A Gasoline Floor Price for Hybrid Cars

The coverage of this year's Detroit Car Show has focused on hybrids and electric vehicles, with a number of high-profile launches, including the debut of the third generation Toyota Prius. However, as convinced as I am that electric-drive cars represent the future of the car industry and will make important contributions to reducing greenhouse gas emissions and oil imports, the collapse of oil prices has erected a substantial barrier to the rapid market penetration of these technologies. Nor can the answer be simply ratcheting up the nation's Corporate Average Fuel Economy (CAFE) standard, as the New York Times recently suggested. We need a practical way to bridge the gap between consumers' growing interest in electrified vehicles and the economic deterrent posed by the added cost of these complex systems. Rather than taxing fuel itself, as has been widely suggested, we should consider a new hybrid car tax credit based on the price of fuel.

Despite growing interest in hybrids, these vehicles accounted for only 2.4% of the 13.2 million light-duty vehicles sold in the US last year. Although its 2008 sales of around 160,000 units made the Prius the 15th most popular model in the US last year, it did not even make it into the top 20 for December, thanks to slumping gasoline prices and the credit crunch. For that matter, the December monthly figures showed trucks, including SUVs, outselling cars again at 53% vs. 47% of the market, essentially back to their average for 2007. For all of 2008 cars outsold trucks by 51% to 49%, though that included those summer months of $4 gas when you couldn't have given a big SUV away. Perhaps the most encouraging news in this data is that sales of "cross-over" SUVs declined much less than other light trucks to become the largest segment of that market. (Moving someone from a 15 mpg SUV to a 22 mpg crossover saves more gallons of gas than converting a Camry owner to a Prius driver.)

The lackluster hybrid sales at the end of the year shouldn't surprise anyone. Consider the Saturn VUE crossover SUV. The sticker for the hybrid version is $4,880 higher than the base model with the same 4-cylinder engine. Boosting fuel economy from an EPA-estimated combined 22 mpg to 28 mpg saves 117 gallons of gas per year, based on 12,000 miles of annual driving. Yet even if gas were still $4 per gallon, it would take 10.4 years of fuel savings to pay out the hybrid premium. With gas at $1.78/gal., that stretches to 23 years. If the savings at the pump aren't sufficient to justifying spending an extra $5k on the hybrid, a buyer must bet that the combination of higher resale value and lower maintenance costs would close the gap.

How could the government induce more consumers to buy hybrids, even when fuel costs are too low to justify the extra investment? One option is to raise the CAFE standard beyond the 35 mpg target that the industry must meet by 2020. That might force manufacturers to produce more hybrids, bringing their cost down, and sell fewer non-hybrids, which would tighten the market, reducing the effective premium from both ends. The Congress would like to impose that outcome, in any case, as a condition of financial assistance to Detroit. Unfortunately, such a command-and-control approach risks creating another disconnect between car companies and consumers, and the modest fines by which CAFE has been enforced may end up looking more attractive to Detroit than the distortions an unrealistic fuel economy standard could create in their already-strained sales channels.

Another solution would be a big increase in the gasoline tax, or a floor-price tax on gas, to boost pump prices to a level that would ensure high demand for very fuel-efficient cars. As I noted the other day, however, the gas tax looks like a much less effective way to reduce greenhouse gas emissions than a tax on carbon or emissions cap-and-trade that would create a similar disincentive for CO2. Nor does raising the gas tax during a major recession--even if a large portion of the revenue could be returned to taxpayers--look like smart economic policy, when the recent drop in fuel prices is among the few forms of relief actually reaching consumers and smaller businesses.

Perhaps the answer lies in inverting the proposition offered in those car ads we saw when gas prices were rising steadily--the ones that promised your first few years of fill-ups at some low fixed price. To make hybrids more attractive, we could replace the current, expiring hybrid tax credits with a new, fully-refundable tax credit--one that the government pays even if it exceeds your income tax liability for the year--that would create an effective gasoline floor price of $4, but only for the purchasers of hybrid cars. The amount of the credit would be set by the difference between $4 per gallon and the national average pump price for each year, applied to the EPA fuel economy rating of the hybrid purchased. This could easily be made technology-neutral by extending it to any car exceeding the actual new-vehicle CAFE for the previous year, which for the 2008 model year averaged 31.2 mpg for cars and 23.4 for trucks. Even with this modification, the bulk of the subsidy would still flow to the models that save the most fuel.

