A little while back, an anecdote was being passed around by liberal folks on Facebook that made Ann Romney look pretty bad. Apparently she said that a woman in the workforce “should be happy just to be out there in the working world and quit complaining that she’s not making as much as her male counterparts.” Even by the relatively relaxed standards that are rightfully applied to the families of political candidates rather than the candidates themselves, that sounded a little tone-deaf to me. So I checked on snopes.com and, indeed, found out that the story was completely false. It was made up by a humor site, and then picked up by people who don’t like Romney, who were willing to take it at face value. As ridiculous as any particular claim may be, confirmation bias nudges us toward greater credulity when we are faced with stories that we want to believe are true.
Which brings us to the Chevy Volt, the electric car from General Motors. One of the blogs I generally read is Outside the Beltway, which is a group of conservatives who are more than willing to decry the worst excesses of conservatives as well as liberals. I generally don’t agree with them (except for the decrying), but they say a lot of interesting things. Doug Mataconis, one of the bloggers there, fell quite a bit short of that standard in a recent post about the Volt.
Mataconis, relying on an equally silly Reuters article, tells us that GM loses $50,000 every time it sells a Volt. The attitude of the post is simple — “maybe I’m no fancy businessman, but even I know that it’s not a good strategy to keep building cars and selling them at a tremendous loss!”
Well, that would be a bad strategy. So bad, in fact, that it might be advisable to pull back a bit and ask if that’s what’s actually happening.
The answer, to what should be no one’s surprise, is — no, that’s not at all what’s happening. Where does the $50K figure come from? Easy: add up all the costs that have gone into developing and building the Volt, subtract what customers have paid for it, and divide by the total sold. That’s a bizarre calculation to do, and even if one was tempted to do it, it’s blatantly dishonest to describe the result as “the amount GM is losing on each Volt it sells.”
There’s an old West Wing episode which explained this in the case of pharmaceutical companies. One guy complains that a company is selling pills for a large cost when the only cost four cents to make. The other corrects him: “The second pill costs them four cents, the first pill costs them $400 million.” With any new technology, there are development costs. But those costs aren’t repeated every time you sell a new copy of something you’ve developed. The reality is that GM basically breaks even on every Volt it sells, maybe making a bit of a profit. The idea that they should shut down production today because they haven’t yet recouped their development costs is a bit nutso.
It’s easy to explain why someone would allow themselves to believe such an obviously dubious claim: it fits into their pre-existing beliefs, and confirmation bias does the rest. What is really puzzling to me, however, is: why should anyone have such strong bias against electric cars?
I get that an individual person might not want to have an electric car. At the current state of technology, they’re both expensive and somewhat inconvenient. So… don’t buy one. I haven’t gone to a car dealership recently, but my impression is that most of the vehicles on sale are still of the cheerfully gas-guzzling variety. But why would the very concept of other people buying electric cars cause so much internal anger that you lose all sense of proportion?
Part of it is political, of course. Liberals want to stop global warming, and therefore want to encourage alternatives to fossil-fuel consumption, and liberals are bad, therefore alternatives to fossil fuels (which electric cars don’t even count as quite yet, since much of our electricity comes from burning coal…) must be bad.
But it goes beyond that. Controversy erupted between Tesla Motors and the BBC show Top Gear when the show (after saying nice things about the Tesla Roadster’s acceleration) went out of its way to give the impression that the car quickly ran out of charge and had to be pushed back to the garage, even though that never actually happened during the tests. The producers had decided ahead of time to push a gloomy line about the Roadster, and they arranged the filming accordingly.
Whether you are liberal or conservative, a fan of muscle cars or a granola-crunching hippy, I don’t see why anyone would rationally hope that electric cars will fail. It’s a fun new technology! Maybe they will never be profitable or practical, although I suspect otherwise. But actively rooting against them seems bizarre.
Then there is Mitt Romney, who says good things about electric cars, but less good things about innovative start-up companies:
So for instance, I would not be investing massive dollars in electric car companies in California. I think Tesla and Fisker are delightful-looking vehicles, but I somehow imagine that Toyota, Nissan, and even General Motors will produce a more cost-effective electric car than either Tesla or Fisker. I think it is bad policy for us to be investing hundreds of millions of dollars in specific companies and specific technologies, and developing those technologies.
