Grant's Auto Rants

Invest in Extension Cords?

Electric cars are certainly not a new idea. As a matter of fact, most manufacturers have considered them, and many have taken a formal poke at them only to be shocked back to reality after realizing that using electrical energy to mimic a gasoline/diesel-powered internal combustion engine is a tougher task than it seems. And not because we don’t have the technology in batteries as many industry folk might have you believe.

Investment and divestment in such programs went largely unnoticed for decades though the 2006 Chris Paine documentary "Who Killed the Electric Car?" brought a world of hurt to some PR departments and has somewhat reignited interest not only in the use of electricity as a the sole source of passenger car energy, but also in one of the more interesting corporate conspiracy theories of all time.

The film illustrates, among other things, the development, introduction, and quick death to what seemed like a very promising program in the 1990’s. One key to the initial GM investment in the program came in the form of a piece of California legislation (isn’t that always the case) from CARB, or the California Air Resources Board. The mandate was ZEV, which stands for Zero, not Ultra-Low (ULEV) or Partially Zero (PZEV), or Super Ultra Double Top Secret Somewhat Low but Zero Emissions Vehicle.

Even before the mandate or programs like the GM EV1 could begin to get traction, those pesky “powers that be” started to come down on poor Alan Lloyd, then head of CARB, harder than a deep water oil drill. After plenty of arm twisting the mandate was overturned and the EV1 led out to pasture. Since then, many have added their two cents and more on the both the film and EV1, whose short life was extinguished quicker than a submerged carburetor in the mother of all corporate short circuits.

Among those other things in the film, are descriptions of lawsuits brought on by the auto manufacturers, Big Oil and the Bush administration (aka the trio of doom), which it notes is headed by several past oil and auto executives. Also, it paints a very clear opinion on how complex and codependent different industries are on not only each other, but also government policy from a competitive standpoint. One would never think that an administration’s high point could be helping stack the deck for two of the largest industries in the world against technology.

Ah, yes, the technology, or more succinctly said, battery-power, which has been at the center of the issue from the beginning. Battery design and power have come a very long way and, according to the movie, would be much further alone today had the oil companies not patented much of the technology so that it couldn’t be used as a replacement for gasoline. And while early efforts at useful battery packs were hit or miss (lead – acid batteries were used to successfully power EV1s across the country) Zinc – Air and Nickel Metal Hydride technologies have certainly produced much better results. Today, it seems that Lithium – Ion cells will realistically drive vehicles between 200 and 400 miles between charges.

Which brings up another point. One, which has been the most critical and damaging tool in the campaign against electric vehicles. The range of electric cars makes or breaks the technology because people immediately compare how far they can drive on electric versus gasoline. One must remember, however, that the range on a gasoline-powered vehicle is essentially an arbitrary figure that is simply a product of the vehicle’s fuel economy and the size of its gas tank. Electric cars have been criticized because they would need to be charged somewhat more frequently than you would fill up with petrol, regardless of the cost, ease or time taken to do so, etc…

Also, when you consider that the vast majority of fuel consumption comes from many short trips and that our driving patterns and habits only require a small percentage of our total vehicle range, the considerably lower cost and fuel efficiency equivalents of an electric vehicle makes its argument much stronger. The trio of doom, however, is a very powerful bunch, even more so that those cattlemen, and Oprah will be the first to tell you how much influence they have.

This November, Tesla Motors will start delivering the $92,000, 130 mph, Tesla Roadster, which in all rights is a very attractive sports car. The fact that the company has gone right after the sports segment is telling as their strategy for public education and car efficiency will be best served there. The car is not some giant Duracell on wheels, but rather a svelte two-seater reminiscent of a Lotus and capable of blistering performance. The company has also announced that they will supply their Lithium – Ion batteries to other manufacturers as well as other internal projects including an intra-city car and sedan.

Unfortunately, the company CEO Martin Eberhard recently had to admit that the car wouldn’t have the 350 mile range as originally hoped, but would be more like 200 – 250 miles (the equivalent of a 4 hour drive rather than 5 ½ hour one) further perpetuating the useless oranges to apples comparison.