For example, if we calculated the credit on 10,000 miles of annual usage, a buyer of the new 37 mpg Ford Fusion Hybrid would receive a credit of $600 for 2009, if gasoline remained at last week's average of $1.78/gal for the entire year. Of course, that would be in addition to roughly $260 of actual fuel savings, compared to the 24 mpg non-hybrid Fusion. If gas prices averaged $3 in 2010, this taxpayer's credit would drop to $270, while fuel savings rose to $440. Once gas was back over $4, the tax credit would go to zero.

It sounds complicated, though in practice it would merely be a hedge contract on the price of fuel--in the opposite direction from the ones typically offered to heating oil customers--conferring the equivalent of a set of annual put options on gasoline at $4. It probably would not be any more difficult to implement than a floor-price tax for all gasoline sold, even if the latter were politically feasible or economically desirable. It would also have the benefit of a built-in phaseout, as overall fleet fuel economy increases and future gas prices rise.

Perhaps someone can think of a simpler way to reduce the uncertainty of hybrid car buyers about future fuel prices than by issuing federal gasoline floor price tax credits. What we can't do is merely to hope that gas prices will recover enough to make hybrids and other advanced technology vehicles attractive on their own merits, or to assume that consumers will remain so stunned by last summer's high gas prices that they will buy the most efficient cars possible, even if they don't promise a financial return. This discussion will turn distinctly non-theoretical as soon as the government considers another round of financial assistance for a Detroit that it insists must build as many hybrids as possible.

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Another Tumultuous Year?

Whether or not next week's inauguration of the 44th President of the United States marks the true start to the 21st century, as a Washington Post columnist recently suggested, 2009 could herald momentous changes in long-term energy trends. While a return to the extraordinarily high oil prices we experienced last summer looks improbable, we could yet see a significant price spike as a result of geopolitical events--or a further slide towards $30 per barrel. Developers of alternative energy technologies and projects will be watching Washington intently, in hopes that the expected stimulus bill or separate energy legislation will boost their fortunes and unlock access to persistently tight credit. And against that backdrop, the behavior of consumers in a new economic environment bears watching, as the ultimate source of energy demand.

In no particular order, here's my list of energy trends and events to watch as the year gets underway:

