Energy Business

Driving The Plug-In Hybrid To Oblivion

Douglas A. McIntyre

The plug-in hybrid, a car that uses the same socket as a vacuum cleaner, or at least one close it, has gotten the full force of backing from the Obama Administration. The President believe that America should have one million of the vehicles by 2015. Ford (NYSE: F), GM, Toyota (NYSE: TM) and Honda (NYSE: HMC) all plan to have their plug-ins on the road by then, if there is any road to have them on. The plug-in is a good product in theory, but it is hard to imagine how people will get a charge once they leave home.The Senate is about to vote on legislation that would give plug-in hybrids an $11 billion government investment. Most of that money may go to pay consumers to buy them. Plug-in technology adds about $12,000 to the cost of a normal car. The US may have to pay steep subsidies to people who drive them.

The plug-in has several problems, not the least of which is that other hybrid models based on different technology are for sale now and are doing very well. Clean diesel have become a viable alternative to hybrids, and VW is using that fact to push its cars in the US, where it market share is less than 1%. Diesels, hybrids, and new highly efficient gas engines may cut the gasoline use of America by themselves. The plug-in is a product without a market.

The plug-in is an example of what goes wrong when the government takes a popular notion and spins it as an excellent way for Congress and the Administration to show that they are visionaries about what is best for the future of the nation.

It is not at all clear the current infrastructure of the power grid can take the strain of millions of people  charging their cars as they sleep. And, even if that works, there are nearly a million gas stations in the US, but not a single place with a row of plugs,  a men’s and women’s bathroom and a place to buy cigarettes, maps, and candy.

Douglas A. McIntyre