Connection between the Electric Market and the Americian Car Industry - Report Example

Connection between the Electric Market and the American Car Industry In today’s era of sustainable policymaking in a number of global business ventures, the concept of promoting green initiatives has been espoused by various organizations. Green initiatives basically refer to implementing environmental-friendly action plans to real business enterprises. With the large scale emission of harmful green house gases in the earth’s atmosphere, widespread measures have been taken in global automobile industries to countermine the increasing threats of global warming and other atmospheric hazards. The electric car market in particular has received certain degree of attention as an alternate means to gasoline-driven automobiles. The automobile industry being a part of the energy industries calls for cost effective economy not just for increasing market revenues, but also for smoothening operational mobility. On one hand, electric cars are built to serve the purpose of energy saving. On the other hand, designing an energy saving unit requires certain engineering mechanisms that are otherwise costly. So the basic challenge for the automobile companies worldwide is to devise production strategies at par with both efficiency and competitiveness (Steen 150). Moreover, it is also imperative to follow the environmental regulations to make sure that all cars meet sustainable standards. The American car industry has been historically leading the way to fulfill this objective. Majority of the big market players in the automobile industry are American organizations having branches in other countries. This paper dwells on how the electric car market and the American automobile industry are connected with each other for mutual business interests. The paper shall examine the role played by General Motors Company (GM) in the context of promoting sustainable transportation through manufacturing electric cars. The Electric Car Market: A Brief Overview The electric car market provides an alternative means to consumers to choose from a competitive selection of commercially successful vehicles that are available to nearly all nations. This market has made it to the global arena fairly recently and it is yet to be confirmed whether it can withstand the tough competition from hybrid and gasoline-driven automobiles. Yet, the initial signs are promising enough to make the conjecture that this enterprise has arrived to leave its lasting footprints on the future of automobile business. The line of products available in the 21st century date back to as early as the 1830s when more primitive designs first hit the European market (Electric Car Forum & EV Electric Community 2009). In the outset, the market underwent a relatively less competitive phase as gasoline cars in the mid-19th and early 20th centuries were not so well equipped with modern technologies. However, the automobile propulsion technologies evolved a great deal early in the 20th century when the petroleum industry worldwide started to grow. It was a major economic phenomenon the impact which could not be diminished in the context of global power games. Asian countries such as the United Arab Emirates, Iran and Jordan came up higher in the ladder as global exporters of petroleum and related byproducts. The developed nations in the continents of Americas, Europe and Asia could not but seize the opportunities of competitive automobile productions. Moreover, the gasoline powered vehicles allowed for reduced production expenses as labor charges did not cost much to the companies. While an electric unit required several smaller units such as motors, batteries, electronic circuits and so on, the petroleum-driven vehicles, with the aid of groundbreaking technical finesse, ensured more financial returns against less capital investments. Another reason for the decline of the electric cars especially in the US market was their handling intricacies. Long been known as the ‘woman’s car’, these vehicles in the earlier times were powered by electric starter motors which later became an integral component in the production of gasoline cars as well. This induction led to more widespread acceptability of the non-electric cars for their enhanced maneuverability. Now aided by the starter motors, drivers with mediocre expertise could maneuver the cars better than ever before. It also helped expanding the potential market for gasoline cars in the US (Mom 276). Europe or America? Literature on this topic demands additional emphasis on factors involving ownership and dissemination of electric cars across the globe. General Motors Company manufactured both passenger and business vehicles in the beginning of the 20th century, with majority plying on the US roads. It grappled the truck manufacturing market in particular as the company had established its own Electric Division in 1911, thus enjoying almost a market monopoly in the United States (Mom 228). However, several German automakers also displayed their engineering feats and produced electric car ingredients such as stationary batteries and other types of batteries. Accumulatoren-Fabrik (AFA) in particular excelled in light machinery product manufacturing and threw serious challenge to the erstwhile American dominance in this sector. The company stepped up its sales force by setting up delivery points in various other countries, including South Africa, India and Egypt. By the 1930s, AFA began to rub shoulders with its American sister concern Electric Storage Battery (Chandler and Hikino 527). Thus, the automobile industries on both sides of the Atlantic slowly but surely inched toward grabbing the new age car market which, as it was to unfold later on, was making telling indentations to the earth’s atmospheric blanket. Electric Cars as Environment-Friendly Vehicles Barring the superior technological aspects of electric cars, these vehicles are claimed to be far more environment-friendly as opposed to their gasoline or hybrid counterparts (Banister and Button 11). The CNG cars that are in vogue these days do not address the issue of greenhouse effect completely, despite the fact that a CNG engine emits significantly lesser volume of carbon monoxide and hydrocarbon than regular gasoline vehicles. An electric car, on the other hand, gives off fewer pollutants such as smog (Rao 306) and lead particles, which have an implicitly harmful bearing on the environment. American Initiative to Promote Electric Cars Since the United States of America is one of the leading members of the G8 Summit and other UN missions for maintaining a greener and cleaner earth, it is quite understandable that the country should adopt a pro-environmentalist