ClimateOne

Greg Dalton:  Welcome to Climate One, the conversation about America’s economy, energy and the environment.  I’m Greg Dalton.

 

Today, we’re looking at the future of automobiles in California and the fuels that move them.  After years of litigation and conflict, car makers, federal and state regulators and environmentalists struck an agreement recently on rules requiring all new cars sold in the United States to reach an average of 54 miles a gallon by 2025.  A related California-agreement is expected to put over a million cars on the road that emit no tailpipe emissions.

 

In 2003, auto companies and regulators killed similar rules. That saga is chronicled doing the movie “Who killed the electric car?”  Does this new deal mark a new era of the talk between companies in Detroit and Tokyo and street cart?  And policy makers in Washington and Sacramento?  How it would affect auto prices in the range of vehicles available to car buyers?

 

For the next hour, we’ll discuss the road ahead with our live audience at the Commonwealth Club in San Francisco, and we are joined by four experts - a top regulator, an environmentalist, and representatives of two auto companies.  Shad Balch as manager for environment and energy communications at General Motors, Roland Hwang as Director of Transportation Programs at the Natural Resources Defense Council, Mary Nichols is the Chair of the California Air Resources Board, the main regulator of Greenhouse Gases in California, and in fact the country, and Chris Paulson is a VP of Strategy and Business Development at CODA Automotive, a star of automaker here in California.  Please welcome them to Climate One.

 

[Applause]

 

Greg Dalton:  Welcome all.  Mary Nichols, let’s begin with you.  There’s a bunch of new rules passed recently.  They’re very complex, but if you could simplify for us, what are they and what’s their significance?

 

Mary Nichols:  Well, at our board meeting in January of 2012, the Air Resources Board unanimously passed a whole series of rules that we call “The Advance Clean Car Regulations”, and basically what they do is for the first time in California as long and I think rather distinguished history of regulating automobiles, we pulled together all the main strands of what we’re trying to do.  So we’ve set tailpipes standards on into the future for all the conventional ingredients of smog, as well as for the duo pollutants that we have been focusing on for the last couple of years which are the greenhouse gases.  We’ve also put in place a mandate, a specific sales requirement for all the major companies that sell Pasteur cars and like trucks in California that they will have to meet new and more ambitious targets for having a zero emission vehicles they will sell.  And then lastly, we have a requirement on the oil companies or the people who sell transportation fuel in California that will require that when we get to the numbers that we -- I think we’re going to be seeing fairly soon, that they will be there with the fuels, that the buyers need to have in order for this to be a successful market.

 

So we’re trying a mix of direct mandates on the auto companies.  They’ve come tremendously a long way since we started on this and mandates for fuels, but also we’re trying to build in incentives into this with more use of flexibilities, and I’m sure we’ll get into some of that as we talk further.  But basically this is now taking us into the 2025 timeframe with all the rules in place so that everybody who plays in the transportation market in California will know what’s coming in comply.

 

Greg Dalton:  Shad Balch -- that sounds like a lot of rules.

 

Shad Balch:  It is a lot of rules for sure.

 

Greg Dalton:  What does GM think about that?

 

Shad Balch:  Well I think -- we embrace it.  We’re -- for the first time, we’re not in disagreement with the regulation and I think the most significant reason is that there is harmonization between what the state is going to do at the local level here with what the federal government wants to do.  So that allows us to do what we do best, and that is to innovate.  And combine that with the cultural change at General Motors and we’re going hit a full steam ahead.  I mean, we’re going to build cars and trucks that use less gasoline if not, no gasoline at all.

 

Greg Dalton:  So you’re fully onboard with it.  Let’s get Chris Paulson here.

 

[Applause]

 

Chris Paulson:  Wow.

 

[Laughter]

 

Greg Dalton:  How often does that happen?  Chris Paulson, how is it going to affect pure electric car makers such as CODA?

 

Chris Paulson:  Well, the way I would describe it is that the work that Mary and Cali ARB has done has really paved the way for the companies like ours to exist in the first place.  You know, we -- a lot of ways, we are a product of the “Who killed the electric car movement?”, in the first place.  The electric car companies and startup companies like ours are here to develop new products that now have a chance to exist because the demand is there, and now the regulation matches that demand.  I, of course, think that more could be done.  You know, we want to be able to continually innovate and deliver new product.  We’re a technology company first and foremost, and the regulation allows that company like ours to be there.

 

Greg Dalton:  So you said more could be done.  You think that these rules should have gone further?

 

Chris Paulson:  Always.  I mean, when all you make are zero emission vehicles, of course we think that more can be done.  We -- but I think it’s important that those are all of the OEMs are on board with this legislation.

 

Greg Dalton:  Original Equipment – meant the car maker.

 

Chris Paulson:  Yeah, all of the car makers.  Yeah.

 

Greg Dalton:  Okay.

 

Chris Paulson:  In D.C., when the announcement was made, most of the car makers were there, which I think is a big step.

 

Greg Dalton:  Roland Hwang, this is a new day.  You’ve been – you know, the NRDC, you know, does a lot of things to address climate change.  Put this in a context in terms of other accomplishments, other policies.  How big a deal is this?

 

Roland Hwang:  This is a huge deal.  It’s a really big deal.  When you combine this latest round of standards 2017 to 2025, we have the first round of standards of the Obama administration, California, and the automakers also negotiated back in 2009.  This is the single biggest step in a generation to get our country off of oil and cut carbon pollution.  This is a big deal.  It will cut your fuel bill in half, and by 2030, it will cut oil imports by a third, and it’ll cut the equivalent in terms of carbon pollution of 90 million cars.  This is a big deal.

 

Greg Dalton:  So I want to get a little bit about how did this happened because just a few years ago, regulators in Sacramento would announce some rules, General Motors would seek their lawyers, auto companies would sue, and here we have this kind of “Kumbaya” moment out here.  How did this -- what changed?  How did this happen?  Mary Nichols?

 

Mary Nichols:  Well, I’ll start I guess, I think it was a number of forces coming into play at the exact same time.  I want to give credit going back a few years to leadership in California particularly to then assembly member Fran Pavley, who authored a bill ordering California to set tailpipe emission standards for Greenhouse Gases.  This was a wild and crazy at the time except to a few people but as it turned out, it did play a critical role in moving everybody’s thinking in a different direction.  At the same time, the U.S. Supreme Court was telling the Bush administration, they had to take action against Greenhouse Gases.  They couldn’t ignore them that they are a form of air pollution and they are going to have to do something.  In turn, I would say some very thoughtful people in the auto industry started thinking about whether there wasn’t a way that they could embrace this concept rather than simply keep on fighting what seem to be constant battles in the political arena where nobody was really getting anywhere.  And they saw a chance, as Shad said, to try to get California and the federal government into alignment, and at the same time, the country elected a new president.  And President Obama made it clear that when he went into office, he said this during the campaign and practically the day after he was elected, he started working on setting national standards for vehicles.  So I think the handwriting was on the wall.  The car companies had been through terrible economic crisis.  There was an issue about the future and how it was all going to play out and everybody was ready for once and sometimes it does take a crisis to think differently, to do things a little bit differently and maybe take some risks of sitting down and talking.

