SUV surge Explorer leads among sport-utilities; Camry is bestselling car

By Matt Nauman Mercury News

The sport-utility backlash hasn't hit California -- yet.

Sales of SUVs continued to grow across all segments in 2002 in the Golden State, according to registration figures compiled by Polk, an auto-industry research firm.

In recent months, religious, political and environmental figures have attacked sport-utilities as wasteful, impractical, unpatriotic and dangerous. Last month, Jeffrey Runge, head of the U.S. National Highway Traffic Safety Administration, said automakers need to build safer SUVs or face stiffer regulations.

Despite the criticism,

SUVs still have a strong image, and luxury SUVs have some of the best images of all,'' said Wes Brown, an analyst with the NexTrend automotive consultancy in Thousand Oaks. He sees Hummer H2s, for instance, everywhere in the trendy parts of Los Angeles.

It all comes down to product,'' said Bob Kurilko, a vice president with edmunds.com, an online automotive research company in Santa Monica.

People like a lot of things about SUVs -- the high ride position, the versatility, the room for people and stuff, the ease of entry and egress, and the coolness factor.''

Ultimately, people drive what they want to drive, Brown said.

Many of us, especially baby boomers, we talk a great game, but don't actually ask me to do something to change my life,'' Brown said.

Among cars, California preferences reflect those in the other 49 states, as the Toyota Camry, Honda Accord, Honda Civic, Toyota Corolla, Ford Focus and Ford Taurus were the bestsellers. But the relative wealth of California is apparent as the Mercedes-Benz C-Class, BMW 325 and Lexus ES300 were all among the 20 top-selling passenger cars.

Two products built at Fremont's New United Motor Manufacturing Inc. (NUMMI) were among the 10 bestselling vehicles in California last year, as the Toyota Corolla sedan ranked sixth and the Toyota Tacoma pickup ranked eighth. The plant's third vehicle for American buyers, the Pontiac Vibe sport wagon, registered 2,367 sales in California in its first year on the market.

Ford was the most popular brand in California, selling 339,738 cars and trucks. Toyota was second, and sold 54,000 more cars than Ford but 86,000 fewer trucks. Chevrolet, Honda and Dodge were the next three bestselling brands.

http://www.nytimes.com/2003/02/08/automobiles/08SUV.html

NY Times Page 1 February 8, 2003

In California, S.U.V. Owners Have Guilt, but Will Travel

By PATRICIA LEIGH BROWN

GREENBRAE, Calif., Feb. 6 — Encased in a massive black Toyota Land Cruiser, Shirley Collenette admits feeling a little guilty about her gas-guzzling, smog-inducing, planet-warming, road-hogging "armor," as she calls her sport utility vehicle.

But need is stronger than guilt.

"The world is becoming a harder and more violent place to live, so we wrap ourselves with these big vehicles," said Ms. Collenette, a 46-year-old mother of two. "It's like riding a horse. You have more power."

Like many other S.U.V. owners in Marin County, this corner of Northern California where wealth and liberal politics converge, Ms. Collenette has found herself stuck up the on ramp of a politically and culturally risky freeway. A fledgling anti-S.U.V. crusade has joined the list of trendy "anti" causes — antismoking, antifur, antimeat — and this has some members of the upper-middle class bristling in their bucket seats.

Hostility seems to be everywhere, with attacks from all directions.

Here comes the columnist Arianna Huffington and her nonprofit Detroit Project, with its soul-wrenching TV commercials linking S.U.V.'s to support of terrorism. The Evangelical Environmental Network, a coalition of Christian groups, declares Jesus "lord over transportation choices" and runs TV advertisements asking, "What would Jesus drive?" (Answer: not an S.U.V.)

Earth on Empty, a group of Boston artists, plasters fake parking tickets on S.U.V. windshields that instruct drivers to "try to get honest with yourself." The Earth Liberation Front claims to have set fire to S.U.V.'s recently at a dealership in Pennsylvania. The posters at a recent antiwar rally in San Francisco said "Draft S.U.V. drivers first."

