Personal Log  #373

April 30, 2008  -  May 15, 2008

Last Updated: Sun. 5/25/2008

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Knowing History.  Part of the problem with some Volt enthusiasts is they make assumptions, especially when it comes to hybrid history.  A great example of this came yesterday, when trying to get them to look beyond just the vehicle.  They had absolutely no idea that Toyota had declared sales goals years in advance.  It was assumed that production decisions were made after the market was established, not volume being part of the establishment itself.  Reading my personal logs clearly confirms that history to strive for increase, stating year & quantity goals.  Last year's exceeding of 400,000 sales fell right into place, as planned.  Next year's significant production volume ramp up is the next step.  And by lucky coincidence, today's big news of over 1,000,000 Prius now on the road worldwide helps to confirm that too.  I hope they start studying history.  Knowing that is very important when it comes to understanding the automotive market.


Specifics.  Not knowing what the business plan is for Volt has been the source of many problems since day one.  What is the purpose?  Striving for an ideal, that "best" trophy, is the mindset of the enthusiasts.  So when you ask for specifics, they get confused and think you are asking for a list of components.  The perspective of economics simply doesn't come to mind.  In other words, they are caught up in the engineering combined with the emotion stirred by soaring gas prices.  They still do not have answers from the automaker for these fundamental questions...  What is the market price are they targeting?  What vehicle types/sizes will use the technology?  What efficiency goal do they wish to achieve?  What will be sold to consumers without an outlet?  How will this affect Two-Mode and BAS production?  How will this change the traditional vehicle product line?


AdBlue Pricing.  The problems for diesel continue to grow.  Those systems designed to cleanse emissions using an after-treatment spray of urea are now facing higher prices.  That essential chemical is required by the EPA.  Without it, the system will shut down.  That puts owners in the position of paying whatever it costs, regardless of price.  So naturally, the supplier recently raised it.  Anywho, refill is required every 15,000 miles or so with 4 to 5 gallons of AdBlue.  That's not a big expense.  But it is something that other vehicle owners never have to worry about.  I certainly don't.  Engines that use gas & ethanol are dramatically cleaner.


Seeing $3.69.  The effect that has is starting to show.  Large vehicles are no longer king.  In fact, even the so-called "midsize" SUV is dropping in numbers on the road.  The price of gas & oil is obviously influencing the choice of what drive.  New sales are dropping too.  Focus on aspects other than size & power are finally getting decent attention.  The nonsense of the past is over.  In fact, the arguments against "global warming" have ended too.  Whether or not there is a human influence on climate change is besides the point.  Gas is expensive.  Seeing that per-gallon number is all the debate that's needed.  Nothing more needs to be said.  Reducing fuel consumption is necessary, period.


Market Appeal.  With diesel 70 cents more per gallon than gas and the expected higher MPG from the upcoming new Prius, the "clean" diesel vehicles aren't expected to break out beyond just the niche market.  The appeal for monster-size hybrid SUVs that deliver 21 MPG isn't anticipated to be anything beyond small either.  Examples of new technologies like that simply don't inspire much hope.  Designs that depend on dramatic battery capacity & cost improvements are struggling to retain consumer attention.  People want better now.  The nonsense about automakers quickly responding to a change in market appeal has proven to be a fantasy, not how things actually work.  There is a very significant delay.  We are going to have to tolerate competition disappointments for quite awhile still.


Competition.  Some of the Volt enthusiasts still believe the objective is a trophy.  For example: "We will see if Toyota is really serious about improving their Prius in time to compete with the Volt."  See what that portrays the word compete to mean?  Like many of their statements, it disregards the need to serve many in favor of efficiency exclusively.  They just figure the highest possible MPG will persuade consumers to pay extremely high purchase prices and the automaker to build in extremely high volume.  Offering a vehicle as a hybrid with a plug-in upgrade option is dismissed as not being serious.  I don't think they've studied economics.  The extreme rarely ever equates to a large-scale business success.  Competition requires balance.


