve wanted to buy a Prius hybrid for several years, in part to reward Toyota’s pathbreaking innovation. But for various reasons, including energy independence and fear of fuel shortages, I was hoping to get a commercial model that I could charge up from the grid.

Now GM promises that the Volt will go 40 miles on a charge (enough for most of us to get to work and back), travel at normal highway speeds, and plug in to normal electrical outlets. Abandoning the “not invented here” syndrome that has left the American auto industry in the technological dust, GM is waiting for two independent companies to develop the necessary batteries. It promises to bring the Volt to market by 2010, with working prototypes next year or in 2009.

Depending on how you power it, driving a Volt will strike a blow for energy independence and national security. If you run it mostly off the local power grid, you’ll most likely be driving on North American coal, which provides a little more than 50% of our nation’s electric power. Virtually none of our electric power comes from oil, so you won’t be using Mideast oil.

Only if you run the car mostly on gasoline will you be using the 60% that comes from Mideast oil, or increasing the demand for Mideast oil by increasing demand for oil generally (after all, oil is fungible). If your area offers a convenient source of E85, a blend of 85% ethanol and 15% gasoline, you can run the Volt on that, decreasing your use of oil by 85% while still running off the grid.

You won’t help cut global warming if you run the Volt on gasoline or on electric power derived from burning coal. You’ll do a bit better if your local power comes from natural gas, which is more “carbon neutral” than coal. But you can be completely carbon neutral if your local power comes from nuclear, hydroelectric, wind, geothermal or other renewable sources of electricity. If you use E85 to fuel the beast, your carbon neutrality will be 85%.

From the consumer’s perspective, one of the best things about the Volt is flexibility in powering it. With the Middle East in perpetual instability and war brewing between Turkey and Kurdistan, depending on oil for transportation is no more sensible for the consumer than it is for our nation as a whole. The Volt will offer a solution for that vulnerability; even the Prius doesn’t yet.

So I’m pleased to see at least one American car company return to Yankee ingenuity and innovation, which also helps address energy indepedence and global warming. So pleased am I that I will make GM a public pledge. If it can produce the Volt on time, by 2010, if the price is under $35,000, and if the car gets reasonable reviews from consumer and auto magazines, I will buy one.

It doesn’t have to get rave reviews; all it has to do is avoid being characterized as a clunker. If GM can achieve that modest goal, I will proudly drive a Volt as an emblem of restored American innovation in cars, after half a century of industrial stagnation.

Quick Comparison Chart

Following is a quick comparison of salient promised specifications for a Chevy Volt with typical specifications for a currently available comparable small car:

Small Car
Chevy Volt
Energy Cost per Mile12 cents
x gal/25 mi)
1.26 cents
(0.2 Kwh/mi
x 6.3 cents/Kwh)
Range on Gasoline300 miles
(12 gals x 25 mi/gal)
600-700 miles
Range off GasolineNone40 miles
Nominal Top Speed120 mph120 mph
(0-60 mph)
9.5 sec8 - 8.5 sec
Charging TimeN/A6 - 6.5 hours
Engine NoiseMedium to NoisyQuiet
Garage PollutionStinkyNone
Energy SourceMideast OilNorth Am. Coal
or Greener Source

The Volt will still have a typical American car’s lousy steering radius, 37 to 38 feet, but I guess I can live with that.

Update (7/15/2008):

The Seattle Times and New York Times have reported two important recent developments. First, as of June 4, GM’s board approved production of the Chevy Volt for 2010. Second, on June 30, GM’s Bob Lutz, its vice chairman and chief of product development, said the first generation Volt would sell for $40,000 and would lose money at that price. He also said that the Volt’s 40-mile range per battery charge would satisfy the commuting needs of 78 percent of U.S. commuters.

The new $40,000 price tag is 33% above GM’s initial estimate of $30,000. Undoubtedly it reflects increased cost for the batteries. With GM’s century-long experience in car production, it cannot have been so imprecise in predicting the cost of the mechanical and electrical systems that it will make and assemble. The price increase must reflect a revised estimate for the cost of the batteries, which GM itself will not make and which are still under development.

While the new price is disappointing, the new estimate and GM’s board approval suggest that sufficiently reliable batteries can be made; they will just be more expensive than originally expected. Presumably mass production and the production learning curve will bring the prices down with time.

Based on the new purchase price, the New York Times compared the price of the Chevy Volt to that of two Priuses. But the initial purchase price is not the relevant comparison. Operating cost is.

If you drive 40 miles per day, 365 days per year, you will drive a little less than 15,000 miles per year. At 20 MPG and $ 4 per gallon, that’s $3,000 yearly for gas. A Prius that gets 40 MPG will reduce that cost to half, or $1, 500. But a Volt will reduce the $3,000 price by a factor of ten or more. Therefore, assuming you don’t have to replace the batteries earlier, if you buy a Volt rather than a Prius you will recover the $20,000 price difference in about fifteen years. (Actually, the difference is less than $20,000 because a fully loaded Prius can cost up to $24,000).

That’s not particularly good, as few people keep their cars that long. But if the price of gas goes up to $ 8 per gallon, as many expect, you’ll recover the price difference in a mere 7.5 years. In the interim you won’t have to visit a gas station; you’ll just charge the car at home. You won’t be vulnerable to further gas price hikes. And you’ll have the knowledge that you are reducing air pollution and global warming by the percentage of your electricity that comes from sources other than fossil fuel.

That’s probably enough to get many people to buy a Volt, just as many have bought Priuses. But massive popular conversion to plug-in hybrids will depend on price reductions brought by mass production and perhaps new technology. They may well follow, as now GM is not alone. Toyota also has committed to producing a plug-in hybrid by 2010. If nothing else, GM will provide a nice price umbrella for Toyota’s competitive car.

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