Wednesday, October 04, 2006

Guess what? Detroit's survival may depend on better fuel efficiency

The higher their fleets' fuel efficiency, the more Detroit's automakers can profit. If domestic car makers don't see this light yet, they have fresh fuel for thought from a credible study by the University of Michigan's Transportation Research Institute weaving its way into blogs and mainstream media.

Co-author Walter McManus, who heads the Institute's auto analysis division, apparently convinced Wall Street Journal columnist and hybrid critic Holman Jenkins, writing today, Oct. 4, that "fuel efficiency is not a virtue independent of economics--the chief selling proposition behyind hybrids, which expect you to pay extra for the privilege of saving gas."

The authors contend that at any gas price between $2 and $3.10 per gallon, GM, Ford and Chrysler can make more money by investing a dollar in fuel efficiency than by any other approach with technologies already available.

Bottom line: Detroit's survival depends on making significantly more fuel efficient cars with new designs in the months to come for cars due out in 2010. No doubt that constitutes a deep transformation. How much brighter does the light need to shine?

fuel efficiency, miles per gallon, U.S. automakers, University of Michigan, hybrids, GM, Chrysler, Ford


At 10/09/2006 10:49 AM, Blogger Tom Gray said...

Interesting to note that there is an article in yesterday's (Oct. 8th) New York Times Business Section about all of the folks, particularly on the conservative side of the spectrum, who agree that raising the federal gasoline tax is a good idea. They include former Federal Reserve chairman Alan Greenspan, former Council of Economic Advisors chair (under Pres. Bush) Gregory Mankiw, and Gary S. Becker, economics professor and Nobel laureate at the University of Chicago.

Greenspan's quote: "That's the way to get consumption down. It's a national security issue."

Who knew?

Thomas O. Gray
American Wind Energy Association

At 10/16/2006 1:08 PM, Blogger Jim Pierobon said...

The notion of a higher gasoline tax was front-and-center throughout much of the "Advancing Renewable Energy" conference by USDA and DOE in St. Louis, Oct. 10-12. In addition to folks such as venture capitalist Vinod Khosla, several authorities chimed in. The concept of a sliding credit based on the NY MERC price also generated buzz.


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