Detroit Auto Show: Chairman Chu

by Henry Payne

Cobo Hall, Detroit — Like plutocrats walking their stables, Obama administration officials have been ubiquitous at this year’s Detroit Auto Show Press Preview touting themselves as industry saviors and nodding wisely at the electric coaches on display for their approval.

“President Obama refused to sit back and watch the industry and potentially more than 1 million jobs fade away,” the president’s Energy Secretary Steven Chu pronounced this morning at a speech wrapping up a two-day visit in which he was accompanied by EPA chief Lisa Jackson, Commerce secretary John Bryson, and NHTSA chief David Strickland.

“They move through the show followed by a comet’s tail of taxpayer-paid toadies that would put a rock star to shame,” observed disgusted columnist Nolan Finley of the Detroit News. “This is the same administration that chided auto executives for exploiting the trappings of their offices.”

Chu was no less arrogant in claiming to know the future of battery costs.

He predicted that the administration would meet its goal of putting 1 million electric cars on the road by 2015 because battery prices will fall from their current $12,000. “That’s pretty expensive. We think we’re on target by 2015 so that the cost of that same capacity battery will be reduced to $3,600,” Chu said.

This from the same man who flushed $500 million in taxpayer dollars down the Solyndra drain because he got solar-panel prices wrong.

Chu’s comments defied the very industry experts he had visited during the auto show. A survey of 200 executives by KPMG Consulting on the eve of the show found that electrics’ costs would prevent them from gaining more than a small percentage of vehicle sales by 2025. Indeed, 2011 saw a continued decline in hybrid-vehicle sales as a percentage of the market despite a record number of offerings. Most conspicuously, the administration’s pet electric plugin Chevy Volt has fallen short of its 10,000 unit sales goal despite lavish public subsidies.

The former UC-Berkeley physics prof shrugged off such realities. He believes that automakers will be forced to adopt those technologies as draconian new MPG mandates come online requiring automakers to meet 55 mpg average fuel economy rules by 2025. “(These standards) will drive American innovation,” dreamed Chu.

How absurd are these numbers? Toyota’s miniature hybrid Prius (the Prius c) was introduced at this year’s show touting a fuel economy of 53 mpg.

As Chu and his entourage boarded a plane back to Washington, automakers were already busy preparing the show floor for public consumption next week. Chu’s electrics will move to the background as automakers flog the popular SUVs that have once again captured over 50 percent of the U.S. market.

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