Archive for September 2010
The green car industry is facing a pivotal time in the coming couple of years which will decide whether it is ready to become the main stream. The UK based company Moneysupermarket, has done extensive research into the green car industry in order to judge the likely outcome.
Green cars- Fuel is the key
Fuel prices are continuing to rise and this isn’t a trend which will reverse as oil reserves continue to dwindle. Scientists at the Oil Depletion Analysis Centre, which advises the major oil companies, projected that oil production would reach its peak in 2011 unless the lifestyles we currently lead change. What would follow would be a decline in availability and hence a boom in prices.
This may be the key moment for the green market to take control, with the major car manufacturers all increasing the range of environmental cars they offer. There are differing routes through which the car manufacturers are tackling this problem, and likelihood is that they won’t all survive. Honda and BMW appear to be advocating the hydrogen route, while Renault, Nissan and Mitsubishi are tackling the problem with the electric cars. Availability is the key problem for hydrogen, with their not being enough hydrogen filling stations available. Indeed, the number of registered hydrogen filling stations around the world is 100. To put this into perspective, there are 121,446 conventional filling stations presently available in the USA alone. As for electric, the practicality issue is still a problem. With the most practical electric car available on the market at present, the Nissan Leaf, having a range of just 100 miles before it needs a recharge.
However, a number of states are tackling the problem of a lack of hydrogen stations by making them more available by funding various schemes. As for electric cars, their range will obviously improve as technological advances are made. The electric cars of today are far more practical and powerful than the ones available just five years ago.
The price of fuel may also prompt people to make the switch to an environmental motor. Presently, to do the average annual mileage of 12,000 miles in a Ford Fiesta would cost $1710 per year. However, in a Nissan Leaf this cost would be reduced to an annual payment of $220, which amounts to a saving of almost $1,500. This difference is only going to increase as the price of fuel rises.
Additional costs and incentives
A Nissan Leaf is almost $13,000 more expensive than a Ford Fiesta. This is an extra expense which is hard to justify for most families. However, New York governor George Pataki is currently finalising his “energy reduction plan”, which will potentially save drivers of environmentally friendly vehicles $5,400 a year through tax breaks. Many other states are likely to follow New York’s lead as the importance of being green becomes ever clearer.
Your employer is also a consideration, with leading internet company Google, having started a programme where each employee will be offered $5,000 towards the purchase of a new environmentally friendly vehicle. This has recouped $10,400 of the price difference already. Then there comes insurance firms, many of whom will offer a discount to drivers of environmental motors. This is the case with Travelers Insurance, who offer a 10% discount to all environmental drivers, which can save a driver anywhere between $90 and $500 per year.
Will the green car industry succeed?
The above research has uncovered that there is the potential to recoup almost $11,000 of the price difference between the Leaf and the Fiesta. This leaves a $2,000 difference which will take just 15 months to recoup through fuel savings. Therefore, the cost benefit of owning an environmental motor is already there for some. However, as fuel prices rise, base environmental car prices drop and more states offer tax breaks to environmentally conscious motorists, the number of people making the move to an environmental vehicle will increase. The hardest point will be making the initial move, due to the need to adapt your driving style and the way you fill up your car. However, once this is done its likely that you won’t look back and manufacturers without a viable environmentally friendly model should begin to worry. The next two years should be the big turning point.