New posts from Gas 2.0!

J.D. Power Says Green Cars will Net Less than 10% of the U.S. Market
Gas Prices Go Up Twice as Fast as They Go Down, and It’s Our Fault
Brammo Announces a 6-speed Motor AND Starts Playing Dirty

J.D. Power Says Green Cars will Net Less than 10% of the U.S. Market

Posted: 05 May 2011 11:49 AM PDT

With many auto makers currently selling, or planning on selling, alternative fuel vehicles a study released by J.D. Power and Associates is worrisome. The study concludes that there are “relatively few consumers” in the American alternative fuel vehicle market. It estimated that the alternative fuel vehicles will capture less than 10% of the U.S. market by the end of 2016.

Alternative fuel vehicles are indeed on the rise in the United States and capturing around 10% of the U.S. market in five years is nothing to scoff at. However, while gas prices are continuing to climb and alternative fuel vehicles are becoming more available the 10% figure does seem a bit low.

J.D Power and Associates' study looked at the attitudes of American consumers towards four main alternative power train technologies– gasoline-electric hybrid vehicles, clean-diesel engines, plug-in hybrid vehicles, and battery-electric vehicles. The study concluded that consumers did acknowledge the saving of money on fuel and positive environmental benefits of owning alternative fuel vehicles. 75% of consumers cited lower fuel costs as a main benefit of alternative fuel vehicles while 50% cited “better for the environment” as a main benefit of these vehicles. The study also found that some consumers had concerns about the performance of alternative fuel vehicles such as driving rage and maintenance costs; but the main issue keeping consumers away was the high price tag of alternative fuel vehicles.

The purchase price of alternative fuel vehicles will be even more of an issue in the years to come. At the end of 2010, tax credits from the Energy Policy Act of 2005 were stopped eliminating an up to $4,500 in federal tax credits for hybrid vehicles. Eventually Congress will eliminate the $7,500 federal tax credit that lowers the purchase price of plug in alternative fuel vehicles such as the Chevrolet Volt. “Without a tax credit to offset the price premium, consumers must absorb all of this additional cost. Furthermore, aggressive government subsidies are unlikely to be sustainable over the long term. Ultimately, the true cost of the technology needs to come down substantially.” said Mike VanNieuwkuyk the executive director of global vehicle research at J.D. Power and Associates.

Battery-electric vehicles ran into two major dilemmas for consumer according to the J.D Power and Associates' study; one being the high price tag of the vehicle and the other being the lack of public charging stations. Clean-diesel engines that can currently be found in some Audi and Volkswagen models have run into problems in recent years as well due to lack of availability and the rising cost of diesel fuel. Additionally, negative views of older diesel powered vehicles continue to affect perceptions of clean diesel vehicles and keep consumers away.

At the end of the day the J.D Power and Associates' study found that consumers are interested in alternative fuel vehicles and do understand the positive benefits of the technologies. Unfortunately, it once again comes down to the all mighty dollar as it is the high price tag of the alternative fuel vehicles that is currently keeping American consumers away. Only through promotion, education, and a significant drop in the price of the technology will a noteworthy numbers of American consumers become comfortable with both the financial investment and lifestyle changes needed to make the leap from traditional fuel vehicles to alternative fuel vehicles.

UPDATE: The Consumer Federation of America responded to the J.D. Power study by saying that 1 million plug-in vehicles on the road by 2016 will a positive, not a negative. Read the response here.

Source: autoobserver.com

Andrew Meggison was born in the state of Maine and educated in Massachusetts. Andrew earned a Bachelor's Degree in Government and International Relations from Clark University and a Master's Degree in Political Science from Northeastern University. Being an Eagle Scout, Andrew has a passion for all things environmental. In his free time Andrew enjoys writing, exploring the great outdoors, a good film, and a creative cocktail.

Gas Prices Go Up Twice as Fast as They Go Down, and It’s Our Fault

Posted: 05 May 2011 07:05 AM PDT

It is no secret; it does appear that gas will hit a national average of $4.00 a gallon very soon. Over the past year gas prices have increased rapidly, prices have jumped 30 cents from mid-March to mid-April alone to an average of $3.88 a gallon. This has a lot of people scratching their heads. Why do gas prices go up so fast but drop so slowly? Some economists think it is the consumers fault.

Americans have been told that the ongoing turmoil in the Middle East has scared the traders who set the gas prices. The story goes this scare is responsible for gas prices climbing to $1.00 per gallon more than a year ago. Some consumers looks at this situation and factors in the assumption that gluttonous retailers also take advantage of the momentary high prices and bleed a little extra out of the situation to stash away for profit. Thus, prices will rise faster than they fall.

While economists now agree that the retailer's actions to boost profits during times of increased prices does play a role in price fluctuation, the rise and fall in the price of gas is a bit different. The first study into gas "stickiness" took place in 1997. The conclusion of the study was that gas prices fall twice as slowly as they rise after a price spike.

Ohio State University economist Matt Lewis has a theory as to why gas prices fall so slowly. Middle East turmoil aside—the majority of the blame falls on the consumer. The Readers Digest version of the theory is when gas prices fall, consumers stop shopping around for the best price. This lack of consumer thriftiness eliminates the normal downward stress on gas prices and allows stations to squeeze out a few more pennies to stash away as profit while gas prices slowly decrease. “Consumers shop around more intensely when prices are going up. When they are falling, they don’t shop around as much,” Lewis said.

An interesting theory and one that some might find offensive; with a struggling American economy high prices at the pump do hurt. At the same time oil rigs are exploding off the American coast and large oil companies are taking in record profits. For some Americans to hear that they are in part responsible for the slow decrease in the price of gas, Lewis' theory might not sit well.

