31 July 2011

Flex-Fuel Cars Only Add $70 to Cost

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.


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