|85 E85 Tahoes and Suburbans marshall outside Javits for the Driveaway promotional event at the New York International Auto Show. Click to enlarge.
GM has rapidly become the most outspoken of the major automakers in its promotion of flexible-fuel vehicles that can burn ethanol blends of up to 85% as well as gasoline, and with good reason.
The ongoing increase in oil and gas prices—and, for some, concerns about energy security—are eroding the market for the full-size SUVs that are important to GM’s profitability. The automaker hopes that emphasizing the E85 capability of many of its big vehicles will give it some time to shore up its product line to adapt to the changing market conditions.
Accordingly, GM used its presence at the New York International Auto Show to drive home its messaging on flex fuel vehicles that can burn E85.
New York-area Chevrolet dealers departed from a preview of the New York auto show in an E85 Driveaway featuring 85 black all-new flex-fuel Tahoes and Suburbans.
One of GM’s two exhibit areas in the Javits exhibition hall features a “Live Green Go Yellow” display featuring a flex-fuel Avalanche. Flex-fuel vehicles are distributed throughout the GM stand, and prominently marked as such. The show organizers anticipate that more than 1.2 million attendees will flow through the show during the next week.
GM is offering a free one-year National Ethanol Vehicle Coalition membership at the show. NEVC will provide updates on E85 fueling locations, legislative news, and full access to the NEVC web site. Individual membership normally carries a $50 contribution.
GM in February launched a sweeping consumer education and advertising campaign promoting E85 and GM’s flexible-fuel vehicles. “Live Green Go Yellow” ads broke during the Super Bowl XL broadcast and will continue throughout the year with print, web (livegreengoyellow.com) and broadcast media components.
In addition to being E85-capable, the 5.3-liter V8 engines in the Chevy Tahoe and Suburban feature Active Fuel Management—GM’s new term for displacement on demand—that enables the engine to operate on only half of its cylinders when full power is not needed.
Although when using gasoline, that combination allows the GM full-size SUVs to offer estimated fuel economy of 21 mpg on the highway (4WD), when using E85 that rating drops down to 14 mpg due to ethanol’s lower energy content compared to gasoline.
Nevertheless, from a positioning point of view, GM is aggressively going after what is seen as the more fuel-efficient competition, using gallons of petroleum gasoline as the metric.
|GM’s E85 Positioning Chart
Gallons of Gasoline Saved Annually with GM E85 Vehicles vs. the Competition
Using EPA Highway MPG estimates driving 15,000 miles per year. Mileage figures assume GM products us only E85.
(23 mpg highway)
|E85 2006 4WD Yukon
(14 mpg highway)
|E85 2006 2WD Silverado
(16 mpg highway)
There are problems with this positioning, however.
First, although it is true that a big, fuel-swilling E85 Yukon uses less petroleum gasoline than an E0 Honda Insight or an E0 Prius, it terms of actual fuel consumption—for which the consumer pays—it clearly uses a great deal more. Those same 15,000 miles of highway driving will see the E85 Yukon burn 1,071 gallons of fuel, versus 263 for the Insight or 294 for the Prius.
|Promotional sign in New York—playing the environment card.
Assuming we get to $3/gallon fairly soon, that’s a difference of more than $2,300, Yukon to Prius. If consumers are sensitive to either global warming or energy security concerns—both mitigated by biofuels—that might not be troubling. If consumers are more worried about how much they’re forking over to fill up the tank, however, that delta could be a problem.
Second, just because it is a biofuel doesn’t mean that ethanol is “free”; producing it still carries an energy and emissions cost. Fueling a 14mpg vehicle is still worse overall than fueling a 51mpg vehicle.
Third, indications are that in the short term, E85 is not going to be cheaper than gasoline.
Fourth, the lack of an E85 fueling infrastructure makes it likely that the flex-fuel vehicles will run primarily on gasoline, certainly in the short-term, and likely in the medium-term.
The 85 flex-fuel vehicles participating in the New York driveaway were, for example, fueled with gasoline, not E85. That’s not GM’s fault (there is only one E85 station in the area—on Long Island—and that just recently opened) but it does highlight the classic chicken-and-egg problem with moving to a new fuel.
The question for GM is whether or not consumers will buy into the E85 positioning in sufficient quantities, even when E85 fueling is scarce, to give the struggling giant time to make its next move.