Wednesday, May 20, 2009

Mandating technology

Let met get this straight... The government wants to mandate (or up the mandate) technology with new CAFE standards. And then the government wants to actually build the cars that meet the standards. Is the next thing on the agenda a mandate as to which car I should buy?

I'm just saying: this doesn't sound like it would go well. Presumably GM was already making their best guess at what was "most sellable" vs "most efficient". I say presumably because -- well, they haven't quite been successful lately. So mandating what will be sold via CAFE ... I'm not entirely sure that is going to go in GM's favor. The most recent numbers I could find online (or the most recent I found when I stopped trying) show the Honda/Toyota crowd to be well ahead of GM... almost to the point of meeting the new proposed standards. My guess is that a chip tweak and they are there (at the slight expense of horsepower).

If I were in charge of one of the auto companies, this would be my plan:

Let the government test it at full efficiency... Then let the consumer choose.

The whole thing reminds me of A Nice Morning Drive -- which was a fictionalized product of the same type of government mandates as it was applied to safety. And if you don't recognize Morning Drive... shame on you.


Og Make Blog said...

50+ mpg has been around for about 17 years now. 80+ for almost as long, albeit in something a little smaller than the compacts, but larger than a Smart Car (room for 4 or 5). They are far more energy efficient than any hybrid (cradle to grave) and the lowest CO2 emissions per mile. I haven't exactly seen the public clamoring for it ... not... wait... not the US public. Fact of life in Europe, though.

Your government has done its best to keep them out of the market over here.... severe quota limitations and increasingly draconian NOx regs from the friendly boys and girls over at the EPA.

That's OK, keep driving those monstrous truckosauri at 10 mpg. Auto manufacturers just love 'em... cheapest to build, lower safety mandates, and the highest of profit margins. Oil companies love 'em, for they assure the bottom line is profitable through plenty of demand. The gubment loves 'em for the gallons consumed and their cut of excise taxes. Johnny six pack loves 'em because... well.... something must be lacking. Silly soccer mom loves 'em because... well.... it's more massive and fancier than the neighbors' ... and she really needs all that room for crap and the one point fractional kids in tow.

Wanna shake up the system? Start using around 40% of the current road fuel consumption overnight. Imminently doable... just a complacent, overindulged public out there that would rather bitch than act.

Keep burnin' that oil and gas baby.... it'll always be around. It just won't be in any appreciable amount that is easily accessible. Oil prices are back in contango, and your retail gasoline is 2/3 the peak price of a year ago with crude at just under 1/2 the price. Did they absorb the cost then, or are they laughing now? Margins were low for the oil cos. last year... they are looking really good right now.

This country is in for some very rude shocks when the supplies tighten just a bit. The Chinese have been quietly but steadily tying up mineral and oil contracts around the world and they have the money to throw at anything they want and outbid any contenders. Ghawar is into the tough rock in the southwest (according to the satellites) to keep up output and is still producing nicely... for the moment. When this supergiant shows any signs of faltering... the SWHTF. The fun with Mexico is just beginning... Cantarell tanked just over a year ago and was their cash cow. It is in a freefall as far as production is concerned. Their contracts at over $70/bbl are just starting to expire right about now. The drug cartels are battling for control, and the Federales are losing a major chunk of GDP. Interesting times indeed.

Spork In the Eye said...

Not only do the Chinese have the money to throw at it... they have OUR money to throw at it!

Of course, the gotcha there is that we're just as likely to default on it -- either up front or by inflation.