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Back in the 1990's
Congress gave
a billion tax dollars to Detroit to create America's next
generation of clean and efficient vehicles.
They failed.
Though they developed electric and hybrid prototypes,
Detroit refused to push the edge of technology forward,
citing numerous excuses for not better utilizing the
billion dollars we taxpayers gave them.
Toyota and Honda; however, built on an industry always
striving for efficiency, took a different take on the same
technology and proceeded with their hybrid programs to the
ridicule and scorn of Detroit.
Fast forward to today and no one in Detroit is laughing
any more. Delphi and GM are facing bankruptcy, as shares
of GM have dropped to the lowest levels in 18 years. Ford
takes two steps backwards with each step forward. American
automaking just isn't going in the right direction.
Toyota, on the other hand, is on the verge of becoming the
world's largest automaker as it sits on a pile of massive
profits.
Sure, Detroit has been in this kind of predicament before,
and it survived. This time; however, it is different.
In the 70's and 80's, when high energy prices pushed many
Americans into Japan's economy cars, there was one main
difference compared to today: Japan's vehicles were
fundamentally no different than America's vehicles. Sure,
they were smaller and built better than expected, but they
functioned just like any other automobile. This converted
many Americans into Toyota and Honda owners, but SUV
popularity gave Detroit a product that Japan just didn't
have.
Today; however, things are far different. This time there
will be no SUV to save Detroit. Even worse, hybrid
vehicles have come full circle to haunt Detroit's
arrogance and incompetence. I mean, Detroit had a billion
tax dollars and what did they do with it? Nothing!
Many analysts, such as J.D. Power, believe that by 2012,
hybrid sales will achieve around 600,000 total units. I'm
here to tell you that sales will easily surpass twice that
number by 2012. Toyota will sell 600,000 hybrids per year
- by itself - starting around 2008, but that's just the
beginning of the bad news for Detroit.
Around that same time, when Toyota starts to make J.D.
Power analysts look silly, Toyota will be utilizing its
third generation Hybrid Drive, a move that is going to
make hybrids more fuel efficient, more powerful, and
CHEAPER, possibly cutting hybrid costs in half or more.
As Toyota achieves this level of production, Ford hopes to
ramp up development of its hybrid program to 250,000
vehicles per year. That's good news for Ford, but will
Ford hybrids compete with Toyota hybrids then? If Ford is
using the same hybrid drive at the same costs in 2008 as
they are today, how will they compete with cheaper, more
fuel efficient, and better performing Toyota hybrids?
Then there is GM. GM is still a bit of a wild card in the
hybrid game because, well, they don't yet have any full
hybrids. GM's hybrid technology is going to vary
significantly from the technology of both Ford and Toyota
- yet early reports seem to indicate that the core of GM's
hybrid technology will achieve its greatest improvements
in highway driving.
Twenty years ago, Americans did do the majority of their
driving on open roads and highways, but we no longer live
in that world. Not only do the majority of Americans live
in urban areas, they drive in significantly more
congestion than 20 years ago - even those that live in
suburban and rural areas. Stop signs and street lights
have turned even the small town commute into stop-and-go
traffic during the morning and evening commutes. According
to transportation studies by government and university
alike, the problem isn't only going to get worse, it's
going to get significantly worse.
City driving, not highway driving, MUST become the
standard by which fuel efficiency is determined. In such
driving, conventional vehicles and even clean diesel
vehicles simply cannot compare with hybrid vehicles, and
hybrid technology is just emerging. For example, second
generation hybrid technology turned the first generation
Prius into a second generation superstar. Toyota's third
generation hybrid drive will make the Prius, and all other
Toyota hybrids, even faster, more powerful, more fuel
efficient, and cheaper than current Toyota hybrids.
By the fourth generation such gains will again be
achieved. By that time hybrid vehicle costs might equal
conventional vehicle costs. At that point, it becomes very
hard to justify the costs of conventional technology, not
hybrid technology.
Yet, GM might barely be on the map by then. Ford, with its
similarities to Toyota - in terms of its hybrid drive -
might be able to capitalize on Toyota's success via better
supply channels, but could they ramp up production quickly
enough to match Toyota? Maybe.
Regardless, the automotive world as we know it, is over.
GM and Ford might compete in this new world, but without
developing their own Prius,
it's not going to be easy.
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