American dilemma: electric cars vs. trucks

Americans like to drive but it is unclear whether they will be driving electric cars or trucks in the future:

The auto industry is at a crossroads, with the future of legacy automakers like Ford, General Motors Co and Fiat Chrysler Automobiles NV uncertain as governments float proposals to ban internal combustion engines over the next two decades.

But in the present, consumer enthusiasm for trucks and sport utility vehicles is strong, especially in the United States. And that is providing Ford, GM and other established automakers with billions in cash to mount a challenge to Tesla…

Electric cars are money losers, which explains why global automakers have been slow to roll them out until now. But regulatory and consumer pressures are forcing established automakers to put more electric vehicles in their fleets over the next several years. In a cash-intensive industry, profits from pickups and SUVs may give them a competitive edge.

Ford said on Thursday that the average price of one of its F-series pickups rose $2,800 to an average $45,400 a truck in the third quarter. Sales of F-series trucks, which range from spartan work trucks to Platinum models with the features – and price tags – of a European luxury sedan, were up nearly 11 percent to 658,636 vehicles for the first nine months of this year.

This is not just a consumer preference issue. There are potential repercussions for the auto industry (a fairly large one), urban and transportation planning, tax revenues for governments, and a whole space – the suburbs – built around driving around. Oh, and many Americans seem to prefer driving larger vehicles and intertwining their identity and the related activities with these vehicles.

Which comes first on a mass scale: electric cars or driverless cars?

The car of the future could be quite different but what exactly it will be is still up in the air. Will it be an electric car? We need some significant infrastructure for that to work:

But here’s the thing. As a piece of new driving technology, the Bolt totally works. But the adoption curves and take-up rates of new technologies aren’t driven simply by the efficacy of the technology in and of itself. New innovations require infrastructure to reach their full market potential. Often that infrastructure has to be built by companies other than those who build the original products. And right now, electric cars remain hindered by a massive infrastructure gap…

Tesla has dealt with the infrastructure challenge by building its own network of proprietary superchargers—stations that only Tesla owners can use. But it’s a closed system, and it is part of what makes Tesla a luxury product. Non-Tesla users are out of luck. And while some of the big automakers are establishing partnerships with charging networks, none has taken it upon itself to build the dense, easily accessible, and highly functional network of charging stations that is needed. So it’s great that the Bolt feels like it belongs in everyone’s garage. But until that gaping infrastructure gap is bridged, it won’t be in nearly as many as it could be.

And working out all the kinks of driverless cars and then making them affordable to the mass market may take a while:

Despite technological advances, accidents like these reduce consumer trust and send companies back a few steps. A true autonomous future is perhaps as far away as 50 years, considering all that needs to happen to ensure safety and prepare the average driver.

While one will see the occasional driverless car zipping tech execs around Silicon Valley, new connected cars will still be out of reach for most families.

The internal combustion engine vehicle with a human driver may prove to have quite the staying power. How about we envision the electric self-driving vehicle for all several decades down the line?

Another thought: given all that would need to be done to completely switch over to either option, could the money and time be better spent on other problems?

Testing a pay-per-mile tax in Oregon

Looking for more revenue, Oregon is starting a test program of paying for miles driven rather than gasoline used:

The program is meant to help the state raise more revenue to pay for road and bridge projects at a time when money generated from gasoline taxes are declining across the country, in part, because of greater fuel efficiency and the increasing popularity of fuel-efficient, hybrid and electric cars.

Starting July 1, up to 5,000 volunteers in Oregon can sign up to drive with devices that collect data on how much they have driven and where. The volunteers will agree to pay 1.5 cents for each mile traveled on public roads within Oregon, instead of the tax now added when filling up at the pump…

Private vendors will provide drivers with small digital devices to track miles; other services will also be offered. Volunteers can opt out of the program at any time, and they’ll get a refund for miles driven on private property and out of state…

Drivers will be able to install an odometer device without GPS tracking.

For those who use the GPS, the state and private vendors will destroy records of location and daily metered use after 30 days. The program also limits how the data can be aggregated and shared. Law enforcement, for example, won’t be able to access the information unless a judge says it’s needed.

