Investing in Cars of the Future

  • Both studies agree that we need more efficient cars (Photo by Karen Kelly)

Recently two reports on the future of automobiles came out. They looked at cars and trucks from very different perspectives, but came to some similar conclusions. Lester Graham reports:

Transcript

Recently two reports on the future of automobiles came out. They looked at cars and trucks from very different perspectives, but came to some similar conclusions. Lester Graham reports:

The first report was published in the journal, Environmental Science and Technology. It looked at what it would take to get U.S. automobiles to reduce the greenhouse gas, carbon dioxide, enough to lower it to 1990 levels.

Why cars? Because cars and trucks produce a third of U.S. CO2 emissions.

Greg Keoleian is one of the authors at the University of Michigan. He says there are three things that need work.

We need to drive less, burn cleaner fuels, and, within about 40 years, increase the average fuel mileage way beyond the 20-miles per gallon we’re getting now.

“That would need to increase to 136 miles per gallon to meet the carbon targets. Alternatively, if we just focused on fuels, basically we’d need about 80% cellulosic ethanol by 2050. And the third scenario is a reduction in driving. It would mean we’d have to cut our driving in half by 2050.”

It’s unlikely we can accomplish any one of them, and the study’s authors suggest it’ll probably be a combination of more efficient cars, better fuels, and driving less if we’re to reduce greenhouse gases enough to make a difference.

The second report entitled ‘Envisioning an Uncertain Future’ comes from the Boston Consulting Group. It looks at the future of the automobile from a business perspective.

One of the authors, Xavier Mosquet, says the study assumes rising oil prices will force some changes.

“And that the pressure from the consumer on the governments will be so high that the governments will have to take energy actions to develop green products and green cars.”

But the report notes green cars will cost more – as much as 15,000 dollars more for hybrids or plug-in hybrids compared to standard cars.

“The consumer will look at these cars and say, ‘well, these are more expensive than I can pay.’ And therefore they’re not going to buy them. So, what I think the government has to do if they want to go that way is to look at the cost of putting those technologies on the market and either subsidizing the car’s manufacturers and suppliers or helping the consumer with much more tax incentives. Otherwise it will not happen.”

So, from a business perspective, the Boston Consulting Group report suggests without government help, manufacturers won’t build more efficient cars at a price we can afford. But we’ll need them because of high fuel prices.

The University of Michigan report on cars and climate change agrees the government will have a major role.

Author Greg Keoleian says if we take climate change seriously and are committed to doing something about it, we’ll have to change driving habits, encourage innovative manufacturers and invest government money.

“We are capable of doing this and the cost of climate change to society is tremendous. And each sector needs to play a major role in addressing the needs to reduce.”

The studies look at the future of the automobile from very different perspectives, but both agree we need more efficient cars and that won’t happen without the government pushing a little and helping a lot.

For The Environment Report, I’m Lester Graham.

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