(Parenthetically, I’m not sure how an American politician got away with saying that Japanese car companies might be able to do something, but imply skepticism that Americans are up to it.) Of course this is the same interview where he proclaimed his support for basic science, and the one example he could think of was … cold fusion. Platitudinous declarations of support are good, but sometimes the devil is in the details.
Of course, Jeremy Clarkson from Top Gear is well known as a conservative pundit, so this angle on the show is not surprising.
As to “it sounds like X, and X is bad, so it must be bad”, consider the portrayals of Obama as a Nazi. A half-Black man as a Nazi? How bizarre is that? (It’s rather like the journalist who, due to Peart’s libertarian leanings at the time, thought that Rush was some sort of right wing or even Neonazi band, to which Peart quipped “Right, we’re the only Nazi band with a Jewish bassist.” (Geddy Lee’s parents actually met in Auschwitz.)) Well, let’s see: the US fought the Nazis in WWII, the Nazis were bad, Nazi comes from “National Socialism” (which has about as much to do with socialism as the German Democratic Republic had to do with democracy), Obama’s healthcare plans and other things are an aspect of socialism (at least from the point of view of the US—they are much to the right of anything even conservative parties in Europe would advocate), so Obama=Nazi. Conservative logic at its worst.
That particular Romney quote actually looks pretty reasonable to me.
Bill Clinton’s nomination speech of P.B.O. was excellent. Neither political party has a monopoly on good sense or good ideas, and even a broken clock is right twice a day.
It’s one thing to discuss the pros and cons of electric cars, but let’s do it with real data, shall we? I have questions about the life cycle costs (both economic *and* environmental), but I see very little written about that. In any case, *all* new technologies are expensive. Does anyone remember what it cost — in adjusted dollars — to buy a computer 40 years ago?
Great post, well put, but one caveat.
I see the Top Gear decision to portray the Tesla Roadster in a negative light as a statement about the higher performance demands for “sports cars.” Sports cars are for sporty driving. Sporty driving is dangerous outside of the controlled environment of a racetrack so really anyone who buys a Corvette should sign up for a couple of days of instruction at a track to learn what they’ve gotten themselves into (in my opinion). So the car should “work” under those conditions if it’s a sports car. From what I’ve read, Teslas do overheat at the track and run out of charge very quickly when driven in a performance oriented way (normal cars will get a third of their mpg on a track, only they can be immediately refueled for more laps). (http://www.electricracenews.com/2012_08_01_archive.html) From this standpoint, the Tesla as a sports car doesn’t “work” and a honda civic is a better sports car because you can actually take it to a track and use it all day. Top Gear has since tested commuter electric cars and were not as harsh in their judgement nor did they test them on a track since that’s not a natural use.
For the commuter, I think electric cars make a lot of sense, actually, since the average trip is fairly short. Electrification of the vehicle fleet seems necessary for any serious attempt at climate change mitigation. I hope for the continued development of electric cars as well as electric sports cars (that have better cooling and quick-charge capabilities!).
Also, great talk on time at Berkeley…
Another funny thing about those Pulitzer deserving hosts of Top Gear is how they complain that electric cars will just require burning of coal, but hydrogen-powered vehicles are truly the future… as if you can just go pick hydrogen off of a tree much less how there is not a hydrogen infrastructure similar to the existing electric power grid.
GM and other existing car makers could and have on occasion built fine electric cars for at least a decade, BUT THEY DIDN’T, and that’s why there are car companies like Tesla.
Even granting that the Tesla might have limitations when driven sport-style… Isn’t it still more than a bit dishonest to imply that they had to push it back to the garage when nothing of the sort actually occurred?
Some added info:
Coal is 36% of electrical generation in the US currently, down 19% from last year (thank NG). Also there are in some states excess coal energy/emissions (not electricity!) at off peak hours at night when electric cars can be charged. Therefor why not fuel your car for free! (sorta).
