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green and sustainable business

Juice is juicy, gas is too gassy

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J.D. Power is weighing-in with a degree of optimism on the future of electric-powered vehicles as a power behind the drive to “go green.”

A recent report from the customer satisfaction, buyer behavior and product quality rating firm says global alternative vehicle sales are rising and that sales will get a further lift when battery electric vehicles (BEVs) start to enter the market in larger numbers next year.

But while the percentage increases look good, sales on a unit basis will remain small, hardly a blip in the overall scheme of things. And this sector, which includes hybrid electric vehicles (HEVs) and plug-in hybrid electric vehicles (PHEVs), will remain dominated by the gas-electric hybrid segment for the immediate future.

“Concerns about the cost and environmental effect of gasoline, rising worries and energy security in many countries, and the improving performance of alternative fuel vehicles are resulting in rising sales of gas/electric, hybrid, plug-in and battery powered cars worldwide,” the report says. It’s a four-page ‘Guest Opinion’ released by the financial rating company Standard & Poor’s, which like J.D. Power is a subsidiary of The McGraw-Hill Cos. (Purchase a copy of the report by calling (1) 212-438-7280 or sending an e-mail to research_request@standardandpoors.com.)

J.D. Power’s report estimates that global sales of these alternatively-powered vehicles this year will reach 940,000 units, up 28 percent over the 732,000 units in 2009.

It also projects that by 2015  hybrid and electric vehicles will surpass three million units each year, representing 3.4 percent of global light-vehicle sales.

Over the next few years, J.D. Power says gas/electric hybrids will account for more than 98 percent of those sales. By 2015, the report continues the U.S. will account for 55 percent of global hybrid sales (1.3 million units), with Asia at about 30 percent.

By that year the battery electrics will be making market inroads. Last year only 7,000 such vehicles were sold worldwide, not even one-tenth of 1 percent of the market. “We think improvements in battery technology, and thus driving range, will boost BEV sales worldwide to 23,000 units this year and 500,000 in 2015,” the report says. Even then battery-powered cars will comprise less than 1 percent of total global light-vehicle sales.

The report wheels out all of the standard arguments on why this market can’t or won’t grow at a sprightlier pace: high cost, short EV driving range, uncertainty about availability and the cost of battery replacement systems, and few BEV charging stations.

As usual China looks to be the frontrunner. “China is emerging as a clean energy powerhouse – and a key element of its strategy is to pump money into alternative energy cars,” the report says. “We believe China carries the greatest potential for developing a BEV market in the midterm – within five years.” Power also said that nearly one-half of global BEV sales in 2015 will be in China, “Where electric-battery vehicles have generated significant consumer interest thanks in part to aggressive marketing.”

It goes beyond aggressive marketing though. A real breakthrough will take commitment, incentives and the will to break the hold that fossil fuels and Big Oil have on society. And if the BP/Deepwater Horizon disaster teaches anything it’s that new attitudes, strategies and mindsets about oil and getting to the next energy age need to happen fast. Left alone, Big Oil is not going to let that happen until it’s too late.

What if oil companies became energy companies? What if gasoline stations were replaced by alternative fuel stations? Or if alternative fuel stations were added to service offerings at each gas station? They would become energy stations. That vision is not all that outlandish, what with the report that Coulomb Technologies plans to install nearly 5,000 electric car charging stations across the U.S. next year.

Aren’t the oil companies, with the infrastructure they already have in place, in a great position to make untold billions by grabbing this market?

So then, what if the major carmakers just stopped making internal combustion engines entirely in favor of alternative-fuel engines for light vehicles? No matter how fuel efficient gas engines are made they still use gas. Or maybe if they at least began phasing out new gasoline engines over a short time span? Ridiculous and impossible? A liberal tree-hugging pipe dream? Yeah, probably so.

But drastic action and radical strategies are needed to break the globes’ dependence on oil. As long as carmakers continue to feed the need for fossil fuels with the products they build, dependence on oil and subservience to Big Oil will never diminish, and the damage to global economies, security and the environment will continue unabated.

It’s nice that hybrid and EV sales are increasing, but a 3.4 percent piece of the global sales pie by 2015 is nowhere near good enough or fast enough. It’s an alternative that Big Oil can easily take to the bank for years and years to come, sustaining the nightmare addiction while laughing at the dreamers all the way.

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