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A few weeks ago, I was cleaning out my email inbox – something I’d meant to do for years – and happened upon one particular old email I had written to a friend in 2002 while I was vacationing in Germany. I spoke of my rental car, a Mercedes-Benz C180 (yes, that’s a C-Class with a 1.8 liter normally aspirated 4-cylinder and about 130HP), and how the fuel prices over there necessitated these fuel sipping engines in vehicles that we Americans think of as pretty upscale. Specifically, I referred to “Germany’s $4 per gallon gasoline” and its impacts on vehicle choice in that part of the world.

Guess what? We’re there now! As of this morning, gasoline is officially at $4 per gallon nationwide. As a nation, we are now paying for fuel at a price level that resulted in Europeans driving smaller and more efficient vehicles long ago. Look through the headlines and you can already see numerous ramifications of today’s much higher fuel prices. To list just a few events from the past week or so:
Hybrid sales are down not because people don’t want them, but because manufacturers can’t get enough hybrid batteries – leading to long wait lists.
GM’s traditional full-size SUVs like Chevrolet Tahoe will likely evolve into more efficient car-based models.
The Hummer brand may be for sale, as such vehicles get less and less relevant in these times
Numerous truck plants across North America are closing.
In May, the perennial best-seller, the Ford F-Series pickup, was outsold by Honda Civic, Toyota Corolla, Toyota Camry, and Honda Accord.
Pretty big deal, with some pretty epic ramifications for the car companies – and for you. Now that we’re paying for fuel at prices that were until recently the domain of the “rest of the world”, are we going to start driving luxury cars with Corolla-sized engines like that C180 that I rented (and actually liked a lot, by the way)? Or taking it a step further, are we going to start downsizing in a big way?
I don’t have a magic crystal ball, but my hunch is that at least in the shorter term, the changes might not be as drastic as one might think. You see, technology just keeps getting better. Think about the computer you’ve got right now and the one you might have had five years ago. You probably paid less in adjusted dollars for your current computer than your last one, and your current one probably has far greater power and capability. In other words, technology has created a better product for you, and you have not had to sacrifice anything in order to get it.
While I’m definitely not saying that we won’t have to make any sacrifices with our vehicles, it IS true that many new (and relatively low cost) technologies are coming that will raise fuel efficiency very significantly. Lower cost hybrids, direct injection, and automatic engine shutoff at stoplights are a couple of the numerous technologies that will soon be here (or are already here). In short, these technologies will enable much greater efficiency and effectively allow many consumers to continue driving similar types of vehicles – but with much greater efficiency.
Make no mistake – there are a lot of ways that we are and will continue to be affected by higher energy costs. And – feel free to throw those recalled salmonella tomatoes my way – I tend to think that higher energy costs are in the long run a good thing, albeit painful in the short term (that topic deserves its own discussion for another time).
Still, don’t forget that we’ve got some pretty darn smart people developing next generation technologies – and ultimately those technologies (and ultimately vehicles) that provide amazing efficiency without making the consumer unduly change his or her own habits will find the most success in the marketplace. Remember, the consumer is generally loathe to sacrifice and will gravitate towards products that entail the least amount of sacrifice. And you’d better believe that the car companies – especially in this struggling market – are eager to develop products that are eager to please.
I for one have a feeling that we’re going to be seeing some amazing technology in the coming years.