It will be very interesting to see how this car is accepted. About the only thing able to take on the constricting forces of the BOA (Bush – Oil – Auto) is the public itself. You can simply no longer hide all of the social, economic, environmental and political consequences of protecting an antiquated industry. The public is becoming more interested and better informed and will eventually question what we are doing.

Well, I guess a little help from the Terminator doesn’t hurt either.

To read excerpts from an interview with Tesla CEO, Martin Eberhard, click here.

High Fuel Prices: Positive Fallout?

Most North Americans are pretty frustrated these days with fuel prices reaching and exceeding post-Katrina levels already this spring without the added pressure of a mid-summer gas crunch or some natural disaster to blame. The price for an average gallon of regular (if you haven't heard it two or three times yet today on your various doomsday news outlets) has reached $3.19. Heaven help the commuters in parts like Maui or San Francisco where fuel is approaching $5/gal.

Actually, come to think of it, commuters in Hawaii?, never mind them.

Sure, in relative terms, we won't face the same "pinch" that we did in the late 1970's or 1980 until fuel is (today) at about $4.50/gal., all other things being equal. I say other things being equal, because a variable in the equation like average fuel economy (at roughly 24.5 mpg today) is roughly what the average was back during those crunch times and is a terrible indictment of the domestic auto makers and legislative powers that have lobbied for stagnating technologies and promoting our wasteful habits. But that is another issue. Regardless, it costs many people up to $120 to fill up their SUVs and pickups, and for whatever chain of events and policies that got us here, it has certainly put a damper on the drive.

Rather than simply get angry like the "old guard" leftover management in parts of the auto (and related) industry(s), is it possible to look at this situation differently? Going a step further, is it possible that there may be something good to come out of higher fuel prices?

The short answer is yes, the long answer, however, is very long indeed and unfortunately depends on many outside shots and monumental shifts in attitude, lifestyle, and perception, which may not be realistic in this day in age. Either way, many in media currently ask people when they will shift their behavior (i.e. at what price of fuel?) based on these higher gas prices. I am not certain that this is the right question to be asking ourselves. Much more relevant is: How are we going to shift our patterns and behaviors?

We think that these higher gas prices are going to be a temporary thing. "Oh, Sir, you are paying through the nose, for our nightly newscast, how many trips or vacations are you going to give up this summer because of high gas prices and you do you blame for it?" (cue: crying children) We think that later in the fall, prices will fall and then we can get "back on track." Well, that really doesn't seem to be the case, as these crunches are likely going to become longer and more common until they are no longer crunches at all. Rather than wait around like everybody else, maybe a modified strategy is in order today.

18% say they will choose mass transit, while some 30-40% say they will choose vehicles with better efficiency (fuel economy), based on today's prices. These, along with curtailing extra driving, are the only answers we have really some up with so far. Maybe considering some of these other potential legacies of higher prices will help people come up with some more creativity where transportation is concerned.

Extended fuel prices of $5 or 6/gallon, a bit more like Europe or Scandinavia, might really force auto manufacturers to place a considerably greater focus on efficiency. Are you really ready to give up the added space and size and consider a smaller vehicle, say with a lower displacement engine?

What about a different vehicle altogether? Maybe these prices will push more people to scooters and motorcycles. Imagine how driving on two wheels for at least a portion of your driving (say to work and back) might affect your life and energy costs. Or, how about riding a bike to do certain tasks? It would certainly have a positive impact on your health at the same time.

Of course, it we are all riding around bikes everywhere, then we will want to be closer to the city center, where we can do our shopping and commuting easier, which will, in turn, put a renewed emphasis on urban living, raising real estate costs and decreasing the size of the average "in-town" home. This will also put a new premium on inner city/town vendors of our favorite goods and services. No longer will we be out in the suburbs with our giant vehicles where we will back up to our farthest discounter where we load up on two years worth of toilet paper. Instead we frequent several shops and stamp-sized stores on our way home from work to get the next day's needed supplies.