To the backlashers against the backlash, the Marin soccer moms with children, groceries and ski equipment for weekends in Tahoe, it can feel like a personal affront.

"How else am I going to get four children from A to B?" said Zoe Daffern, 41, of Kentfield. "I don't think we're going to solve the world's problems by getting rid of S.U.V.'s."

She certainly is not getting rid of her black Chevy Suburban. "It gives you a barrier, makes you feel less threatened," she said.

For all their bulk, S.U.V.'s are not as safe as many owners imagine them to be, and the National Highway Traffic Safety Administration has said it might propose new standards that would force substantial design changes. These include adding side curtain air bags, to reduce the risk in rollovers, and possibly lowering the profile of the biggest models, to cut the risk to cars hit by S.U.V.'s.

And in response to tax laws that let businesses deduct $30,000 or more for supersized vehicles like the Hummer, Senator Barbara Boxer, Democrat of California, recently introduced a bill called the S.U.V. Business Tax Loophole Closure Act.

Other gas-guzzling vehicles are out there, like pickup trucks, but none as popular and as profitable. One of every four new vehicles sold last year was an S.U.V., said Jeff Schuster, director of North American forecasting for J. D. Power and Associates. 3,977,864 in all. Even with the economy slumping, he said, that number is expected to rise to about 4.15 million this year.

Government standards call for S.U.V.'s sold in the country to average 20.7 miles a gallon, while passenger cars must average 27.5 miles. The H2, the new Hummer model, weighs more than three tons and gets 11 miles to the gallon.

Sarah Jain, an assistant professor of cultural anthropology at Stanford University, said that the S.U.V. — a vehicle marketed for the independence it is supposed to provide even while posing serious social costs, like smog and rollovers — embodies many incongruities in the culture.

"It represents the inability of Americans to make a connection between consumption decisions and their social impact," she said. "The war — and the Huffington ads — are giving voice to that frustration."

To Todd Gitlin, a professor of journalism and sociology at Columbia University, the biggest surprise about the S.U.V. backlash is that "it took so long."

Ms. Huffington "pressed a button that was ready to be detonated," he said, on a topic made acute by the threat of war. "It is the transmutation of a big issue into a neighborhood issue. The S.U.V. is the place where foreign policy meets the road."

The Huffington commercials were financed by a $200,000 war chest. Critics have noted that the sponsors themselves have conspicuously consumed: Ms. Huffington, for instance, lives in a costly home in the Brentwood section of Los Angeles and owned a Lincoln Navigator S.U.V. before buying a Toyota Prius, a hybrid gas-and-electric subcompact.

Csaba Csere, the editor of Car and Driver magazine, said the vilification of S.U.V.'s seemed somewhat arbitrary. The gas mileage of the pickup truck is just as horrendous as any S.U.V.'s, he said.

"I don't see how commuting to work in a 5,000-pound pickup is any less sinful than a 5,000-pound S.U.V.," he added. "I hope Arianna Huffington never gets into a limousine. It's a very fuel-inefficient vehicle."

The image of the S.U.V. taps into deep-seated yearnings in the American psyche, said Dr. Clotaire Rapaille, a medical and cultural anthropologist in Boca Raton, Fla.

With their image of strength, power and size, the S.U.V. connects to "reptilian" instincts that are important for reproduction and survival, Dr. Rapaille said, "disregarding the
intellectual cortex' information that says rollovers are dangerous."

"My theory," he added, "is the reptilian always wins."

The issue has made for dissimilar political bedfellows, Hollywood liberals and evangelical Christians. "They might not be part of a religious organization, but many are concerned about transportation choices for spiritual reasons," said the Rev. Jim Ball, executive director of the Evangelical Environmental Network.

"We've all seen the same evidence. First it was human health, global warming and oil dependence," Mr. Ball said. "With the Middle East troubles, another cause has sprung up. It's a moral issue."

People who love or hate S.U.V.'s will probably not be affected by the advertisements, said Dan Becker, director of the Sierra Club's global warming and energy program.

But "the people in the middle, who may have bought an S.U.V. and are now saying

It is doubtful their ranks will include Kelly Kriston, 39, who was lusting over an orange Hummer H2 the other day in Marin County. It weighed 6,400 pounds and cost around $50,000.

