by David Fessler, Advisory Panelist
We found out that Tesla Motors joined the growing list of automakers receiving federal funds this week. It locked up $465 million to develop and produce battery-powered vehicles.
But as we know too well, large government checks are hardly ever the answer to our problems. And one of the biggest right now is that we’re seeing gas prices climb slowly higher.
While $147-a-barrel oil served as a wake-up call for the car-driving consumer, it was also the catalyst that shifted the plug-in electric vehicles industry into high gear (pun intended).
I’ve talked about Plug-in Hybrid Electric Vehicles (PHEVs) before, and I’ve heard a lot of reader comments on the hybrids on the market right now. So let’s take a look at some of the major car companies’ efforts so far, as well as what lies ahead for consumers and, more importantly, for investors…
GM’s Escalade - An Implausible Hybrid SUV
Starting with the ridiculous, GM has a hybrid version of the Cadillac Escalade that seats eight…
- While a miniscule market for large SUVs still exists, these $70,350 base-price behemoths aren’t exactly flying off dealer lots in this economy.
- Even if you’re willing to choke down the expensive sticker price, the hybrid version of the Escalade gets a mere 21 MPG on the highway… and that’s only 10% better than its non-hybrid brethren (19 MPG).
- Incidentally, that difference amounts to a paltry $1,506 savings in fuel over the life of the vehicle, assuming a vehicle life of 100,000 miles and $3.00/gallon gas.
Compare that to the new five-passenger Honda Insight that gets 50-plus MPG and comes with a $19,000 price tag, making it the most affordable high-mileage hybrid on the market.
Gasoline-Electric Hybrid Cars: Don’t Believe The Hype
While gasoline-electric hybrids are a small improvement over straight internal combustion engine-based vehicles, they’ve been over-hyped by the media and the car manufacturers.
Sadly, many consumers have the perception that gasoline-electric hybrids are the answer to our oil import problem. Getting a feeling of deja vu?
You should be: Corn-based ethanol was going to seriously put a dent in our oil imports, too. Of course, it’s turned into one of the biggest government-sponsored boondoggles of the 21st century.
Like all other large, successful, problem-solving exercises, this one is going to be solved by private industry. The government’s role will (hopefully) be limited to providing tax incentives for the manufacturers, as well as similar incentives for the buying public.
