By the Financial Times
The rich are different from you and me: they can afford to be green.
Forgetting that it is a Japanese import, Arianna Huffington called her Toyota Prius "an automotive two-fer, a pleasure to drive and patriotic to boot" while actor Will Ferrell said "there's no reason all Americans shouldn't be driving hybrid cars" and Meryl Streep opined that America would not be in the Middle East if everyone drove one. Perhaps the most honest of these A-List Prius-drivers was comedian Larry David, claiming he "needed something to make me feel smugly superior."
But hybrids are sooooo 2007. With the arrival of electric vehicles (EVs) such as the $100,000 Tesla Roadster or the cheaper $41,000 Volt from General Motors, the likes of George Clooney, Matt Damon and Google's Larry Page achieve zero tailpipe emissions while buying American. One would think that surging petrol prices would induce more ordinary mortals to follow suit. Instead, Boston Consulting Group recently cut its US EV penetration estimate by two-fifths to just 3% by 2020 while another study pegs the Volt's "addressable market" at 7%. More mundane technologies will appeal to those who are cheap rather than than chic.Generously assuming a 60 per cent drop in battery costs by 2020, BCG calculates that an EV's price per percentage carbon dioxide reduction is twice as high as cutting-edge combustion technology and five times the gain from improved aerodynamics. Even this ignores electricity's own carbon footprint. Based on the average US generation mix, the Volt would release about 25 pounds of C02 in a typical commute versus 28 pounds for the similar-sized Chevrolet Cruze, which costs half as much even after the Volt's $7,500 tax subsidy. But what environmentally-aware Hollywood star would be caught dead driving a Cruze from his mansion to his private jet? E-mail the Lex team in confidence at firstname.lastname@example.org
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