 

Greg Dalton:  Shad Balch, how did you think it came about?

 

Shad Balch:  Yeah, for Jim’s perspective, I mean, if you look at the old business model, it just wasn’t working.  And I think we also underestimate--

 

Greg Dalton:  Oh, it’s working while gas prices were low.

 

Shad Balch:  And then 2008 hit, we had no car that would compete in the marketplace and our dealers were watching people run into competitors’ showrooms.  That will never happen again.  We now have a car out in the market that gets best in class, fuel economy, and it unseated two of our top competitors.  So we’re back in that game for sure.  But I think the business model wasn’t working and so it required a cultural shift.  And we underestimated the image and reputation aspect of the whole situation as well.  People did not want to buy one of our products because we were -- we had a history of fighting and looking for, you know, any alternative besides building better cars.  So with the cultural change, it makes -- there’s a business case for it.  There is such -- there seems to be such a public hatred towards petroleum-based fuel that why not, you know, build a product that uses anything but.  And so that makes sense, we’re going to leverage that and I think that that is going to help shape where we go in the future in terms of automotive technology.

 

Greg Dalton:  Is General Motors playing along here because taxpayers own a quarter of the company?  Is that a part of the process?

 

Shad Balch:  Well, certainly.  Absolutely.  I mean, of course we’re grateful for having a second chance and we have to -- there is added pressure to make sure that we deliver not only what everybody expects but what they don’t expect.  So while the regulatory framework is fantastic, from our standpoint, and from the innovators in the company, we want to do better.  That will give us our competitive edge.  We don’t just want to meet the standards, but we want to do more.

 

Greg Dalton:  Roland Hwang, anything to add to this in term of how this shift came about, Roland Hwang?

 

Roland Hwang:  Yeah absolutely.  I think you can look at three major factors which remade both the economic, the political, as well as the legal environment which all made this happen.  High oil prices start to go up in 2005 and reshape the whole economic business climate as Shad is referring to.  Supreme Court ruling in 2007, we had to go all the way to the Supreme Court to get the authority for California as well as USEPA to regulate carbon dioxide as an air pollutant.  And the third issue of course is California leadership, and I think as Mary has mentioned, in 2002, California established very first law in the entire nation to start setting standard for carbon pollution.  That set in to motion all kinds of things when you combine it with the legal as well as the high oil prices, it all kind of came together to a situation where it just makes business sense, and it makes a good environmental policy sense to move forward with this kind of ground breaking regulations.

 

Greg Dalton:  Shad Balch from General Motors.  You said there’s a deep -- you said hatred of petroleum.  There’s a history of romance collision between the oil industry and the auto industry.  Are you -- are you guys on the skids? (Laughter) Trust me.  Are you there on the rocks?  Who else--

 

Shad Balch:  The oil industry didn’t do us any favors back in when we went through bankruptcy and they were making billions in record profits.  So by no means, I mean, they don’t scratch our back and we’re not scratching theirs at all.  We want to build cars and trucks that run on anything but petroleum.

 

Greg Dalton:  Okay.  And one of this new package of deals calls for hydrogen to be put into place.  This clean fuel outlet rule requires energy companies to provide hydrogen.  And so let’s talk about that.  The car makers want to make hydrogen-based good cars for one.

 

Shad Balch:  Well, we have invested a lot of -- a significant amount of resources into developing hydrogen fuel cell technology.  Still, it’s a very expensive vehicle and it’s probably several years out.  But it--

 

Greg Dalton:  It’s been several years out for about 40 years.

 

Shad Balch:  And that’s why I will not give you a date when we will start selling these cars.  One, because the infrastructure is not in place, although we do now have the backstop to make that happen through the clean fuels outlet regulation.  But hydrogen fuel cells offer a way to apply electric vehicle technology in larger applications - trucks and SUVs and things like that.  So that is going to play a significant role as we work towards the states and the federal government’s role of getting off of petroleum-based energy for cars.

 

Greg Dalton:  Mary Nichols, the oil companies think that hydrogen is being rammed down their throat, that they’re being made to produce something that is not economically viable, there’s no market for, the heavy hand of government coming down on them and they’re considering litigation against this rule.  I like to get your perspective on why force hydrogen.

 

Mary Nichols:  Well, first of all we would much prefer to work something out with the oil companies where they would work with the state to help us get relatively small amount of fuel that we think that we’re going to need to tie this over for the few years while people are beginning to see some of these fuel cell vehicles out there on the roads, get used to them because they have wonderful driving characteristics, and then we think that once there is a market, there won’t be any problem getting oil companies to want to jump in and sell the fuel.  It’s really a transitional issue, and I think we’re on a very similar position with respect to the fuel cells as we were with the electric battery cars, maybe a decade ago which is that the technology exists.  Those who can see the future know it’s coming, but to get to that point where people can see enough money in it to make it worth their while to actually invest, it takes a little longer.  And that’s where the government gets involved both in the form of mandates and of incentives because there were other ways to try to build this market while we’re getting ready for there to be enough out there so that people can see what it does.

 

I think it’s really important to underscore the fact that companies like General Motors and most of the other major companies that are manufacturing vehicles now, do have very active programs with fuel cells because there are certain applications for the heavier vehicles for longer distance travel that we still don’t see how the plug-in vehicle is exactly going to meet all that demand.  But I think if there’s one thing that many players in this field have learned in the last years of debate is that there doesn’t have to be one fuel and one vehicle that for the foreseeable future, there is going to be a mix of different of kinds of fuels and technologies out there, and it’s very exciting to see them all now beginning to bloom, but they’re not all at exactly the same stage.

 

Greg Dalton:  Mary Nichols is the Chair of the California Air Resources Board.  Chris Paulson, you make -- CODA makes electric cars.  Do you have a dog in this fight about hydrogen, good thing, bad thing or you do not care?

 

Chris Paulson:  Well, the -- you know, we’re a small company and so we don’t spend a lot of time worrying about things that were not working on today.  And I would hate to disagree with Mary but she said electric cars are coming, they’re here.

 

Greg Dalton:  I own one.  I just bought one.  I love it.

 

Mary Nichols:  Thank you.  I agree.  I agree if I said that I was behind the times.

 

Chris Paulson:  We’re -- and our cars are in production today and it’s coming soon to the Bay Area.  We have a dealer that we just signed in the Bay Area.  We’re going begin to sell cars to customers that are ready.  And I think you’ll see the cost come down very quickly in electric cars because there are companies that only care about electric cars and are focused 100% on EV technology, companies like CODA.  I think that in the long term, I totally agree with Mary.  You’ll see a lot of different technologies develop.  I think electric cars are going to have a big place because of the inherent fun of driving electric car.  It’s different.  You know, it’s quiet, it’s a really aggressive drive, you got instant torque off the line which you don’t get unless you buy a high-end sports car.  It’s a really different experience, and I think consumers are going to make the switch themselves.

