Thursday, June 26, 2008

GM Stock Plummets to Near all Time Low: Is it too Late for Volt to Save the General?

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Continuing its downward spiral that began in 2000 when the stock was trading near $100 a share, GM stock fell to a near all time low today of $11.

Could it be too late for the Volt to save the General? It certainly is looking like the Volt might be in danger of outliving it's creator.

Despite opportunities to exploit the Volt during the spate of recent bad news, GM has yet to release an updated photo rendering of the redesigned Volt concept.

It has been speculated that the Volt might be the spark that ignites the GM flame anew. However, the Volt has lost luster of late due to speculation that it will cost more than anticipated. This, coupled with recent high profile moves by Toyota, Nissan, Tesla and Aptera among others, have collectively shifted the spotlight that once belonged almost exclusively to the Volt.

Of some concern is the fact that its been months since GM announced that the concept car would need to be redesigned (for better aerodynamics) and still no one outside of the GM team knows what the resultant design looks like.

While once riding a wave of publicity when the aggressive and stylistic Volt concept was first unveiled, GM has missed several opportunities to capitalize on this momentum and has lost significant ground due to an inability to counter negative news with timely leveraging of the Volt program's progress. The lack of product buzz along with the repeated string of bad news, factory closings and the like have all turned investors cold on the GM brand, despite any fading promise that the Volt program might someday bring.

Can the marketing gurus at GM wake up and start playing the Volt card before it's too late? We better know soon or it might not matter.

Thursday, June 19, 2008

It's About Supply and Demand. Really?

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Here's a paradox to consider: If the price of gasoline is really driven by supply/demand fundamentals, why is the price of premium unleaded more than regular? Can anyone claim that there is more demand for premium than regular? The obvious answer is no. As a matter of fact, a report just out today highlights the substantially decreased demand for premium fuel.

As drivers shied away from premium gas to cut cost, premium gasoline consumption dipped to a 24-year low of 35.6 million gallons of gas daily, the USEIA said. As a result, it takes gas station owners between three to four weeks to dispose of their high-octane inventory, while more inexpensive regular gas runs out in a few days.
Still, the price is well over 30-40 cents more than regular grade.

Just another sign that supply/demand fundamentals are no longer the dominant factor in what we pay at the pump.

UPDATE: One might argue that the cost of refining the higher grade fuel should obviously create a price premium over lower octane8 fuel. That's certainly a fair argument, however, the point of this discussion is that one would expect the lower demand commodity, regardless of production cost, to decrease (in price) relative to the high demand alternative.

Wednesday, June 18, 2008

Onboard electrolizers promise increased fuel economy. Does it really work?

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You've seen the ads "Run your car on water", "Water4gas", etc... Youtube videos abound of ordinary folks who, with a few parts from the hardware store, have cobbled together fuel cells and put up videos professing upwards of 50-100% increases in fuel economy.

It is certainly normal to approach these claims with a degree of skepticism. After all, if such a device exists, and can be made for under $100, then one might expect that the Hondas or Toyota's of the world would surely add them to a production vehicle.

Well a local news outlet has taken up the challenge to either prove or disprove the claims. You can see the results of their test here:

Monday, June 16, 2008

The Future of Transportation is Electric

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There is growing consensus that the future of our transportation system is electric. More specifically, plug-in electric via the conversion of vehicles (new and retrofit) to plug-in hybrid tech.

Already we are seeing the first signs of an imminent battle brewing between Detroit and Asia as GM readies the Volt for an all but guaranteed production run in 2010 and Toyota, always super secretive and tight lipped about it's future plans, has more than hinted that a plug-in Prius is forthcoming (perhaps in Lexus branding).

Both candidates for president appear to be in favor of plug-ins as a means to help wean us from petro. McCain is being advised by none other than James Woolsey, whose Set America Free Coalition is a prominant supporter of the plug-in initiative (Woolsey himself not only drives a retrofitted plug-in Prius, but has become a travelling ambassador for the concept).

The thing that has been missing from the hourly national debate that has ensued in the wake of $4-a-gallon gasoline has been an emergent plan from either candidate on a comprehensive energy policy, or even better, immediate action on legislation, that will help steer us clear of energy disaster and into energy victory.

While we wait on either candidate to put forth a bill that makes America and energy leader as opposed to an energy hostage, America's fate hangs in the balance...

Will they act?

Tuesday, June 10, 2008

Could $4 Gas be the Magic Pill We've Needed?

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You might have to sit down for this, but I'm pretty stoked about the price of gas lately. Especially now that it's passed the magic $4 a gallon mark. How could this possibly be a good thing you ask? Let me count the ways...

