Is U.S. Auto Task Force Getting Accurate Assessment of Plug-In Segment?
By John O'Dell April 17, 2009Advocacy Group Thinks Panel's Consultants Use Flawed Arguments to Downplay Technology
It's great that the Obama Administration is trying to do something to save the U.S. auto industry, but a bit unsettling that the right hand doesn't seem to know what the left is up to - a common Washington problem in general, we imagine, and in particular a problem in a new administration trying to grapple with half a dozen catastrophic events simultaneously.
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GM's Chevy Volt is seen by consultants as too expensive to be commercially viable in the nearterm.
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The issue we're talking about is the seeming disconnect between the president's oft-stated goal of promoting development of rechargeable, or plug-in, hybrid-electric vehicles - with a goal of having a million of them on the road by 2015 - and the administration's Automotive Task Force's apparent reliance on a consulting group that hasn't seen much future in plug-ins.
Felix Kramer, founder of the plug-in hybrid advocacy group California Cars Initiative, raised the alarm in a piece posted this week on the CalCars.org website.
It seems that the Obama administration, whose task force is charged with helping figure out how to save the U.S. auto industry, has awarded the Boston Consulting Group a contract worth up to $7 million for an analysis of the prospects of General Motors Corp. and Chrysler LLC.
Both automakers have said in the restructuring plans they've presented to the government that plug-in vehicles - hybrid and "pure" electric - will play a big role in their futures.
But Boston Consulting, Kramer says, has relied too heavily in the past on "business as usual" assumptions and "flawed data" in assessing plug-ins.
Kramer cites one recent report from the company, co-authored by one American- and four German-based analysts, titled "The Comeback of the Electric Car? How Real, How Soon, and What Must Happen Next." (Click here to download the 10-page report.)
The press release issued by the company to promote the report when it was released in January was headlined "Electric Cars Are Unlikely to Help Carmakers Cut CO2 Emissions Significantly by 2020," a less neutral approach that alerts you to the one of the report's conclusions.
We've no axe to grind with a hard-nosed assessment of the facts, but Kramer argues that the consulting company's analysis of the plug-in EV scene uses outdated, excessively high battery costs and ignores the impact of recent U.S. funding programs for battery development.
Green Car Advisor hopes to get Boston Consulting to comment, but two days after taking our request under consideration (with the remark that it would be unfair of us to write about Kramer's concerns without including BCG's response) the best the company's been able to come up with is a "no comment at this time."
Kramer, whose own agenda centers on pushing for rapid adoption of plug-in hybrids as national policy and is far from a disinterested observer, suggests that Boston Consulting Group's influence can been seen in the Automotive Task force's March 30 report rejecting GM's plan to regain financial viability - specifically in the finding that the plug-in hybrid Chevrolet Volt, due to go into production at the end of 2010, isn't going to help the company much.
The Volt, the task force wrote "holds promise [but] is currently projected to be much more expensive than its gasoline-fueled peers and will likely need substantial reductions in manufacturing cost in order to become economically viable."
Kramer says he's been reliably informed that Boston Group already was working with the task force when that assessment was made and that it reflects the consultant's bias against plug-ins.
GM has been given until June 1 to come up with a better viability plan - much of which will have nothing to do with technology and everything to do with sales, marketing and financial management strategies.
Meantime, Kramer is urging his readers to contact Congress, the Automotive Task Force and the White House to make known their concerns over the apparent "disconnect" between the administration's stated policy regarding plug-ins and the advice the task force appears to be getting from its consultant.
The task force's report doesn't say GM shouldn't build and market the Volt and, indeed, GM says the project is moving along at full steam. Still, if BCG really is looking at the case for plugs-ins and EVs using inflated battery costs and shaky assumptions about market conditions, it doesn't bode well for a realistic review of automaker viability plans by the task force it is advising.
We urge you to read Kramer's assessment, and BCG's January report, both linked-to in this article, and then decided whether you should add your voice to those already asking the Task Force to allow GM to continue developing the Volt and other cars using the company's extended-range plug-in powertrain.
It may be expensive now - the first generation of a new technology generally is - but if we bar our automakers from spending to develop it and and fuel economy solutions like it, there would seem to be little future at all for GM or the rest of the U.S. auto industry.
John O'Dell, Senior Editor
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"It may be expensive now - the first generation of a new technology generally is - but if we bar our automakers from spending to develop it and and fuel economy solutions like it, there would seem to be little future at all for GM or the rest of the U.S. auto industry."
I couldn't agree more!
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