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United States | | 2006-01-05 |
Source: Detroit News

Carmakers fight to be king of green

With all the buzz surrounding hybrids, just about every automaker is trying to carve out a piece of the burgeoning market for environmentally friendly cars and trucks that harness electric power to boost fuel-efficiency -- including some which harbor misgivings about the technology.

At the upcoming North American International Auto Show, General Motors Corp. will unveil a bargain-priced, gas-electric Saturn Vue Green Line, while Toyota Motor Corp. -- the leader in the field -- will display a hybrid version of its best-selling Camry.

Ford Motor Co., the first U.S. automaker to sell gas-electric vehicles, is going a step further with the sporty Reflex show car featuring a diesel-hybrid powertrain.

Over the next two years, the number of hybrid models on sale will more than triple to include gas-electric versions of the Lexus GS450, Hyundai Accent, Kia Rio, Chevy Tahoe, GMC Yukon and Chevy Malibu, according to consulting firm J.D. Power and Associates. Using technology developed for Ford's Mercury Mariner hybrid sport utility vehicle, the automaker's Mazda affiliate will launch a hybrid version of the Tribute SUV.

Former skeptics such as Nissan Motor Co. and DaimlerChrysler AG also are developing hybrids, the fastest-growing segment in the market for fuel-efficient alternatives to cars and trucks powered by conventional gas engines.

Nissan CEO Carlos Ghosn previously said hybrid technology was costly and complicated. But last year, he clambered on the bandwagon, and Nissan plans to offer a hybrid version of its popular Altima sedan in 2007. After pushing fuel-efficient diesel engines, the Chrysler Group is developing a gas-electric Dodge Durango SUV.

Some critics grouse that the fuel-savings don't cover the higher cost of the hybrids, but demand for gas-electric cars soared last year as automakers rolled out models and gas prices spiked to record highs above $3 a gallon.

In a sign of how effectively hybrids captured the moral high ground, all five finalists for Green Car Journal's 2006 Green Car of the year are hybrids: the Honda Accord and Civic hybrids, and the Lexus RX 400h, Toyota Highlander and Mercury Mariner SUVs.

Technology enthusiasts and hard-core environmentalists initially embraced hybrids, but studies show mainstream buyers are now putting hybrids on their shopping lists.

"It looks like a good third of people would consider a hybrid next time they buy," said George Peterson, president of Tustin, Calif.-based consulting firm Auto Pacific.

In 2005, a year when Detroit's automakers struggled to sustain sales, Toyota's Prius hybrid was the fastest-selling model in the market, spending an average of just two days on dealer lots, according to J.D. Power.

In less than seven years since the U.S. launch of the first hybrid -- the quirky Honda Insight -- sales of gas-electric vehicles have surged from fewer than 20,000 in 1999 to an estimated 200,000 in 2005. J.D. Power predicts hybrids will triple their share of the U.S. auto market from one percent last year to 3 percent by 2008, even though they cost thousands of dollars more than similar vehicles powered only by internal combustion engines.

However, as it remains uncertain which technologies will dominate ultimately in the effort to cut vehicle emissions, automakers are also investing in other promising alternatives, such as new, cleaner and quieter diesel engines, fuel cell-powered vehicles and innovative technological combinations.

Exploring all options

"Our technology strategy is, in the near term, to improve our gasoline and diesel engines, and for the medium term, we're heavily focused on hybrids," said Larry Burns, GM vice president of research and development.

For the long run, GM is sticking with its belief that hydrogen-powered fuel cells hold the answer. "In every study we've done, fuel cells surface as the most promising long-term pathway for the industry -- even if you use fossil fuels, like natural gas, as the source of hydrogen," Burns said.

Currently, though, researchers have not figured out affordable ways to store and transport hydrogen safely to a large network of fueling stations. Major automakers have developed hydrogen-powered vehicles but are testing them in fleets, such as city bus systems, where hydrogen storage and fueling can be carefully controlled.

At the Detroit show, Ford will unveil an emission-free vehicle with an internal combustion engine that can run on gas, ethanol or hydrogen.

"Hydrogen is often seen as a long-term solution, and we recognize as a business that you don't invent an infrastructure overnight," said Graham Hoare, Ford's director of powertrain, advanced and research engineering. "What we're trying to demonstrate is that hydrogen can be used to power mainstream products."

