By on July 15, 2011

As a relatively pragmatic person who generally chooses the imperfect-yet-achievable path rather than agonizing over the perfect-but-unattainable goal, this chart [from a fascinating Boston Consulting report, in PDF here]  frustrates me. I understand why Americans choose hybrid-electric cars as their most favored “green car” technology, but from their it gets fairly crazy. EVs are fantastic on paper, but in the real world they’re still far too expensive, their batteries degrade, they have limited range, oh and did I mention that they’re freaking expensive? Biofuels, America’s third-favorite “green” transportation technology can be fantastic in certain limited applications, but the ongoing ethanol boondoggle proves that it will never be a true “gasoline alternative.” Finally, at the bottom of the list, Americans grudgingly accept only relatively slight interest in the two most promising short-term technologies: diesel and CNG. Neither of these choices is radically more expensive than, say, a hybrid drivetrain and both are considerably less expensive and compromised than EVs at this point. So why are we so dismissive of them?

And here’s how deep the irony goes: America is, apparently, far more sensitive to lifetime costs, and is particularly concerned with upfront costs. So if 56% of Americans are not willing to pay any extra upfront for a “green car,” and only 38% are willing to pay more upfront if it pays off over time, why do 64% claim to be interested in EVs? After all, the battery-powered cars that are currently on the market cost considerably more upfront (on average) than comparable hybrids, diesels and CNG cars. Even the most hard-core EV fans admit that buying an electric car now makes no financial sense, and even hybrids must be driven a huge number of miles to pay off its upfront premium compared to a comparable gasoline or CNG car. American consumers had some of the highest “don’t understand” response rates across the board, but when you break down the data you can’t help wondering if there should have been a few more.

But don’t blame Americans. After all, we’re so well-protected from our energy externalities (a topic I covered recently when I called for a serious push to increase gas taxes), that we couldn’t possibly be expected to know or care about fuel-efficient technologies as our $8/gallon-paying bretheren across the pond and around the world. As this chart shows, the US government lags other developed nations and regions in its fuel economy standard… but even this isn’t the real story. After all, the current argument being made by automakers is that they will be forced to put more cost into future CAFE-compliant cars which consumers will not find worthwhile if gas prices don’t rise. Which brings us back to the real issue:

The problem, it seems, is that America still sees “fuel efficient” cars and “green” cars as being fundamentally different. Just look at the rise of high-priced cars that are green for the sake of being green, and offer no chance paying back their additional costs compared to comparable cars that are simply “fuel efficient.” Fisker’s Karma is “green,” while a 335d is “fuel efficient.” Chevy’s Volt is “green” but the Cruze Eco is merely “efficient.” Tesla’s Roadster is “green” but a Lotus Elise is amazingly efficient. I could go on, but the point should be fairly clear: because “green” has become such an aspirational marketing trope, and because we are still so insulated from the price motivation that drives nearly everyone else on earth to save fuel, we can’t even evaluate the “green car” options out there in a way that makes any sense. In my mind, this is a troubling sign of the market failure that comes from hidden externalities… and as a believer in market solutions, I hope American consumers can start looking at alternative drivetrains with more objectivity in the near future.

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45 Comments on “Where Are Our Green Car Priorities?...”


  • avatar
    Educator(of teachers)Dan

    Why the hostility to diesel? See GM circa 1985 – I know the problems with the 350 diesel eventually got fixed but the public perception is still there.

    CNG? Who knows, maybe people don’t know enough about the tech involved. Overall it’s gotten very little press.

    • 0 avatar
      BigOldChryslers

      The GM 350 diesel was sold in cars from 1978-85. I haven’t seen one on the road in probably a decade, maybe longer, aside from my parents’. Many people I talk to don’t even know/remember these cars existed. I think that the GM 350 diesel scares more car company executives against putting diesels in cars than anything.

      Consumers today still equate diesel as being noisy and smelly, but because of transport trucks and pickup trucks that they see every day. If they are beside a diesel car but the car is quiet, most people wouldn’t even know it was a diesel. In that regard, diesel can’t get any good press, only bad press.

      • 0 avatar
        Bisbonian

        I still think diesels are considered dirty and smelly.

        Maybe you can’t tell so much while you’re cocooned in your car but while riding a motorcycle I can certainly tell that I’m behind a diesel at some point. Normally this point is while climbing a hill (I live in the mountains) when most of these vehicles spew a cloud of particulates back at me, yes I’ve been smoked out by new(er) VWs.

        Getting home only to find that my clothes bear the stench of diesel exhaust is not the highlight of my day.

        Also, does this article deal with what the consumer is most likely to buy or what technology they find the most interesting? I find a lot of stuff interesting but that doesn’t mean it’s on my purchase radar.

