Our blogger Michael Hoexter recently took a very satisfactory test drive in the US’s new Chevy Volt electric car. However, lower than expected sales and a fire after a crash test have been exploited by the Right side of the American political spectrum to use the Volt as a political football. That said, the Volt continues to carry the highest 5-star safety rating and Hoexter is confident that the Chevy Volt is “a big step in the right direction” to reducing the US’s oil dependence and constructing a green industrial policy.
With rising gas prices, high unemployment, and a dwindling industrial base, you would think that American politicians and political pundits would line up in support of one of the most innovative American products of the last several decades, the Chevy Volt by GM, a gas-sipping extended-range electric vehicle. Unlike, for instance, the iPhone and iPad, which are made by American multi-national Apple computer in China under what are now recognized to be terrible working conditions and low wages, the Chevy Volt was conceived of, designed and is built in the United States.
As nominal and real gas prices in the US flirt with their all time highs, the Volt’s ability to drive as much as 40-50 miles on electricity alone and afterwards at 36 miles per gallon using a gasoline-powered electric generator for another 325 miles would seem to be a boon to the American consumer now being squeezed by gas prices. While carrying a fairly lofty nominal sticker price, GM, Chevrolet’s parent company, is currently offering these cars a favorable low three year lease which should be very attractive to commuters with 20-50 mile daily drives.
Built on GM’s Voltec platform, the Volt is a serial hybrid, meaning that the wheels are driven by the electric motor with the gasoline engine functioning as an electrical generator to supply electricity to the motor and to charge the battery. Not only is it the first mass-marketed serial hybrid but it is also the first mass-marketed plug-in hybrid electric vehicle (PHEV).
The Volt can run either on only battery power or only gas power, depending on which energy source is available; the vehicle has been designed with a 15 kWh battery that is intended to cover the daily driving needs of most Americans. The Voltec platform is going to be used by GM’s luxury brand, Cadillac, in the forthcoming ELR coupe and in Europe as the Ampera sedan by Vauxhall and Opel. The cars built on the Volt platform have won both North American and European Car of the Year awards.
The PHEV concept, pioneered by environmental technology advocate Felix Kramer, solves a group of four related hurdles for the adoption of electric vehicles: range limitations of early generation batteries, drivers’ range anxiety, the relatively slow rate of battery charging, and lack of public charging infrastructure. The choice of using either gas or electric power, enables a single vehicle to serve all expectable demands for a passenger car in a world without wide availability of rapid electric vehicle (EV) chargers or battery swap stations and capacities.
Even though most drivers do not drive more than the range of current-generation EVs in a day, the PHEV exists to allay range anxiety, enabling any driver to drive as far as he or she would like on the spur of the moment, given our current gasoline oriented infrastructure.
The American economy (as well as that of Canada) and individual American households are particularly vulnerable to oil shocks and measures that can reduce oil dependence will have major favorable effects on the short-, medium-, and long-term health of the US economy.
With Volt lessees able to drive 1000 miles between fill ups of its small 9-gallon gas tank, it is not too difficult to achieve 100 mile per gallon or more fuel economy. It is conceivable that some Volt owners could go two or three thousand miles between trips to the gas station without, at the same time, ever having to experience “range anxiety”.
This along with any other activity that would reduce overall oil demand (taking public transportation, driving less, telecommuting) has broad “positive externalities” for the entire economy as it reduces overall oil demand. In some sense, Volt (and other EV) buyers are doing themselves and non-Volt buyers an economic favor by using the Volt instead of a gas-only car for short and medium commutes.
Work on the Volt started in 2006 as GM vice-chairman Bob Lutz observed that American start-up Tesla was building an all-electric vehicle, an effort which GM had abandoned several years earlier. The Volt project was nearing a critical phase of its development at the time of the financial crisis of 2008 and GM and Chrysler were pushed into bankruptcy in May and June of 2009, potentially leaving only Ford standing and endangering the entire automotive supply chain, which had depended upon the “Big Three”.