 

I suspect a number of governments will be interested in how this test works out. One big hurdle to overcome would seem to be privacy, though government tracking of vehicles may not be far off anyhow (through cell phones, insurance company monitoring devices, black boxes, toll booths/devices, license plate readers, etc.). The argument about deincentivizing electric or hybrid cars doesn’t really hold up because these vehicles still use the roads and add to the maintenance burden. Yet, ultimately this will be about revenue: is this a better model for bringing in the money needed for roads?

“How solar power and electric cars could make suburban living a bargain”

New technologies may help the American suburbs live on for decades:

[A] new National Bureau of Economic Research working paper by Magali A. Delmas and two colleagues from the UCLA Institute of the Environment suggests that recent technologies may help to eradicate this suburban energy use problem. The paper contemplates the possibility that suburbanites — including politically conservative ones — may increasingly become “accidental environmentalists,” simply because of the growing consumer appeal of two green products that are even greener together: electric vehicles and solar panels…

Installing solar panels on the roof of your suburban home means that you’re generating your own electricity — and paying a lot less (or maybe nothing at all) to a utility company as a result. At the same time, if you are able to someday generate enough energy from solar and that energy is also used to power your electric car, well then you might also be able to knock out your gasoline bill. The car would, in effect, run “on sunshine,” as GreenTechMedia puts it.

A trend of bundling together solar and “EVs,” as they’re called, is already apparent in California. And if it continues, notes the paper, then the “suburban carbon curve would bend such that the differential in carbon production between city center residents and suburban residents would shrink.”…

The reason is that, especially as technologies continue to improve, the solar-EV combo may just be too good for suburbanites to pass up — no matter their political ideology. Strikingly, the new paper estimates that for a household that buys an electric vehicle and also owns a solar panel system generating enough power for both the home and the electric car, the monthly cost might be just $89 per month — compared with $255 per month for a household driving a regular car without any solar panels.

Read on for the discussion of how both solar panels and electric cars are becoming cheaper to purchase and operate. Yet, I’m sure environmentalists and critics of sprawl would argue these costs aren’t the only ones incurred by suburban life. Other factors include using more land, spreading out services (from police to shopping centers), the resources needed to build and maintain individual properties, and the loss of community life.

This is another piece of evidence that the suburban based lives, the space where a majority of Americans live, is not likely to disappear anytime soon.

Want better crash test ratings for your car? Have a trunk in the front

The latest model from Tesla Motors received high marks in crash-test ratings. What is the secret to the safety of this electric car?

The luxury electric sedan earned an overall safety rating of five out of five stars from the federal agency, Tesla announced Tuesday. It also earned at least five stars in every category, a feat that puts it in the top 1 percent of cars tested by NHTSA…

Because the $70,000-plus electric car does not require a large gasoline engine block, there is added room in the front of the car for crumple zones, which absorb energy from front-end collisions. The motor is only about a foot in diameter and is mounted close to the rear axle, away from the most common impact zones. The car’s front section is instead used as a second trunk.

“A longer crumple zone means there’s a longer period of time in which the crash is unfolding,” said Russ Rader, a spokesman for the Insurance Institute for Highway Safety, which has not yet tested the Model S. “The vehicle can slow down over a longer period of time, which benefits the people inside.”

In its press release, Tesla compares it to a diver jumping into a pool of water from a tall height. “[I]t is better to have the pool be deep and not contain rocks.”

Didn’t more cars in the past have the engines in the rear? This idea could prompt all sorts of government action: why not require, or at least strongly recommend, the front of the car should not have an engine for safety reasons? Perhaps Tesla is doing some other interesting things with their design to minimize crash damage but this seems like an “easy” fix to the number of injuries and fatalities in cars each year.

Argument for a flat tax for both electric and gas drivers

There is ongoing discussion in several states about a flat tax for electric and gas cars per mile driven:

“EV drivers want to pay their fair share,” says Jay Friedland, the legislative director of Plug-In America. “We want the roads to be supported, but we’re still in a phase of early adoption and there’s a greater public good.”