  • avatar
    APaGttH

    Down under you can buy a Zeta platform Commodore that runs on both gasoline and CNG straight from the factory. I would buy one in a blink of an eye, 3.0 slow and all.

    I don’t know why American car buyers are so dismissive of CNG. Have lots of it, have infrastructure, at the factory level not that expensive to build (very cost prohibitive to convert a gas engine after the fact), don’t have range or reduced HP issues, and you don’t sacrifice people in third-world countries wondering where their next meal is coming from. Fill ups would be near gas station quick versus “hours” on a charger, burn is far cleaner than gasoline or diesel. It really seems like a no brainer.

    • 0 avatar
      Loser

      I agree. When I would visit Saskatchewan in the mid-80′s I would spot quite a few pickups with CNG tanks. Could never understand why I never saw the same thing here in the U.S.

  • avatar
    Z71_Silvy

    “Green car priorities?”

    That headline alone means we have major problems.

    My only green car priorities are to avoid them at all cost when it comes time to buy a vehicle. They are a gimmick.

    • 0 avatar
      Pch101

      My only green car priorities are to avoid them at all cost when it comes time to buy a vehicle. They are a gimmick.

      I agree. The Volt, Tahoe and Escalade Hybrids, and Eco Cruzes are all absolute crap, to be avoided at all costs.

    • 0 avatar
      megaphone

      If you don’t believe in global warming there is nothing I could say that will change your mind. However there are other perfectly valid reasons for a “green” car. First. oil is in finite quantities and the further we go into the future without alternatives the more expensive it will get. Green cars will, if you are in the market for a car save you money. If I need a new car today and two similar cars cost $25,000 why not buy the one with better mileage.

      Second, we import much of our oil, a sizable chunk from countries that really don’t like us too much. Greener cars are better for us national security wise.

      Third, again putting global warming aside, pollution from fossil fuels is simply bad for your lungs so why would you not want to burn less of the stuff.

      There are a a lot of cars I could lust over, but fuel consumption will be my first priorty next time I shop for a car.

      • 0 avatar
        rpn453

        There is no such thing as a green car (yet). They all consume massive amounts of energy and resources. It would be impossible for everyone in the world to live the lifestyle that you do. If you truly care about global warming, you should be walking or riding a bike instead while living in a small apartment close to your workplace.

        Look after your own interests and conserve in order to save yourself money, not for some greater cause that you have absolutely no impact on. The world is going to use as much petroleum as it can afford. If you’re not using it, someone will be.

        Diesel and CNG are not green. They’re no more green than gasoline vehicles. They’re just different forms of finite fossil fuels, but requiring a more expensive platform to make use of. If you can operate them for a lower overall cost than an equivalent gasoline vehicle, then there is probably a small savings in energy used. But using only 95% of a ridiculous amount of energy and resources still ain’t “green”.

        Sorry for the rant. I just can’t stand when people try to classify anything about our wasteful lifestyles as “green” or “environmentally friendly” just because of an extremely small or falsely perceived reduction in consumption. “Green” is my younger brother: never owned a car, sharing a house with many people, riding his old 10-speed around, wearing old clothes, living on well under $10,000 a year . . . yeah, I don’t really want to be green.

  • avatar
    evan

    Z71_Silvy: Thanks for the well-considered comment, as always… Now I know how to fit in at DENSA.

  • avatar
    Darkhorse

    T. Boone Pickens had the right idea with CNG. Convert most of our large trucks and leave the petrol for cars until someone solves the “Big Battery Problem” or BBP.

    • 0 avatar
      APaGttH

      +1

    • 0 avatar
      dimitris

      Has TBP also figured out the fixes for poisoned water tables and fire-breathing water faucets?

      • 0 avatar
        Darkhorse

        Hey, it’s free natural gas! You can heat your kitchen with it.

      • 0 avatar
        Steven02

        dimitris,
        Don’t take a propaganda movie as your only source of information.
        http://blogs.forbes.com/greatspeculations/2010/04/22/slurring-natural-gas-with-flaming-faucets-and-other-propaganda/

        There are other sources out there. The flaming water faucet, that was almost certainly not caused by natural gas.

      • 0 avatar
        aristurtle

        Indeed he has! The “fix” is to live somewhere where your water table isn’t going to get fracked to hell, and screw everyone else. “Our power doesn’t run on nothing, we need the land you’re standing on!”

        Look what just passed in New York. They’re making sure that the city’s water source stays safe. Who cares if a bunch of upstaters get cancer?

      • 0 avatar
        APaGttH

        Yes, because nuclear waste from atomic power, destroyed salmon runs and ecosystems from hydro, and “clean coal” electric power (snicker) is soooooooo much better.

        Twenty-percent of electricity in the United States comes from nuclear power and we do not have the infrastructure, excess capacity, or resources to take it off line for other alternatives.

