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Boo! And Happy Halloween!
I hope everyone has a fun and safe Halloween tonight. I will be carving pumpkins with my kids, who picked out this Jack O’Lantern pattern for this year. My wife is mortified. But what’s truly frightening seems to be happening more on Wall Street than in Transylvania. And that can affect both us and our cars. So let’s get to it.
Scott Nathanson
UCS National Field Organizer &
HybridCenter.org Administrator
In this issue:
 The kids may be heading out tonight to get scared by visions of ghouls and ghosts (though my boy is quite safe armed with his circa 1992 Star Trek phaser), but it’s visions of Dow Jones and NASDAQ that have us grown-ups ready to hide under the blanket.
While the credit crunch is hurting all of us, the Detroit automakers are really feeling it because they were already in fiscal trouble to begin with. Their financial predicament was compounded this summer when high gas prices helped hasten a market shift away from the gas-guzzling vehicles they have been relying on for the past two decades. As GM continues to cut benefits and shed jobs, a more intensive market restructuring could be in the works. GM and Chrysler are rumored to be in merger negotiations, with some saying that a deal could be done as early as…today.
Some have said that the merger of two struggling automakers that have yet to make the shift to more fuel efficient vehicles makes little economic sense. From a technology standpoint, however, I do find the mix of Chrysler’s more advanced investment in diesel technology (seen mostly in their European models) and GM’s impressive two-mode hybrid technology to be intriguing. With predictions that we’ll soon see significant cost-drops for hybrid technology and solid pollution regulations in place to ensure that diesel engines emit about the same as gasoline engines, might these two beleaguered giants be able to bring clean, cost-effective diesel-hybrid technology to the market? Such a combination might make a sensation on the diesel-friendly European market and also provide the stereotype-busting application that could bring diesel back to America as well.
But the credit crunch isn’t just hitting big auto companies that have had trouble looking to the future, it’s also hitting small startup companies that are trying to be the automotive future. Tesla Motors—the upstart electric vehicle company with the $100,000+ roadster that’s been touted by the likes of George Clooney and Arnold Schwarzenegger—is in a fiscal fix. Their ambitious plans for new models, as well as London and Detroit offices, have been nixed as they batten down the hatches to focus on making their current model cost-competitive in a rough market.
 The market for electric and other high-efficiency vehicles isn’t just rough because of the general economic slowdown, but also because of what that slowdown has meant to gas prices. Given that the government is already guaranteeing up to $25 billion in loans that are supposed to help the industry retool their production lines to produce more fuel efficient cars, I guess we deserved a break at the gas pump. And that’s pretty much what we have gotten. Oil prices have tumbled along with the market, and the once $4.00+ gallons of regular gasoline have dipped to a national average of $2.78 per gallon, with some parts of the country seeing prices dip back below $2.00.
This precipitous drop in oil and gasoline prices has brought back the inevitable question—will this cause demand for better fuel economy to wither? Steve Mufson has written an excellent article on the subject in the Washington Post. I believe many Americans would agree with me that, unlike in previous years where a decline in gas prices felt like a return to normal, this decline feels like an aberration. This decline feels like an increase in uncertainty and the fact that, as we saw this summer, gas prices can climb back to highly uncomfortable levels as quickly as they can fall.
This, of course, makes fuel economy a win-win solution for the American driver. A family driving a fuel-efficient 46 mpg sedan or 30 mpg SUV keeps more cash in their pocket when gas prices go down, but are also far better insulated when those prices climb back up. This is why the Corporate Average Fuel Economy (CAFE) standards passed in 2007 are so vital. They provide us with the insurance we need so that if automakers want to backtrack on fuel economy commitments due to a short-term blip in gas prices, our long-term future will still be toward more efficient, less polluting vehicles. It is also why state standards like California’s Zero Emission Vehicle mandate are all the more important to keep leading-edge technologies headed to market as well.
Of course, automaker lobbyists are pushing to double the $25 billion in loan guarantees they’ve already gotten. If this is approved, I hope this money is tied to fuel economy improvements. Because history shows that automakers will use any excuse to try to undermine strong fuel economy standards—even ones that have already passed into law. The CAFE standards passed in 2007 must be both protected and augmented in order to give drivers the choices they need and to give the auto industry a brighter, job-creating future. That will be a key job for the next Congress, the next president, and all Americans who want to see a clean vehicle future.
- Car Shops Get a Handle on Hybrids: Many hybrid owners feel tied to taking their car into the dealership for basic services such as oil changes, air filter replacements, and maintenance on brakes and tires. Looks like small car shops have noticed the growing number of hybrids on the roads and have begun training their staff to do these types of maintenance and repairs themselves. Some shops are also touting their expertise with hybrids as a way of encouraging this growing source of business. To learn more, visit the Hybrid News Center.
- Honda’s Business Plan Goes Against Conventional Wisdom – and Might Work: Honda is turning industry heads with its plan to make hybrid electric/gasoline cars mainstream. How do they plan to do this? Honda will be selling the Insight at a much lower price than its main competitor, the Toyota Prius. Honda’s long-term focus is on developing hydrogen fuel cell technology and not on producing full electric cars or plug-in hybrids. Who will end up on top? Only time will tell. To learn more, visit the Hybrid News Center.
- Where Will the Power Come From?: The auto industry and consumers are buzzing about plug-in hybrids and all-electric vehicles. But it’s important to take a step back and ask: where will the power come from: Coal? Oil? Nuclear? Natural Gas? Renewables? What are the costs and carbon dioxide emissions from those sources? For more, visit the Hybrid News Center.