As Mr. Kriston considered buying it, did he feel guilt? "Not one iota," he said. "I like having all that metal around me. It's got that massive feel-good factor."

Copyright 2003 The New York Times Company

February 9, 2003 NYT Sunday Business Section

Can Energy Ventures Pick Up Where Tech Left Off?

By AMY CORTESE

FOR Andrew Beebe, the light bulb went off almost two years ago at a computer technology conference in the Arizona desert. Mr. Beebe, who had just sold his profitable Internet start-up and was wondering what to do next, picked up a book on harnessing the sun's energy — or, as he saw it, "how to hack photosynthesis."

At the time, March 2001, the computer industry was suffering from post-bubble shock and California was being racked by an electricity crisis. The normally zealous attendees at the annual gathering seemed dazed. After reading the book, Mr. Beebe, 31, was convinced that the almost-within-grasp promise of solar-, biomass-, hydrogen- and wind-generated power was "the new new thing." After returning to San Francisco, he became a partner at Clean Edge, a firm in Oakland, Calif., that is a consultant to energy start-ups.

Mr. Beebe's former company, BigStep, provided Internet services to small businesses. Now he is one of several former Internet entrepreneurs and professionals who over the last several months have quietly migrated to the emerging field of alternative energy.

With the threat of war in Iraq refocusing public attention on the United States' dependence on oil from the Middle East, renewable energy is regaining some of the buzz it had when Mr. Beebe was in diapers. It is attracting the attention of entrepreneurs and venture capitalists who not long ago were dreaming of riches on the Internet.

For now, the size of venture funds that are focused solely on energy is relatively small. About $2 billion is available to invest — as much as in two good-size computer-focused funds. About $488 million of that was actually invested in 2002. That is off from a peak of slightly more than $1.2 billion in 2000 but up significantly from the early 90's, when less than $25 million a year was being invested, says Nth Power, a venture capital firm with a long history of energy investing.

While interest is growing, enthusiasm has been tempered by the fact that renewable energy — particularly solar energy — has been the subject of optimistic pronouncements that have not always panned out. And some people who are racing to start alternative-energy companies once extolled the world-changing virtues of the Internet.

As they race to commercialize fuel cells, wind farms and solar panels, are Silicon Valley's whiz kids setting themselves up for another fall, along with investors?

Alternative energy, like the Internet a decade ago, is largely the realm of arcane technology and technologists. The newcomers see an opportunity to apply the formula they honed with the Web: take technology with big market potential and add managerial talent and venture capital. It remains to be seen, of course, whether that will result in the equivalent of Webvan — the Web-based grocery, a multibillion-dollar Internet-era idea that vainly searched for a market before going out of business — or in something as wildly successful as eBay.

"The tech refugees are moving in," said Martin Lagod, managing director of Firelake Capital Management, an investment firm that specializes in energy, advanced materials and communications companies. And he says that's a good thing. "They are technically savvy, know how to build companies and access capital," Mr. Lagod said.

Investors who were burned by buying into highflying dot-coms may think otherwise. And alternative energy, unlike the Internet, has a history. High expectations for it were punctured in the early 1980's when oil prices tumbled, making the new technologies uneconomic. With oil prices still relatively low, adjusted for inflation, selling alternatives like solar remains difficult.

"Solar is sexy and everybody loves it, but the fact is it remains too costly" for anything but niche applications, said Stanley R. Bull, director of research and development at the National Renewable Energy Laboratory, an Energy Department center in Golden, Colo. "We get concerned about overhyping some of these technologies."

In the 1970's, when solar energy was first commercialized as a source of heat for homes, promoters declared that the sun would also become a mainstream and affordable source of electricity in just a few years. Today, converting sunlight into electricity is still four times as expensive as coal or gas power, though the price has come down to 20 cents to 30 cents a kilowatt-hour from $1 in 1980, and advocates say technological advances will make it competitive with coal within a decade.

