Tuesday, March 6, 2012

Student Post: Big Oil, the Prius, and Other Musings on Who Killed the EV


The movie “Who Killed the Electric Car” evaluated several suspects, giving guilty or not guilty verdicts to each category they evaluate.  There were two categories that interested me most:  oil companies and the consumer.  They interest me not because they weren’t actually guilty; I think the evidence suggests that they were.  My interest lies in the negative emphasis that is put on their guilt.  Are oil companies and consumers bad people for not supporting the electric car?

1. The Consumer

First, the movie asks several people whether they had ever even heard of the EV1.  Most said no.  But is it the consumer’s fault for never hearing about the electric vehicle?  That particular failing should most likely be attributed to the marketing departments of the car companies.

Secondly, the movie significantly plays the down the impracticality of the EV1.  Sure, the average commute is 30 miles, well within EV1 range.  But how many people are going to lease or buy an electric car that they can only use for their commute?  The lease prices were very high as well, $400 per month on the low end, and almost $550 per month on the high end (depending on the government incentives).  The initial MSRP was going to be over $33,000.  When the average new car price in 1997 was just over $17,000 (which would be a lease cost of about $200), and you see an increase in electricity costs while gas was so cheap at the time, it seems that there would be almost no economic benefit to a consumer considering the EV1.

Finally, in what I see as the biggest failure of the movie, it fails to even mention that the Toyota Prius was first brought to market (albeit only in Japan) in 1997.  It seems to me that GM saw the hybrid coming, and likely knew that hybrids would blow out EV’s because they are simply more economical.  The Prius debuted in the U.S. at an MSRP of $19,995, plus Prius buyers were eligible for $2000 tax deduction.  Why would a consumer buy an electric car which costs so much more but has such a small range when the consumer can buy a hybrid with a much longer range and still drastically lower their emissions?  It seems likely that the executives at GM and other companies saw this hiccup coming, and decided to get out while they still had the chance.

2. Oil Companies

Another culprit the movie blames is oil companies.  Again, this is most likely true.  But why wouldn’t oil companies try to kill the electric car?  It is the oil company’s job to make money from oil.  Just rolling over and letting one of their largest consumer bases get taken out from underneath them would be a dereliction of their duty to their shareholders.  Now, a rational person could argue that their methods were unethical.  But how is lobbying the government to not spend its money on EV service stations any different than EV supporters lobbying the government to give money to EV’s?   Each party is supporting their own interests.  Sure, oil companies were guilty of killing the electric car.  But in their case, as in the case of consumers, was it really a crime? I think not.

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