 

Greg Dalton:  I bought an electric car last month and I can’t get my kids to get in a gasoline car.  It’s like, it’s like it’s old, it’s stinks.

 

Chris Paulson:  Yeah, it’s loud and smelly.

 

Greg Dalton:  Yeah.  It’s dirty.  Roland Hwang, anything to add on hydrogen?  Does the environmentalist care to see hydrogen as a problem because it takes a lot of energy to produce hydrogen?

 

Roland Hwang:  Well, I mean let’s step back a little bit from a hydrogen question and talk about the oil industry problem.  We’re having a problem with the oil industry.  They are not willing to move forward with solutions.  What Shad is talking about in General Motors and in the auto industry, and we’re talking about with CODA, is an industry that’s reinventing itself and moving forward.  It had a different relationship to government standards and regulations, it’s on board with that.  It’s a different relationship with innovation.  Yet, the oil industry is highly profitable industry yet in every step of the way, it seems to be fighting and fighting and fighting to open up its market to innovation and competitors.  Well you might -- there might be a good reason for that, from their business prospective, but the problem is whether it’s hydrogen stations or whether it’s something called the California low carbon fuel standard, or whether it’s called keystone excel, you see an industry which is continuing trying to fight new requirements to provide with greater choices to get us off of oil and continuing to push quite heavily to keep us essentially addicted to oil.

 

Greg Dalton:  And we should note that these rules call for automobiles to basically increase their efficiency 100% and oil companies are fighting reduction greenhouse gases of just 10%.  So the autos are doing 100 and the oil companies are fighting 10.  Is that accurate?

 

Mary Nichols:  Yes.  That just--

 

Greg Dalton:  Let’s talk about the cost.  Are this new -- these mandates going to drive up the cost of automobiles?  Mary Nichols, is the Air Resources Board done some work on--

 

Mary Nichols:  ARB and also USEPA and DOT all had to come together around some numbers that’s required as part of the regulatory process to make predictions about what any new regulation will add to the status quo.  We don’t look at the benefits economically, we only look at the cost.  And the cost of regulation will add to the price of a new vehicle, on the average, you know, down the road, no question about it.  The numbers spread out over the whole vehicle are a couple thousand dollars which will be made back fortunately for the consumer within four years.  So in the lifetime of an original buyer, they will receive the economic benefit of any additional cost that they might pay for a vehicle.

 

I think most people are pretty skeptical about these numbers and I don’t blame them because the history of competition is that companies want to sell cars, they will find ways to bring the initial cost down and of course the meantime with the benefit of more fuel efficient car is going to be there no matter what.  But we’re still experiencing, I would say some push back from the dealers who always view anything that might increase the sticker price on a car as a bad thing and so we’re still having discussions with them about this because they’re opposed to any type of mandate that could add anything to the original sticker price.  But what we’ve seen in the last few years and I think we’re seeing it right now, is that customers are finally beginning to recognize that there is an actual benefit to a car that has greater fuel economy.  And so they are used to be, you know, Mantra that you’d hear all the time from the auto industry of people who don’t care about fuel economy, they won’t pay for fuel economy, and I think we’re seeing that that’s not true anymore.  The price of gasoline has gone up.

 

Greg Dalton:  Shad Balch, General Motors, prices will go up, you’re okay with that?  Do you say how much?

 

Shad Balch:  Well, this is the exciting part for GM is that now that we have right side of our business and we are making money and don’t have the debt service, we’re reinvesting our profits into R&D.  Last year, we filed 1100 patents and that is the most for any -- for R&D across any sector.  So we’re going to -- we see this as a challenge for sure, to keep the cost down, but this is going to give us probably an advantage, a competitive advantage.  It will initially, I mean, they’re will be technologies that add to the price of the car.  The 2012 Volt dropped a grand from the 2011 Volt.  So we’re already going down the hill.

 

Greg Dalton:  But your dealers were not happy.  You don’t control them.  They’re independent business owners but they are pushing back.  They’re not happy about this idea you disagreed to which could lift prices a little bit.

 

Shad Balch:  Well yeah, and they probably don’t also have the insight into the manufacturing process that we do.  They don’t, you know, their dealers are probably used to historical old GM way of thinking, and it’s different now all the way down into the dealer body too.

 

Greg Dalton:  So you have to convince not only their customers in the public but your own business partners that--

 

Shad Balch:  That’s correct.

 

Greg Dalton:  --this new GM is really different, that’s a fact.

 

Shad Balch:  That’s correct.

 

Greg Dalton:  Let’s talk about jobs.  Is this going to -- what this got to do with job creation?  Is this going to have an impact on jobs at General Motors?  Are you going to hire some people or, you know, is this going to be – what’s the job equation?

 

Shad Balch:  Without a job, this is going to add jobs.  We’ve already seen that happen pretty substantially and the industry has added hundreds of thousands of jobs or about 100,000 jobs I guess in the last few years.  So that is going to happen and it’s because of new technologies that are coming.  We just opened up a plant in Orion, Michigan that builds the subcompact, Chevy Sonic.  And it’s the only subcompact car built in this country.  And we did it through employing efficiencies in the assembly process, that’s 1300 jobs in this country for a car that no competitor can build here.

 

Greg Dalton:  And are going to make money on that car or is that just to please regulators who are sitting next to you?

 

Shad Balch:  We’re absolutely going to make money on that car.  Yeah, we wouldn’t do it if we’re not going to make money out of that car.

 

Mary Nichols:  I wish.

 

Shad Balch:  Yeah.

 

Greg Dalton:  Roland Hwang, jobs impact?

 

Roland Hwang:  Yeah, jobs impact.  Let’s talk about what happened in 2011 - highest average gasoline prices on record.  Gasoline prices were up, yet profits from the US auto industry, up.  Job hiring, up.  And, fuel efficiency in January is at the highest level ever in the history of the United States.  So we can see that jobs, profits, fuel economy, they all can go hand in hand.  Now, if you’re a consumer and you’re looking at a vehicle in 2025, the great thing about is that if -- most people finance their vehicles.  The great thing about it, almost as soon as you drive that car off the lot, that vehicle will pay for itself.  It’s quite remarkable that the additional car payments will be offset by the fuel savings.  So that’s why we believe these higher standards will just be a -- like a tremendous boost and will continue to allow the US auto industry to thrive, because they’ll be innovating and providing the kind of automobiles that the US auto consumer wants.  The number one attribute according to surveys from JD Power’s, which is an industry auto consultant, Ford motor company has released a poll recently and others showing that the number one attribute that new car buyers want is fuel efficiency.

 

Greg Dalton:  We had some reporters here recently who predicted $5 gas this summer for a number of reasons around the Strait of Hormuz or some dynamics inside the oil company in the oil industry, 2008 oil or gas hit $4 a gallon and Americans went nuts and politicians were running around, “What happens at $5?”  You guys thought about that?  Mary Nichols?