Germany's BMW also has developed a car equipped with an internal combustion engine that runs on hydrogen -- but the Bavarian automaker is now hedging its bets and has teamed up with GM and DaimlerChrysler to develop hybrid powertrains, too.

Honda, a pioneer in hybrid technology, has developed a fuel-cell car that runs on hydrogen. It will showcase its vision for cleaner energy at the show by displaying its latest Home Energy Station, a generation unit which draws on natural gas as its primary energy source to provide enough hydrogen to power a vehicle and supply electricity for an average-size home.

Ford is aggressively pursuing gas-electric hybrid technology, pledging to produce a quarter of a million annually by 2010 and beefing up its ranks of hybrid specialists. But with the Reflex, the Dearborn automaker is also refining its diesel technology. "I think there'll be both diesels and hybrids around," Hoare said.

In Europe, vehicles with new and refined diesel engines now account for roughly half of all new cars sold. Gas is highly taxed, costing twice as much in some European countries as it does in the United States. Consumers generate big savings by driving vehicles with diesel engines, which are about 30 percent more fuel-efficient than gas engines.

In the U.S. light vehicle market, however, sales of diesel-powered cars have been hampered by strict regulations on nitrous oxide and particulate emissions -- which are spewed in larger amounts by diesel-powered vehicles than cars and trucks that run on gas. Most European automakers do not offer diesel cars in California and other states that have adopted its emission standards.

But DaimlerChrysler, whose Mercedes-Benz division has labored for years to produce cleaner diesel cars, is expected to announce a technological breakthrough at the show that would allow it to market diesel cars in all 50 states.

Green is the new black

While diesel specialists face an uphill battle, hybrid vehicle manufacturers are benefiting from tax breaks and other incentives, such as access to carpool lanes in major cities, for drivers of gas-electric cars.

Pointing to the months-long waiting lists for the Prius, many industry experts forecast hybrid sales will surge as more manufacturers enter the segment, increasing the supply of available models.

But not all hybrids are selling as briskly as the $21,725 Prius, which is unmistakably a hybrid. "There's no easy competitor to the Prius, and there's no non-hybrid version to compare it with," said Mark McCready, director of pricing strategy at Carsdirect, an online car-shopping site.

By contrast, "the Accord (hybrid) is selling at large discounts, and the Escape is going for the (discounted) supplier price, with $1,000 in dealer incentives."

Demand is strong for Honda's new Civic hybrid, but there are plentiful supplies of Toyota Highlander and Lexus RX 400h SUV hybrids, McCready said. "The price point will be extremely important for hybrids to continue to sell."

Critics of hybrid technology -- particularly Toyota's full-hybrid system, whose gas and electric motors can independently power the car -- complain that the fuel savings don't cover the price premium.

Dave Markus, a retired policeman from Depew, N.Y., and two-time hybrid owner, estimates it will take 3 1/2 years to recoup the additional $3,000 he spent on a 2006 Civic hybrid. "Other people who do the math may say it's not worth it," Markus said.

But the fuel savings weren't the only reason he considered hybrids. "You stop less often for gas. You can go 500, 550, even 600 miles on a tank of gas if you want to," he said. He calculates that the Civic gets 49 miles to the gallon in combined city and highway driving.

"I like the idea of being less reliant on foreign oil," he added. Many hybrid owners describe a fascination with the new technology, while other hybrid owners express altruistic motives. Few admit to a desire to show off their green credentials -- but Peterson suspects that underlies the success of the Prius. "It's a unique looking car," he said. "People are able immediately to say: that person's an environmentalist."

If automakers have underestimated the "show-off" factor, they may be in for a disappointment, Peterson says. The newest models -- and those in the pipeline -- are hybrid versions of existing vehicles with only discreet indications -- a small badge or minor name change -- of the dual powertrain.

Because most hybrid vehicles are equipped with gauges showing when, and under what circumstances, drivers generate the biggest fuel savings, their owners have grown aware of the extent to which driving habits also influence fuel-efficiency.

Steven Turgeon of Atlanta has boosted the mileage on his 2004 Civic hybrid to more than 60 miles per gallon this winter from 55 two years ago by driving less aggressively.

"Our family also has a 2001 Grand Caravan," Turgeon said. "Using the same lessons learned in our hybrid car, we have raised its (fuel) economy from about 16 mpg to the lower 20s, simply by dumping the aggressive driving habit."



Source: Detroit News