stance to mitigate the risks associated with indiscriminate greenhouse gas emissions from fueled transport sources. Similarly, the nation must also encourage other nations to resort back to electric cars as a safer and cleaner practice. But to achieve the task, it is crucial to formulate clear business objectives and if possible, to tie up with the leading powerhouses in the automobile industry to facilitate the consumers’ cause. From the past few decades, major states like California, Sacramento, and New York have been running more and more on electric fleets. Albeit Stempel (68) argues that fossil fuels used in electric cars have detrimental effects on the environment in the long run and therefore, electricity cannot be seen as an alternate source of propelling automobiles, quantitative data shows otherwise: In 1990, California’s Air Resources Board passed a Zero Emission Vehicle (ZEV) mandate which initially required two percent of all vehicles sold by major automakers in California to be ZEVs (i.e., electric) starting in 1998. About the same time, the city of Los Angeles approved a ten-point initiative to promote electric car use (Alvord 181). The above report goes to show the mobilization prospects of electric cars in the US auto market. Based on the quantitative research findings, it is in fact worth arguing that the American automobile industry has espoused the electric car market in recent years. Now if one considers how Michigan, which happens to house the headquarter of General Motors, featured in 2007 when a private enterprise, not endorsed by any national-level subsidized scheme, built an air battery that “permitted a 185-mile range for electric cars” (Oppenheimer and Boyle 54), it would be easier to plot General Motors in the automobile business map of the United States. General Motors Company The correlational metrics between General Motors Company and the US electric car industry are best illustrated through GM’s recent announcement of the commercial launch of the Cadillac Converj which was preceded by the 2011 series of Chevrolet Volt (Voetcker 2009). Following the trend of marketing one can observe that GM has maintained the line of business both in accordance with the company’s spotless profile as a utility automaker and in terms of adhering to the ZEV mandate issued by the California Air Resources Board. The scope for making an experimental run with lesser number of fleets was clearly out of consideration following such a mandate. It was only in the 1990s that General Motors faced serious problems in generating sufficient revenues from the US automobile market. The organization even adopted a holding up tactics which severely throttled the production of electric vehicles. This strategy was taken to raise formal protest against California’s ZEVs mandate (Sperling et al. 39). The statewide unrest was a phenomenal event in America because it reflected more the company’s firm economic vision than its green manifesto. As far as the line of business is concerned, General Motors puts nominal market shares for its products. Looking back into the post-War situation, General Motors fared incredibly well in the stock market, doubling its revenues at the closure of each financial year from 1925 to 1929. Resultantly, financiers put their money on the GM stock without any hesitation and it helped beefing up the organizational infrastructure (Shipman 50-51). The market-centric focus of General Motors has led to the company’s dominating stature in the US electric car industry. While the regulation of stocks is one crucial offshoot of market-oriented planning, another point of contention is the company’s outreach to subsidiaries. Both General Motors and Ford, two of the giant auto producers not just in the US but also in the global market, are tied up with a number of parts makers, including Harrison Radiator, Delco and Packard Electric. This, however, does not levy any loss for the company as it is also known to manufacture its own automobile parts. The joint collaboration just provides functional as well as economic impetus for General Motors (Law 126). The restructuring of the company in the beginning of the 20th century can be held as an important milestone in the annals of General Motors. Olson (107) substantiates: During the 1920s, General Motors led the way in corporate organization systems in order to deal with its huge size. Alfred Sloan became president of General Motors in 1923 and pioneered the concept of corporate decentralization. The company was simply too large to manage in a highly centralized, top-down management style because bureaucratic inertia would have guaranteed serious inefficiencies. Instead, Sloan awarded near autonomy to the individual divisions – Chevrolet, Buick, Cadillac, Pontiac, Oldsmobile, Fisher Body, and so on. In doing so, he pioneered a pattern of decentralization that would become common among the Industrial Revolution’s corporate giants. It is quite interesting to note that this decentralization of departments could possibly lead to the future undertakings of parts suppliers. As each of the main divisions was made independent to some extent, they could create their own opportunities of sustenance in the ever dynamic market. To sum the paper up, it may be suggested that General Motors Company and its gradual evolution in the US car industry is less specific to electric cars and more illustrative of the overall automobile industry of the nation. The recent product launches go to prove that the company has in its agenda a number of propulsion objectives in which the electric car manufacturing holds only its due importance. Works Cited Alvord, Katherine T. Divorce your Car!: Ending the love affair with the automobile. Gabriola Island, British Columbia: New Society Publishers, 2000. Bannister, David, and Kenneth J. Button. Transport, the Environment and Sustainable Development. London: Taylor & Francis, 1993. Chandler, Alfred D., and Takashi Hikino. Scale and Scope: the Dynamics of Industrial Capitalism. Massachusetts: Harvard University Press, 1994. 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Philadelphia: Kogan Page Publishers, 2006. Sperling, Daniel, Mark A. Delucchi, Patricia M. Davis, and Andrew F. Burke. Future drive: vehicles and sustainable transportation. Washington DC: Island Press, 1995. Steen, Nicola. Sustainable Development and the Energy Industries: Implementation and Impacts of Environmental Legislation. Pentonville Road, London: Earthscan, 1994. Stempel, Robert C. “Fueling the Future: Fossil fuels may go the way of the dinosaur.” Popular Mechanics Sep 2002: 68. Voetcker, John. 2009. “GM’s Second Electric Car After Chevy Volt To Be Cadillac Converj.” High Gear Media. 22 November 2009 Read More