• Oil prices are being squeezed between the weight of accumulating inventories, especially at the Cushing, OK storage that comprises the New York Mercantile Exchange's main delivery point for West Texas Intermediate crude oil, and the anticipation that a combination of OPEC discipline and resurgent demand will tighten markets appreciably later in the year. The resulting contango remains very wide. The prompt contract, for delivery in February, has fallen below $40 per barrel, while oil for delivery in July sells for well over $50/bbl, with next year's crude going for more than $60.
• As I noted on Friday, the gap between oil and natural gas has closed, even as gas has fallen below $5.50 per million BTUs, a level that is providing an energy-price stimulus for industrial and utility customers similar to the one that sub-$2 gasoline gives consumers. Gas is in contango, as well, though hardly as steep as oil. How long will the present US gas supply bubble persist, given the rapid decline rates of many gas wells and the weak finances of many of the big producers?
• The influence of government over energy looks certain to expand this year. Will the stimulus bill satisfy the wish list of alternative energy and environmental advocates, including assistance for struggling ethanol producers, cash subsidies and loan guarantees for wind and solar firms, and big investments in infrastructure, including new long-distance power transmission and a down payment on the "smart grid" of the future?
• An article in this morning's Wall Street Journal raised the prospect of a new wave of energy industry consolidation, similar to the one that created the "Super-Majors" (Exxon-Mobil, BP-Amoco-ARCO, Chevron-Texaco, Elf-Fina-Total) starting a decade ago. The industrial logic is probably there, though any merger would play out in a political context that seems much less likely to be receptive to such combinations, even if the publicly-traded oil companies do account for less than 10% of global oil reserves and less than 20% of production.
• If the financial crisis has pushed geopolitical risk into the background, the conflict in Gaza and the revelation over the weekend that Israel had asked for US assistance in an attack on Iran's nuclear complex should remind us that it hasn't vanished entirely. Although the oil market is in a much better position to forgo Iran's oil exports than it would have been for the last several years, taking 2 million barrels per day off the market--a likely response to any attack on Iran--could still be good for a quick pop of $15-20/bbl, or an extra $0.40 or so per gallon at the pump.
• Last year's weakness in the US dollar contributed to the summer's high oil prices, and the late-year dollar rally helped to unwind the residue of that spike. As the US deficit expands past $1 Trillion next year and into 2010, between fiscal stimulus and falling tax revenues, could the dollar begin falling again, and if so, what would that mean for energy prices? Economists tend to view these deficits as a manageable fraction of GDP. However, in absolute terms they are enormous, and they will compete with deficit spending all over the globe, taking us into uncharted territory.
• Finally, we can't forget about consumers. If the sharp drop in demand--around 6% year-on-year--was the pin that popped the oil-price balloon, will low gas prices begin to revive it? But while today's average pump price for regular gasoline of $1.68/gal. is a whopping $1.42/gal. less than last January and $0.62 lower than the same week in 2007, it surely doesn't look quite so cheap as a fraction of average purchasing power, between declining home values that have dried up the home equity loans with which many consumers were supplementing their income, and rising unemployment. It will take some time to see whether the weak economy and vivid memories of $4+ gasoline have altered consumption patterns permanently, or just temporarily. That will have important implications for environmental policy, too.

It's going to be interesting, for good or ill, and I look forward to continue sharing my perspective on energy and related environmental matters with you, as Energy Outlook begins its sixth year.

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Alternative Energy And Natural Gas

At the end of the first full work week of the new year--a week I suspect I am not alone in having found a bit of a slog--a pair of articles in MIT's Technology Review got me thinking about the under-appreciated relationship between alternative energy and natural gas.

In the first, TR looks back at the energy technology developments of 2008. After noting the volatility of oil prices, they paint a picture of steady progress on many fronts. Nothing stands out as a major breakthrough, though several items, including concentrating solar cells and the scheme for storing solar power using catalyzed room-temperature electrolysis, hold breakthrough potential, if they can be scaled up cheaply and efficiently. With a typical lab-to-market time lag, either one might be a major factor by the late 'teens--or not.

Their emphasis on oil prices suggests that TR, like many others with a keen interest in alternative energy, pays too much attention to the influence of oil prices on alternative energy, and too little to natural gas. Other than psychologically, the price of oil really only matters when competing directly with its products, as biofuels do. If you're generating power from wind, sun, or geothermal heat, it's the price of power from the incremental electricity source that matters, and for the immediate future, that's still the gas-fired turbine. Even electric vehicles, which would certainly displace oil, will depend partly for their attractiveness on the price of electricity, which in many markets will be set by gas-fired power. (I know they're supposed to recharge overnight on under-utilized wind power, but I can't help wondering how many consumers will insist on recharging them as soon as they get home.) The scarcely-noticed Big Surprise of the crude oil spike of 2007-8 was the uncoupling of oil and gas prices. Oil's collapse has restored the premium for its BTUs over those in gas to the level of around 25% or so that prevailed from 2002-2006, after peaking at 150% in August. In order for renewable electricity to thrive, it needs high natural gas prices, not just high oil prices.

The other story in TR that caught my eye also concerns gas, but more directly. It features a company that has investigated bacteria that digest coal underground and turn it into methane. They have figured out how to coax them to produce more of it, faster. If this can be made to work commercially, it could dramatically boost the output of coal-bed methane, which now accounts for 9% of US gas supplies. Moreover, it could help solve the conundrum of how to capitalize on the energy potential of the world's vast coal reserves without derailing efforts to reduce greenhouse gas emissions. This technology might prove especially attractive, once the slowdown in gas drilling caused by the financial crisis deflates the current "gas bubble"--the supply spike resulting from the shale-gas bonanza of the last few years. The success of coal-eating gas bugs, however, would not be good news for renewable power.