 

Chris Paulson:  His business plan goes very well.

 

Greg Dalton:  CODA isn’t very happy with that.

 

Mary Nichols:  Well I was going to say that I think we should let our friend from CODO say maybe a few words about the multiplier effect of EVs too because it’s not just about building them or selling them, it’s also about everything else that goes with it.

 

Chris Paulson:  When I think about -- and look closely at the discussions about increasing cost of fuel efficient cars, I actually completely disagree.  We’re making a car from much less than the cost of cars that are made today that are less efficient.  And we have plans to build several new cars that will cost a lot less.

 

Greg Dalton:  So what does a new CODA going to cost?

 

Chris Paulson:  Well, we’re launching the car at 37 -- $37,000 but after the tax incentives, you can get it down below -- below 20 -- below 30, sorry.

 

Greg Dalton:  Yeah.

 

Chris Paulson:  And the--

 

Greg Dalton:  Be careful of his car, guys.

 

Chris Paulson:  Right.  And when you take into account the benefit of the cost of electricity versus the cost of gas, you got $3 a gallon, let alone $5, the pay is off very quickly.  And we’re going to -- the cars we’ll launch in the future, our target is to be competitive in transaction price with a gas vehicle.  We know we can do it, and we can do it for less than cars are being produced today.  And that will -- in my view that totally changes the equation.  So when someone goes into a local northern California dealer, and decides, “Should I buy a EV or should I buy a gas car?  Both have the similar costs, knowing that I can drive for $0.10 a mile or less versus $0.15 or more for a gas car.”

 

Greg Dalton:  Chris Paulson is the Vice President of Strategy at CODA Automotive.  Our other guest today at Climate One are Mary Nichols, Chair of the California Air Resources Board, Roland Hwang, Director of Transportation Programs at NRDC, and Shad Balch from General Motors.  I’m Greg Dalton.  Let’s talk a little bit more about the technology that’s going to be required to develop some of this technology that seems to be here today.  But to meet these ambitious goals, what other technologies are going to have to be developed and is that sort of incremental technology or breakthrough technology.  Shad Balch, what is it--

 

Shad Balch:  Actually, it’s a little bit of both.  I think for us, the biggest pot of gold is electrification.  That seems to be where we want to head and put most of our resources, but there are several forms of electrification - hybrid, extended range electricity like the Volt, hydrogen fuel cell.  So we’re applying the technology the battery chemistries that we’re using right now in Volt and other cars into different platforms so like the Buick, with a new ESS program.  Those sorts of technologies will spread out among different vehicles and different platforms.  But there’s also a place for bio fuels for diesel to some extent and it’s got to do that mix.  It won’t be just one technology that wins at the end of the day.

 

Greg Dalton:  So a lot of things.  And Roland Hwang, also the inefficiency of internal combustion engine.

 

Roland Hwang:  Yeah, I think what’s remarkable when you look at the Air Resources Board and the EPA and Department of Transportation analysis of how we cut carbon pollution in half by 2025 in today’s vehicles, it’s quite remarkable that what they’re forecasting is 80% of the fleet will still be conventional gasoline vehicle technology albeit very sophisticated.  Fifteen percent will be hybrids like the Toyota Prius type hybrid.  And only 3% is required to be pure battery electric or a plug-in type vehicle.  I think those battery electrics and plug-ins will do much better than 3%, don’t get me wrong, but I think what we were finding out is when you set a standard on a auto industry or any industry for that matter, what they do is they innovate.  They figure out ways to do better and do it at lower costs.  And so a year ago, I would’ve been -- I would have not believed that the internal combustion engine could go this far, getting more miles out of a single gallon, with an internal combustion engine vehicle, albeit it’s going to have a turbo charger on it, it’s going to have less cylinders, it’s going to have variable valve timing and direct injection.  It’s probably going to be made into a seven, eight, or even nine-speed transmission.  But all these things are well truly incremental, and that’s the bulk of what we’ll see in 2025, but because of the incentives built into these programs with California and the federal incentives, that are also be I believe a flourishing of innovation that will pull forward into the marketplace technologies like the Volt and the CODA vehicle.

 

Chris Paulson:  We’ve hired hundreds of people, 250 people today and worked in Los Angeles.  And we have a very aggressive plan to expand that, people who are focused on our core technology.

 

Mary Nichols:  We’re here talking about in a sense a sliver.  It’s the most glamorous sliver in the passenger cars but we’re talking about really transforming the entire transportation system.  California, and actually the country as a whole, are in the business of moving around things.  We import, we export, we have big ports, we have railroads and rail yards and they are at the cracks of our pollution problems, they’re also major drivers of our economy.  But we have to figure out how to get a balance going here where we get these ultraclean and ultra-efficient vehicles and transform the whole market for these vehicles, and at the same time, also recognize that there were limits on them because we need to put more things and more people into mass transit.  We need to put more goods onto railroads and then we’re going to need to electrify the whole thing, and then we’re going to have to generate the electricity renewably.  So we’re talking about a gigantic economic transformation that’s going on that we’re just really on the edge of in this country, but it’s all connected, it’s just starting with the passenger cars.

 

Greg Dalton:  And, will it happen fast enough for the climate?

 

Mary Nichols:  Well, Jim Henson says it’s already too late.  There are experts who believe that we’ve already reached the point of no return and certainly, we see the effects of climate change happening today.  But I guess I’m of the glass half-full variety, I believe that we can innovate our way out of our disasters, relying on the excellent technology that comes to the fore, if we can also get the policies and the incentives right.  And as -- I think you’ve been hearing from this panel, at least we feel like we’re finally moving in the right direction.

 

Greg Dalton:  And we’ve been talking here the mileage standards, 54 miles a gallon, that’s a national thing.  The other things we’ve been talking about are just California.  Many waves start in California and move east, so let’s talk a little bit about the national connection here, is what’s going to -- is any of this going to kind of have an effect on the country’s auto market?  Shad Balch?

 

Shad Balch:  Most definitely.  California is, by far and away, the most important market for us.  We have the most market share to gain and we also have the ideal customer base here.  And I think that is -- that is sort of the missing equation of, you know, in terms of whether or not this is going to happen in time.  We have a great, you know, strange bedfellows up here, but who’s missing is the consumer.  They have to buy into this, they have to be willing to understand the technology and the need, and be willing to buy it.  Right now, there are all alternatives to buying a car that runs on gasoline and if they’re not picking it, we have a problem.

 

Greg Dalton:  There’s also some confusion, in fact, General Motors has runs ads of the Chevy Volt at a gas station kind of explaining, “Well, wait, it’s electric but you put gasoline in it, right,” there are so many different flavors of cars --

 

Shad Balch:  Oh yeah.

 

Greg Dalton:  -- these days that people a little confused.

