PLUGGING INTO THE FUTURE

Plugging Into the Future The future of the automobile industry is going to be re-written in the next few years, but not for the most obvious reason. President Obama's 2016 CAFE standard of 35.5 MPG has pushed all of the manufacturers into a mad rush to improve the fuel economy of more mainstream gasoline-powered vehicles since they will represent such a high percentage of the expected fleet. However, plug-in vehicles are going to occupy a much more important place in the business than we first expected, even if their volume will be relatively small in the near future. The main reason for this optimism comes from driving the range-extended Chevrolet Volt and full-electric Nissan LEAF. Rather than being seen as curious marketing exercises or coming across as "not-quite-ready-for-prime-time," we were very impressed with their refinement and, more importantly, their ability to blend in. When drivers honestly evaluate their driving habits and day-to-day mileage requirements, we feel that both of these vehicles offer virtues that cannot be ignored. In addition, the fact that such big-league manufacturers are running head-first into the future with cars that would have been considered impossible just a few years ago should give consumers confidence that these are not just experiments. In fact, after spending considerable time in each vehicle, and especially in the Nissan LEAF, we feel that the more pedestrian hybrids now cruising neighborhoods across the U.S. are going to feel old and outdated in short order. James Bell, Executive Market Analyst Kelley Blue Book