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An Ethanol Stimulus?

As the new Congress and incoming administration scramble to craft a stimulus package to lift the country out of the deepening recession, it's understandable that a variety of industries and their trade associations would be lobbying for their share of the expected federal assistance. Many struggling businesses no doubt feel at least as deserving of help as GM and Chrysler. With jobs at stake and pragmatism standing in for principle in this crisis, the Obama team and the Congressional leadership must make some tough calls in a very short span of time. One call that should not be difficult, however, is to rule out any further federal assistance for the struggling ethanol industry.

I'm late to the party commenting on a prospective ethanol bailout. Before New Year's, the Wall Street Journal and Business Week both reported that the Renewable Fuels Association and its members are seeking $1 billion in short-term loans and $50 billion "to develop ethanol technology and new biofuels," though I couldn't find anything on the RFA's website to confirm those figures. Backed by the lobbying muscle of Archer Daniels Midland, their chances of getting at least a portion of their request don't look half bad.

In order to see why a bailout ought to be unnecessary, let's remind ourselves of the federal assistance the industry already receives, summing the amounts for 2009 and 2010 to put them on a comparable basis to the stimulus:

• The largest item is the Volumetric Ethanol Excise Tax Credit, also known as the blender's credit. The 2008 Farm Bill reduced this benefit from $0.51/gal. of ethanol to $0.45/gal, unless the quantity sold falls below 7.5 billion gallons per year, in which case it reverts to $0.51.
• The Energy Independence and Security Act of 2007 (EISA) substantially increased the quantity of ethanol required to be blended into gasoline. Multiplying the minimum volumes for 2009 and 2010 by the blender's credit yields a combined $10.1 billion in assistance. While the ethanol producers don't receive this money directly, it supports the price of ethanol in the market and compounds the demand creation from EISA's Renewable Fuels Standard (RFS).
• Domestic ethanol producers are also protected from foreign competition by virtue of an ethanol tariff of 2.9% and import duty of $0.54/gal. The Farm Bill extended that benefit for another two years.
• As for assistance for advanced biofuels, EISA also authorized at least $595 million for R&D grants covering advanced biofuels, cellulosic biofuels, and biofuel-enabling infrastructure. Meanwhile, the Farm Bill provided a "producer's credit" of $1.01/gal. for advanced biofuel(i.e., not produced from corn starch.)

It's also relevant to consider why the ethanol industry is in trouble, just now. After being squeezed between spiking fuel and grain prices for the first two-thirds of the year, it faces a shrinking motor fuels market, in direct competition with a glut of wholesale gasoline that for weeks was selling for less than crude oil. But although these circumstances might appear at first glance to have been beyond the control of the industry, that's not entirely true. If ethanol producers had expanded at a slower pace over the last two years, instead of outracing the rising RFS mandate, there would be no ethanol surplus, their margins would be higher, and they would have less debt to service.

So that leaves us with an industry that will receive nearly $11 billion of federal assistance without a dime from the stimulus, and whose customers are required by law to buy most of their output. The excess capacity that is crushing its margins looks more like a manifestation of classic manufacturing boom-and-bust cyclicality than a result of the financial crisis, per se. If anything, the current slow-down might be an excellent time to prune the oldest, least efficient ethanol plants, to prepare the industry to compete with the next generation of biofuels from non-food sources, for which R&D is already well-funded by the government, venture capital, and the oil industry. That shakeout won't happen if producers are propped up with still more taxpayer money.

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Choosing A Priority

The new year brings no shortage of energy concerns, even though oil prices are much lower than last January. Instead of enumerating those that I think merit particular attention, for today I'd like to focus on an over-arching energy policy choice facing the US. The recent flurry of calls for a quick increase in the tax on gasoline highlights the need for us finally to decide whether energy security or climate change constitutes the higher priority for urgent action. Altered circumstances have undermined the natural linkages between these two problems, and the financial crisis and recession make it not just impractical, but undesirable to attempt to tackle both with equal vigor.

