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~~~ Hybrid Cars Newsletter: Issue No. 0046 ~~~
Moderator: Bradley Berman [email@example.com]
IN THIS ISSUE:
Carmakers Shift Hybrid Plans
They said they wouldn’t do it, but Honda and Nissan are now considering plug-in hybrids; Mazda will build its first standard hybrid; and Toyota is thinking about a hybrid RAV4.
Auto Engineers See Slow Road to Green Car Future
Press releases and concept car unveilings for whiz-bang green cars are exciting; however, deploying the technology takes time, according to auto engineers gathered at their annual conference.
Hybrid Policy: Two Steps Forward, One Step Back
President Obama just bought 2,500 hybrid sedans with federal stimulus money. But the biggest tax credits available to consumers these are days are for hulking, low-volume, clean diesel or hybrid SUVs.
Garbage, Fuel and Economics: An Interview with Arnold Klann
Arnold Klann, CEO and co-founder of BlueFire Ethanol, told us that the credit crunch has significantly delayed progress on cellulosic ethanol projects.
Chinese Scare: The EVs are Coming!
The New York Times warns that electric cars from China pose a threat to Detroit. But maybe existing hybrid and electric car players in Japan are more of a concern.
Hybrids in Motorsports Shift into High Gear
Green developments in the world of motorsports, from NASCAR and Formula 1 to Champ Car and Le Mans.
Greetings, Hybrid Car Enthusiasts,
The road toward sustainable mobility continues to wind and curve in unpredictable ways. Car companies swear off a particular technology and design one day, and embrace it the next. Federal policies designed for one set of market conditions make no sense when the economy changes. Timelines for green cars and green fuels can quickly shift by a few years, and nobody stops to share the news with consumers. In this issue of our newsletter, we’ll make our best effort to correct that situation. Enjoy.
Carmakers Shift Hybrid Plans
In the decade since hybrid cars appeared on the scene, critics dismissed gas-electric cars as cute science projects, then scoffed at them as fringe products for tree huggers, and more recently characterized the hybrid as a “bridge technology”—a euphemism for a second-rate technology that briefly serves a purpose until it can be replaced with something better. But recent statements from major auto executives could lead one to see that bridge look more and more like the Golden Gate—very long with many lanes. Here’s a quick sampling of news.
Honda and Nissan Change Their Mind about Plug-in Hybrids
Honda has been banking on a transition to fuel cell cars as the long-term strategy for sustainable mobility. Nissan has been primarily moving toward pure battery-electric vehicles. Executives from both now are suggesting that plug-in hybrids might be a smart idea. Minoru Shinohara, Nissan corporate senior vice president, said that plug-in hybrids will be an important transition solution to the pure electric vehicle because they don’t need an extensive public charging infrastructure. In late 2007, Honda President Takeo Fukui told The Wall Street Journal that plug-in hybrids were “unnecessary.” Last month, he said Honda will be ready with fuel cell cars for when the price of oil skyrockets. But until then, he is “thinking about plug-in hybrids.”
Mazda Flip-Flops on Hybrids
In the March 30 issue of Automotive News, Yuji Hara, Mazda managing executive officer, criticized hybrids as a fleeting “mood” of a “brand society.” A few weeks later at the New York Auto Show, Mazda CEO Takashi Yamanouchi committed to producing hybrid gas-electric cars by 2015. But Yamanouchi’s view is not especially gung-ho. He predicted that hybrids will represent no more than 10 percent of worldwide auto sales by 2015, and said, “We’re focusing on the 90 percent.”
Toyota Hybrid Manager Hints at RAV4 Hybrid
Toyota plans to produce a hybrid version of the RAV4 small sport utility vehicle, according to Koei Saga, Toyota managing officer of hybrid system development. Saga was quoted by Dow Jones as calling for a RAV4 Hybrid to be offered in China “as soon as possible.” Saga did not indicate specific intentions or dates to bring a RAV4 Hybrid to the United States—but the US is by far the largest global market for gas-electric vehicles.
Auto Engineers See Slow Road to Green Car Future
The theme of this year’s annual meeting of automotive engineers was “Racing to Green Mobility.” The unlikely headliner of the event—the 2009 World Congress of the Society of Automotive Engineers held from April 20 to 23—was California Governor Arnold Schwarzenegger and the Hummer. The governor kicked off the conference by pointing to shortcomings in federal energy policy, while overlooking his role as the most famous promoter of the ultimate gas-guzzler. “There is nothing wrong with the Hummer. It’s a great vehicle,” he told The Detroit News. “We should change the technology within those vehicles.”
