A New Deal for Green Cars

Obama and Gore

After accepting the position of White House chief of staff under Barack Obama, Rep. Rahm Emanuel said, “You don’t ever want a crisis to go to waste. It’s an opportunity to do important things that you would otherwise avoid.” Emanuel was speaking broadly about the economic crisis, but his statement holds even truer for the crisis facing Detroit automakers.

“It is our hope that [government] actions will restore the pre-eminence of our domestic manufacturing industry so it can emerge as a global, competitive leader in fuel efficiency and in new and path-breaking energy-efficient technologies that protect our environment.”

Democratic Leaders
Letter to Treasury Secretary Henry Paulson

Rising gas prices earlier this year took a toll on sales of the SUVs and large trucks produced disproportionally by General Motors, Ford, and Chrysler. When the credit crunch hit, many remaining buyers became unable to secure auto loans. Sales plummeted, and the Big Three have been hemorrhaging money. General Motors could run out of cash by mid-2009.

When car companies were profitable, they put up every resistance to government intervention—such as standards for higher fuel efficiency, reduced emissions, and advanced zero-pollution technologies. Now, they are in deep trouble and have come running to Washington for emergency assistance. And it appears they will get it.

In a letter to Treasury Secretary Henry Paulson, Democratic leaders said yesterday “a healthy automobile manufacturing sector is essential to the restoration of financial market stability and the overall health of our economy.” The Democrats urged the Bush administration to use a portion of the $700 billion bailout for the financial industry to rescue American automakers.

The potential Detroit bailout is a once-in-a-lifetime crisis turned opportunity. A grand bargain is in the works: the federal government provides billions of dollars to the automakers, and in exchange, the automakers must retool to produce high-mpg gasoline cars, gas-electric vehicles, clean diesel cars, plug-in hybrids, and all-electric cars.

The Democrats spelled out the deal in their letter: “It is our hope that [government] actions will restore the pre-eminence of our domestic manufacturing industry so it can emerge as a global, competitive leader in fuel efficiency and in new and path-breaking energy-efficient technologies that protect our environment.”

Obama’s Climate Czar, And Hybrid Cheerleader

The new deal for green cars will probably have to wait until after Obama is inaugurated. (Bush has been cool to the idea of a bailout for carmakers.) The responsibility for striking the right deal with carmakers could fall to Obama’s “climate czar,” a new cabinet position that environmentalists hope will be created in the new administration. The definition of this position has not yet been established, but in broad terms, the individual would facilitate initiatives between the Environmental Protection Agency, the Department of Energy, and the Interior Department.

“We should help America’s automobile industry to convert quickly to plug-in hybrids that can run on renewable electricity.”

Al Gore
“The Climate for Change,” Nov. 9, New York Times

In effect, this person would become the chief governmental strategist for reducing the emissions of greenhouse gases in the US.

Several names have been circulating throughout the media and blogosphere. The short list includes New Mexico governor and former energy secretary, Bill Richardson, and the former head of California’s EPA, Terry Tamminen. But the leading candidate is Al Gore, former vice president and Nobel Prize winner.

Gore was practically filling out his application for the position with the opinion pieces he wrote this week for The Wall Street Journal and New York Times. He outlined a five-point plan for massive carbon reductions, which included helping, “America’s automobile industry (not only the Big Three but the innovative new startup companies as well) to convert quickly to plug-in hybrids that can run on renewable electricity.”

Gore also called for a nationwide fleet of plug-in hybrids to help solve the problem of electricity storage. He wrote, “Cars could be charged during off-peak energy-use hours; during peak hours, when fewer cars are on the road, they could contribute their electricity back into the national grid.”

Despite a limited choice of gas-electric cars and negligible support from government in the past eight years, more than 1 million consumers purchased a hybrid car. This is a precursor to the next eight years when hybrids could benefit from the full support of government funding, the leadership of a Nobel-winning cabinet member, the eagerness of consumers craving alternatives, and the compliance of an auto industry made to be accountable. The green car revolution is about to shift into overdrive.

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  • simon Lloyd

    The promotion of open pin charging stations is the most urgent project now so that all EV’s can charge fast, safe & avaialble to the public. we at Evoasis have stated that process with many pilots being agreed across USA, Mexico and GB in 2009

  • Eric

    Finally!…there is going to be the political will in the US to give these energy and environmental issues traction!

  • Corky O’Smoginpooter

    The Time IS Now. There are companies developing solar film and other aftermarket solar accessories that can charge cars during the 9-5 hours employees cars sit in their place of employments parking lot.

