Lutz On Hybrids: Not Just A Short Run Short Fall

Bob Lutz, the village bicycle of the automotive community and current GM Vice Chairperson, recently made what many are calling a damning prognostication. Mr. Lutz predicted that hybrids would never achieve profitability or even double digit market share in the United States. Mr. Lutz went so far as to say that The General expects to lose money on hybrids it sells in the future, losses which will be subsidized by profits from other automobile sales. He is probably correct when he concludes that hybrids are just too costly compared to what consumers are willing to pay for them. After all, Americans are not used to having to pay for the hardware for two propulsion systems.

Given the amount of money automakers, and even the US government is pouring into hybrids, it would seem that Mr. Lutz’s remarks amount to a no-confidence vote of disastrous proportions. But that position obscures an inevitable transition. Fossil fuels are finite, and predictably so. M. King Hubbert’s work on Peak Oil Theory illustrates that reality most clearly. Something has to emerge to fill the gap. It would probably be better if governments were to force markets to make that decision with high energy taxes rather than to hand down the decision from on high in the form of incentives for electric and hybrid vehicles. Despite the monolithic decision making, electric transportation has several advantages: electric motors are radically more efficient than the IC engine, extracting on the order of 90 percent of the energy from an electric source. Moreover, there are a plethora of sources of electricity, including the sun, wind, and nuclear reactions, none of which trade off with food stocks as directly as biofuels do.

Obviously, electric vehicles are not yet feasible. Lack of infrastructure, limited range, and poor cold weather performance all preclude the deployment of strictly electric solutions. But just because parts of the technology are not ready for prime time does not mean that manufacturers cannot test other parts of the technology in the real world. The choice is not hybrids vs. gasoline or hybrids vs. electricity. The choice is between keeping electric technology in small scale lab tests until all parts of it are ready for consumers vs. supplementing electric hardware with gas engines to allow companies to perfect motors, batteries, and controls on a large scale while the rest of the technology catches up. If anything, hybrids are an imperfect, often inelegant, interim solution. Mad props to marketing departments for sanitizing press releases of ‘interim’ phraseology, instead embedding ‘hybrid’ in the collective consciousness. There would be no early adopters for an ‘interim’ solution.

So when Mr. Lutz said that hybrids will never be profitable, whether he realized it or not, he merely meant that the car of the future will revert to having a single powertrain, likely an electric-only one at the rate things are going.