 

Shad Balch:  It is very confusing.  And the problem is, or the issue is, the reality is, is that you buy a car based on the way it makes you feel.  It’s the most irrational purchase decision you’ll ever make.  So trying to inject some rational reasoning into why you should buy a clean car doesn’t resonate as much as we want it to, it just -- it doesn’t.  I’ve got it -- we’ve got to talk about the performance and the way that electric car is different than a gasoline, conventional-powered car.

 

Greg Dalton:  Auto companies spend huge amounts of money, you know, making this an emotional purchase, right?

 

Shad Balch:  Right.

 

Greg Dalton:  You guys are a master at this, right?

 

[Laughter]

 

Shad Balch:  We try.

 

[Laughter]

 

Greg Dalton:  Okay.  So let’s talk about who buys a Volt now, are they environmentalists or technologists?

 

Shad Balch:  Technologists.  They’re self-described technologists.  And they also -- 98% of them are more than satisfied with their car.  So the customer satisfaction rate with the Volt is higher than any other car out there.

 

Greg Dalton:  But the Volt has become a political punching bag.  Has that hurt sales?

 

Shad Balch:  It has, most definitely.  I mean, it’s the antics that were going on in D.C. around that car were just unbelievable.

 

Greg Dalton:  To clarify.  The CEO of General Motors went to testify before Congress…

 

Shad Balch:  Right, about the battery investigations and things like that.  And we will -- we probably haven’t lost sales entirely, probably just delayed them a bit, as people realize that what they saw was just overly exaggerated.  We think those customers will come back.  So it’s just a matter of getting through this issue.

 

Greg Dalton:  But Roland Hwang, let’s talk about, you know, California to national.  Is some of the things we’re talking about here going to affect the national market?

 

Roland Hwang:  Yeah, well absolutely.  And in fact, the California Clean Car Program has been adopted by a number of other states, particularly in the northeast and in the northwest.  And so immediately, when you talk about the 1 million or so plug-in electric vehicles and fuel cell vehicles that will be in California by 2025, multiply that by a factor of, say, three for the rest of the nation that has California’s standards also, it’s a huge effect.

 

Let’s talk a little bit about the whole issue of, can we go fast enough in -- you know, what can we -- what lessons can we draw out of what just happened?  What just happened in the auto industry, reinventing itself almost within a blink of an eye within the last five years I would say, huge breakthroughs have occurred and we have come -- and are coming together in a political process, which by frankly, as we know, from the General Motors’ Volt situation in Congress, the whole issue of how we move this country forward on environmental policy has taken a real poisonous atmosphere.  But you can look at what California did, you can look at what General Motors did, you can look at what UAW, who also is a big supporter of these standards now, as well as environmentalists and consumer groups, and energy security groups.  You see a coming together in a process, you see government at its best, government working to make progress.  And that’s something which has a very short supply in Washington, especially with the General Motors’ Volt situation and investigation.

 

When you have Bob Lutz out there, telling what he, in his own words do we need it --

 

Greg Dalton:  Let’s tell who Bob Lutz is.  He’s Vice Chairman of General Motors…

 

Roland Hwang:  -- the former Vice Chairman of General Motors who started the General Motors Volt Program, probably not to solve global warming, as we know…

 

[Laughter]

 

Roland Hwang:  … from his opinions of such.  But he is out there right now, in the public saying, “The right wing media, Bill O’Reilly and the others, need to back off from attacking the General Motors Volt, from politicizing the Volt, from politicizing progress to getting off of oil, and from our perspective also, of course, solving climate.”  It is hurting jobs, and as Shad has said, talked about the Volt sales being hurt.  That means jobs and that means jobs in Michigan that means jobs in -- all other parts of this country, including California who’s dependent upon this country moving forward with clean energy.

 

Greg Dalton:  Roland Hwang is the Director of Transportation Programs at the NRDC.  Other guests today are Mary Nichols from the California Air Resources Board, Chris Paulson from CODA Automotive, and Shad Balch from General Motors.  I’m Greg Dalton.

 

We’ve been talking about 54 miles a gallon but in reality, people are going to get what, mid-40’s or something like that.  We’re not really going to get 54 at the end of day.  Mary Nichols --

 

Mary Nichols:  Right.

 

Greg Dalton:  -- isn’t there a little inflation in those numbers?

 

Mary Nichols:  Well, the numbers are the numbers as shown on the tests that are required by the Department of Transportation, which sets the cafe standards.  So you have to have apples-to-apples, you got to compare test results to test results.  And every time you try to mess around with the tests, then you open up another hole or a can of worms.  But it’s always been the case that what people experience in the real world is not exactly what’s shown on the federal test procedure, and that’s going to continue to be true on into the future.

 

Although I will say that we’re seeing that -- about two things.  First of all, clearly, there are things that a person could do in the way that they drive their car, that can get them closer to those targeted numbers, and people are becoming more interested as fuel becomes more expensive.  And the car companies themselves have done some things to try to educate their customers about how, in the real world of driving, they can actually experience the optimum fuel economy, which never used to be an issue for much of anybody except a few, sort of cranks who actually cared about, you know, how their cars performed.

 

But the other thing is this, again, is part of the push in the direction of the zero-emission vehicles, the advanced clean cars, is that if you’re starting to actually get interested in these problems and you start to look into what the technologies are, that are available, and what you can do to break our dependence on imported oil or to get a greater degree of improvement in air quality.  And whatever your motivation may be, if it’s health or just being part of what’s going on out there in the world, it’s going to lead you in the direction of an advanced hybrid, a plug-in vehicle, or maybe checking out one of those fuel celled vehicles.

 

Greg Dalton:  And these zero-emission cars are supposed to be 15% of all cars sold in California by 2020?

 

Mary Nichols:  That’s a floor, that’s a floor, that’s not a sale.  In others words, that’s the mandated requirement on the major companies who can either make those sales out of their own production or they can buy credits from both, like CODA here, if they don’t want to make them themselves.  But I think that what we have an obligation to do, and I’m very excited about the opportunities here, is to make this a successful market.  And it’s not just about selling the cars.  It’s also about making it easier for people to bring them home.  Easier to get the chargers installed, easier to find fueling, having an app that you can download unto your Smartphone that tells you where the charging stations are any place you’re going.  And these are all things that, you know, collectively, cities, counties, local building departments, the utilities, everybody’s going to have to get together and work on this, if we’re really going to hit the numbers that we think we should be seeing.

 

Greg Dalton:  As a new EV owner also, not only is there a charging station there but is it available, can I reserve it, either --

 

Mary Nichols:  Yeah.

 

[Laughter]

 

Greg Dalton:  -- am I going to drive there and find someone else parked there, and I’m, you know, running out of juice.

 

Mary Nichols:  All those things.

 

Greg Dalton:  We’re going to bring our microphone up here, I invite your participation.  Again, if you’re on this side of the audience, please go on that side of the -- in the line.  We’ll start with Jane Ann back there and, yeah, if you’re on this side please go at that door, and the line forms at that door over there.

 

We’re talking about clean cars at Climate One.  Let’s put these new rules in -- international perspective.  How do Americans and Californians new efficiency standards compare with the rest of the world?  Roland Hwang, are we catching up with Europe?  Ahead of Europe now?