The federal government rescue of the Chrysler and GM by the Obama Administration as well as direct support for the development of batteries for the Volt helped GM bring the Volt to market, as well as enabled GM to return to financial health and in 2012 is now leading the world in auto sales. Additionally, the Administration has offered a $7500 tax credit for the purchase of new plug-in electric vehicles, which includes the Volt, the Nissan Leaf, and the Tesla Roadster. It is these relationships with government that have become the target of a destructive barrage of ideological attacks on the Volt in particular.
I recently took a test drive in a Volt at Broadway Chevrolet in Redwood City, California and I was impressed with the build quality of the car as well as its performance as a smaller midsized family sedan/hatchback. Overall, the interior space is enough for a family of three for an overnight trip and more than enough as a commuter or two-person car; the backseat folds down so there is space inside for golf clubs or snowboards.
The vehicle can accommodate people of up to about 6 foot 4 inches in the front seats, though will be considered too small by committed SUV drivers. As one would expect from an electric car, the Volt accelerates briskly from a stand-still. Merging onto the highway was no problem and at higher speeds for greater responsiveness you can switch to “Sport” mode, which uses up battery charge more rapidly.
The gas engine-generator switched on quietly and automatically when the battery depleted on the test drive, as I had asked for a car with less battery charge so I could experience what it was like with the generator on. All in all, including standard features like two 7 inch LCD displays and keyless ignition, this was a car that would match or exceed the expectations of most Americans for a mid-sized, very well appointed commuter vehicle or as a smaller mid-sized family car.
However sales of the Volt have been below expectations though higher gas prices in the last month have started to drive up sales. Targeting 10,000 vehicles in 2011, 7671 were sold and the more ambitious 2012 target of 45,000 has been scrapped because of slow sales in January and February.
The Volt has lagged its nearest competitor, the all-electric Nissan Leaf, which is about $5000 less expensive and has cumulatively sold just over 10,400 vehicles as of February 2012. Contributing to the Volt’s lower sales, besides the higher price has been the amplification by political operatives of the report of a fire that occurred in car used in a crash test that occurred a few weeks after the crash. Though a fire after a crash would not be considered unusual, there was an investigation called by the National Highway Traffic Safety Administration. After two months, no defects were found by the NHTSA and the Volt continues to carry the highest 5-star safety rating.
The minor and even expectable bump in the road for the Volt, an entirely new vehicle platform, has become the opportunity from the Right side of the American political spectrum to use the Volt as a political football. The well-oiled propaganda machine that supports the American Right has stylized Volts as “Obama-mandated death traps”. Rush Limbaugh has called GM a “corporation that’s trying to kill its customers”.
On the Fox News channel program “The Five”, the host Eric Bolling was lent a Volt by GM after he criticized the car on air. Bolling complained that his car ran out of electricity “in the Lincoln Tunnel” two days in a row, suggesting but not stating that viewers should be afraid of being stranded in the vehicle. While Bolling is supposed to represent the non-intellectual “everyman” on the show he is also attempting to represent what to the change-averse Fox audience is considered “common sense”. Bolling told the audience, waving a gas pump handle prop: “Stick with this stuff”. The American Petroleum Institute could not do a better PR spot than offered by Fox and Bolling.
Bill O’Reilly, also of Fox, has erroneously stated that “several” Volts have caught fire, for which Bob Lutz, the now retired vice-chairman of GM, has criticized him for distortion and inaccuracy. Lutz, the “father” of the Volt, who calls himself a conservative and a global warming “skeptic”, has directly attacked his erstwhile friends in a number of media , calling them “the loony right”, “rabid”, and likening them to dogs that bite “the postman’s butt”.
Via these insistent attacks and distortions, the right-wing media has been over the last few months attempting to make “Chevy Volt” into a “dog-whistle” word that is supposed to conjure up on the one hand “Big Government” largesse gone amuck and on the other hand, foolish environmentally-minded consumers willing to pay extra to benefit others and not themselves.
Thus, the actual characteristics of the Volt, its many awards, its top safety rating, the very favorable leasing deal currently available, and increases in the price of gas are meant to fade into the background. Mention of the Volt is used as a trigger to inspire rejection of President Obama, the Democrats, and their supposedly left-wing agenda, when as Lutz points out, GM started work on the Volt 2 years before Obama was elected.
