Automotive and oil industry profits

Automakers' profit margin typically hangs around 1% (in the U.S., 0.4%), far below the oil industry’s. The 2007–2008 global financial crisis sharply cut sales of new vehicles and the financial stability of the U.S. Big 3 auto manufacturers (Ford, General Motors, and Chrysler).

 

U.S. price vs. rated efficiency of 250–hp motors

Premium-efficiency motors are normally assumed to cost more because they use more and better copper and iron. Yet analysis of all models on the 2010 U.S. market, in this case for 250 hp (TEFC, NEMA Type B) shows this is untrue despite standards’ having knocked the least efficient models off the market.

 

Cost reduction potential of powertrains

Different powertrains have different cost reduction potential for Revolutionary+ autos. By 2020, for example, battery electric vehicles would be priced about $6,000 higher than business-as-usual autos as forecasted by EIA. However, by 2050, this price difference drops to $500 due to learning curves in carbon fiber, structural manufacturing, and battery packs.

 

U.S. motor gasoline consumption with and without policy change and accelerated retooling, 2010–2050

Feebates are necessary for Revolutionary+ autos to be adopted because of their initial price premium. However, even after feebates are adopted and the U.S. begins to move off of oil, speeding EIA’s factory retooling rate by a few years could move U.S. autos completely off of oil by 2050.