    Many other start-ups are testing or developing technologies that can once and for all rid us of our dependence on any kind of cabon emmitting energy source…One day, the energy that companies use produce these accessories will also be provided by non carbon emmitting energy sources.

    Only Al Gore can see this to fruition. He can help expedite the go to market deployments of these technologies and give the consumer what they really want…cheap, efficient clean energy.

  • Paul Beerkens

    That is very exciting.

    Gore as climate czar would be a great step in sorting energy independence and climate change.

    Yes we can.

  • Anonymous

    “not only the Big Three but the innovative new startup companies as well”

    Hell yes, give Aptera 1 billion and see what they can do.

  • edna david

    With a President Elect who is committed to climate change and has made this issue one of his core campaign issues – I believe that this is the time for the United States to really make a difference on creating new jobs and impacting the global environment. Al Gore is the man who can make this happen!

  • Collin Burnell

    Finally, a breath of fresh air!!!

  • ex-EV1 driver

    Subsizing the auto industry to build electric and hybrid cars again will be just as big a failure as it was the last time (the 1990’s. Millions of dollars was spent both to subsidize battery development as well as charging infrastructure buildout and it was all destroyed along with the cars that were developed to use it.
    The only affect a bailout of the auto industry will have will be to waste money and kill any startups that are honestly trying to do the right thing such as Tesla, Aptera, Phoenix, Miles, Commuter Cars, AC Propulsion, Vectrix, EVC, Zero Motorcycles, etc.
    I’d feel a bit of sympathy for the workers in Detroit but I didn’t exactly see the UAW or anyone in Detroit protesting the destruction of the EV1 or the RAV4EV.
    Detroit is obsolete. Throwing more money into it isn’t going to help.

  • Samie

    Can it be… Refreshing indeed

  • Jeff

    I agree with ex-EV1 Driver. Bailing out Detroit has been done to death. It is a cliché now. Helping Detroit needs to go up in flames and reinvent itself. Let’s make the best of a good crisis. Safe, high density, energy storage technology is vital for all sorts of applications not the least of which is electric vehicles. Expanding public transit is vital in reducing fossil fuel use. Let’s quit jerking our knees because someone will loose their job. Let’s make long range decisions that will mean stable jobs with a living wage over the long haul.

  • Shines

    I think this line says it: Democratic leaders said yesterday “a healthy automobile manufacturing sector is essential to the restoration of financial market stability and the overall health of our economy.”

    The problem is giving Detroit money won’t create nor provide a healthy automobile manufacturing sector…

    Chevy makes trucks – GM should shut down GMC
    Cadillac makes luxury – GM should shut down Buick
    Chevy makes cars – GM should shut down Pontiac

    Just my opinion…

  • Richard Burton

    anybody remember the details of the last time that Congress gave Detroit millions of $ to develop fuel efficient vehicles? Seems it would be important to know what we did that time, and why nothing,even cars that partially met the goal, were produced!

  • sean t

    Obama will be a better Pres.
    LOL at John Howard, ex-PM of Aus. He said terrorists will be happy if Obama (or any Democrat) is elected. What a stupid comment.
    I believe in the long term, most cars will be powered by electricity because electricity can be produced by many renewable energy and can be stored (batteries) easily and transported (grid lines) easily.
    Although Al Gore electricity consumption is about 8 times of mine, he can be a good climate czar.

  • WompaStompa

    This is great. Obama is already setting the ball in motion to do so many things and he’s not even in office yet. Gore as Climate Czar would be just amazing. I enjoy actually feeling something when hearing a president (elect) speak or reading a press release from him. That feeling? Hope.

  • Max Reid

    Way back in early 1990’s Al Gore started a program called PNGV to build high mileage vehicles. It was scrapped when Bush took office and the Big-3 cheered it as they can happily sell SUV’s.

    Now the Big-3 has fell in the trap. Anyway, when Fed gives them cash, it should ensure that the automakers start selling smaller high mileage cars. After all with no one is going to buy SUV’s anymore.

    I guess Al Gore should be made the Energy Secretary and he will promote the renewables with vigor.

  • AP

    A bit of history for all:

    Automakers (including Toyota) have fought CAFE because it is a poor law. It creates supply of fuel-efficient cars, but no demand (we had $1 gas just a few years ago). Manufacturers must practically give their cars away, unless they can take advantage of cheap foreign labor and/or a manipulated currency (think yen).