As the largest auto market in the world (that’s us) turns to smaller vehicle choices, the offerings coming out of European auto shows take on added resonance for what we may expect to find on American roads soon. Paris took center stage this month as automakers came together to  show off their latest concepts in design and style. In what has become a continuing trend, muscle cars were sent to the proverbial rear of the exhibit hall as concept cars designed to use alternative fuels and hybrid technology emerged as the belles of the ball.
Several car companies showed-off their latest concepts for fuel efficient technology, including Peugeot’s Prologue Hymotion4—a diesel hybrid; Nissan’s NuVu—an electric car with an interior ‘tree’ that provides shade for its passengers and solar panel ‘leaves’ on the glass roof to recharge the battery; and Audi’s A1 Sportback Concept Hybrid—which claims a whopping 60 miles per gallon and the power to burst the car from 0 to 60 mph in less than 8 seconds. But the biggest buzz came from two hybrid cars: the Chevy Volt and the Honda Insight.
Chevy Volt: GM’s Centerpiece
General Motors (GM) used the Paris show to continue its major PR push for its plug-in Chevy Volt. For a refresher on the Volt, look back to our September newsletter. With 43,000 people already on the Volt’s waiting list and an expected rollout in 2010, it’s clear that GM is trying to cement a public perception as the leader in plug-in technology. But GM isn’t celebrating quite yet. Before it’s even hit the road, the Volt has received plenty of criticism—from its styling to its practicality. Check out the photos and decide what you think of the car’s aesthetics. Some call it bland while others call it futuristic.
The car’s interior has two LCD screens in place of the typical knobs, gauges, and dashboard needles and it’s powered by Lithium Ion batteries. But there still seems to be concern about Lithium Ion’s commercial viability at this stage of development. We are cautiously optimistic that the Volt is going to make its way to market—hopefully the leading edge of a more significant fleetwide commitment to fuel economy by GM, and not just a drop in the oil savings bucket with a low-volume model.
Honda Insight: The Next Generation
 Honda displayed the concept version of its new Insight at the Paris Auto Show—but other than the name, this Insight bears very little similarity to its 2-seat predecessor. Indeed, the new Insight is taking direct aim at the hybrid standard-bearer. The Insight is a five-door hatchback that resembles the Prius, is somewhat smaller than a Civic, and borrows styling from the Honda fuel cell FCX Clarity. The lightweight vehicle is designed to be more practical—claiming to comfortably seat five people and cargo. Honda hasn’t released any fuel economy numbers yet, but says it’ll be ‘on par’ with the Honda Civic hybrid (which gets a combined 42 miles per gallon in city/highway driving).
The biggest draw to the new Insight is its price tag—approximately $19,000—making it the least-expensive hybrid on the market. With a lower price, Honda hopes to make its hybrid more accessible and appealing to a broader range of consumers. It’s an interesting business move because Honda may undercut the Civic Hybrid by coming in cheaper with equal fuel economy, but Honda’s counter-trending strategic plans have worked for the company before. Looks like the Insight will be available in the United States this Spring.
While Toyota did not show off its Gen. 3 Prius in Paris, the first pictures and descriptions of the anxiously-awaited redesign have finally emerged. Judging by the photos, the Prius will retain its signature look, but is perhaps a little bit sleeker and sportier. Rumors say it will be lighter and have greater power—about 25 more horsepower from a 1.8 liter engine. Toyota has confirmed that it’s about the same size as the previous one, but with more interior room and “better fuel economy.”
 Toyota has yet to release any numbers for fuel economy or pricing. If the Honda Insight really does come in at $19,000, Toyota might have to worry a little bit about losing some of the hybrid market. But reports indicate that Toyota is seriously considering “Going Scion” with the Prius and spinning it off into a separate brand, with several different models. (I’m lining up for my “Prius MV” minivan right now…) Also, Toyota is still working toward the Lithium Ion holy grail, thinking that there may be “breakthrough” versions of the Gen. 3 Prius coming down the pike in the next year or two. If they pull it off, the Prius might finally live up to the initial, but unrealistic, 60mpg rating it used to get when the Environment Protection Agency used its outdated testing methods.
Another juicy tidbit is that Toyota will be manufacturing the new Prius in its plant in Blue Springs, Mississippi, which was originally slated to build the Toyota Highlander. Toyota currently builds the Prius in two factories in Japan and one in China, but those failed to keep up with global demand for the iconic hybrid. Toyota is expected to debut its Gen. 3 Prius at the Detroit Auto Show in January, 2009, and we are all eager for announcements about fuel economy and pricing.
If it’s true that the Gen. 3 Prius won’t hit showrooms until early 2010, Honda will have most of 2009 to itself to establish the credentials of the new Insight. Toyota is confident that there is room for both the Prius and Insight, and the continued market demand seems to support that position.
 Richard Mateko of Wilton Manors, FL is devoted to the Toyota Prius. He’s already owned two of them and has put down a deposit for a 2009 Prius.
 S. J. Bienvenu of Falls Church, VA says he can easily haul around his two tall teenagers and their sports equipment in their Toyota Prius. He’s also learning how to maximize his mpg while going around town—so far he averages 52.2 mpg!
 Karen Ontiveros of Sanford, FL loves her Toyota Prius and says she too can easily fit her family of four plus a car seat. She’s enjoying all the envious looks she gets as she goes around town.
If you own a Prius (or any other hybrid model) or know of anyone who does, please remember to tell them to submit their testimonials today!
Don’t fill up too much on candy, and I’ll talk to you again after Turkey (or Tofurkey) Day.
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