      • 0 avatar
        dimitris


        dimitris,
        Don’t take a propaganda movie as your only source of information.
        http://blogs.forbes.com/greatspeculations/2010/04/22/slurring-natural-gas-with-flaming-faucets-and-other-propaganda/

        There certainly is propaganda in the air if the magazine that calls itself “The capitalist tool” is involved.

  • avatar
    djoelt1

    The lines on the charts for the US show a population scared of change, scared of the future, holding fast to the old while the world passes them by.

  • avatar
    stuki

    I wish you wouldn’t keep regurgitating “market failure” as if it was a term with meaning beyond simplistic political agitprop

    Other than that, I suspect part of the problem is, Americans can still afford to choose cars more as “statements of who they view themselves as”, than as transportation devices. And some, those who view themselves as “ecologically concerned”, will of course want to raise their social standing in that subgroup by being seen in THE greenest alternative, practicality be damned. And then there is Z71_Silvy……

    To say something nicer about my fellow countrymen, Americans are also less liable to believe any BS spouted by self anointed “experts” than at least people in Europe are. Hence less likely to fall for things like “clean” diesel, despite the fact that the darned car still stinks when you back up. And to fall for, “in the real world, diesel is stronger, because it has more torque”, despite the thing getting summarily dropped in any stoplight grand prix anywhere. In any real world, even the 335d is slow compared to it’s gas counterpart, at least until someone welds both their respective transmissions in overdrive.

    • 0 avatar
      Z71_Silvy

      And then there is Z71_Silvy……

      IE: People who believe that there is PLENTY of oil all over the world and that the FREE MARKET should decide whether these green gimmicks are successful or not.

      It boils down to politics. You drill here and now, and all of our oil issues go away.

      • 0 avatar
        Patrickj

        …and once we wipe out all the treehuggers, gas will cost 30 cents a gallon, cars will have solid steel dashboards and no seat belts, and children will be able to run freely in the back of the station wagon sucking black smoke from the open rear window.

      • 0 avatar
        Pch101

        You drill here and now, and all of our oil issues go away.

        You should add petroleum to the (long) list of topics about which you know little or nothing.

      • 0 avatar
        Z71_Silvy

        Pch…you are the pot calling the kettle black.

      • 0 avatar
        megaphone

        Some of us no longer believe in the so called free markets because of what unregulated markets led us to in the 08-09 downturn. If profits are the only priority, greed will apparently overcome common sense.

      • 0 avatar
        Loser

        “You drill here and now, and all of our oil issues go away”.

        You are joking…Right?

  • avatar
    BigOldChryslers

    I think that many consumers differentiate between a “green” car and an “efficient” car as:

    An efficient car is one that will use less fuel AND save you money over its lifetime.

    A green car will use less fuel but TCO over the ownership period is still likely to be higher than a comparable conventional car. (In the near future at least, green cars are also more likely to have range and/or refueling availability issues.)

    This study shows the vast majority of people want a fuel-efficient car, not a “green” car. Except for a small percentage of consumers, saving the planet is not reason enough to spend more money on a vehicle.

  • avatar

    the problem is that Americans are heavily influenced by marketing, and are lazy about carefully evaluating reality. And in this case, probably part of the problem is–as Ed writes–the (relatively) low level of financial incentives to apply their brains to the issue.

  • avatar
    1996MEdition

    How do you reconcile the two following statements made in the same article?

    “as a believer in market solutions”

    “a topic I covered recently when I called for a serious push to increase gas taxes”

    Taxes are not a market solution. The taxes you propose are the ultimate NON-market solution. And before you say it…. so are subsidies.

    • 0 avatar

      Because markets only function when costs aren’t hidden. Oil presents a classic “tragedy of the commons” (Wikipedia is your friend), the only solution for which (sadly) is government. Does government often do a bad job of addressing these costs with tax revenues? Absolutely, but I’m unaware of an alternative that can even imperfectly address a tragedy of the commons.

      David Holzman crystalizes my point well: strong financial incentives, in other words the awareness of the real individual and collective costs of a given course of action, promote strong market function. Belief in markets should not be an excuse to never look beyond ones short-term individual interests… self-serving orthodoxy can be dangerous stuff.

      • 0 avatar
        SP

        Lost in all this talk of Americans haplessly foisting negative externalities upon the rest of the world is the fact that the Europeans placed the choices in exactly the same order that the Americans did.

        These are the same Europeans with the high gas taxes, the same ones that protest new runways at Heathrow, the same ones with the mass transit and the car-unfriendly cities?

        Who knew that we dirty, filthy, fat, gun-toting Americans had so much in common with the clean, sleek, stylish, loving, peaceful, socialist Europeans?

  • avatar
    redav

    “So if 56% of Americans are not willing to pay any extra upfront for a “green car,” and only 38% are willing to pay more upfront if it pays off over time, why do 64% claim to be interested in EVs?”