More recently, fledgling energy companies that went public in the last few years, like Capstone Turbine and Plug Power, have suffered along with the rest of the market, or more so. Shares of Capstone, which peaked at almost $100, can now be bought for less than $1; Plug Power, which soared to $150 a share during the California crisis in 2001, closed Friday at $5.05.

The outlook is uncertain. Deregulation, which should encourage the use of alternative energy sources, has been set back by the Enron debacle and market manipulation by traders during the California crisis.

"Some of the hopes and expectations about how quickly energy would be liberalized and how fast distributed generation would catch on have been dampened," said Nicholas Parker, a longtime investor in alternative energy and chairman of the Cleantech Venture Network, which brings together so-called clean-technology entrepreneurs and investors.

But advocates of alternative energy say things are different this time.

"Twenty years ago, a lot of the technology just wasn't ready," said Dan W. Reicher, an assistant energy secretary in the Clinton administration. He is now the executive vice president of Northern Power Systems, an energy engineering company, and a partner at New Energy Capital, which invests in alternative energy projects.

Today, he said, energy technology is more reliable and is often backed by giants like General Electric, which bought Enron's wind power business, and BP, which is pursuing several projects in solar energy, wind power and alternative fuels like hydrogen.

Advances in biological and materials sciences could become breakthroughs, advocates of alternative energy say. Most important, they add, the economics of alternative energy are beginning to look compelling.

Wind power, the most developed renewable energy source, generates electricity for around 4 cents a kilowatt-hour, putting it on par with coal. Advances in solar technology, like so-called thin-film materials that are being used in place of rigid silicon disks, may cut costs significantly, people in the industry say.

Biomass technology — which takes organic materials, waste products or gases trapped in the earth and turns them into fuel — is already widely used. It is attractive to companies like Cargill Dow — which has a biomass plant and is a joint venture of Cargill, the agriculture conglomerate, and Dow Chemical — because it also creates chemicals for plastics, clothes or carpets.

The market potential is certainly large. Electricity alone is the third-largest industry in the United States, worth about $300 billion annually. And of the two billion people in the world who the United Nations estimates are without electric power, some may be candidates for off-the-grid renewable sources of energy.

Governments are helping to drive demand, which could spur innovation. About 30 states encourage renewable energy; New York and California, for example, require that 20 percent or more of their energy supplies come from renewable sources in the next decade and a half. Mr. Reicher said, "It's a convergence of technology, policy and market forces that make clean energy such a terrific investment."

ENTREPRENEURS' and venture capitalists' enthusiasm for alternative energy stems partly from the continuing slump in the computer and telecom industries. "There's nothing much else to look at," said Ivor Frischknecht, a co-founder of Angara Database Systems of Palo Alto, Calif. He is investigating opportunities to invest in clean technology.

Venture capitalists are starting to follow the entrepreneurs into this unfamiliar terrain — with an estimated $90 billion in venture capital idle, they are looking for places to invest it. Kleiner, Perkins, Caufield & Byers, Silicon Valley's top venture fund, is reviewing deals in energy and clean technology. Draper Fisher Jurvetson, another well known venture firm, in October led a $13.5 million investment in Konarka Technologies, a start-up in Lowell, Mass., that is working on less-costly thin-film solar panels.

Many entrepreneurs see in alternative energy that rare and desirable condition — a disruptive technology that could transform entire industries, from energy to transportation. "This is really the Internet 10 years ago," Mr. Beebe said. "We're on the verge."

Such enthusiasm has been scarce since the bursting of the Internet bubble also deflated entrepreneurs' big dreams. They might be advised to be careful what they wish for.
http://evworld.com/databases/printit.cfm?storyid=492

Coming EV Redemption

By Bill Moore Feb 11, 2003

When William McDonough was a child growing up in the Far East, his parents used to buy him candy wrapped in rice paper. If the paper was clean, he could eat it along the candy. If it wasn't, he'd peel off the rice paper and throw it away. By the next rain, the paper had dissolved and returned to the soil.

That childhood experience may account for McDonough's passion for a different, what he sometimes calls his 'quirky' approach to the environment, an approach shared by his German partner, Dr. Michael Braungart, and encapsulated in the book they co-authored entitled, Cradle to Cradle'.