That “greater good” is to give electric vehicle technology a chance to crack through its niche status, reducing the continued reliance on fossil fuels from unstable nations. The more state and federal breaks EVs get, the greater the possibility that drivers will look to them as an alternative. But they still need to contribute to the greater good of roads and infrastructure, and Plug-In America agrees.

The advocacy group believes a flat road tax is a better solution – taxing all drivers equally, no matter how their vehicle is powered. That idea is gaining momentum.

In New Jersey, a road tax proposed by Sen. James Whelan, a Democrat from Atlantic City, would charge all drivers 0.00839 cents per mile driven. For the average driver who travels 12,000 miles per year, that comes to a little more than $100. It’s an easy way for Jersey to recoup some cash from EV drivers without targeting them directly.

It’s the same idea with Virginia’s HB 2313, which eliminates the $0.175/gallon tax on fuels in favor of a tax of 3.5 percent for gasoline and six percent for diesel fuel, while imposing larger annual registration fees and a $64 per year for EVs, hybrids and alt-fuel vehicles.

There seem to be several competing interests in these discussions:

1. States who desperately need money to pay for roads.

2. Advocates of electric vehicles who don’t want new taxes and fees to limit the adoption of electric vehicles.

3. Where are the gasoline drivers and the trucking industries? There has not been much reporting on their status in these ongoing discussions…

Another factor that makes these conversations more difficult is the potential changing nature of driving in the coming years. States need certain levels of funding for roads but it is unclear how many people will be driving what and what the status of miles driven per capita will be down the road. All of this means it is harder to make projections and also suggests that whatever is decided in the near future will probably have to be revisited soon.

Considering replacing the gas tax with a tax per mile driven or a flat fee for electric vehicles

Here is a recap of efforts to replace the gasoline tax and the relatively less revenue collected because the federal gas tax hasn’t risen in years and the future decrease in gas consumption with more hybrids, electric cars, and fuel-efficient vehicles:

The favored answer of road engineers? Taxing by the mile driven. A handful of states — Oregon, Minnesota and Nevada — have already tested ways to use GPS and other electronics to adjust taxes. In the Nevada and Oregon tests, drivers had devices installed on their cars that sent data to special fuel pumps; those pumps automatically adjusted their fees based on how far the vehicles had driven, without revealing data that would amount to tracking drivers.

The GAO told Congress this week it should allow a similar test on electric vehicles and commercial trucks, and estimated that a pay-by-the-mile tax of 0.9 cents to 2.2 cents per mile designed to replace fuel taxes would raise a typical driver’s costs from $98 to between $108 to $248.

But it’s not the only answer to filling this financial sinkhole. Washington state lawmakers have put a flat fee of $100 a year on electric vehicles to make up for the gas taxes they don’t generate, and Oregon lawmakers may follow suit. In Virgina, Gov. Bob McDonald has proposed abolishing the gas tax entirely, replacing it with a sales tax and a new $100 fee on “alternative fuel” cars and trucks. That idea has already drawn fire from critics who point out that it would make Virginians who never drive pay for roads while letting people who travel through the state do so for free.

I’ve covered the proposals in some of these states earlier (see here) but I haven’t heard of the electric car flat fee. I imagine a flat fee will not be specific enough to target electric cars – why not just go by a reduced mile-driven rate as well to account for all of the roads being used?

I suspect the first state to institute this will encounter lots of protests. At what point can a tax like this be implemented: before taxes start to decline or only once it is really clear that gas tax revenues aren’t enough to cover road costs? A case could be made that we are already at the second scenario and need more revenue to cover federal roads.

A disconnect: having electric car chargers at Costco

The story that Costco is getting rid of electric car chargers in their parking lots because of a lack of use could be taken in several directions. One could ask: doesn’t there need to be an infrastructure in place before electric car owners would go to Costco? But I think there is a more interesting question: are electric car users really the sort of people who would shop at Costco?

Costco is a big box store, plain and simple. They offer bulk goods at cheap prices. Their buildings are bland and surrounded by parking lots. Is this the sort of place that electric car users would go? Are there people who would shop at Costco but wouldn’t shop at Wal-Mart (and I assume there are quite a few)? From a broader perspective, the picking and choosing between the “righteousness” of certain big box stores (Wal-Mart versus Target versus Costco versus Sam’s Club versus Home Depot…) is odd: they all operate on similar principles though their particular implementation varies some. To shop at any of them is to encourage standardization and sprawl. This doesn’t really go with the electric car culture/vibe.