 

Roland Hwang:  In terms of actual standards on the books, it’s quite remarkable.  California and the U.S. can now quite, proudly say we have the strictest clean car standards for CO2 or fuel economy that’s on the book.  However, the rest of the world is not standing still, the European and the Chinese market, and the North American market -- those are the three big markets now globally.  Europeans are moving forward with the standard by 2020, which will probably be about below 60 miles per gallon by 2020.  That will probably happen in the next year or two.  And in China of course, has a tremendous problem of not having a lot of oil and now, having an explosive growth in its car market. And they are going quite heavily into electrification as well as stronger fuel economy and CO2-type standards.

 

So, we’re ahead for the moment, but these other major markets and the Chinese are investing huge amounts of money in the electric vehicles.  We can stand still, innovation is the key to keeping the U.S. auto industry competitive.

 

Greg Dalton:  Shad Balch, global automaker, do you see the same way?

 

Shad Balch:  Yeah, and we’re going to be ready for it.  I mean, we have -- China is probably one of our second most important market for us, it’s definitely the largest.  So we’re going to be their solution too and we’ll be able to, you know, innovate and do what we do best here, and then move a manufacturing to those areas and sell the cars in those particular regions.

 

Greg Dalton:  Let’s have our audience question.  Yes, sir?

 

Audience #1:  Hello and thank you all for coming and joining us today at noon.  I know you might all be wanting some lunch by this point.  I would like to ask, as someone who’s been deferring a car purchase precisely in hopes of seeing this transformation, the fact that all of you are here together with us today, discussing this is very heartening.  My concern is that there are a lot of people, my age and younger, who because of the current economic climate in the U.S., had been hindered from both making new car purchases and having to look at the sticker price has been discussed much more closely than before.  And where those upfront prices, despite the fuel savings, are still a deterrent.  So I would like to hear your perspectives on the car buying market, i.e., the consumer end of the equation under this economic climate, now that we finally have these breakthroughs coming on to the market.

 

Greg Dalton:  Still a price premium for your car.

 

Mary Nichols:  Absolutely.  Well, and the cars, overall, are expensive anyway so the biggest market in a bad economy is for used cars, and we want people buying new cars.  So how are we going to get there?  I think we have to be looking at incentives, at the purchase side of things.  California stepped up to the plate, the legislature approved tax incentives for people and they match up with federal taxes and it’s to the point where you can write the cost of the sticker price down by about $10,000 on one of these vehicles.  That’s a hefty subsidy --

 

Male Speaker:  Yup.

 

Mary Nichols:  -- coming directly out of the pocketbook in effect.  And we’ve been accused of subsidizing wealthy people because they’re the only ones who can buy these cars.  They also need to make efforts to find ways to get them into the zip car market or equivalent car-sharing kinds of programs, get them out there into places where you don’t have to be affluent to be able to start to drive an electric vehicle.

 

Greg Dalton:  And some of those car-sharing services are buying electrics --

 

Mary Nichols:  Indeed.

 

Greg Dalton:  -- or Volts, et cetera.  Roland Hwang?

 

Roland Hwang:  I think, you know, something back from this issue of immediate affordability, when you look at car sales in the United States and you look at what drives the large -- in some cases, large fluctuations in -- the ability for people to buy a car, it’s really about the state of the economy, and the state of the economy is highly connected to the price of oil.  And so what we do have as a nation, we do have a choice.  Over the next 20 years, the clean car program that Mary Nichols is talking about as well as the Obama Administration is doing a process of adopting.  Over the next 20 years, that will keep $350 billion of our wealth in this country.  It will reinvest that money back into U.S. manufacturing.  It will insulate us against price swings in the oil market, which we know are coming.  It will make our economy stronger so that young people and all -- every American can have a job, a healthy economic climate to afford these vehicles.

 

Greg Dalton:  Let’s have our next audience question.

 

Audience #2:  I want to thank you very much for an informative discussion and I especially thank Climate One.  As a 2001 owner of a wonderful Prius which still running, I’m all for it.  My question is for you Mr. Dalton, who funds Climate One?

 

Greg Dalton:  ClimateWorks Foundation, the Goldman Fund, a number of corporations, General Motors.  We also get some money from Chevron, it’s all on our website.  Many foundations.  As well as ticket buyers and members of the Commonwealth Club.

 

Audience #2:  Thank you.

 

Greg Dalton:  Let’s have our next audience question.

 

Ron Gremban:  Hi, I’m Ron Gremban with CalCars, and have Volt number 24.

 

[Laughter]

 

Ron Gremban:  And -- which is a wonderful vehicle, really have to say how much fun these things are to drive.  But my question is, has to do with, you know, these vehicles -- passenger cars have a lifetime of, in the order of 15 years, and larger vehicles often longer than that, which means that if we start getting, say, 15% really off oil in 2025, of new vehicles, it’s a long time before we start getting off oil in our fleets.  You know, with over 25 million, I believe, in California and 250 million in the country and a billion in the world.  Is there -- can anybody see there as a possibility to do something with vehicles that are on the road?

 

[Mary Nichols:  Good question.

 

Greg Dalton:  There are some people out there advocating, I believe, the Andy Grove wasn’t it, an advocate of this at one point, in retrofitting the existing.  Which gets into all sorts of complicated issues about violating warranties, et cetera.  But this -- you know, it takes 17 years, it’s a long time just to turnover the fleet, right?

 

Roland Hwang:  The good news is, is that the vehicle fleet now is probably the oldest it’s been in quite a while.  So there’s going to be an appetite for that fleet to get idled and replaced with newer technology.

 

Greg Dalton:  Let’s have our next audience question.  Yes, ma’am?

 

Audience #3:  Hi, I’m a big fan of e-cars and I would love to buy one, but I’m still saving money for it.  I have a question about how the government supports this program?  And clean energy has enjoyed a lot of support from the government and therefore financial assistance from taxpayers in the form of rebates, subsidies, or favorable loans.  And I just wonder, how do you see that for clean cars to come about?  How much financial assistance do you see will be needed from taxpayers for your vision to come to life?

 

Mary Nichols: -- Well --

 

Greg Dalton:  Mary Nichols?

 

Mary Nichols:  -- right now, the way we’re financing the incentives is through a surcharge on vehicle registrations, which I think is a very fair way to do it.  So somebody buys a new gasoline car, a small share of the registration fee for that car is going into a fund which can be used in part for these kinds of customer rebates for the cleaner, more efficient vehicles.  Some of the money also goes to programs that are pioneering research and development and deployment of new clean fuels.  So the state, as a whole, is in investing in this and they’re doing it through funds that are collected basically from gasoline sales and from the registration charges on new cars.  And we’re going to continue down that path, I think, as long as we possibly can because of the same reasons that others have alluded, which is that we think it’s good for the economy as a whole of California.  If California benefits from being seen as a place where companies want to locate because they think this is a good market for cleaner, more efficient technologies.  More companies locating here, more venture capital, more jobs, more people able to buy cars, it’s a virtual circle.  And that’s the direction that we’re headed in.

