Newsletter Archive Index

~~~ Hybrid Cars Newsletter: Issue No. 0015 ~~~
Moderator: Bradley Berman [brad@hybridcars.com]

In This Issue:

Updates
What’s Selling? – Price Pulse Tool – Bush’s Hybrid Plan – Tour Del Sol

Follow, Lead, or Get Out of the Way
Most people think the slowpoke is more socially responsible than the tailgater. Most people are wrong—according to economist Walter McManus.

Mileage Tax Creates Hybrid Disincentive
Oregon is running a pilot program where cars are taxed not on the fuel they consume, but on the miles they drive.

Hybrid Weenies, Unite!
Hybrid cars are just a ruse for eco-fascists and enviro-weenies. Hybrids don’t reduce foreign oil dependency. We will never run out of energy. And other reasons that hybrids are useless.

Greetings, Hybrid Car Enthusiasts,
As prices at the pump hold steady at a national average in the $2.20 range, journalists and auto industry observers are all asking the same question: How high do prices have to go before American consumers get serious enough about fuel efficiency to change their automotive behaviors? That magic number is elusive, but it appears as if Washington is getting nervous and believes the tipping point is near. President Bush is now pushing for incentives for hybrids and alternative fuels (that’s a good thing). Also, the Senate Finance Committee, inspired by the State of Oregon, recently approved a $16 million project to explore taxing motorists by the mile rather than the gallon. In this issue of our newsletter, we cover the news about these gas price jitters, ponder the virtues of speeding and tailgating, and unravel the most common arguments against buying a hybrid.

UPDATES
What’s Selling?
A trickle of Lexus Rx400h SUV hybrids arrived in showrooms in the past few weeks. Dealers are calling in the 12,000 "pre-sale" customers, who after putting money down on the idea of a Lexus hybrid are now seeing the actual goods. April sales of the RX 400h tallied 2,345 units. Nobody knows yet how many of the remaining pre-sales will turn into real sales. If the pre-buyers balk at the $53,000 price tag, enterprising shoppers eager to jump on the hybrid bandwagon may have that chance.

The Toyota Highlander will join the Rx400h in showrooms this summer, as will the Mercury Mariner SUV Hybrid late in the year, to round out the year’s full lineup of four SUV hybrids. Prius sales climbed to a record 11,345 units in April, keeping the waiting lists going in many part of the country, while Honda and Ford dealers are more aggressively trying to move their inventories of Accords, Civics, Insights, and Escapes.

Hyundai upped their release date of not one, but two, subcompact hybrids for the end of 2006, right about the time that the full hybrid version of the GM pickup arrives on the scene. The wee subcompacts and the full-sized pickups will serve as the bookends to the hybrid lineup, leaving the minivan market as the only gap. Nobody knows which carmaker will jump first to meet the needs of environmentally conscious soccer moms.

The HybidCars.com Price Pulse
We need your help. If you have recently received an offer from a dealer on a new hybrid, then share the details (price, waiting list, and deposit info) with other hybrid shoppers. It’s easy to enter that info into the HybridCars.com Price Pulse:
http://www.hybridcars.com/pricepulse

A first look at the price info submitted by shoppers in April show these average prices and waiting periods:

Toyota Prius
Average Price: $23,342
Average Waiting Period: 6.8 weeks.
Deposits: $300 to $6,200 ($500 is the norm)

Ford Escape Hybrid
Average Price: $30,875
Average Waiting Period: 1.6 weeks
Deposit: $1,000

See pricing and other offer info at:
http://www.hybridcars.com/pricepulse/

Bush’s Hybrid Plan
On April 27, President Bush outlined a $2.5 billion initiative to grant tax credits to consumers who purchase hybrid cars and trucks, as well as vehicles with cleaner-burning diesel engines.

The current president’s plea for energy independence was eerily reminiscent of Jimmy Carter’s warnings nearly 30 years ago. In 1977, President Carter said, "We simply must balance our demand for energy with our rapidly shrinking resources. By acting now, we can control our future instead of letting the future control us…If we wait, we could endanger our freedom as a sovereign nation to act in foreign affairs."