During the holidays I received emails from friends and other readers pointing out various op-eds calling for a big increase in US gas taxes. The arguments in favor of such a measure include reducing US oil imports from unfriendly nations and making fuel-efficient cars and other advanced energy technology more attractive for consumers and investors. The current low gas prices would allow such a tax to be imposed with much less pain than only a few months ago. Yet as Tom Friedman's New York Times column on the subject recognized, this entails an explicit choice between taxing gasoline and taxing the greenhouse gas emissions linked to climate change. Friedman has been a consistent supporter of higher gas taxes, and he still comes down on that side of the argument. For many reasons, I disagree, but it's even more important to choose one strategy or the other than to continue assuming that we can do both, if we wish.

The need for a choice between the two is rooted in our basic energy balance and the trade-offs that a carbon tax or a gas tax would stimulate, and in the potential of alternative energy sources to displace coal, oil, or both. Oil today accounts for 39% of US primary energy consumption and 15% of US energy production--more like 23% if natural gas produced from oil fields is included. Coal makes up another 22% of energy consumption and nearly 33% of production. Simply put, we can't grow the 1% of current US energy production from wind, solar and geothermal power fast enough to replace the 62% of energy consumption supplied by both oil and coal in the foreseeable future, never mind the enormous problems of technology and capital turnover involved in trying to substitute renewable electricity for the liquid transportation fuels, lubricants and petrochemicals that account for all but a small fraction of our oil consumption. Even doubling current ethanol production, which hinges on as yet uncommercial cellulosic biofuel technology, would only back out around 2% of US oil use, at 2008's reduced rates. We also need to be clear that putting a price on carbon emissions will have a much bigger impact on our coal use than on our oil imports.

Throughout 2007 and into 2008, as oil prices climbed and concerns about climate change mounted, while the economy remained surprisingly resilient, it was hard to choose between the importance of reducing oil imports and reducing greenhouse gas emissions, and it looked possible to do both. Moreover, energy security and climate change appeared positively synergistic, with reductions in oil consumption expected to reduce emissions and emissions-reducing policies seen as cutting oil consumption, as a side-benefit. But while those physical synergies still look attractive, the rapid decline in oil prices has drastically reduced the urgency and near-term economic benefits of tackling our oil dependence, particularly during what is shaping up to be the deepest recession since World War II. That makes the emissions reductions associated with reducing our oil imports more expensive, compared to other reductions.

Taxing gasoline, rather than carbon, would certainly reduce the greenhouse gas emissions from our use of petroleum, but it could easily result in largely offsetting emissions increases elsewhere, as industry turned increasingly to coal and natural gas for feedstocks, and as biofuels--which would likely be exempted from the tax increase--would mainly be produced in the near term from food crops that require significant inputs of energy-intensive fertilizer and cultivation. Sales of efficient cars would be helped, no doubt aiding a Detroit that seems certain to be forced to make more of them, as a condition of further federal assistance. However, the accompanying fleet-efficiency gains will occur slowly, as long as total car sales--and thus the total fleet turnover rate--remain depressed by a weak economy.

That brings us to the direct economic impact of a gas tax. Until a federal stimulus is passed and actually reaches consumers and businesses, cheap gas and diesel fuel are the stimulus, to the tune of roughly $37 billion/month compared to July/August 2008 prices. I take suggestions that a higher tax on petroleum products could be made revenue-neutral--that is, returned dollar-for-dollar to consumers/taxpayers through cuts in other taxes--with more than a grain of salt. With all due respect to the incoming Congress, that institution has not demonstrated the requisite spending restraint, faced with the prospect of a major new revenue source, in many years. It certainly wasn't on display in last year's debate on the Boxer-Lieberman-Warner emissions cap-and-trade bill.

