Washington Should Avoid Mandating Auto Technologies

A number of commentators have come out with "suggestions" on how the Big Three should improve their business models. Originally, Congress approved a $25 billion loan package designed to help the automakers retool their plants to produce more efficient vehicles, and many members of Congress support diverting those funds to provide operating loans. As the money is repaid into the fund, it can be re-assigned to its original purpose of re-tooling factories.

Detroit has become Washington's whipping boy when it comes to energy and transportation, but the truth is that the energy policy Detroit is carrying out right now has been shaped by Washington for years. The consumer has also put pressure on the Big Three to design high quality vehicles, but until gas prices hit $4, few consumers were concerned with vehicle mileage. The result is that the manufacturers have built high quality vehicles - Ford's quality ratings are higher than Toyota's - that achieve only average fuel economy, and consumers - who said that their primary concern was vehicle quality - are still unwilling to purchase American vehicles.

Critics are now saying that any bailout must also break our dependence on foreign oil. Therein lies the problem. It's not clear which alternative propulsion technologies will be successful. The evolutionary process in that regard isn't complete. By insisting that Detroit focus on hybrid-electrics or all-electric vehicles, it's entirely possible that newer, more efficient propulsion technologies will languish while Detroit attempts to meet Congressional design requirements.

A lot of promising technologies could reduce or eliminate our dependence on foreign oil; they need to be explored. Mandating a hybrid-electric or all-electric design solution is short-sighted, to say the least. Hybrid-electric and electric vehicles aren't without their problems. First and foremost, they operate on battery technology that, while improving, isn't cheap, hasn't been proven safe in the long-run, and isn't manufactured in the United States. Why trade dependence on foreign oil for dependence on foreign batteries? Toyota's and GM's crippling problems with hybrid-electric batteries this year alone should stick out as a giant red flag.

In addition, the manufacture and disposal processes for electric and hybrid-electric batteries aren't exactly green. A long-term plan for dealing with the environmental fallout of millions of dead EV batteries needs to be in place.

PHEV, HEV and EV batteries are insanely expensive. Current battery life is unclear, but these battery packs could need replacement every 25,000 miles. Would you tolerate a car whose engine needed to be yanked and replaced every 25,000 miles at the cost of a few thousand bucks - not covered by your warranty?

Second, other promising technologies, like hydrogen and plug-in electric support, require changes in infrastructure that could take years to complete. Without these changes, these technologies will never be practical. A myopic focus on what promises to be an intermediate evolutionary stage could derail our long-term progress toward energy independence in favor of a solution-by-committee that brings an immediate flurry of action but doesn't bring us closer to true energy independence.

A third consideration is that in the migration to electric vehicles, the electric energy producers are licking their chops at the prospect of becoming the new Big Oil. Our electrical grid is badly outdated, overworked, under-powered and relies for the most part on coal. The rolling blackouts experienced on the West Coast, and the 2003 Northeast Blackout are indicators that our electrical supply isn't as robust as we would like it to be. The immediate solution for capacity issues is to add a significant number of coal-fired electricity plants to supplement our electrical needs. More coal-fired plants means more greenhouse gases, and a diminished or negated positive impact on the environment, plus a likely spike in the price of electricity.

At this point, Washington would be well advised to avoid loading the bailout package with additional requirements that will dilute the primary purpose of the bill. Further, mandating the use of technologies that may not meet the country's long-term energy goals will do little other than to set Detroit up for a larger failure in the future.