So where should electric car chargers be installed? A few retail options: Whole Foods and Trader Joe’s. I suspect these would get a lot more use.

Proposal for government to study driving tax by mile

I’ve occasionally written about the gas tax (see here and here for recent examples) as well alternative forms of deriving tax revenue from driving (see here). There is a report that the Obama administration has proposed a new federal study that would look at taxing drivers per mile driven:

The Obama administration has floated a transportation authorization bill that would require the study and implementation of a plan to tax automobile drivers based on how many miles they drive…

Among other things, CBO suggested that a vehicle miles traveled (VMT) tax could be tracked by installing electronic equipment on each car to determine how many miles were driven; payment could take place electronically at filling stations.

The CBO report was requested by Senate Budget Committee Chairman Kent Conrad (D-ND), who has proposed taxing cars by the mile as a way to increase federal highway revenues…

The administration seems to be aware of the need to prepare the public for what would likely be a controversial change to the way highway funds are collected. For example, the office is called on to serve a public relations function, as the draft says it should “increase public awareness regarding the need for an alternative funding source for surface transportation programs and provide information on possible approaches.”

I have several quick thoughts about this:

1. Doesn’t the government have to go to some method like this in the future with the advent of electric cars? If people are buying less gasoline (which is generally thought of as a good thing), then gas tax revenue will decrease.

2. If a tax like this were implemented, does this deincentivize purchasing electric cars or more fuel-efficient vehicles? Although you might pay less at the pump for gas, you would then pay more for driving longer distances.

3. How much of this is going to turn into a public relations battle? It is interesting that the proposed study would look into this. I’m sure a few things would worry some people:

a. How is the government going to use this tracking information since they will already be tracking the miles driven? Of course, this is potentially already an issue in states with toll transponders like Illinois and the IPass system

b. Is this a tax on mobility or on the American way of life (i.e. sprawl)? It would be interesting to see how this new tax might compare to existing costs for driving. Overall, this article reminds me that driving is not cheap – it may feel like freedom but it is expensive freedom.

4. Is a tax for miles-driven too broad? Different vehicle sizes put different stress on road surfaces. Should a tax also take this into account? Or is the difference between a Honda Insight and a Honda Pilot not significant?

5. There could be some interesting consequences of this. Would there be fewer road trips and driving vacations? Would the airline industry (and the rail/high speed rail industry) benefit? Would putting the costs into miles driven rather than tacked onto a gallon of gasoline make people think twice about purchasing a home further from their work?

How to offset the lower gas tax revenues from electric car drivers

With more electric cars coming to market, more state governments are discussing how to offset the loss of gas tax revenues from electric car drivers:

After years of urging residents to buy fuel-efficient cars and giving them tax breaks to do it, Washington state lawmakers are considering a measure to charge them a $100 annual fee — what would be the nation’s first electric car fee.

State lawmakers grappling with a $5 billion deficit are facing declining gas tax revenue, which means less money to maintain or improve roads.

“Electric vehicles put just as much wear and tear on our roads as gas vehicles,” said Democratic state Sen. Mary Margaret Haugen, the bill’s lead sponsor. “This simply ensures that they contribute their fair share to the upkeep of our roads.”

Other states are trying to find solutions to the same problem, as cars become more fuel-efficient and, now, don’t use any gas at all.

The two main options for this are either to impose an annual fee or to base payment on how far the car travels. But the cost-per-mile approach seems to have several disadvantages (including a good amount of opposition) even though it seems like it would be the closest to the gas tax (the more you drive, the more you pay).

The last paragraphs in the article seem to hold the key: this is another instance when government is trying to catch up to the newest technology. On one hand, governments don’t want to discourage the purchase and use of electric vehicles. On the other hand, roads still need to be built and maintained. Additionally, most states are facing large deficits and can’t be going about taking in less revenue.

Regardless of what route is taken, it seems like it would be better to make decisions like these sooner rather than later so that future electric car drivers know what they are getting into.