Although I expect oil prices to recover, once the economy does, the recession presents us with a unique opportunity to begin realigning the entire economy, not just to use less oil as it returns to growth, but to be much less carbon-intensive, overall. With greenhouse gas emissions from the electricity sector exceeding those from transportation by at least 20%, and with renewable power sources looking much more viable and sustainable than current-generation biofuels, focusing on climate change and the gradual and systematic de-carbonization of the economy now seems like a better priority than "energy independence," which has remained unattainable for more than a generation. It will be hard enough for the Obama administration to determine how aggressively to pursue climate policies in the current environment, without the distraction of a gas-tax debate. And while energy security remains vitally important, in its broader definition, it can be achieved for now through the same strategy of supplier diversification that served us so well after the energy crisis of the 1970s-80s.

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Energy Lessons of 2008

A year ago, I looked back on 2007 and ahead to 2008, a year that has defied the predictions of most observers. Although I can't claim to have foreseen the possibility that oil would break $140 and $40--from opposite directions--in the same year, I worried about energy market volatility and cautioned that risk cuts both ways. That seems equally appropriate advice today, when markets are focused on the downside, and "confirmation bias" is such a powerful force. But while we shouldn't expect a repeat of the wild ride of the year now ending, the experience has provided some expensive lessons about energy markets. The following is a non-exhaustive list of those that struck me:

1. Demand matters as much as supply in determining prices. The difference between oil at $145 per barrel and $40 is only a couple of percent of global demand, or more precisely a swing between steady growth of 1-2% per year and a shrinkage of similar magnitude.


2. Speculation can amplify prices and market volatility, but it can't override a dramatic shift in the underlying fundamentals of supply or demand. Leverage increases not only the magnitude of speculative gains and losses, but apparently also the speed of the shift from one state to the other.


3. When prices have been rising steadily, commodity price hedging can look like a sustainable revenue source--almost a perpetual motion machine--until the trend breaks. Then we see that the main benefit of hedging is to smooth out cash flows and enable firms to take on risks they couldn't bear otherwise. Used improperly, it's just an elaborate form of speculation, and as risky at Las Vegas.


4. Fundamental price imbalances between commodities that are substitutes for each other, however imperfect, don't persist indefinitely. For much of the year, natural gas traded for less than half the energy-equivalent price of oil. As of Friday, this relationship had closed to about an 11% discount for gas vs. oil.


5. High oil prices don't automatically make alternative energy sources competitive. For the last several years many alternatives faced higher construction costs, as they competed for some of the same inputs (materials and workers) as new oil and gas projects, while alternatives with low "net energy" or Energy Return on Energy Invested (EROEI) saw their operating costs rise in tandem with oil and gas prices.


6. In particular, investors in corn ethanol production found they were making two bets: one on the difference in price between food and fuel and another on the difference between petroleum products, with which ethanol competes, and natural gas, of which it consumes large amounts, directly and indirectly. (See #4 above.)


7. Government incentives and mandates can help to create a market for alternative energy, but they cannot guarantee its profitability, particularly when capacity is added faster than mandated targets rise, or than existing infrastructure can accommodate. The recent Chapter 11 filings of VeraSun and several other ethanol producers are evidence of this.


8. The cost of capital turns out to be as important as the cost of oil for the expansion of all forms of energy, conventional and alternative alike.

I'm sure I've missed some important learnings in this quick tabulation. Next week I'll look at what the coming year might bring, or at least what bears watching. In the meantime, I wish my readers a happy, healthy, and more prosperous New Year. Let's hope the economic consensus is as wrong about the length and severity of the contraction we're in, as it was about the prospects for a soft landing from the bursting housing bubble.

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New York Preview: 2009 Porsche Boxster RS 60 Spyder Limited Edition

It’s no secret that Porsche’s Boxster was inspired by the German sports-car maker’s classic 550 Spyder racing model. And it’s also no secret that Porsche loves to run limited-editions of its popular roadster. The first generation Boxster (that’s 986 for those in the know) saw a special 550 Spyder commemorative edition made in limited numbers, while the current (987) Boxster has a North American-only special edition on the market now, of which only 500 examples were produced - all in Porsche’s GT3 RS Orange paint.