ME student
Of course, one has to consider the source of electricity when looking at the impact of electric cars on the environment. As for hydrogen, the same applies—-it has to be generated in a clean way for it to be a clean fuel all things considered, even though it of course burns to just water. The advantage is that one fills up like with conventional fuel, i.e. no charge times etc. As for infrastructure, it seems like one could adapt natural-gas infrastructure to hydrogen relatively easier. (Natural gas, though it is cleaner than coal, oil etc of course still produces additional CO2 in the atmosphere.)
To be fair, isn’t Mr. Romney simply saying that the *government* shouldn’t invest in companies such as Tesla and Fisker. One can wish for electric cars to succeed but at the same time be suspicious about whether it will succeed, and different people will have different views about how successful it will be. So whether to invest in them should not be for the government, but for the private investors to decide.
I’ve seen hydrogen produced using solar energy, so it doesn’t have to have external power to make it work.
We had a GM hydrogen powered car in town at a farm that’s producing the fuel for fuel cells to go in the cars.
Interesting thing about hydrogen fuel, is as Carlos Franca points out, “you can literally run this car… in your house,” as the output is water.
http://www.youtube.com/watch?v=E14drN_1wbs
At the rate they are selling not just Volt but all the other electric cars, it will take a long time to ever break even on the 1.2B r&d cost let alone the other fixed costs associated with vehicle production.
The bottom line is, nobody seems to want these things, even the cheap ones. That is probably a good thing too as there is no way the electric grid could withstand a significant shift from traditional to electric vehicles.
I’m right there with you Sean Carroll, What Gives? Are people seriously SO stupid that they would bash an up and coming technology just because their rivals want to try and fix a proven global problem? I think the problem is that conservatives have already so publicly voiced their incorrect beliefs on global warming, and now they live a delusional life of denying that human beings pollute at all; as though we fart pure O2. What if we do achieve a viable fusion technology in just the next 40 years? Then I think it would be extremely wise to continue developing electric cars so that we can make the production process less costly and far more environmentally friendly, not because it’s a political agenda, but because I want my damn food and water to be clean. And Hydrogen fuel is great, and the Honda Clarity is a great car; but hydrogen happens to be dangerous in condensed forms. How about in 20 years, we develop a battery, using some crazy nano form of carbon, which holds a charge for 20 years? The complaint from the top gear guys was that electric cars will never work because you have to stop and recharge them, but with hydrogen, you can fill up anywhere you want. What if you buy the car and that’s it?
The ultimate car design is one that doesn’t require a lifetime of buying another product so that it can function. Or at least the ability to buy that product up front and never have to worry about it again. That will never, ever happen with gas. In fact, NO form of combustion engine will allow you to power your car for even a year (15,000 miles) on one tank. And one that does really makes you think “do I really want to be sitting on top of this F*****g thing?”
If the Top Gear complaint was that the exotic electrics are finicky and impractical, then most exotic cars have that issue. Gee, don’t they remember that British exotics were once famous for breaking down regularly? Even with the reliability issues more or less in the past, supercars have a terrible price to feature ratio.
That cold fusion comment by Romney is shocking, and I’m surprised it hasn’t been getting more play on science blogs and websites. This is the first time I’ve heard about it.
I know politicians aren’t supposed to be the brightest when it comes to science, but cold fusion? Sigh.
I agree with your financial analysis.
However, you presume that many people actually believe the $50,000-lost-per-car statistic. I do not recall seeing your studies that back up this somewhat insulting straw man.
Then you declare that the reason that these people believe it, is that they want it to be true. Again, I missed the interviews and/or polls that demonstrate that this is actually the truth.
Then you pronounce the reason that all these unknown people want to believe it to be true, is that they are politically conservative.
These are obviously all made up guesses and assumptions. The truth is probably much more rich, nuanced, complex and more varied than your somewhat insulting and simplistic declarations.
In actuality, your guesses and assumptions tell the reader much more about your beliefs and opinions, rather than informing the reader about the tens of millions of fictional people that you apparently imagine are out there.
