A Look Ahead at Our Automotive Future
As mentioned in my prior post, I had the opportunity to meet one on one with top management at General Motors prior to the opening of the Chicago Auto Show, which is the largest auto show in North America. I am writing several posts about this experience for two reasons. First, I learned a lot that is worth sharing, and second, our collective ability to drastically reduce the production of greenhouse gases during the next two decades is significantly dependent on transforming how we power transportation.
The good news is that all the major auto companies have gotten the message that finding new ways to power vehicles is now an essential part of their future economic success. This is due to market demand, developing political pressure, competitive pressures, and the stark fact that 98% of vehicles today are powered solely by petroleum energy. There are many energy analysts today that think we are passing through â€˜peak oilâ€™ during this current decade. What this means is that it is quite possible that sometime after 2040, the planet will run out of oil, at least oil that can be affordably extracted. Any auto company, whether it is GM, Ford or Toyota, does not want to be in the long term business of building vehicles that donâ€™t have fuel.
Green is clearly a new marketing hot button in the industry. While many hard core environmentalists have historically valid suspicions regarding green claims from car companies, I sense that a corner has been turned. Market success always gets attention. The incredible success of the Toyota Prius cannot be denied. As Troy Clarke, GM VP, North America said during the interview time I had with him: â€œToyota clearly showed that the marketing of technology can be powerful.â€
During a brief but focused interview I had with the Jill Lajdziak, the dynamic GM of Saturn, she clearly, forcefully stated the fact that, from an overall product line point of view, Saturn is the leading American green automotive brand. When you think about the Saturn brand, this makes good sense from a forward thinking branding point of view. Sure, we all wish that people in leadership positions at all the auto companies had been saying this for years. The good news is that Jill is being clear about this message today. She is going on the record, and with customer support, can take it to the bank.
As I have consistently written here, we experienced a tipping point in the US in 2006 when it comes to global warming. If vast numbers of us go out and buy SUVs and allow our heads to be turned by Hummers, we cannot point our fingers at those who respond to our demands for ever bigger SUVs by making them and selling them to us. What happened in 2006, however, was that the price of gas shot up so far and so fast, that dealers had the greatest backlog of unsold SUVs in history sitting on their lots. At the same time there was a growing waiting list to buy a Prius. It is wonderful what $3.00 a gallon gasoline can do!
The issue at hand however is lead time. It takes years to bring a car from design stage to market. The market demand for cars that provide high MPG or high MPC â€” Miles per Charge (if that is a new term, Iâ€™ll take credit for it) â€” is now, but it will be several years for the auto companies to retool and scale up. In addition there is the unfortunate problem I discussed in the An Electric Car post which is that today there is not a battery technology available that can deliver what is needed for a mass produced, affordable electric car. We have yet to develop alternative sources of power and energy for practical transportation.
Our demand for vehicles that are cleaner is making most automotive companies, certainly GM, respond. It will be two or more years until hybrid and electric cars can be produced and sold in significant numbers. It will take another five years until this trend can even begin to slow carbon dioxide emissions. As consumers, we must demand such vehicles and when they finally start coming off the assembly lines in large number we must buy them. It is this simple equation of the marketplace that can start to bring about the change that is so essential for us all.