At stake, in defending the Volt, is, I believe, not just the fate of this particular car or company, nor even defending battery-electric mobility but defending the possibility for the United States to establish some leadership at all in one or more areas of clean tech manufacturing.
Of course GM’s substantial investment in the Voltec platform is also at stake and large US multinationals may draw the lesson that product development in the green-tech area is either a lost cause or should avoid exposure to the benighted American market. While the smears directed at the Volt are foolish and not based on the qualities of the vehicle itself, the choice of vehicle and its price is ultimately a personal decision for consumers and if the Volt is not “to the taste” of right-wing commentators, it is their prerogative to state as much.
However, the attempt to poison the well for the Volt, grasping at any faint shred of data and distorting it, is an exercise in nihilism by political operatives who offer no working alternative in an era of rising gas prices.
What is indisputable is that the right-wing media and politicians in the United States, as well as substantial portions of the center-right and center-left political establishments, have been operating for at least 30 years with a completely misguided notion of how nations develop and maintain industries for cars and other large consumer and capital goods (including wind turbines and solar panels).
In the last 30 years, the US has de-industrialized under the influence of the beliefs propounded loudest by Fox News, Rush Limbaugh and Republican operatives but echoed by more “moderate” elements of the American political establishment who have too credulously bought into “free trade” ideology. Economic history, but unfortunately not orthodox economic theory taught in most colleges and universities, shows that industrial powers of necessity have industrial policies that revolve around some combination of government subsidies, trade barriers and incentives, and a stable currency that is not overvalued.
As the great heterodox economist John Kenneth Galbraith observed many years ago, major long-term capital investments in factories and machinery required to mass produce “hard goods” like automobiles or wind turbines, demand a degree of planning and influence upon the market that contradicts the popular but misleading free market ideal. Particularly in the Anglo-American world, the “official story” of free markets is promoted as an “innocent fraud”, which the media and politicians foster.
In reality, large successful manufacturers are compelled to operate via a number of different strategies which are not explained by an Economics 101 understanding of the economy, enabling them to sponsor the research and development necessary to build an innovative product like the Volt. Competitors in these sectors in explicit and implicit ways coordinate their activity with each other to inhibit a race to the bottom, work mightily to influence the tastes of consumers, and almost always operate within a government-created industrial policy that offers subsidies, research cooperation, and some degree of protection from international competition.
Sometimes it is not pretty or not fair but some form of industrial policy is how almost every nation in history has fostered and maintained its manufacturing capacity, including the United States. Public discussion should be “how” we have an industrial policy and not “whether” we have one.
The right-wing media would have us believe that we should stand back from aiding critical or promising new industries (i.e. laissez faire), promoting belief in the fairy tale of an economy without government support or protection.
The German, Chinese, Japanese, and Korean industrial success stories each have behind them government institutions that promote manufacturing. Despite displaying a credulous belief in free trade ideology, the United States does covertly have its own industrial policies which favor white-collar industries such as the pharmaceutical, financial and movie industries. These do not seem to provoke the ire of powerful right-wing commentators. Meanwhile, for some reason, the blue-collar industrial policy of aiding the auto industry is made controversial with almost rabid intensity.
On the ground, “having an industrial policy” means that American consumers are met with some evidence of the government showing a greater interest in certain technologies and products than others, including tax incentives; in other industrial powers this is accepted as a matter of national pride and/or necessity but remains the political football that it is in the United States.
Across the political spectrum, those who allow the unchallenged belief in unregulated and unaided markets to continue are consigning American manufacturing to further decline and eventual irrelevance. Instead, some mixture of patriotism, common sense, and concern for the greater good should drive these fanciful ideas from the marketplace of ideas. Without being continually held by the media and politicians to the fantasy of entirely “free” markets, American consumers will be free to view the Volt’s qualities, including its role in helping American industry advance in the area of electric mobility, in a fair manner.
There are no easy answers to our oil dependence, to constructing a green industrial policy, and to using renewable energy to power transportation but the Chevy Volt is a big step in the right direction.
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