Fast forward to late April 2005 when Bush declared, "The fundamental problem is this: Our supply of energy is not growing fast enough to meet the demands of our growing economy…A growing economy causes us to consume more energy. And, yet, we’re not producing energy here at home, which means we’re reliant upon foreign nations."

In the 30 years between the two presidential speeches, Democratic and Republican administrations alike have failed to make the necessary reforms to create a sustainable American energy infrastructure. During those years, new automotive technologies, including hybrid gas-electric vehicles, have emerged as one potential way to curb our insatiable thirst for oil. Bush acknowledged the new technology. He said, "Hybrid vehicles are one of the most promising technologies immediately available to consumers…They provide better fuel efficiency, ultra-low emissions and exceptional performance. And their electronic systems are paving the way for tomorrow’s hydrogen-powered vehicles."

In his press conference on April 28, Bush praised the Energy Bill recently passed by the House of Representatives, but failed to mention that the bill does not include hybrid car tax incentives and does not close the loophole allowing SUVs and Hummers to escape fuel efficiency standards. According to The Economist, the "energy bill is stuffed full of subsidies for the oil-and-gas business."

How many more presidents (of any party) will talk the talk on energy policy, but fail to take the necessary steps?

Tour Del Sol: May 13-16
If you are anywhere near Saratoga Springs, N.Y. the weekend of May 13-16 (or if you love to drive hybrids cars) show up at the Tour de Sol. Hybrids, Fuel Cell, and Bio-Diesel motor vehicles of all types we be competing for $10,000 in prize money. For more information, go to:
www.auto-careers.org
Thanks to Craig Van Batenburg for submitting this announcement.

Sponsored Content
HybridCars.com highly encourages all readers to check out the Better World Club. They are the only eco-friendly auto club that offers a 2-for-1 discount on membership to hybrid vehicle owners. Buy one year of membership and your second year is free! This offer is good through May 31, 2005. They guarantee 24/7 nationwide coverage, with more than 35,000 vendors in their network. Services include towing up to 5 or 100 miles, jumpstarts and
flat tire assistance; free gas coupons and maps; discounts on eco-travel services; and insurance in some states. They are the only auto club that donates 1 percent of revenues to environmental cleanup and advocacy.

Better World Club is out to change more than just tires!

Check them out at www.betterworldclub.com or call toll free 1.866.238.1137
(Mention hybridcars.com for a special discount.)

FOLLOW, LEAD, OR GET OUT OF THE WAY: RECENT BLOGS BY WALTER MCMANUS
Dr. Walter McManus has been on a tear in early May with this HybridCars.com blog. He opened a can of worms with his blog-diatribe on the merits of speeding. He explained that he simply can’t afford to drive within the 55 mph speed limit:

"Driving 55 miles per hour means that each mile takes 1 minute and 6 seconds. If gasoline costs $2.00 per gallon, and I get the average 1997 fuel economy, then I will burn just over 6 cents of gas in that 1 minute and 6 seconds. At 55 miles per hour, I would burn about $3.40 worth of fuel per hour.

"Now, suppose I speed up to 70 miles per hour. How much more per hour does it cost me in fuel? A paltry $2.65 per hour. I earned $2.65 per hour (which was below the then minimum wage) in the summer of 1974 as a highway construction laborer. So, as long as an hour in a stationary state (at home or work, but NOT A TRAFFIC JAM, at least not until I get my in-car computer installed) is worth more to me than $2.65, it pays to speed."

Walter figures in the likely costs of traffic tickets and higher future insurance rates, and still concludes that speeding makes good economic sense.

To add insult to injury, Walter’s next blog extolled the virtues of tailgating. He said, "Most people think the slow-poke is more socially responsible than the tailgater. Most people are wrong." He explained:

"Assume a one-lane, one-direction road on which cars are traveling. Drivers choose how fast to go and how closely to follow the car directly in front of them. If one car is initially going faster than a car ahead of it, then when the faster following car reaches the minimum following distance its driver will tolerate, then it slows to the same speed as the lead car. The social benefit of the tailgater is simply this: more cars can be accommodated on a given stretch of road the smaller the average following distance. The more tailgaters there are, the smaller the average following distance."