It is important to keep an awareness that the things one assumes or guesses to be the truth, and what is actual reality, are always two very different things.
wow, i honestly thought you were checking your readers for confirmation bias detection with the last “cold fusion” reference. now i found you were not. and even worse, Romney didn’t say he wanted energy production by cold fusion. no, he specifically said he wanted “electricity to be conducted with it”
holy smokes! now i didn’t really expect any politician to be firm even on the basic physics behind energy production, but i did assume that even the most rustical types would have gathered that it’s about the production mainly, not the energy distribution.
“But why would the very concept of other people buying electric cars cause so much internal anger that you lose all sense of proportion?”
This kind of behaviour can be observed literally everywhere. There are a lot of people who, despite claiming that they know the meaning of individual freedom, cannot cope with the fact that other people might use that freedom to make different choices. Instead, they expect that their own life choices, their behaviour and their points of view be imposed on everyone else.
“Despite their many potential advantages, all-electric vehicles will not replace the standard American family car in the foreseeable future” [APS news].
Why does APS news have such strong bias against electric cars?
As a Volt owner, I can assure you that they’re not at all inconvenient. I just plug it in in the evening (all of 4 seconds), in return for which my first gallon of gas every day comes out of the wall socket and costs me 75 cents. I drive about 30 miles a day, so I only ever burn gas when I go on a long trip.
The Volt is a well-made, comfortable, and stylish car, and it’s an absolute blast to drive in the city. Electric drive is so much nicer than an IC engine; no noise, no vibration, instant torque. My wife is insisting our next car also be an EREV.
I agree that pure-electric vehicles have a ways to go (because of battery capacity and recharge speed) but EREV vehicles really hit a sweet spot, and the economics will become more compelling as battery prices come down.
If you do less than 40 miles of driving a day (or <40 each way and you can recharge while at work), the Volt is well worth considering. And if you're a naysayer, do yourself a favor and go test-drive one so you get a feeling for the car (pro-tip: keep it in L, that's the full-regen electric mode where it drives like an electric car).
Great example confirmational bias. I am not sure where the technology will go and if it will really take off. There are a lot of other really interest things on the horizon: compressed natural gas, gas-to-liquid fuels, biofuels, etc. that I think will beat out EVs in the long-run.
And from someone loosely tied to the auto industry (automotive lubricants), it is standard practice to sell the little cars for next to no margin because it boosts your fleet average fuel economy for the CAFES standards. Not sure exactly how it works out, but selling something like 2 Volts or Sonics at next to no margin allows them to sell a gas-guzzling luxury car/SUV or truck for a seriously high mark-up.
People do not spend lots of money on a car to make an “average trip”. Does one have to rent another car to visit grandma ? Question – if a hybrid need only make electricity for the motors then why not use Stirling to power the alternators, since you don’t need to throttle it anyway- which Stirling engines don’t do well. Other than that -thanks for pointing out the absurd arguments about the economic factors.
Romney believes in cold fusion. Now I’ve heard everything.
“Gee, don’t they remember that British exotics were once famous for breaking down regularly? Even with the reliability issues more or less in the past,”
All major British car companies are now owned by foreign car companies, and under the hood are more or less similar to the cars of said companies. Maybe that’s the reason they don’t break down as much anymore.
“it is standard practice to sell the little cars for next to no margin because it boosts your fleet average fuel economy”
One can debate about whether the companies (who will pass it on) or the consumers directly should pay more for cars which are worse for the climate, or even if this is the proper way to influence the choice of vehicle, but one has to admit that the fleet-average fuel economy is a stupid idea. It sounds OK: the average fuel economy of the fleet. But it is not weighted by the number of cars sold (and certainly not by the amount of distance driven)! Thus, selling even one ultracompact brings it down. It is, of course, just as silly to have it rise because one sells a handful of high-powered cars. (Having these in the fleet is actually good since the customers will pay about any price so new technologies can be tested and the costs recovered which wouldn’t be the case for a company which made only economy cars.)
Do you think that not weighting things properly is just a statistical goof which only some bureaucrats or used-car salesmen could come up with? A case of similar voodoo is the fact that the famous Dow Jones stock index is price-weighted and not market-weighted. How anyone can base anything on such statistical nonsense is beyond me.
Mr. Obama, fire all bad conductors. Start with Bernanke.