Delusional.  I'm not sure how else to describe this comment made yesterday: "But now the Volt is nothing less than the only hope for our country!!!"  Was he clueless or in denial?  Full hybrids like Prius and Camry-Hybrid are already providing hope.  By the end of the year, Ford's new Fusion-Hybrid will join in too.  These are all clean & efficient vehicles that will appeal to a very large number of consumers.  They are very realistic steps forward, products providing hope for our country.  To believe that Volt is the only solution goes well beyond any smug we've heard about in the past.


$125.96 Per Barrel.  Whatever you want to call it, the oil "peak" has arrived.  Whether that means these new high prices for fuel will plateau, go down later, or continue to climb up really doesn't matter.  The point is that the past is now ancient history.  Guzzling gas with the large SUV you bought to impress others in the name of "safety" simply doesn't make any sense anymore.  The market has fallen apart.  Death of the dinosaur is happening way faster than anyone had imagined.  The smaller, accident avoiding, less impact to the environment, more responsible vehicles are taking over this newly emerging world.


6-Speed Automatics.  A way to squeeze out greater efficiency from a traditional vehicle is to increase complexity of their transmission.  Isn't that a step in the wrong direction?  If nothing else, it really makes the simplicity of the PSD in the "full" hybrids easy to argue in favor for.  Anywho, Ford is pushing to significantly increase their production.  The goal is to get 98 percent of the automatics switched over to 6-speed by the end of 2012.  Anticipated efficiency improvement is 4 to 6 percent.  Too bad increased cost was never mentioned in the article.  Extra gears aren't free.  And what the heck happened to using a CVT (the Cone & Belt type) instead?


Two-Mode Confusion.  It's becoming really difficult to tell the difference between a writer not understanding hybrid technology and an attempt to intentionally mislead.  Today, we were told that the electric motor accelerates Prius up to about 19 MPH, then the engine takes over.  But the Two-Mode system works differently by assisting the engine so it gets better efficiency on the freeway.  That's such a confusing mess of so-called facts that I don't have any idea how to rebuttal.  That most definitely is not how Prius works... but it certainly does give the impression that Two-Mode is the favored design.  I wonder how long it will take for consumers to figure out what really happens.


Getting Worse.  Yesterday, the price of a barrel of oil topped $120.  Today, it hit $122.  That's so high rounding to a whole number is just fine now, no need to mention the decimal part anymore.  Heck, just saying "too much" works.  Remember 3 years ago?  We were just on the edge of breaking $60 for the first time.  Now, it's double that.  Makes you wonder where we'll be in 3 years.  Those end-of-decade predictions that were deemed "treehugger extremes" are coming true.  Turns out, a more appropriate label could have simply been "market aware" people.  They saw the pressure building and looked for realistic solutions before the need became obvious, like it is now... and getting worse.  What do you think they'll be called now?


Gas Tax Sanity?  Using money from "windfall profit" taxes to compensate for those not collected from "holiday relief" makes sense to me.  Funding that is depended upon will still be available.  Isn't that ok then?  After all, weren't efforts to deal with the overwhelming profits being made from skyrocketing oil prices supposed to finally be addressed?  Wouldn't this do that?  Or does political fighting pretty much means nothing actually gets agreed upon?  Well, after the election there will still be plenty of opportunity to find out.  I seriously doubt this is the only time the topic of gas tax will ever be a hot topic.


Editorial Response.  Fortunately, there are a few that get the opportunity to state their frustration with certain reporters.  In this case, it was a claim that the fastest highway speeds offer no efficiency benefit at all.  The editorial curtly contradicted that stating undeniably better MPG than a non-hybrid would get... and even went as far as adding: "I have yet to find a Prius owner who has had different results."  This was a Prius owner who had become pretty upset by that misrepresentation, to put it politely.  I don't have though.  I know the reputation of this particular reporter.  He has consistently written negative articles about hybrids by misleading.  Remember, selective data and being vague makes the person seem to have credibility.  But when facts are checked, their story falls apart.  Thanks for that editorial!


