The Future of the Automobile Industry

The Political Front

As is true with many environmental issues, politics will play a crucial role in determining the future prominence of alternative vehicle technologies and the course of the automobile industry.  To stimulate incorporation of hybrid and electric cars into the American marketplace, federal and state governments have established tax incentives for consumers and programs encouraging cooperation between federal and private groups.  Perhaps the best example of a state program is California's ZEV program.  In 1990 California committed to increasing the fraction of its vehicles that qualify as ZEVs in increments by certain fixed deadlines.  Since then Massachusetts, Vermont, Maine, and New York have adopted similar programs.  Also, in May 2002 the IRS extended tax deductions for owners of electric cars to include owners of hybrid cars as well.  These deductions are scheduled to phase out after 2007, but should still ease public acceptance of hybrid and electric cars. 

Programs like FreedomCAR and the California Fuel Cell Partnership promote fuel cell cars.  FreedomCAR is a joint research effort between the U.S. Department of Energy and the U.S. Council for Automotive Research.  These two groups encourage research into environmentally helpful vehicle technologies such as fuel cells. 

Picture courtesy of http://www.fueleconomy.gov/feg/fuelcell.shtml

The California Fuel Cell Partnership consists of auto manufacturers, fuel cell technology companies, and government agencies that cooperate to stimulate commercialization of fuel cell cars and to improve the public image of these cars.

Aside from emissions control, another major issue for the future of automobiles is the United States' dependence on foreign imported oil.  As the graph below shows, both total oil use and use of imported oil are higher than ever in the U.S.

Picture courtesy of http://www.fueleconomy.gov/feg/oildep.shtml

The OPEC oil cartel controls between 65% and 75% of the world's oil reserves, and reliance on the cartel makes dependence on imported oil an issue of serious economic and political significance.  Currently oil provides 95% of the energy used for transportation in the U.S.  Unless automobiles begin using alternatives to traditional gasoline fuel or improve dramatically in efficiency, the need for oil could cause serious damage to the future national economy.  The desire to avoid such a calamity provides a non-environmental motivation for embracing technologies such as hybrid and electric cars.    

Sources:
http://www.ucsusa.org/clean_vehicles/advanced_vehicles/page.cfm?pageID=206
http://www.ucsusa.org/clean_vehicles/advanced_vehicles/page.cfm?pageID=205
http://www.usatoday.com/usatonline/20020625/4219930s.htm
http://www.fueleconomy.gov/feg/fuelcell.shtml
http://www.fueleconomy.gov/feg/oildep.shtml