Is Detroit's Horsepower War Doomed?

A 650-horsepower Corvette begs the question: Will this end well?

Jun 22, 2014 at 4:10PM

Images

The 2015 Chevrolet Corvette Z06 will generate 650 horsepower from its supercharged 6.2-liter V8 engine, General Motors recently confirmed. Source: General Motors Co.

How much horsepower is too much?

High-performance car fans might be quick to answer that there's no such thing as "too much" power. And lately, automakers are rushing to cater to those fans: Just in the last month, GM has announced that the 2015 Chevrolet Corvette Z06 will have a whopping 650 horsepower -- a number that could be eclipsed when Fiat Chrysler (NASDAQOTH:FIATY) reveals the final horsepower numbers for the ferocious new "Hellcat" Hemi V8 that will power the top-of-the-line 2015 Dodge Challenger.

Dg

So far, Chrysler has only said that the 2015 Dodge Challenger SRT Hellcat will have "over 600" horsepower -- but some reports suggest that the final number could be considerably higher. Source: Fiat Chrysler

Those are numbers that put the top-tier exotic cars of just a few years ago to shame. And there's more on the way: Higher-powered versions of the new Ford (NYSE:F) Mustang could eventually top the Hellcat, while the German luxury-car makers are rushing to add turbos to their already-high-powered premium sedans. Even Nissan's (NASDAQOTH:NSANY) Infiniti could soon be getting in on the game.

Motley Fool senior auto specialist John Rosevear loves fast cars as much as anybody, and he's owned a bunch -- but as an investor, he's starting to wonder if things are on the verge of getting out of hand. Products like the Corvette Z06 and the Challenger SRT Hellcat are very profitable for their makers, and great marketing tools for their brands. But in an era when fuel-economy regulations are rapidly tightening and safety concerns are higher than ever, is a full-blown horsepower war inviting trouble -- or is it just good old-fashioned tire-smoking fun?

A transcript of the video is below.

Why "Made in China" is on the way out
China is overtaking the U.S. as the next global superpower... right? I've heard that too, but I know there's one HUGE reason why China is actually falling BEHIND...and fast. It's not a military buildup or giant new oil fields -- it's a brand-new technology being used by everyone from Ford to Nike to the U.S. military, and the payout for investors could be massive. Watch The Motley Fool's shocking video presentation today to discover the new garage gadget that's putting an end to the "Made In China" era... and learn the investing strategy we've used to double our money on these 3 stocks. Click here to watch now!

John Rosevear: Hey Fools, it's John Rosevear, senior auto specialist for Fool.com. General Motors dropped some product news a couple of weeks ago that got a lot of attention among high performance enthusiasts, and I think it's worth a look from us as well.

Back in January, GM revealed the 2015 Chevrolet Corvette Z06, a super high performance version of the new Corvette that GM launched a year ago. I was there with my Foolish colleague Rex Moore and we brought you some coverage of that at the time.

Now, the Corvette Stingray that they introduced last year has been a big sales success, at least by Corvette standards, and now GM is going to build on that with the Z06. We knew it was going to be a monster but we didn't know how much of a monster, GM didn't release horsepower ratings for it when they showed it in January.

Well, now they have, and now we know that the supercharged 6.2 liter engine in the new Z06 will make 650 horsepower at 6,400 rpm and 650 foot pounds of torque at 3,600 rpm.

Folks, that's a whole lot of power.

GM said it's the most powerful engine ever from Chevrolet. GM's press release points out that it blows away the Porsche 911 Turbo S by 90 horsepower and 134 pound feet of torque, and it's almost certain to blow away the Porsche in price too, but in the other direction, the 911 Turbo S starts at $182,700. GM hasn't announced pricing for the new Z06 but it's likely to be half of the Porsche's price tag, probably less, the best guesses are that it will come in around $80,000 give or take.

It's a cool product, but step back a minute.

There's one heck of a horsepower war going on in the global auto business right now that has been facilitated by the technology that has come into play over the last several years. Cleaner-burning engines can generate more power while still complying with tough emissions regulations, and more sophisticated computer controlled handling aids, like anti skid systems and so forth, have made these new super-powered cars safe for ordinary people to drive, or at least a lot safer.

But this is just the latest in a lot of high horsepower announcements, we've been talking about the new Hellcat engine that Fiat Chrysler is introducing to the Dodge brand, it's a supercharged 6.2-liter version of the Hemi V8, that'll have over 600 horsepower, again they haven't said how much, and Ford just ended production of the top of the line Shelby GT500 version of the outgoing Mustang, which had 662 horsepower, and it's a safe bet that they'll do something even wilder for the all-new Mustang in a year or two.

Meanwhile, cars like the BMW M5 which has 560 horsepower have upped the game in luxury, and a version of this new Corvette engine might end up in the next Cadillac CTS-V, the old one had a mere 556 horsepower and GM has hinted that the new one will have more.

Now, I personally like high horsepower cars, I own a CTS-V, and I know that these are very profitable products as well as great marketing tools for these brands, but as an investor I have to wonder where this ends. How much horsepower is too much? If you're watching this on Fool.com, scroll down to leave a comment and let me know your thoughts. Thanks for watching.

John Rosevear owns shares of Ford. The Motley Fool recommends Ford. The Motley Fool owns shares of Ford. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich" rated The Motley Fool as the #1 place online to get smarter about investing.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of fool.com.

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to www.fool.com/beginners, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. It's also featured on several dozen radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at www.fool.com/podcasts.

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.


Compare Brokers