Walter concluded "classical liberals should see the tailgater as the arbitrageur of the roadway, the agent who enables the efficient flow of traffic. The modern liberal should see the tailgater as the equal of the recycler or the hybrid-car driver in saintliness."

When Walter declares that switching from the Ford Escape SUV Hybrid from the regular old Escape actually saves more gallons than exchanging from a Toyota Camry to a Prius, it’s just too much to handle for some website visitors. The emails start flying. Check out the blog "Walter’s Brain on Sustainable Mobility:"
http://www.hybridcars.com/blogs/blog.php?thread_id=14

MILEAGE TAX CREATES HYBRID DISINCENTIVE
By Maria McLean

A Tale of Taxes, Tolls, and User Fees
If you use something, you should pay for it. Hard to argue with that, yes? Well, some folks in Oregon are pushing that concept to a degree that might change your mind—particularly if you drive a hybrid car.

Government agencies have been increasing fees and taxes to pay for things we all use every day. Oregon is extending that effort to another degree entirely through a pilot program where cars are taxed not on the fuel they consume, but on the miles they drive.

Would this involve toll roads? Definitely not—toll roads slow down traffic and infuriate drivers who feel they shouldn’t pay at the tollbooth for something they already financed at the pump. Instead, Oregon’s Office of Innovative Partnerships and Alternative Funding wants to let drivers travel where they will, collecting the money where everyone has to stop eventually—at the pump. California and Washington, too, are watching Oregon’s experience closely.

Tax Equity for Gas Hogs
University of Oregon researchers came up with the method—at the behest of state officials—to tax drivers by total in-state miles, rather than by gallons of gas consumed. Thus, a Hummer would pay the same as a Honda Insight to cruise Oregon’s trails. A pilot program consisting of around 280 volunteer drivers is planned for this year.

Transponders (at the cost of $225 per car) that communicate with receivers at gas pumps (another chunk of change) would charge (still more) for each mile driven. Global Positioning System (GPS) devices will ensure that only travel within the state, driven by state residents, is charged.

Libertarians not so Civil over Orwellian Objective
A few years ago, this would have been impossible. For one thing, the GPS system is controlled by the U.S. Department of Defense and, until Clinton changed the rules in 2000, it was programmed to be slightly less accurate for civilian GPS receivers to ensure security.

For another, the plan gives chills to those worried about Big Brother’s ubiquitous presence. Sure, officials say that police wouldn’t have access to the individuals’ GPS receivers, citing a 2003 case in which the Washington State Supreme Court decided that a search warrant was required to snoop via GPS.

However, the federal Patriot Act makes it easy to secure such warrants. And who deserves to be watched is always in the eye of the beholder. Mere "association" with, for example, a gang member is cause for suspicion in many areas; ethnicity, race, sex, age, or even religious affiliation could potentially suffice in others. If you doubt your name could ever make the list, you probably haven’t been paying attention.

People who Enjoy Breathing Weigh in
The problem with the mileage tax, Chris Hagerbaumer of the Oregon Environmental Council told CBS recently, is that the government ignores the impact of such a policy on air quality. "We look at it from the angle of, are people paying their fair share of the road system as well as the air pollution," Hagerbaumer says. She criticizes the state for focusing exclusively on raising revenue, missing the bigger picture.

Thus far, the committee charged with developing the mileage tax has paid no attention to air quality impact, which is also a huge contributor to state expenses. As the federal government shifts more health care burden onto the states, they need to find ways to reduce the cost of health care. Such chronic diseases as asthma and emphysema, linked to polluted air in congested areas, are among the most expensive. The American Heart Association also links stroke and heart disease to pollution.

Oregon, Schmoregon
So why should you care you live in one of the 49 states not named Oregon? You care because the federal government has a voracious appetite for highway and transportation spending—motor fuel taxes of $0.184 per gallon account for 90 percent of the federal highway trust fund. And this money-hungry beast has an eye on similar GPS-based taxation models. The Senate Finance Committee, in a voice vote April 19, 2005, established a six-year, $16.5 million study on the feasibility of moving to GPS-driven, mileage-based taxation. This will be added to the transportation bill, which emerged from the House already replete with plenty of regional projects.

In addition to such pork-barrel boondoggles as the Bridge to Nowhere, federal lawmakers can expect to reap campaign contributions and lobbying junkets from corporate players interested in seeing such a change in tax calculations.

