The unsustainable history  of SUV (Sports Utility Vehicle)

Posted on 04/04/2018 Updated on 04/04/2018

SUVs (Sports Utility Vehicles) are becoming increasingly popular – a paradox!

Before US car companies developed the new car type- the SUV- there were ingenious constructions of cars with fuel consumption of about 1.2 liters per 100 km. This was in line with rising mobility demands, dwindling supplies of oil, and growing concerns about climate change. Although the SUVs required on average 10 times as much fuel, the US government favored the SUV, offered tax incentives and stopped promoting the further development of fuel-efficient and electric cars. The SUV was a triumphal development,  still not ending.  Moreover, the US government called on its citizens to buy a house outside the city and offered low down payment and interest on the loans. The author of this posting himself acquired a house near Philadelphia, where the bank granted him a 120% loan with a low-interest rate and, also, put a large tax-exempt SUV in front of the garage door. The author lived with the feeling of being able to afford everything in the USA. There were hardly any reasons to pay much attention to “sustainability” and environment. One looked fascinated at global finance capitalism and was annoyed only by the outrageous bonuses to the acrobats of the financial circus. These magicians wrapped the mortgages in Christmas paper and sold them on to banks around the world to reduce the risk of US state-owned mortgage lenders (Fannie Mae and Freddie Mac). In 2007 and 2008, the mortgage bank crisis broke out, which in turn disrupted the global financial system. The investment banks, which were commissioned by the US government, bet for themselves that the mortgages become worthless. Back to SUV! The aforementioned urban sprawl and the tax-subsidized fuel-cutting SUV combined with the shock of crude oil prices in 2007 and 2008 and mortgage interest rates triggered the crisis, which can be outlined as follows (Ernst Ulrich von Weizsäcker, Factor Five, The Formula One sustained growth, 2009): 2007: world oil prices go crazy -> long-distance commuting becomes a nightmare in the US -> the pumped-up houses lose value -> subordinate mortgages turn into financial junk -> mortgage banks crash. This triggers an avalanche, many car stocks are scrap. Over the next 20 years, the shift to electric motors and digitization will lead to further economic upheavals that require a transformation of capitalism (destructive innovation, Joseph Schumpeter).

Roland Leithenmayr VfV