Reporter Review.  Hybrids have been around for so long now, that there's simply no excuse for a paid professional screwing up terminology anymore.  It's really sad when a reporter has absolutely no idea what they are writing about.  This caption was under the big photo in the online article I read this morning: "The 2008 Saturn Vue GreenLine is a 'single-mode' hybrid, meaning it can't move under electrical power alone."  No where have I ever seen that definition attempted.  It is just plain wrong... and he should have known that, since he stated the next step up in design is Prius.  But then the term "dual-mode" was used to identify the next Vue hybrid model.  He should have detected his error by not knowing what to call Prius.  But then again, why was "dual" used?  That is just plain wrong too.  Needless to say, I am frightened by the kind of misrepresentation message this sends to readers.  They are being fed incorrect information.  I bet it doesn't make the GM enthusiasts the slighted bit happy either.


Oil Prices.  Closing for the week was $116.23 per barrel.  Is that what we will see all Summer long?  OPEC plans to maintain the current rate.  The economic troubles outside of the oil industry won't be resolved anytime soon.  Worldwide demand will continue to grow.  Not getting any worse seems to be the best we can hope for.  That's not too encouraging.  I think it's a sure bet that interest in Prius will remain high.  With so many people in the past that shunned the thought of ever owning a small vehicle, taking a look at hybrid options would now be more of a priority than ever.  The time has finally come.  That silly resistance to the technology is fading further and further away... with each fill of the gas tank.


April Sales.  They were so good, nothing I could say to a GM enthusiast would be interpreted as constructive.  That's why those patiently waiting for the new Ford hybrid are smart enough to stay quiet.  Market factors are complex.  Bragging about something before it actually happens, as those rooting for GM do all the time, isn't a good choice.  Strange thing is, they don't understand why Prius owners aren't the same way.  Why?  Anywho, there were 21,757 Prius sold in April.  Camry-Hybrid did really well too, with sales coming to 6,678.  It was a very good month.


Stimulus Money.  How much of this money we get from the federal government will actually be used as intended?  When the idea was first approved, there were worries about it being used just to pay off some debt.  But now with gas prices skyrocketing, it is likely to just make up the difference.  Neither will have the effect of stimulating the market.  You actually have to buy something with it instead.  But with times getting tough, that doesn't seem realistic for many.  Next month should be interesting.  I wonder what they'll claim happened.  Hmm?


Recovery Plan.  GM's expected American interest in expensive trucks to continue.  They hadn't anticipated a sudden spike in oil prices that caused a defection away from them.  But that's exactly what's happening.  Those glory days are over.  The automaker is once again losing money.  Now what?  Two-Mode wasn't designed to compete directly with 4-cylinder "full" hybrid sedans, like Camry.  The next generation of BAS wasn't really either, and it's still years away.  The only technology worthwhile is a scaled-back version of Volt.  Offering a "series" hybrid lacking a plug with only a modest-sized battery-pack would be competitive for both price & efficiency.  Do you think they'd ever give up that glory and go with a realistic configuration?


Superiority Complex.  Reality is crashing down on the Volt enthusiasts much faster than I had expected... overnight, in fact.  The company that's been leading the headlines for development of the Volt battery-pack has also been developing an upgrade kit for Prius too.  The enthusiasts weren't taking that serious though.  They just brushed it aside, assuming that would never actually materialize.  Why?  If you develop a good battery chemistry & interface, you offer it to whomever would like to purchase it.  That's the very nature of how suppliers do business.  Volt enthusiasts don't like that idea at all.  A third-party upgrading Prius isn't something they had considered.  Suddenly, they are coming to the realization that competition is actually all the vehicles that don't use electricity for propulsion, not those that use it to a different amount.


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