The Long View
Tax policies have a way of changing behaviors. But Oregon is not hoping that by charging per mile, people will drive less. The state wants to maintain or increase its current revenue stream without having to do the dirty work of raising tax rates. Until people realize that they have to pay, one way or another, for their choices, politicians will continue to invent new ways to "lower" taxes by raising monies through other means.

In this case, it seems that a better choice for Oregon’s future might be another fee. Instead of having a private company be paid $225 for every GPS unit installed, why not simply institute an up-front registration fee of about that much, on a sliding scale weighted toward gas guzzlers or heavier vehicles—or both? Wouldn’t it make sense to have the driver of a 5,000-pound SUV pay more than the driver of a 2600-pound Civic? Since the infrastructure required to collect registration fees is already in place, there would be a huge savings over inventing a whole new transportation paradigm. And just maybe the scales would tilt in favor of cleaner, more fuel-efficient cars while not breaking Oregon’s delicate budget—and stiffing the people who choose to drive more economical vehicles.

HYBRID WEENIES, UNITE!
By Bradley Berman

Hybrid cars are just a ruse for environmentalists and eco-fascists, according to Pacific Research Institute President Sally Pipes. Brian Chee, of Autobytel.com, says "Hybrids cost more money, and don’t deliver an equal value for all that cash." David Booth, writing for the National Post of Canada, says that satisfied hybrid drivers are "stupid enviro-weenies," and he barely resists his desire to—excuse me, his words—"defecate all over Toyota’s recently redesigned ‘green’ car," the Prius.

The drumbeat of anti-hybrid invective makes me pause, pretend for a moment that I’m not a hybrid owner, and give a fresh look at their arguments:

• It’ll take 25 years or more to recoup the premium I paid for a hybrid.
  I would have saved $5,000 by purchasing a Civic HX instead of my Civic Hybrid. Even with the hybrid’s 10-mpg gain in the city, and seven on the highway, I’ll only save about 90 gallons—$200—for the 15,000 miles I drive this year. At that rate, I won’t break even until 2028.
  But: This is not comparing apples to apples. The two-door Civic HX lacks the Civic Hybrid’s interior space, as well as many safety features and conveniences. The hybrid premium for the more comparable four-door conventional Civic is about $2,500, minus a federal tax deduction, the hybrid’s reduced wear and tear on the engine and brakes, and rock-solid resale value so far. That puts my payback period at about 10 years. That’s how long I owned my previous car.
• Other cars are almost as good for the environment.
  Several non-hybrids made greenercars.com’s 2005 Top 10 Greenest Car List, including the Toyota Echo, Nissan Sentra, Pontiac Vibe, and Ford Focus. All of the vehicles on the list emit a tiny fraction of the tailpipe pollution of the previous generation of cars.
  But: Conventional cars are on the list; however, hybrids are at the top. There’s only one vehicle above the hybrids: the Civic GX, which runs on compressed natural gas.
• Hybrids don’t reduce foreign oil dependency or help fight terrorism in any way.
  "Oil is oil," says professor and web entrepreneur Arnold Kling, who earned a Ph.d in Economics from M.I.T. He explains, "If we reduce demand by 10 percent, we probably will reduce our demand for [Saudi] oil by 10 percent, not by 100 percent." Kling argues that only if we stop using oil altogether can we stop contributing to the demand for Saudi oil. "The indirect approach of reducing oil demand is meaningless."
  But: Every percent counts. If you have a choice of consuming more or less oil, why not consume less?
• Global warming is pseudo-science. And even if it wasn’t, the U.S. is reducing world greenhouse-gas carbon dioxide output, not increasing it.
  After a visit to the Cato Institute’s website, I’ve learned that there is no consensus among climatologists that uncontrolled, human-induced warming threatens the planet. In reality, there’s no one right temperature for the planet. Warmer weather is good: fewer people die in the cold, less money is spent on energy, and growing seasons are longer. Peter Huber of the Manhattan Institute and Mark Mills of Digital Power Capital, in their 2005 book, "The Bottomless Well," claim that America’s forests cover tens of millions more acres than they did a century ago. Therefore, our combustion of fossil fuel is not only neutralized, but America is a “carbon sink.” Global warming solved. Phew!