Now that the magic $4 threshold has been eclipsed the national conversation has inevitably turned it's sole focus to gas prices, the lack of practical fuel efficient automobiles, and our transparent and anemic energy policy. And that's a very good thing indeed.

It's something that we've needed to get serious about for far too long now. I knew we had reached a tipping point when I flipped over to Fox News last night and heard Bill O'reilly calling for a government mandate. In this case it was a flex fuel mandate, one that we've covered here in numerous pages and Orielly is basically adopting the Set America Free blueprint in that regard.

Orielly's contention is that this, plus nuclear power is our last hope to stave off an increasingly likely oil war. Although I believe the flex fuel mandate is needed, I don't agree with Orielly that it would be in my top two options to avoid an imminent catastrophe.

I believe that the future is electric and in particular, plug-in hybrid vehicles are the key to averting our collision course with continued reliance on foreign oil.

But that's just my opinion, what say you?

Fox's Bill Oreilly Calls For Flex Fuel Mandate

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Bill Oreilly has come out in favor of the Flex Fuel Mandate calling for congress to pass a law requiring all new cars sold in the US to be capable of running on flex fuel.

This idea is nothing new, but having an advocate with the visibility and reach of Fox's Bill Oreilly is without a doubt a major shot in the arm for the idea. I've also been hearing paid news consultants beginning to profer the idea as well.

The original and most comprehensive blueprint for the mandate, also called the "Open Fuel Standard" has been put forth by the Set America Free Coalition, the bi-partisan group composed of hawks, doves, evangelicals and environmentalists promoting energy security through flex fuel and plug-in hybrids.

Tuesday, June 3, 2008

GM Officially Announces Major Shift in Strategy...A bit Late?

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We've known for some time now that GM (and other domestic automakers) are in dire straits as they make moves to compete in today's marketplace that devalues SUVs and pickup trucks (long the solid money maker for Detroit's big 3). This morning, at a press conference from corporate headquarters, GM's Rick Wagoner made it official. The question on everyone's mind, especially GM shareholders, might be "is it be too little too late? The news that GM is closing four North American truck and SUV assembly plants should come as no suprise. Perhaps the most telling news though, is that the future of the Hummer brand (which just six years ago GM made a national icon), is in serious jeopardy. In a move that most certainly is intended to signal that GM is serious about it's new strategy around fuel efficiency and petroleum displacement, Wagoner today announced that all options, including a sale, are on the table for the brand that has come to signify the apex of excess in the SUV market. Also of significance, and suprisingly late in coming, GM's board has officially given the go ahead for the Chevy Volt program, including the budget funding necessary to meet the goal of having production models in showrooms by late 2010.

This is particularly significant because the Volt is perhaps the single biggest card in GM's dwindling deck. They have shown signs of life with the restyled and promising Malibu (although the fuel efficiency still lags behind competitors such as Camry, Altima and Accord). Still, the Volt has the real potential to resurrect the GM brand and signal a complete shift in the marketplace to a completely new path. The Volt's plug-in technology and GM's novel extended range EV concept that the Volt depends on are both potential "game changers" in the auto industry.

What is disapointing though, is GM's track record at being behind the curve in almost every way in their efforts to regain the lost luster of what was once the dominant automaker in the world. First, they have largely ignored hybrid technology on small cars and family sedans in favor of hybridizing their large SUVs and pickups. The mentality has been "it makes more sense to us to increase fuel efficiency on a large gas guzzler than a car that already gets decent gas mileage". This thinking misses the mark on two key points: First, no one is buying SUVs and trucks anymore (and folks who've purchase them already can't give them away). And second, they are getting their clocks cleaned on vehicles that are selling...fuel efficient small, midsize and family sedans that would-be SUV owners are flocking to.

Perhaps in no other area is GM's apparent market incompetance more telling than in the Malibu hybrid. They take a very worthy vehicle, Bob Lutz newly redesigned Chevy Malibu and add a hybrid system to it that only nets and increase of 2 miles per gallon over its gasoline counterpart. What's more, until just recently, they only offered the hybrid in basic trim packages, further reducing its appeal. They've reserved their best performing hybrid systems for their large SUVs and trucks which aren't selling at all!

Its with complete irony that a company with such a terrible track record could perhaps lay claim to the one technology that has the potential to change the entire automotive landscape, the "e-flex" platform. In a rare bright spot for the company, it appears that their hopes and future depends on their ability, despite themselves, to get the e-flex Chevy Volt to market on time and at a competitive price point to stem the tide of Prius and Camrys that are flying off dealer lots amid an energy crisis that will only get worse in the years ahead. The Volt just might stave off bankruptcy and complete ruin for GM, but can they beat the clock? I'm sure hoping they can, for the sake of American ingenuity and for the sake of American consumers in need of an alternative to our growing petroleum addiction.