Free Market Environmentalism

This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.

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NEW YORK SUN CONTRIBUTOR

An intense competition is heating up among automakers to bring more environmentally friendly cars into the marketplace. Both Toyota and Honda plan to launch marketing campaigns this fall promoting new lines of hybrid cars,which use a combination of combustion engines and electric motors to raise fuel efficiency and reduce emissions. American manufacturers are also itching for a piece of the hybrid market. It’s not because of some new government mandate in respect of fuel efficiency but because consumer demand for hybrids is so great – and growing.


A spokesman for Toyota, William Kwong, told us that his company sold 54,000 of its hybrid Prius cars last year and expects the number to double this year. The hybrid vehicles are so popular that customers must wait an average of two months for a new Prius and four weeks for Toyota’s hybrid Highlander and Lexus models as well.


Toyota this year rolled out the first luxury hybrid SUV, the Lexus RX 400h, for which one must already wait up to four months. Sales have been better than the company expected. “Customers are paying more attention to clean air,” the vice president of marketing of Toyota Division, James Farley, recently told AutoWeek magazine.


Toyota includes gasoline-electric engines in six types of vans, sedans, and sport utility vehicles. It announced on Monday plans for the first gasoline electric pickup truck, which will be part of a new lineup of low-emission vehicles. A hybrid version of its mass-market Camry sedan will also be rolling off assembly lines.


“This is now a core technology for us,” the president of Toyota, Katsuaki Watanabe, told the Wall Street Journal. “We would ideally want a full lineup of hybrid vehicles,” he told Bloomberg News. Mr. Watanabe aims to sell a million hybrids “as soon as possible,” compared to last year’s 134,000.


Honda Motor Company, for its part, announced earlier this month that it has developed a new gasoline-electric engine for the Honda Civic. Honda has introduced hybrid engines on three models, including the Civic and the Accord, since first marketing hybrids in 1999. The redesigned Civic, which will arrive in showrooms this fall, will improve fuel economy by 5% over the previous hybrid model, according to the automaker.


Ford Motor Company on Monday began taking orders for the Mercury Mariner, a gasoline-electric sport utility vehicle. Ford introduced a hybrid version of its Escape SUV last year and plans to introduce three more hybrid models in the near future. General Motors has announced that it will offer hybrid sport utility vehicles by 2007.


American purchases of hybrids soared 146% to 56,440 from the like period a year earlier, according to J.D. Power and Associates. Overall automotive sales, meanwhile, remained flat. While hybrids account for only 1% of car sales this year, J.D. Power and Associates reckons that proportion will rise to 3.5% in the next five years.


Some tax breaks kick in for buyers of fuel-efficient vehicles, and one thing driving the cost of gasoline higher is taxes. But the remarkable thing in all of this is how much it is being driven by consumer demand rather than government mandates. Only last year Senator Kerry was still pushing a plan to raise federal fuel-economy standards 50% by 2015, though the Senate rejected the plan, offered by Senators Kerry, McCain, and Hollings, in 2002.


“The Senate had a chance last week to tighten these standards and do something meaningful about global warming and the country’s dependence on foreign oil,” the editorialists at the New York Times complained at the time. “The Senate has produced an energy bill with no incentives for innovation and a bias toward waste.”


The Times editorialists argued that car manufacturers were “relieved of the obligation (absent strong new fuel economy standards) to produce serious breakthroughs in the next few years.” But the most effective incentives don’t come from the Congress, but from consumer demand. It’s now clear that the effort to mandate corporate average fuel-economy standards was a distraction from the business of developing fuel-efficient cars that consumers actually want to drive. Somehow, the free market and competition sometimes produce breakthroughs even without help from senators.

The New York Sun
NEW YORK SUN CONTRIBUTOR

This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.


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