As oil prices drop and car manufacturers’ profits are squeezed, the economic downturn could present a make or break moment for green cars.
While we all enjoy the cheaper petrol prices and many motorists select to hold onto their cars for longer to cope with economic hardship, it could be seriously damaging cicumstances for the sales of green cars.
Crude oil is currently hovering around the $45 a barrel mark, while industry experts warn that the price could fall as low as $25 a barrel in 2009 if recession hits major world economies according to the Financial Times.
Meanwhile the publication also reports that the leading independent green car innovators could suffer if the US government were to bail out the big Detroit manufacturers (GM, Ford and Chrysler) by focusing public investment in saving established companies rather than promoting green innovation.
“It’s kind of silly to say that the Big Three are going bankrupt making the gas guzzlers they’ve always made, and then give the money to them,” said Elon Musk, founder of the electric sports car manufacturer, Tesla Motors told FT.com.
Adding that: “a substantial capital injection is needed in the electric vehicle industry” for it to establish effectively.
However Tesla themselves have come under fire, as they too look for federal financial assistance to see them through hard times. The New York Times posing the question “Only the rich can afford it. Should the Taxpayer back it?”
While Tesla Roadster is not yet widely available, with a retail price of $109,000, it is hardly surprising. A top speed of 125 miles and a driving range of 244 miles achieving 0-60 in 3.9 seconds, the Roadster does offer a real sporting pedigree and offers a glimmer of hope that electric cars could get over their major hangover of their limited driving range. Their other issue of their price tag may make it harder to secure investment.
However if the big manufacturers are left to flounder, this could well halt the mass marketing of greener cars. If the majors are left to save themselves, their focus would turn to selling established and popular models rather than investing in risky, new technologies and developing new greener models.
Tesla’s bone of contention is that funds originally earmarked for green innovation could be diverted to save the established big three. The future of green cars is uncertain until world economies shows signs of recovery.
What do you think? Should US funds save small innovators or big manufacturers? Who will do the most for the development of new green cars?
