Wednesday, February 29, 2012

Why I bought a Chevy Volt

It has been a short period of time since I purchased my 2012 Chevy Volt... I've been waiting for this car ever since it was announced, while George W. Bush was still in office, and while the sting of high gas prices were still on peoples' minds.

I have taken an activist role with this car, and in my communications on twitter, facebook, and in person with others, I have been astounded by the misinformation on electric cars in general, and people's decision to vilify a car before they have all the facts.

So I wanted to take the time to explain why I, a Republican my entire life, decided to purchase an electric car, and more specifically a Chevy Volt. While I can respect differing opinions, you should at least agree that I made a calculated and very informed decision, and many of my points are compelling.  I’ll speak about the costs of the car in another post.

I have been concerned about the country's energy dependence on oil for a while. Oil price spikes almost always precede recession.  "If" oil prices are a catalyst is an interesting debate, but what isnt debatable is how oil price spikes affect everyone, as it erodes corporate profits and strips consumers of their purchasing power and disposable income, and raises prices for the food we eat. And what we have seen previously can get much worse. I am not a "Peak Oiler." Peak Oilers, as a generalization, believe we have already peaked, or are very near the peak of the amount of oil we can produce, and once we peak, declines will set in, and the global economy will collapse.  It is accepted theory that the world needs increasing oil to grow, and without growth in production, the global economy will contract. What I do believe is that there are significant above ground (political/economical) and below ground (geological) that exist which will cause us to face higher energy prices.  Higher prices will eventually push us to another crisis in the much nearer future with or without peak oil. It is also an accepted fact that the cheap 'conventional' oil has already peaked, and what is left to make up the loss of cheap oil is more expensive to reach, and will inevitably lead to higher pump prices around the world (Why would an oil company spend $70 to pump out oil to sell it at $60?).  Although I won't claim I am an expert, I take more than a passing interest on this. I attend conferences put on yearly by the Department of Energy. I make friends in the industry. I stay very informed, and try to take a balanced approach on energy policy. I think it gives me enough information to make balanced decisions and conclusions about where we are headed as a country with energy policy in mind.

So back to the Volt.

Why I bought an electric car...
1) I think the diversification of the transportation system is paramount for our country. Just think about how precarious it is that we rely on a single source of fuel for our transportation system. We haven't been self-sufficient in years, and even if we do become self-sufficient (we don't need to import crude), since oil prices are traded on a global market, becoming self-sufficient doesn’t necessarily mean cheaper prices.  Many factors beyond our control can create shortages in the market that will push the price of our domestically produced oil to new highs, regardless of how much we produce locally  The key in understanding this is simple: Just because we produce the oil in this country, doesn't mean it is ours.  Companies like BP and Exxon own the oil, and we have to be willing to pay the global market price, or they'll happily ship it elsewhere.  This is the nature of a global market. The transportation system needs COMPETITION OF FUEL SOURCES. This doesn’t mean we all convert to electric. This means that there is a healthy mix of Compressed Natural Gas, Electric Cars, Hybrid Cars, Fuel Cells, and Internal Combustion. With this healthy mix, consumers will finally have a way to escape higher prices. If gas prices go up, when it comes time to buy your next car, you'll consider one of the alternatives. If the alternatives become too expensive, you may consider going back to gas. The good news is that the oil companies will not have you over the barrel, like they do now. Electric cars are a good start because there is no need to build out infrastructure like the other alternatives. We already have a power grid we can utilize.  And what is wonderful about our power system is how diverse it is.  We don’t produce all our power from once source.  It is a mix of coal, nuclear, natural gas, and other renewables. 

2) Foreign trade deficit reduction. We send a ridiculous amount of money outside of this country with oil imports. In 2010, we sent over $200 billion out of this country to buy oil. That is a lot of money that doesn't stay in the U.S. economy. It really just helps everyone else but us. By going electric, much of the money stays in this country.  This is the sole reason I support drilling domestically.  It will also reduce our FTD, but as stated above, it cannot be expected to lower prices.  I have linked studies that come to this conclusion here:

3) National Security. We spend a lot of money protecting oil interests.  Much of that protection is through foreign policy and with military action.  According to a report written in the early 90s by the Government Accountability Office, between the years of 1980 and 1990, we spent close to $400 billion alone protecting JUST Middle Eastern Oil assets.  Extrapolate that for another 20 years with inflation, and that number grows to over 2 trillion.   If you admit that even a fraction of our recent military campaigns were over foreign oil reserves, then that 2 trillion number just got larger. I am not a cynic. Our troops are fighting for good reasons. But they are also fighting for our economic prosperity. The protection of foreign oil reserves, and making sure they produce, is critical to keeping the global price of oil at a reasonable level. Just look at what is happening right now with Iran. The vast majority of oil going through the Straight of Hormuz is not destined to the U.S.. Do you think we'd be doing this if Iran were blockading cotton shipments? Our government understands the criticality of the oil flowing through that passage as it relates to our nation.  We are so dependent on oil, that it has become a critical need to protect it abroad. It is something we have to stop, or at least attempt to be less controlled by. 

Why I bought a Chevy Volt:
1) I am not ready for full electric.  I, like many people, need a way to ease into electric.  The Leaf is great for those that can go full electric, but I want a single car solution.
2) I like the luxury features of the car.  I think the interior is superior to the other electric options out there.  Certainly far superior to a Prius.
3) I like the power.  This car really moves.  The 0-60 is reasonable in the mid 8s, but I can't describe how amazing a single gear perfectly silent car is with loads of torque available throughout the entire range.  The best description I can give to accelerating in this car is what you feel like when you are taking off in a jet.   I owned and drove higher performance vehicles prior to the Volt.  I have NOT been dissapointed with this car.
4) I don't want to burn gas under the vast majority of my driving.  A Prius is not even a comparison to this car.  It will always burn gas and is entirely too slow for my tastes.  For me, I am making more compromises with a Prius than I am with a Volt.
5) I love the technology.  The amount of Research and Development in this car is staggering. The addition of the gas motor to extend range and bring an electric car with no range compromises is brilliant.

I am not going to say Electric Cars are 'THE' solution for this country. However, they are part of 'THE'
solution. The other parts of the solution is exploring and drilling for more oil, and incentivizing alternatives like electrics heavily. If you buy my argument that oil is already heavily subsidized through military protection, and we already know oil companies get tremendous tax credits for exploration, it only makes sense to subsidize alternatives in an attempt to level the playing field.

Another response I often get is, "Well, then we should let the market decide." I respectfully disagree. The market has no business deciding our national security. As we have witnessed, oil prices can spike much more quickly than the ability of the car makers to react. And we have also seen large spikes can kill the economy, making it difficult for car makers to actually build a car people can afford to buy when the layoffs start happening in large quantities. I consider subsidies on electric cars a 'bridge'. They help support a market that may not exist in the manner that is necessary for significant investment and early adoption. When the market is supported through government subsidy, it will provide the necessary sales to allow car manufacturers and their suppliers to innovate and reduce the cost of this technology.  Given the entrenched nature of the gasoline car, this type of innovation is unlikely to happen without support. We must keep the ball rolling. 

The gas you put in your car does not come from a 'free market'.  With the government admitting with their OWN studies that we spend BILLIONS every year protecting external producers, if you are driving a gas car, you've been getting thousands in indirect subsidies you didnt even know existed over the years.  The government just happens to spend your credit on military spending that is necessary to protect Middle Eastern Crude, and the global market as a whole, because without it, prices would be much higher and volatile.  Unless we plan on ending all military support, and allow gas to come up to its true market price as a result of non U.S. intervention (not going to happen), then the only way we can get to a better solution is to use the system already in place: susidies and tax credits. 

Notice I didn't mention something? I didn't mention the 'Green' argument. I don't mention the green argument because it is, in my opinion, the most debatable, most polarizing argument associated with electric cars. I can absolutely make an argument that electric cars are no worse, and often much better than gas cars, but as I hoped to prove above, the other issues are far more important to our country.

It is dissapointing General Motors had to be bailed out. I can't help that.  I do know that as an American tax payer, you are still on the hook for billions in GM shares. You need GM to succeed in order to have a prayer at getting any of that money back. Before you vilify the Chevy Volt, please think about the issues I have mentioned above, and try to see a bigger picture.

For the record, I have spent $58 in electricity to go 2700+ miles. This car is actually cheaper than my Mini and BMW that I previously owned, even though it is a more expensive car. But that is for another post :)

Previous cars I have owned: 1993 Nissan 300ZX, 1997 Acura CL 3.0, 1997 BMW Z3, 2011 Mini Cooper