The snowball effect might change the very identity of North American life to one that is much more efficient, if not romantic somehow. Light rail, expanded train service and loads of buses will come online to take us where we want in both inclement weather and over longer distances. Telecommuting and people working at home in their underwear is commonplace. Trips and vacations are even more appreciated. The energy world receives the same time of revolution that information has and new technologies we never thought possible power our toasters.

Genetically engineered grass grows to a height of 3 inches and magically stops, roof tops are white during the summer and black during the winter, the average size of a North American nearly halves with all the exercise and walking. Obesity and heart disease drops and intelligence actually rises, weather patterns stabilize and El Nino takes an extended vacation. People walk to the theatre and collect frequent rail miles. Local organic foods and farmers flourish. Drunk driving rates and auto-related deaths decline, though bike injuries rise. Foreign policy shifts. People turn off their computers at night.

Hell freezes over?

Well, maybe. But, if not, at the end of the day what are we left with? A society and lifestyle that looks a little bit more like, well, Europe and Scandinavia and refrigerators half their current size. Which isn't such a bad thing; just think of the savings of not having to travel abroad.

My reason for suggesting a new and current personal energy strategy today is not just because riding the train is fun (and comfortable) or that these changes would have a very positive environmental and social impact. I would suggest it to save that one thing that cars are really about, which is the drive.

The real loss in driving is not giving up two stress-inducing hours sitting in rush hour traffic everyday, or having to set our vacation plans around a train schedule. The real loss is not being able to jump in the car on a moments notice to talk the kids for ice cream, or respond to an emergency, or go for a Sunday morning drive in a real sports car that burns real gas and makes a lot of noise. These are what make driving fun or necessary. Driving to work, typically is not.

So, maybe we should not consider when we will change our habits, but how. If not for yourself, than for the scooter mechanics.

Technology swells as pressure mounts...

One of the latest automotive developments to receive considerable attention over the last few years is the introduction of tire pressure monitoring systems.

Not long ago, monitoring tire pressures was something you did every once in a while with that funny contraption at the corner gas station that made those loud dings as you inflated the tires. Typically you wouldn't even do so unless you visibly observed a tire that was considerably flatter than the others. Fast forward just a few years and tire pressure monitoring systems (TPMS) not only represent an entire sub-industry, but they also have legislative backing requiring them on future vehicles all but ensuring a shot for any company that should get involved with their design, manufacture and distribution.

When it comes to TPMS, the single most significant development was the improvement and attainment of radio frequency identification or RFID. It is this type of short term radio signals that allow sensors inside of a car's wheel to send basic data to a receiver somewhere on the vehicle. Of course, TPMS was at first a luxury item destined only for the more expensive brands, the hardware itself has already achieved an economy of scale, which allows it to be delivered on a wide scale, i.e. to all vehicles after 2008.

The benefits of maintaining optimum tire pressures are clear. Safety and fuel efficiency are perennial hot topics in the industry and this simple fix addresses both by removing that pesky task of taking a knee once a month and manually checking all four tires with the tricky to use pressure gauge. If you haven't done so in a while, I recommend doing it as it often brings back some nostalgic feelings associated with Sears and the smells found only around an old gas station.

TPMS has been rolled out manufacturer-by-manufacturer starting with the more expensive models and is just now working its way down to more economically minded cars (see also the Tread Act of 2000). One Canadian company, however, has taken the technology one step farther and aimed their product at the fleet crowd, whether car or truck, which (as you can imagine) equates to a sizable market.

Rather than simply sending the data from the tire sensors to the onboard receiver alerting the driver of pressure discrepancies, this company's units actually send the information back to a central repository (originally in Ottawa) where it is then forwarded to the individual fleet's manager(s) via email, blackberry, cell phone, etc... Pretty nifty.

The idea is that while fleet vehicles may not receive the same amount of love from their drivers as an individual's car might, the problems associated with improperly inflated tires and their failures are often magnified by several degrees both physically (safety) and financially. When a tire can cost up to $2000 and a vehicle is being driven for a living, maintenance & repair as well as operating costs quickly make a strong argument for their extra care.

To see an article on the company (that now has a US office outside of Detroit), click here.
To see the company site, which features a cool ROI calculator, click here.

