Inexpensive Solution: Flex-Fuel Cars Only Add $70 to Cost

Thursday, May 26, 2011

GM has produced four million of the seven and a half million flex-fuel cars now on American roads. GM's Vice Chairman Tom Stephens says it adds "as much as $70 to the production cost" of a car to make it a flex-fuel car. Says Stephens:

Today there's 2,200 (ethanol fuel stations) that are out there but that's not enough. Two-thirds of the pumps are concentrated in 10 states and those 10 states have only about 19 percent of the flex-fuel vehicles that we have on the road.

"That will change when all cars come flex fuel capable," says Anne Korin. "At 10-12 million new cars per year in the U.S., it will take only about three years for flex fuel to reach the 30 million cars needed to justify most gas stations to invest in flex fuel pumps."

Alcohol is a cleaner, less-polluting fuel to burn. It is economical (right now it's 90 cents cheaper than gasoline), and it puts less carbon dioxide into the air than gasoline. It can be produced within the United States, adding jobs and stimulating the economy. It adds very little to the cost of the vehicle, and costs the U.S. taxpayers nothing at all. And it will end OPEC's ability to deliberately damage the U.S. economy, as it did during the recent recession.

Passing the Open Fuel Standard Act will get more and more of these flex-fuel cars on the road, spurring competition between fuels, bringing down fuel prices, and motivating fuel stations to add alternative fuels. Do you want to help make this happen? Click here to get started.

Read the whole Reuters article here.

Most of the time when you read an estimate for how much more it costs to make a flex fuel vehicle rather than a gasoline-only car, the number is usually $100. But if GM is already making flex fuel cars and they say it costs $70, why is there any variance in the number?

Here's why: The definitions employed by the Open Fuel Standard Act are unique in a few ways — one of them being its use of the term "FFV" for cars that can operate on E85, M85 and gasoline blends. The four million GM cars on the road today do not meet the definition because the automaker has not warranted them to run on all three fuels.

The types of cars called for by the Open Fuel Standard may cost a little more — most estimates say around $100. It varies a lot, depending on the type of car and the kind of fuel lines used. But when the industry has fully switched over and cars are routinely made into FFVs, the cost may well come down (because of the economy of scale), so most experts simply use the conservative figure of $100.

Compared to the cost of a new car, any of the estimates, by any measure, add an amount so small it would probably be unnoticeable.

2 comments:

Anonymous,  May 27, 2011 at 5:04 AM  

I can't support ethanol...it's destroying our food supply.

Abe Shackleton May 27, 2011 at 9:06 AM  

Quoting from an article on that very issue:

This myth has its roots in 2008 when ethanol faced its fiercest critics, who gave the industry a black eye by claiming biofuels was at the root of a commodity price boom. The source was an “orchestrated campaign” by Big Oil, food makers and others opposed to ethanol on the grounds that it is a waste of taxpayer money, Luft says. “All of these groups came together and helped each other and funded each other,” he says. “They did huge damage to the industry.”

Food companies perpetuate the myth out of resentment, Korin says. When oil prices pass a certain point, ethanol makes corn economic, she said, which means price supports for corn are no longer necessary. In that scenario the food industry has to pay market prices for corn syrup and animal feed. “Big Food for years has used underpriced corn syrup, enjoying taxpayer dollars paid as price supports to corn farmers, as a replacement for sugar, because the U.S. has a sugar quota and tariff system that keeps sugar prices much higher than elsewhere in the world,” she says. “But instead of taking on the sugar lobby, Big Food has masqueraded itself as a defender of the market and the poor, in the hopes of reverting to a world in which ethanol goes away, corn price supports are required, and it gets all the underpriced corn syrup it wants.”

Even more than Big Food, Big Oil is the real culprit, Luft says. Food prices go up when oil prices go up. “The major factor in the production of food is oil, the shipping the packaging, the fertilizer, and everything, that goes into making food,” he says.

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