Unintended consequences

Commentary January 12, 2011 at 07:00 PM
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It will be interesting to see if battery-powered autos are successful. I tend to think, once tax credits go away, that Americans won't like the restrictions of being limited to X miles daily. How do you feel?

My wife has a 2007 Toyota Camry hybrid. It is just like any Camry, except it has a slightly smaller trunk. The combo of a gas engine, battery pack and electric motor gets 28 to 30 mpg in town and — pretty much no matter how fast or slow we drive — 34 mpg on the highway. But it's a hybrid, and therefore, the range is only limited by the availability of gasoline. We bought the car new and have had no trouble with it whatsoever.

My brother-in-law will soon take delivery of an all-electric Nissan Leaf. The Leaf has a 100-mile range. I wonder what would happen if a Leaf owner takes it to the office one day and his or her boss asks for something to be picked up that's out of range. The Leaf takes quite a bit of time to charge, or so I understand.

What about the unintended consequences? Here's the deal: automobiles with big battery packs use lots of rare earth minerals and other hard-to-find materials. Apparently, disposing of all this stuff is very hazardous to the environment. In other words, the cure of electric cars may become the curse of electric cars. And virtually no one really knows what the effect of many cars charging at once will be on various power grids. The grids rest at night, when electric demand is low. But if everyone charges a car at night, so there is no respite for the weary grids, we may have problems.

I'm guardedly long on hybrids (which charge themselves) and short cars that use only battery power. Presently I own no automobile shares directly, however I think Ford and Toyota are both interesting plays.

Have a fantastic week — when you read this, it will be close to the end of the first two 2011 weeks.

Check out more blog entries from Richard Hoe.

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