 

Greg Dalton:  Hang on one sec.  Chris Paulson, you know, is CODA in California for the reasons Mary just said?

 

Chris Paulson:  Absolutely.  The California worker is the world’s most innovative worker, you know?  We have settled ourselves in Los Angeles because that we can get the best people in the world to work on really cool stuff.  We’re focused on designing new technology that will solve a lot of this problem.  You know, I think it’s a really good question about -- can we do it fast enough?  I think the constraint is going to be partly, our ability to make the cars and get it done.  We see demand that far exceeds supply in the short term.

 

Greg Dalton:  Chris Paulson is VP of Strategy at CODA Automotive.  Other guests today at Climate One are Mary Nichols, from the California Air Resources Board, Roland Hwang from NRDC and Shad Balch from General Motors.  Roland Hwang, did you have something to add on?

 

Roland Hwang:  Yeah, just very -- quickly.  I think it’s useful to put the question of how much government support behind clean energy in the context of how much there is currently government support behind fossil fuel industry.  So you’re talking about how much money the federal government in the state of California has put into supporting clean energy, we’re probably talking about, oh -- several billions of dollars.  But if you look at how much money that’s been put in, historically, into supporting oil -- just the oil industry and at subsidizing the exploration and production of oil industry in this country, you got to multiply what we support by -- for clean energy by a factor of a hundred if not more.  So really, the question is, what are our priorities as a country?  We know we can do this, make the shift, but what are our priorities that -- the money’s there, the wealth is there, the question is how do we prioritize this as a country?

 

Greg Dalton:  Let’s have our next audience question.

 

Audience #4:  Yes, for Mr. Hwang.  It is quite a waste off that this is really going to be finalized and be in the market and be regulation.  In the interim, is the issues of –piece of ethanol technologies important and could that be a significant opportunity to help transition us and get into the reductions that are necessary to meet the goals at hand?

 

Roland Hwang:  Yeah, great question, thank you for that.  First of all, the standards that we’re -- focused on right now, in this discussion, is 2025, 54.5 mpg, but it’s also important to understand that today, in your auto dealership today, you can go out there and buy a more fuel-efficient vehicle in large part due to the first round of standards, which start, model year 2012, model year 2016.  In January, the highest new vehicle fuel economy, highest ever, in the history of United States, which is higher is 23 miles per gallon, that’s about 15% higher than it was four or five years ago.  You’re going to have more choices, whether you buy a pick-up truck or whether you buy a crossover utility vehicle or minivan, or a compact car, every vehicle is getting more fuel-efficient thanks to the regulations.

 

The future standards up to 2025 will allow the industry to take a longer-term view and invest in the new technologies like the electric vehicle drive trains.  Ethanol, as long as it’s made from sustainable sources, corn ethanol, the NRDC does not believe it’s a sustainable source.  Ethanol and electricity, and other forms of non-petroleum fuel can have a role and should have a roll in the future, if we get the rules right and we make sure that the electricity and the ethanol are produced from clean sources.

 

Mary Nichols:  Sometimes, you know --

 

Greg Dalton:  Mary Nichols?

 

Mary Nichols:  -- I just have to say, we approached this topic from a lot of different directions and everybody’s interested in new technology, of course, we have to be interested in the state of the economy as a whole.  But the metric that we’re using here is really one of pollution.  In order to define the kinds of fuels and the kind of vehicles that we want in this market, it’s the cleanest cars and the cleanest fuels that runs in the -- the least amount of carbon dioxide and other greenhouse gases throughout their entire life cycle.  And that’s why we’re not putting a lot of emphasis on trying to get more ethanol, per se, into the market or more of any other alternative fuel because what we’re trying to do is overall, reduce the amount of greenhouse gases, and that means pushing down on the whole system.  But again, we’re seeing resistance even to lowering the carbon content of ethanol.  We’re still, you know, we’re fighting over that one with some of the Midwestern corn growers.  So it’s -- this term that you’ve got for this dialogue, Climate One, you know, is still not that easy to get everybody to go along with.

 

[Laughter]

 

Greg Dalton:  Got to get them in the room.  Okay, let’s have our next audience question.

 

Pete Cooper:  Pete Cooper from Better Place.  Thinking about the glass is half-full for a second.  If I was an integrated oil company, or you’re an integrated oil company, what would you do to take advantage of the clean car mandate?  What are some of the paying points that it could solve for me, as an integrated oil company, so what is -- if we turn it around, you said look from a different angle.  What are some benefits that I could gain as an oil company?

 

Mary Nichols:  If I were an oil company, what I would do would be to come to the state of California and say, “I’ll supply you at my cost just for, you know, some modest sum of money, with all the hydrogen that you need to get this market started, in return for a -- let’s say a 15-year license to be the exclusive hydrogen supplier for the motor vehicle fields for the state of California.”  I think I’d make money off of that deal, unfortunately I don’t have an oil company, so…

 

[Laughter]

 

Mary Nichols:  …I can’t do it.

 

Greg Dalton:  Let’s have our next audience question.  Yes sir?

 

Jeff Hoffman:  Hi, my name is Jeff Hoffman, I work with an EV startup in Silicon Valley called KleenSpeed Technologies.  We’re about three years away from being CODA, we hope.  I’m also a former journalist who covered the Zeb wars of the 1990’s so I have a little bit of context for this.  First I have a comment.  Greg, did you ask anybody from PG&E to come?

 

Greg Dalton:  We’ve done lots of programs here about smart meters, smart cars, we did ask someone from Toyota to participate.  They declined to participate.  We’re happy that these companies.  We’ve had them here other times.

 

Jeff Hoffman:  I’d just be curious to see what PG&E is thinking about this new mandate and how they plan to get renewable energy into batteries.  But my main question is for Mary Nichols and I wanted to ask, when is CARB going to set up the vehicle -- the California vehicle-to-grid mandate?  Why not 25% connected cars by 2025?  And when are you going --

 

Greg Dalton:  Okay let’s -- connecting cars?

 

Mary Nichols:  Connecting cars is a great idea.  This summer we’re doing a conference that’s DOE is helping to sponsor around that very issue, of the vehicle-to-grid.  We agree with you, that’s where it all needs it go.  My understanding and I’m not the technical expert on this, is that there still are some issues that aren’t just policy issues but are some actual technical issues about how you make it work.  But we agree with you that the future needs to be a connected future.  Batteries are a great storage device, they’ll be a big help in regulating the load, and making it possible to get more renewable into the system.

 

Jeff Hoffman:  Just a quick follow-up if I could.  If -- my argument would be that, if we don’t do it in California, that Jiangzhou Province and Guangdong Province are going to lead vehicle-to-grid technology and we’re going to be buying it from them.  That’s my comment.

 

Mary Nichols:  Thanks.

 

Jeff Hoffman:  Thank you.

 

Greg Dalton:  Shad Balch?