    Increasing fuel standards without increasing demand will make the problem worse, because of the expense of improving fuel economy (lighter materials, hybrid powertrains, etc.). Contrary to public opinion, these costs won’t disappear once the technology becomes more common. The commodities needed (like copper, neodymium, etc.) will only become more expensive.

    It would be like the government requiring McDonald’s use prime rib in their burgers. Customers wouldn’t want to spend much extra for it, so McDonald’s would have to “eat” the difference. Now, instead of $2 extra content, think $8000 for a hybrid system in a market with $2.00/gallon gas. Most customers are NOT going to pay $8000 extra for the automaker to break even, much less make a profit.

    This isn’t a “Detroit-vs.-US” battle; we are all in this together (I thought that liberals, who mostly visit this site, would already assume this. Or do they only want the benefits of liberalism – not the costs?). If GM goes down, 2 million jobs (at least) go. If we are in a deep recession now, you ain’t seen nothing yet.

    Creating demand for fuel-efficiency with a higher fuel tax is the long-term solution for Detroit, jobs, and energy security. Al the rest is just fluff.

  • Samie

    McDonald’s prices for food only range a few bucks. We have cars that range in the common market for 12k-to about 70k (for luxury SUV’s). Is it surprising that the 12K cars are usually some of the top fuel efficient vehicles out there? Also is it a surprise that the car manufactures make little or nothing on the 12k cars? The problems with CAFE is that it is not evenly distributed. A SUV that gets 12/14mpg or say a speedy car in the range of 40-70K often is not designed with major fuel efficiency technology. This is going to change somewhat in new CAFE standards but it does not go far enough.

    As for technology yes there is always added costs but that should not be surprising. Honda has just found a way to produce hybrid technology for half of what it takes some of the other guys. Innovation is often left out of many arguments and innovation happens naturally if firms want to stay competitive. Cutting costs, use of different technologies are ways that car companies keep down costs of raw materials.

    Look at fuel tax distribution which would have no affect on those who can afford the Big SUV’s and it may increase the desire for those types of inefficient vehicles due to increased distributional consequences. A more glorified status symbol. If fuel efficiency regulations where distributed more evenly among different classes of vehicles there is not the distinct differences in demand that AP talks about.

    By the way I do agree with what AP said about “This isn’t a “Detroit-vs.-US” battle; we are all in this together”. But I will say disagreement of some for a bailout is shared by both liberals and conservatives even our current President is in this group.

  • RandalH

    The “Big Three” deserve to disappear. By doing so, more nimble and efficient startups can have a better chance in the market. And without the decrepit labor contracts combined with idiotic management, those startups might have a chance to build cars that people want. Any bailout by the Democrats will be for one purpose only – to buy votes by strengthening labor unions that tend to vote Democratic. Cars are being built cheaply and efficiently all across the South today.

    Al Gore as “energy czar” is intended as a joke, right? It could only be true in the sense that a corrupt czar oppresses his subjects while hypocritically living in extravagance; not to mention that he stands to make billions off of a carbon credit program that he would control.

  • Bill Cosworth

    So many stupid people here who are anti- American.

    IF the big 3 disappear watch you home value disappear.

    Since when is a start up can go against a large company like Toyota.

    NO look at tucker !!

    Toyota needs to file for cheaper 11.

    They destroy us jobs. They are a terrible car company make unsafe cars and are built cheap . Toyota cars now are not even reliable.

  • Matt Jarest

    Yes I agree Toyota needs to File for Chapter 11.

    We need to tax Toyota .

    We are not even allowed to sell cars in japan and toyota bribes our consumer magazines and gives heavy donations to consumer reports to make our cars look bad.

  • Halo9x

    I don’t know what you all are smoking but Al Gore is so wrong on … well … EVERYTHING, he must be the just the person to help lead this country to ruin. We’re headed for Global COOLING and maybe even an Ice Age. Al Gore bought the Nobel Peace Prize and he didn’t invent the internet. He’s just a stupid politician who even flunked out of Seminary school.
    As for Toyota building terrible cars, obviously you are all in some kind of Twilight Zone. Toyota has one of the best records for reliability on the planet. My Prius and Yaris are just two examples.
    The Big 3 need to dramatically revamp what they are offering and go to Hybrids which I’m sure they will. Chevy has a lot riding on the Volt. What they need to have is a tax subsidy from the Gov. so they can make the car affordable to many people. That plus some tax credits for the buyers would help make the switch until the car can be made affordable without Gov. assistance. Michelin has just announced they have developed an electric drive system in a wheel. All the need is a power source. Awesome idea that can even make it possible to convert existing gas cars.