    The answer to this seems obvious to me. Interest and willingness to buy are very different things. I’m interested lots of high-tech goodies for my home that I have no intention of buying because (wait for it) they cost too much. If they didn’t cost too much, I’d buy them immediately. The same is true of EVs and the other options on the list. If any of these ‘green’ tech cars cost the same as ‘normal’ cars, I believe they’d be big sellers.

  • avatar
    HiFlite999

    The most striking factor in the graph is that a large percentage of Americans are not interested in cars (or at least non-standard ones) at all. The question then becomes about the same as one with respect to, say toasters. Cars in China by contrast are still new and exciting, plus remain a symbol of having “made it”. Not so here, with Europe falling somewhere between.

  • avatar
    mazder3

    I wonder, if Mercedes hadn’t taken over Chrysler, would we be able to buy a CNG Hemi Charger R/T today?

  • avatar
    ClutchCarGo

    The problem is that most people can’t/won’t sort thru the complexity of the issue. After all, what is “green”? Reduced usage of diminishing resources, when there are those who deny that oil is running out? Reduced greenhouse gas emissions, when some deny that CO2 is even a problem? So for most people, “green” becomes the latest thing that has been promoted to them, be it EVs, hybrids, etc. But when asked to put a price tag on the value of “green”, without a clear understanding of the issues most people will fall back on basic financial decision-making: If it costs more, I’m not interested. The minority of people who do sort thru the issues either decide that “green” doesn’t matter, or come to the conclusion that the “greenest” choice is to not drive, or to drive a car that’s already been made and to drive it more wisely by reducing miles and easing up on the gas pedal.

    • 0 avatar
      Dimwit

      Yep. Green is marketing hype without substance. As Kermit says, it’s good to be green. It’s been purposefully obfuscated to make any green claims legitimate.

      I work in the chemical industry and am confronted by the same trend. Everyone wants green products except they can’t define it. When a whole segment is forced into green like the banning of phosphates in detergents, then everyone complains that the performance went down. It’s not like they were there for no reason!

      • 0 avatar
        ClutchCarGo

        “Green is marketing hype without substance.”

        I’m not saying that there are no actual “green” choices. It’s just that the concept is vague and thus susceptible to marketing manipulation, and consumers will express interest in the “green” choice based on media promotion until they find out it’s more costly and they can’t grasp the value (if any). When the issue is clearer, intelligent choices can be made. For your example, excessive nitrogen and phosphorus are having very real effects in the Gulf and the great lakes. The majority of it comes from agricultural run-off, but household use contributes as well. Much like restricted flush toilets, “green” changes to products cause a decrease in functionality until product developers work out effective designs that work better. I’ve found that the current phosphate-free laundry and dishwasher soaps work fine even tho early products didn’t, and the price difference is minimal.

      • 0 avatar
        psarhjinian

        Green is marketing hype without substance

        All marketing is hype without substance. If it had substance, it would be called “research”.

  • avatar
    Dr Lemming

    “…because ‘green’ has become such an aspirational marketing trope, and because we are still so insulated from the price motivation that drives nearly everyone else on earth to save fuel, we can’t even evaluate the ‘green car’ options out there in a way that makes any sense.”

    Edward, did you ever consider that “green” cars don’t make sense to you because you don’t understand them? Or, perhaps more accurately (if pointedly), you apparently don’t want to understand them?

    Diesel is not a green technology. CNG arguably isn’t either. Accept that and your whole argument falls apart.

    Your missive is yet another example of how all too many gearheads will gleefully embrace adolescent irrationality when it comes to conventional vehicles but insist upon a purely adult and rational justification for a green car. So what if someone aspires to own a Prius because of its “green” status? How is that any different than the guy who buys a Corvette because he thinks it will be a babe magnet? Auto sales would collapse if people bought cars in the same way they did refrigerators.

    At any rate, the “green car” niche is still in its infancy, particularly here in the US. Green design constitutes a lot more than source of power. Consider, for example, non-toxic and recyclable interiors. Or alternative ways of getting access to a car, e.g., through various types of car-sharing plans. Or the ability to buy car insurance that is commensurate with the amount you actually drive.

  • avatar
    Patrickj

    My green car priority is to buy one that won’t make my long commute to work unaffordable over the 150,000 or so miles I’m likely to own it. I’ll take a chance that 35 mpg highway is good enough to do that.

    The VW diesels I see along the way throw enough visible smoke after a few years to convince me that they aren’t the answer.

  • avatar
    AaronH

    When Euro 6 kicks in, you will see “Not Interested” in diesel in Europe go higher. Diesel efficiency will take a big hit in order to pass Euro6 emissions (just like it does now in the USA with Tier 2 BIN 5). Gasoline is the most efficient in terms of costs and emissions and volitility especially with HCCI being developed.


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