 

Shad Balch:  Yeah, I would just -- I would like to add that we will probably or hopefully get there before there’s a mandate, need for a mandate.  That this has tremendous promise to deal with a whole bunch of issues.  So ideally, we’ll just get there before we’re forced to.

 

Greg Dalton:  It’s complicated stuff.  I have to admit, I was a little surprised.  I just bought 240 charger for my garage from General Electric, and it says “Not Smart Grid-Enabled.”  I thought “Why not?”  Isn’t that -- I mean, I was like -- they want me to buy another one in a couple of years --

 

[Cross talk]

 

Greg Dalton:  -- when smart grid comes along.  Let’s have our next audience question.

 

Mike Harrigan:  Hi, Mike Harrigan from City Carshare.  You talk about car sharing up here a few seconds ago.  Proud to say that City Carshare has seven plug-in electric vehicles in service today, and as many of you know, we service the -- or the local small scrappy.  Non-profit car sharing company versus one of the other big companies that we won’t talk about here.  My question doesn’t relate to that at all, but I just want --

 

Greg Dalton:  But it was fun.  Okay.

 

[Laughter]

 

Mike Harrigan:  -- my question is, as we see more and more cars getting fuel from alternative sources besides oil, what are we going to start doing about the taxes that help build our road infrastructure and so forth around the state and around the nation?

 

Greg Dalton:  I believe --

 

Mike Harrigan:  And if there’s any thought go into that sort of thing.

 

Greg Dalton:  -- well some states, Washington’s already toying with EV tax which I think makes people like CODA Automotive probably unhappy.

 

Chris Paulson:  Yeah.

 

Greg Dalton:  Chris Paulson?

 

Chris Paulson:  I think that the -- to start with, there’s a small enough and although I think it’s very rapidly going, the smaller market where that’s a problem we can, I think, solve in the future.  But long-term, I think there’s an opportunity to tax usage, I guess.  But for an electric --

 

Greg Dalton:  So tax per miles, something like that?

 

Chris Paulson:  -- yeah, something -- but the I think today, the challenge is much more about getting the technology in place and then solving that type of issues.

 

Greg Dalton:  Shad Balch?

 

Shad Balch:  Yeah.  We killed that -- GM killed that bill in Washington last year when they tried to pull the stunt and we’re going to fight it again this year.  It’s too early for taxing EV’s especially when on one hand, you’re giving incentives to purchase, don’t think that the consumers not going to know that there is a special fee for buying an EV.

 

Chris Paulson:  Yeah.

 

Shad Balch:  So it’s just too early.  Fair share at some point, but not yet.

 

Greg Dalton:  Not yet.  Roland Hwang?

 

Roland Hwang:  Yeah, I think the key is -- and I fully agree with Shad -- is we have to kind of understand where the technology is right now.  We believe that all vehicle should pay their fair share of road usage fees.  That’s absolutely true.  The problem that we’re having right now is that because of gridlock in Washington, there’s an inability for Congress to move forward with doing what it needs to do, which is to fill a huge gap in the highway trust fund, and that’s the problem.  The solution is not to penalize emerging technologies like electric vehicles.  If you put a -- I can go to the numbers later, but per a vehicle average, per mile charge onto an electric vehicle, what you’re doing is essentially penalizing the electric vehicle compare to, say, a high mileage gasoline vehicle.  The current system, which is the gas tax approach, actually does a twofer.  One, it funds highway infrastructure, and second, what it does is it encourages fuel efficiency.  By doing it on per vehicle mile basis, average per vehicle mile basis, like there are some proposals, what they’re doing is penalizing electric vehicle adopters.

 

Greg Dalton:  Shad Balch, I believe the CEO of General Motors has called for a higher gas tax.  Is that right?

 

Shad Balch:  He mentioned that, he did.  Yeah.  I mean, I think the number one driver of helping us --

 

Greg Dalton:  Twice in one day.

 

[Laughter]

 

Shad Balch:  -- the number one enablers for getting us off of petroleum are to make it more expensive.  That is what will drive people to electrics or some other alternative source.

 

Mary Nichols:  That was the idea behind the carbon tax, you know?  Once upon a time, and once the cap and trade system comes into effect at the national level which I believe it will if we don’t get a carbon tax one way or another, that’s a source of revenue which can go -- filling the holes that we need literally, in our road system.

 

Greg Dalton:  Let’s have our next audience question.

 

Annie Notthoff:  Oh hi, Annie Notthoff with NRDC, and I -- you know, one of the things that’s allowed California to move forward is the bipartisan support for having climate policy and clean cars.  There had a Republican who voted for the clean car bill and another Republican that who was brave in Congress and even voted for the -- house climate bill, and had governors of both parties move it forward.  Now that we see everyone together on this issue, I wonder if GM might have some comments on, what do you think the prospects are for any bipartisan cooperation at the federal level to move clean cars, clean energy, and climate policy forward?

 

Shad Balch:  Well, from our perspective, there’s a tremendous appetite to make that happen, as Roland alluded to earlier, our former Vice Chairman Bob Lutz who’s a staunch Republican came out against those in his party for, you know, doing what they did with the Volt.  So I think there’s going to have to be an appetite for that sort of discussion to happen, and the order to move those sorts of policies forward.

 

Greg Dalton:  I think that’s -- we don’t have any more audience questions.  Let’s just wrap it up by talking a little bit about what we haven’t talked about natural gas or the silent fuel here.  There’s a big supply now of natural gas, it’s not something that is in this current mix.  Mary Nichols, is that -- you know, why doesn’t natural getting any love right now?

 

[Laughter]

 

Mary Nichols:  Well, I think they actually get quite a lot of love.  There’s a -- there are natural gas vehicles out there, both in the passenger car fleet and in the heavy duty fleet.  Like any other different fuel, it requires its own particular set of stations and distribution systems.  It works especially well for centrally fueled fleets and it’s doing very well in that market because the price is good.  A number of businesses that operate whole fleets of cars or trucks, delivery trucks, et cetera, do use natural gas.  I think the issue for the future has been -- and I know there was an initiative on the ballot on this a couple of years ago, that T. Boone Pickens was sponsoring, “Why didn’t that succeed, you know, why don’t we sort of embrace natural gas as the solution?”  And I think the answer to that is, that it has a place in the market but it doesn’t, in and of itself, solve all the problems that we’re talking about in terms of security, in terms of meeting our air and other environmental problems.  And so, while we can give it lots of pats on the back as a fuel for today, when we’re trying to do programs or come up with policies that are really going to make the transformation happen, natural gas is just one of a number of different good fuels that out there, but not the ultimate solution.

 

Greg Dalton:  Perhaps more of a solution for big trucks than passenger vehicles?

 

Mary Nichols:  Well, definitely that would be the first priority.  We’re already seeing at the ports and in other major distribution centers, people go in to see NG and LNG because they can see some very significant fuel economy improvements there, and definitely helps with our localized air quality problems too.

 

OLDER POST NEWER POST