Just the certified fax Ma'am...

So, you are interested in a replacing your ride. What is it going to be New or Used?

Well, over the last couple of years, consumers in the crowded automotive industry have had a third choice, and that is "Certified Pre-Owned," which at least manufacturer says provides all the reliability of new, but the affordability of used.

Sales of CPO vehicles has grown over the last several years to about 1.5 million units annually.

During the excess of the late 1980's, leasing became very popular among automotive consumers as it allowed your average Joe to drive and above average car with enough money left over to fill the closet with white suits and pastel T-Shirts.

The leasing craze, however, provided an eventual legacy the manufacturers weren't entirely ready for, which was lease returns (vehicles).

After a relatively short 2 to 4 year lease, most vehicles are simply returned to the manufacturer with the "owner" choosing for a new vehicle in lieu of actually taking advantage of the end of lease purchase opportunity. This led to a glut of "somewhat" used vehicles coming back into the marketplace, some of which could go straight to wholesale or sales on a new car lot as used. But for many, it is the luxury vehicles that make up the majority of lease deals, which represent a significant profit center in the used car marketplace.

The only issue was, the demographic typically interested in these vehicles was also interested in a like-new vehicle with some factory support.

And so the Certified Pre-Owned category was born.

Every manufacturer now has a program that generally offers two distinct things. The first is an inspection of the vehicle, often coined as "rigorous" and inclusive of X number of physical checks. It is then understood that any problems or imperfections will then be addressed by the certifying dealership. The second offering is a factory-backed warranty, which typically extends the vehicle warranty for an additional two years and (again typically) 50,000 more miles, whichever comes first.

Two recent CPO vehicles, however, have become very high profile recently and are simultaneously featured on the front page of the NY Times, which has shed some light on issues stemming from CPO programs. One woman purchased a certified Chevrolet only to find out that the vehicle was really a "hybrid" unbeknownst to her. And if you thought you couldn't get a hybrid Monte Carlo, you might want to check out this article.

Maybe even more fitting to the Hybrid moniker than a vehicle with two power sources, this woman's car was actually two previously used (and obviously crashed) Monte Carlos that were fused together and sent back out on the lot for another go.

One of the issues at hand here is that manufacturers outline the specifics of a CPO program, but it is the individual dealers that implement and administer it. With more than 21,000 new car dealers out there, you can imagine that there is a wide interpretation of the fine print.

It is the dealership that decides which vehicles to certify and which ones to sell simply as used or wholesale. They make this decision based on whether or not that vehicle might bring the extra money as CPO.

Dealerships "pay" the manufacturer several hundred dollars to certify the car, then they charge the customer a fee, sometimes as much as an additional $2,200 for the CPO vehicle. This creates both a real incentive to certify cars, but also a conflict of interest as it is the dealer's responsibility to fix these small items that ensure the vehicle passes inspection.

An additional lynch pin in the whole process is the Carfax or report of the vehicle's history. Carfax is the company that keeps and sells vehicle histories, which have become the industry standard in used and CPO sales. Unfortunately, it has been shown that Carfax information can be incomplete or otherwise forged (or information withheld, etc...) as was published in this NY Times article. A Carfax is supposed to document major accidents/damage as well as flood damage (an issue made more relevant post-Katrina), though it is yet to be determined who is actually responsible when a car with a "clean" history actually has had significant work.

Industry insiders seemed to be split on the issue with some saying the factory warranty is definitely worth the added money and to pay for a vehicle, which is backed up to 100,000 miles through a CPO program is comparable to what an aftermarket warranty would cost. The others argue that with newer vehicles 100,000 miles is generally an easily achieved lifespan without significant problems anyway and that the cars are often no different from other used cars with the exception of price premium.

Either way, almost all agree that when purchasing a used car which is not certified, it pays to spend the extra time and money required to get a third (neutral) party to inspect the vehicle in addition to a Carfax report. As far as CPO programs, not all are created equal, though they are ranked by companies like IntelliChoice. How much peace of mind is worth is really up to you, but be sure to choose both a brand and dealer you trust.