It turns out that a lot of people have been reading their book, some of them senior executives at Ford Motor Company.

As McDonough discussed with EV World in his pervious interview, Ford hired his architectural design firm to make-over the carmaker's aging River Rouge auto plant in Dearborn, Michigan, Ib Once visionary achievement of Henry Ford, the rusting factory complex had fallen on hard-times. What McDonough and Associates did was to not just renovate the sprawling plant, once the world's largest auto assembly plant, but to turn it into a model of environmental responsibility. McDonough pointed out to EV World that a $13 million dollar investment in water-permeable parking lots, green roofs and landscaping enhancements offset a $48 million water pollution liability facing Ford.

So one year ago, when the Ford Research Group initiated a top secret program to integrate into a single car platform some of the most promising technologies of the 21st century, they decided to invite McDonough and Braungart into their deliberations. The result of that collaboration was the automotive evolutionary leap honored with the name "Model U."

We decided to re-interview McDonough because of his firm's involvement in the Model U. We wanted to get his take on where he now sees automotive technology going, and what may come as a surprise, is that he still firmly believes there is a place for battery electric vehicles in the 21st century and it's on the roads of the world, not just the golf courses and airport concourses. Call it an EV redemption of sorts.

The Charlottesville, Virginia-based architect and author, who Time magazine named in 1999 a "Hero for the Planet," explained that the Ford Research Group doesn't usually originate the design of concept vehicles. That task is normally left to the Design Group. This time, however, Ford wanted to explore a wide range of technologies from materials, to telematics to fuels to lubricants. "How many concept vehicles do you know where even the tires are different?" McDonough asked jokingly. "In the case of the Model U, we quite literally kicked the tires."

But Bill Ford, Jr., the chairman of Ford Motor Company, wanted his company's brightest minds to look into the near future and come up with a technology package that not only provided a faster transition to hydrogen as a fuel but also one that incorporated the latest in information technology. The package also had to include design strategies that made it cost effective to manufacture and assemble, as well as disassemble and recycle according to MBDC's biological and technological nutrient concepts.

A Solar Powered World

The central thesis of McDonough and Braungart's approach to the energy question is that our world needs to be solar-powered. By that, they don't mean equipping every home and business with photovoltaic arrays or people commuting in tiny cars running on solar electric panels. For them solar-powered has a much broader definition. McDonough continually uses the analogy of cherry blossoms.

Nature, he contends, isn't about minimalist efficiency, but exuberant waste! A single cherry tree will shed millions of cherry blossom petals every year. Those petals perform their function of helping pollinate the plant by attracting insects and then fall to ground to be reabsorbed into the soil, continuing an on-going cycle of life.

He is convinced that this is the model mankind needs to more closely emulate in its industrial processes and social structure. He emphasized to EV World that he isn't against oil. He thinks its a excellent material that can be safely polymerized into thousands of useful products. Burning it up in an internal combustion engine is a huge waste of a valuable resource.

For McDonough and his partner, Michael Braungart, a chemist and co-founder of Germany's Green Party, the 'cradle-to-cradle' process can be applied to nearly every facet of modern culture. He noted that if Germany raised the carbon content of its soil by just .02% using the bio-nutrient approach to materials design, it would be equivalent to the entire nation's annual C02 emissions. This alone would have a significant benefit to the nation, which is currently losing 20 tons of top soil per hectare, equivalent to about 5 tons per acre in the US, McDonough calculated.

To further illustrate McDonough and Braungart's "quirky" approach to their view of a "solar-powered" world, he recently told the head of a prestigious university to scrap its plans to renovate one of its older buildings. The university had called in McDonough to consult on ways to make the building more energy efficient. To do so, McDonough noted, would have meant lowering the ceilings, replacing all the drafty windows, changing the HVAC system, all to the tune of about $5 million dollars. It would have ruined the character of the building, he observed.

So, instead of remodeling the campus landmark, McDonough suggested the university invest the same amount of money in a wind turbine farm "in Kansas." This would more than offset any of the energy losses of the old building and create a very positive financial position for the university.