A key element of this, admittedly controversial, theory is something economists call a “reference price.” Once a consumer gets a number in their head all the following consumers choices are impacted by a new price’s relationship to that reference price. If a consumer has been paying above $4.00 a gallon for gas anything less than $4.00 a gallon will be seen as a deal. When a consumer sees this supposed deal the consumer will buy it. The consumer will feel satisfied with self made assertions that they got a deal even if a better deal of still less expensive gas can be found just around the bend.

Lewis used GasBuddy.com to further test his theory in 2008. Consumers can use GasBuddy.com to search for the lowest gas price in their area. Lewis observed that as gas prices raised traffic to the website increased. As gas prices dropped later on in 2008 so did the traffic to GasBuddy.com showing that consumers stopped shopping around for the best deal on gas. With consumers not shopping around for cheap gas, gas stations can level off their prices and gradually decrease the price of gas rather than having to have their gas prices plummet in order to keep up with competition from other stations.

There are a lot of factors that go into the price of gas. Behavioral economists will tell you that people shopping for gas are anything but rational consumers who constantly seek out the best gas price; many consumers just figure that what is offered at the nearest gas station will do. In contrast some consumers overestimate the true value of a cheaper gallon of gas by underestimating the cost of driving to get cheaper gas. All in all, lack of consumer price sensitivity alone does not singlehandedly slow the drop in the price at the pump—but it does play a larger than previously expected role.

Lewis' theory does have its implications beyond the gas market and in part brings into question the fundamental theories of supply and demand. Yet, to Americans who are feeling the burn at the gas pump the message is clear—do not give up your strong price shopping habits. Laziness and compliance not only contributes to the sluggish decline of gas prices at the pump but it encourages gas stations to rip you off.

Source: jalopnik.com

Brammo Announces a 6-speed Motor AND Starts Playing Dirty

Posted: 04 May 2011 10:40 PM PDT

Early this morning, or late last night (if you’re Craig Bramscher and crew) Brammo unleashed a one-two punch on the electric motorcycle industry. Not only have they acquired an exclusive international license for SMRE’s patented Integrated Electric Transmission™ (IET), but they’re also expanding their line to include four new models, all featuring the IET™ and swappable Brammo Power battery packs. But more about that later.

What I find interesting is that this transmission will be so helpful in creating a higher top speed, they felt it warranted scrapping the current prototype of the Empulse and starting essentially from scratch. Yet the press release says little about that. I certainly hope this will deliver. While a clutch-less motorcycle takes some getting used to, I could do without the transmission as long as I could have decent speed and acceleration at a reasonable price premium. If adding the transmission improves any of those three criteria, great. But I hardly expect it to be cheaper.

The new models are all based on competition dirt bikes, and will debut at this Friday’s MiniMotoSX race in Las Vegas:

Engage MX – dirt bike competing in MiniMotoSX – anticipated price $9,995.00
Engage SMR – Super Moto Racing – anticipated price $9,995.00
Engage SMS – Super Moto Street – anticipated price $11,995.00
Encite MMX PRO – mini dirt bike competing in MiniMotoSX – no price announced

Prices do not include relevant taxes or Federal and State electric vehicle incentives.

Their press release goes on to state:

Integrated Electric Transmission (IET™) – The IET™ is a mechatronic propulsion unit that emulates the feeling and performance of a traditional internal combustion engine, with a specially developed electric motor, clutch and gear shift, that enables Brammo motorcycles to accelerate hard from the line up to a high top speed, something that is just not possible to achieve with a single ratio electric motorcycle.

"Electric motorcycle design has always been a bit of a balancing act in direct drive systems where great acceleration performance comes at the expense of low top-end speed." Stated Brian Wismann, Director of Product Development at Brammo. "The IET™ system provides the best of both worlds and is the perfect complement to Brammo's industry leading Brammo Power battery and vehicle control technology to maintain our position as the world's leading electric motorcycle manufacturer."

Where is the Future of Electric Motorcycling?

With Brammo going head-to-head against Zero to serve the off-road riders, it’s clear that’s a strong market. Between the stringent EPA requirements, noise pollution complaints and the fact that you just can’t go all that fast on the dirt, it’s a perfect market for electrics. But as gas prices increase and the economy continues to seemingly stagnate, there’s a real market for street bikes. In fact, I’m seeing a growing number of riders on what are generally considered “starter” bikes, which may indicate a sharp increase in new riders here in LA where gas prices tend to be higher than most of the country.

So now it seems their electric sportbike, Empulse, is now being delayed even longer to enable development of the IET system. The release makes no mention of when the Engage and Encite will be in stores, so there is always the possibility of a long wait, as we’re seeing with the Empulse already. Many sportbike riders (self included) dream of a bike that will be as fun and powerful as our gas bikes, but without the gas habit and of course the leg-melting (even in proper gear) heat on summer rides. But that bike is still unobtanium, unless you’ve got the means to build it yourself, a la Chip Yates and Michael Czysz.

This is exactly what’s frustrating about the industry. So many manufacturers promise electric sportbikes, but the only one I’ve seen on a showroom floor, available for sale, was the Roehr. But at $18k for their 100+mph model or $30k for their 130+mph model, with no financing available from Roehr, it’s out of reach for most sportbike riders. At that price, I didn’t even want to test ride the one Hollywood Electrics had in stock. Hopefully one day all this small-bike technology will indeed trickle up to become something affordable for the larger bikes. Until then, I’ve got my bicycle for days when I don’t feel like blowing through 20mpg on the ride to work. And that has TEN speeds. So there.

Greener Green Grass

Thursday, May 5, 2011