  But: More than 2,500 of the world’s leading climate scientists, economists, and risk experts say that global warming is the real deal. (See for yourself at http://www.ipcc.ch/)
• Diesel engines are superior to hybrid systems.
  Could a few million green-leaning Germans, French, Italians, and Brits be wrong? I’m told that diesel engines are greener in terms of greenhouse gas emissions, crude oil consumption, and the total energy production cycle. Diesels are fun to drive and last longer that gasoline-powered cars. The diesel’s high sulfur content and high levels of particulate matter? That’s the old diesel. Today’s "next generation" clean diesel technology solves all that.
  But: We won’t know if the new diesel technology works until mid-2006, when federally mandated low-sulfur diesel becomes available. Even with the new diesel, and new "Tier 2" standards, automakers produce diesel-engine cars that release two times more soot and smog-forming pollution than the average new vehicle.
• We will never run out of energy, and oil doesn’t really matter in the long run.
  Toss the scientific literature about peak oil production on the trash heap with global warming. Huber and Mills say efforts to conserve oil are futile and counterproductive because the history of energy has shown us that each gain in efficiency produces more demand, not less. That demand speeds up progress toward greater efficiency in an unending spiral of innovation that can only lead to quantum leaps in energy efficiency.

  Take electric lighting, for example. As newer, brighter, and more efficient lighting technology takes hold, consumers scoop it up and apply it to uses not previously considered. We’ve moved from Edison’s light bulb, to vacuum tubes, to fluorescent bulbs and Light-Emitting Diodes.

  More importantly, these advances are being applied to the retrieval of energy itself. "Energy-capturing technologies are improving across the board, and faster today than ever before. The logic of the fuel-retrieving machines has advanced much faster than the fuels have retreated—we keep getting closer to the receding horizon…The issue of exhaustion is resolved. Energy supplies are-for all practical purposes—infinite."

  My response: They have a point. Their argument, greater efficiency increases demand, makes some sense to me. If this is true, what’s their vision for the future of auto technology? Huber and Mills peer into the crystal ball and see—am I reading this correctly?—hybrid gas-electric vehicles with more electric power, more robust computer technology, beefier battery storage devices, and the ability to plug in to the power grid. Plug-in hybrids! The authors view hybrids as the bridge to a brave new automotive world: “With a fully electric powertrain, most of the car—everything but its prime mover, whatever that may end up being—now looks like a giant electrical appliance…As cars grow progressively more electric, the infrastructure for recharging their batteries from the grid will grow apace.”

The Hybrid If-Then Equation
If today’s hybrid cars are the bridge to tomorrow’s plug-in hybrids…if my Civic Hybrid produces about a ton less greenhouse gas carbon dioxide than the Civic HX, and several tons less than most conventional SUVs (just in case global warming is real)…if every American increased their car’s fuel efficiency by seven MPGs the way my hybrid does, thus saving the equivalent of 100 percent of our Middle East oil imports…if my hybrid is at the top of the greenest car list…if my kids can live in a world with far less soot and particulate matter in the air…if I can personally conserve 100 gallons of non-renewable fossil fuels every year…and if gas heads north toward $3 a gallon or higher…if any one or two of these if’s are real, then maybe I didn’t make such a big mistake buying my first hybrid and putting a deposit down on my second: the Toyota Highlander Hybrid.

By the end of this year, there will be 400,000 American eco-fascist, enviro-weeny morons driving hybrid gas-electric vehicles. Toyota, the leader in hybrid technology, is poised to overtake General Motors as the world’s largest automaker in the world. When Toyota passes GM, the nearly half-million current and retired American autoworkers who depend on the company to supply their health benefits, will unfortunately have a real reason to defecate.

WRAP-UP
Thanks for checking our 15th newsletter. Don’t forget to enter information about the price you were offered for a new hybrid in our "Price Pulse." (www.hybridcars.com/pricepulse) In our next issue, we’ll share more information about our burgeoning hybrid market research programs, and offer a surprising answer to the question: Which car company is going to really bring the hybrid car revolution to the masses? Until then,

Happy Driving,
Bradley Berman
brad@hybridcars.com

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