Now, yet another special edition has been produced that once again harks to the Boxster’s heritage. Based on the current Boxster S, the Boxster RS 60 draws its inspiration from the 550 Spyder’s successor, the Type 718 RS 60 Spyder. Produced for the 1960 racing season in which numerous class wins were achieved, the 718 RS 60 Spyder became known as a dragon-slayer after it scored its first overall victory at the 1960 12 Hours of Sebring, dominating over rival cars possessing significantly more power. And that’s kind of the point with the Boxster RS 60 Spyder as well.

Porsche won’t be coming to the Bologna Motor Show in Italy empty handed. Instead, the souls from Stuttgart will be unveiling a limited edition Boxster S that draws inspiration the automaker’s 1960 win at the 12 Hours of Sebring in the Type 718 RS.

The Boxster RS 60 Spyder comes swathed in GT Silver Metallic paint with a Carrera Red interior to match the #42 car it’s attempting to channel, along with a serialized silver plaque on the dash proclaiming its limited numbers and a new front spoiler. But it’s not just a bit of extra glitz heaped atop the already competent Boxster S. The stock rollers are swapped in favor of a set of 19-inch Porsche SportDesign alloys, the suspension benefits from Porsche’s Active Suspension Management system (PASM) and the flat-six is uncorked with a sports exhaust that bumps output to 303 HP.

Appropriately, only 1960 units will be available worldwide, with a base price of 53,000 euro abroad.





PRESS RELEASE

Porsche Boxster RS 60 Spyder Echoes Sporting Heritage

Porsche is presenting a new version of the mid-engined Boxster roadster at the Bologna Motor Show in Italy on December 5 - 16. In its distinctive design, features and philosophy, the Boxster RS 60 Spyder echoes the classic motorsport era of the 1960s, and in particular the success of Porsche sports cars during that period.

After countless class wins around the circuits of Europe and America, in 1960 the Porsche Type 718 RS 60 Spyder beat competitors with much larger engines to score its first overall victory in the 12 Hours of Sebring in Florida, USA, one of the most prestigious long-distance sports car races, courtesy of Hans Herrmann and Olivier Gendebien.

The new Boxster RS 60 Spyder reflects the sporting character and design purism of that successful mid-engined two-seater sports racing car. The RS 60 Spyder is based on the acclaimed Boxster S model, but differs significantly in terms of its performance and features.

Externally, the RS 60 Spyder is distinguished by a unique front spoiler and 19-inch diameter Porsche SportDesign alloy wheels, which spacer plates have moved outwards purposefully in the wheel arches. A modified sports exhaust system combined with dual tailpipes increases engine output to 303 bhp as well as adding further definition to the car’s appearance. Completing the sporting orientation to the driving experience is Porsche Active Suspension Management (PASM) which adds further dynamism to the Boxster chassis.

Distinctive GT Silver Metallic paintwork is accentuated by the contrasting natural leather interior in Carrera Red. The roof is also finished in red. As an alternative, there is also the choice of Dark Grey natural leather in conjunction with a Black roof. The tail light clusters are also finished in red.

Inside, door trim strips made of stainless steel proudly bear the “RS 60 Spyder” model designation. The leather interior trim is further distinguished by a textured surface on the centre sections of the sports seats and the centre door linings, and this also extends to the steering wheel rim and handbrake lever. Completing the sporting ambience is a bespoke gear lever.

Complementing the exterior appearance, the faces of the instrument dials have a GT Silver Metallic finish and with this model not having the usual hood over the instrument cluster, the large central rev counter and the two circular dials on either side bring something of the flair of a racing car to the cockpit.

Further features include the windscreen surround finished in black, as well as the centre console, the seat backrests and the roll hoops all finished in GT Silver Metallic and thus harmonising with the seat belts also finished in Silver.

Reflecting its model designation, the Boxster RS 60 Spyder is limited to 1,960 examples, each one proudly bearing a silver-coloured plaque on the lid of the glove compartment.

The Porsche Boxster RS 60 Spyder will be priced from £45,400 including VAT, and deliveries in the UK and Ireland begin from March 2008.

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