Why electric cars keep showing up at auto shows
Every automaker is working on an electric car, leading some to jump to the conclusion that, in a few years, the internal combustion engine will be obsolete. But since logic tells us that extrapolating trends without context is a classic fallacy, and since the “salience effect” tells us that the unusual is given extra weight in our minds, maybe we should take a closer look.
For every electric car at the Detroit Auto Show, I suspect there was at least one gas-powered car or truck being launched. What’s more, most of the electrics are not actual production cars, but concepts – like the Fiat 500 with a Chrysler electric motor. We know Chrysler, unlike some others, worked on setting up a “universal” electric system that can be put into a variety of cars, albeit without the full-fledged efficiency of the Chevrolet Volt, so powering a Fiat 500 with a motor is less of an achievement that one might think.
There are a few reasons why automakers are putting a lot of work into electricity, and one major reason is patents. Sometimes, it pays to be late to the party; the early birds, like Chrysler with the Airflow and Nash with the Metropolitan, may be too early for public acceptance (or too rough, as the bugs haven’t been worked out – like the 1958 Electrojectors, 1989 UltraDrive, and for that matter the original Rio MP3 player vs the iPod). But at other times, those who are late have precious little to call their own. Just ask anyone building a hybrid today whether they’re paying fees to Toyota – whose basic hybrid design seems to have been transplanted into Ford’s Escape and Fusion.
So one key issue is patents for electric cars. Whoever collects the most critical patents for the most effective design will get licensing fees from the others.
Another key issue is public perception. When gas prices shoot up again – as they will when the economy recovers – the public will go not to the makers of the most efficient cars and such, but to the makers of the ones they think are most efficient. That means, for example, that if Chrysler continues to be seen as the makers of inefficient big vehicles, the public will flock to Honda and Toyota for minivans that don’t match the mileage of Chrysler and Dodge mileage. Perception is everything; facts are important only insofar as they alter perception.
Ford has made great strides in changing the average consumer’s thoughts. They have always been good at that; lots of people think Ford is a center of innovation, Henry Ford was a good employer, and Ford cares about safety. The new campaign putting the Fusion up as the most efficient mid-sized sedan is a good example – it beats the Camry hybrid, but, you may notice, doesn’t come close to the similarly sized Prius. That’s because Prius is a hatchback – not a sedan. The public can’t be expected to remember the difference. That’s good marketing!
So electrics are part of the puzzle. If Dodge is associated with electric cars instead of big pickups, which are now Rams, then when gas prices rise, Dodge sales will rise. As it stood two years ago, when gas prices rose, Dodge sales fell, because Dodge was the Big Truck brand.
Long term, of course, electric cars hold a lot of promises for some people – mainly city drivers, the same people who value the Smart not because of its efficiency, but because it fits into tiny parking spaces. Let’s face it, the Smart isn’t so smart for anyone who doesn’t have parking problems; it costs almost as much as the Corolla whose gas mileage is roughly the same, but whose safety is far, far, far higher. In the city, safety is less important than parking; how often do people drive faster than 40 mph in New York City? (Detroiters can be forgiven for not understanding what a typical city is like. Hint — it doesn’t have perfect grids of 50 mph roads where people drive 70 mph.)
Those who don’t live near a city may wonder what kind of market cities are. After all, very little of the country is city. That’s true, but a great deal of our population does live in cities. That’s why election maps can show huge swaths of red and tiny swaths of blue, and blue wins. It’s not the span of miles, it’s the number of people. That’s true for cars, too — though, admittedly, a lot of city folk don’t own cars. Would you, if insurance was crazy-priced, you had to either move your car across the street every day or garage it, and driving anywhere took far longer than hopping on the bus/train?
In the city, electrics make lots of sense, for the same reason that hybrids make sense in cities. You stop, you go. You stop, you wait. You crawl. High top speeds are unimportant; 80 mph is more than enough (indeed, 70 mph is more than enough). Now, a gas powered car will expend fuel while you wait; and when you stop, it’s gone. A hybrid or electric just sits there, possibly running the heater or a super-efficient a/c unit, and when you stop, it recaptures around 50% to 80% of the energy. Electrics aren’t meant for the wide open spaces, but for the cities, and for the stop and go behavior of mail trucks and such (which is one reason why some milk trucks in England were electrified at least into the early 1970s – I could be wrong on the date). For country dwellers and some suburbanites, we have biodiesel as the “green” fuel. Or alcohol – not ethanol but sugar alcohol, like they use in parts of South America.
Electric cars are also seen have a constituency of people who really, really, really want them to succeed. I’m not talking about environmentalists; they have little power, despite what the ideologues tell you. (Just as one example, during eight years of the supposedly green-friendly Clinton administration, they couldn’t manage a single gas mileage hike). No, it’s the electric utilities. People with money make the policies; we have ethanol because Archer Daniels Midland has corn, we don’t have biodiesel because Archer Daniels Midland has corn, and we have electric cars in the future because utilities want them.
Why do utilities want electric cars, you may ask? After all, these are the guys who keep giving you incentives to use less power, not more. The answer is simple: capital utilization. Power plants are run at full tilt during the day, and they rest at night. How would you like to pay millions of dollars for a factory that’s used one third of the time? Oh, and don’t even talk about peaking plants, often environmentally unsound facilities that run a few days out of the year. Yet, they need to pay people all year round to maintain the things and man them when the time comes. Gak. It’s like having Sterling Heights running five days out of the year in case we suddenly need more Sebrings. You wouldn’t want that, would you?
So power utilities love the idea of anything that can use power at night. That’s found money, to the tune of millions of dollars a year for any given utility. What’s more, if they could run power plants all year round, day and night, they could build more of them and forget about that energy conservation stuff. That would yield an overall increase in power use, which is one reason some people aren’t enthusiastic about electric cars. Then again, maybe nuclear plants would suddenly become fiscally responsible. I wonder if the nuclear folk are behind electric cars for that reason? Because now, no utility will build a nuclear plant unless the government guarantees them a profit. (Seriously. In fact, the nuclear people have been offered more loan guarantees than the auto industry, and they still won’t build. Which should tell you something, since they’ll happily build coal plants over environmentalist objections.)
So will you see a flood of electric cars? Maybe, if you live in a city, where they make sense. Your local power company is rooting for them and your automaker doesn’t want to be left behind; that means a lot more than the collective will of Sierra, Greenpeace, and whatever else is out there. Maybe electrics will always remain a tiny niche vehicle; maybe they’ll someday account for half of vehicles sold (I doubt they’ll ever get over 20%). Either way, that adds up to a lot of vehicles worldwide, and nobody wants to be left behind.
And, again — regardless of whether a company actually builds electric cars, they want the credit for building them. So don’t take the car shows seriously — what matters is what ends up in the showroom. If showing pretty cars was all anyone needed, Tesla would be a household name.