But in many panels, presenters cast doubt on consumers’ willingness to pay for those green technologies—while others questioned the viability of electric cars, the technology du jour. “We’re all stampeding toward an electric vehicle future. I’m not against that…but we don’t know where that could end up yet,” said MIT’s John Heywood. “There are a lot of problems along the way. The primary one is the cost of these vehicles, and there are some major infrastructure questions as well…To assume this can take over and dominate, that’s a pretty naive assumption at this point.”
On Hybrid Incentives: One Step Forward, Two Steps Back
President Barack Obama announced on April 9 that the U.S. General Services Administration would order 17,600 fuel-efficient vehicles—including hybrids—from GM, Ford, and Chrysler. The purchase goal is fuel economy that’s 10 percent higher than the vehicle being replaced. The first step was an order of 2,500 hybrid sedans on April 15. Qualifying cars include the 2010 Ford Fusion Hybrid, the 2009 Chevrolet Malibu Hybrid, and the 2009 Saturn Aura Hybrid.
The total cost of $285 million would come from the $787 billion economic stimulus bill passed by Congress last month. A statement from the White House said the entire purchase will “reduce gasoline consumption by 1.3 million gallons per year and prevent 26 million pounds of carbon dioxide from entering the atmosphere.”
While the federal government is using stimulus money to buy its hybrids, individual consumers won’t get a dime in their pockets for buying the most fuel-efficient hybrids. The Energy Policy Act of 2005 had produced tax credits for the Toyota Prius, Honda Civic Hybrid and other gas-sippers—but that legislation set a limit of 60,000 for any manufacturer, after which a phase-out period begins. Toyota and Honda hybrids no longer receive any tax credit. Ford reached the 60,000-limit in fall 2008, so tax credits for Ford hybrids will be entirely phased out by April 1, 2010.
But the Energy Policy Act awarded sizable credits for buyers of so-called “clean diesel” vehicles. That has left the American consumer in the bizarre situation: The 50-mpg Prius carries no tax credit, while $1,800 goes to buyers of the Mercedes GL320 Bluetec, a $60,000-plus hulking diesel SUV that gets 17 mpg in the city. Other pricey clean diesel and hybrid SUVs—with fuel efficiency ratings in the teens and low-20s—are also still eligible for tax credits.
Get the details:
Garbage, Fuel and Economics: An Interview with BlueFire Ethanol’s Arnold Klann
In recent years, the lofty promise of corn-based ethanol has come crashing down to earth. Once considered a real option for reducing American dependence on foreign oil, corn ethanol is now commonly criticized as a poor replacement for petro-based vehicle fuels, and an environmental and energy washout. On the other hand, so-called cellulosic ethanol—made from materials such as wood chips and switchgrass—continues to be championed as the holy grail of biofuels. To get a better understanding of the current state of the cellulosic ethanol industry, we spoke with Arnold Klann, CEO and co-founder of BlueFire Ethanol.
HybridCars.com: What’s been the impact of the recession on cellulosic ethanol projects, and specifically on BlueFire?
Arnold Klann: It’s been the lock-up in the credit markets. There is no money. Even with the loan guarantees out there from (the U.S. Departments of Agriculture and Energy), the banks are very reluctant to lend the money right now. I’m not aware of any projects that have been financed since the first of the year.
In September 2006, BlueFire had a goal of constructing 20 biomass-to-ethanol plants by 2012, and to produce 1.5 billion gallons and yield $2.7 billion in gross revenue, all by 2012.
It’s not going to happen. When we did that projection, we felt that we could get projects going in the ground in the beginning of 2007. Right now, we would move that schedule out about five years.
How should the public think about cellulosic ethanol, considering that goals set for 2012 look more like 2017?
We have a very irrational market in many respects. On one hand, we’re worried about energy security issues. We’re worried about carbon going into the atmosphere because we believe that global warming is happening. But we’re not prepared to finance those risks to build facilities to take care of those issues. As a society, we want this, supposedly. But on the flip side, from a business standpoint, the people that control the money don’t want to take the risks.
Chinese Scare: The Electric Cars Are Coming!
The New York Times last month reported that China plans to boost its annual production of electric and hybrid cars to 500,000 in the next two years from just 2,100 last year. The report by Keith Bradsher suggests “Detroit’s Big Three, already struggling to stay alive, will face even stiffer foreign competition on the next field of automotive technology than they do today.” Before we could get too worked up about the Chinese EV threat, consider:
Chinese cars are not yet safe enough for U.S. markets.
Chinese cars continue to fail miserably on safety tests. The reputation for quality is even worse for Chinese rechargeable lithium ion batteries, which have to be proven safe and reliable before hitting mainstream markets. In fact, The Wall Street Journal reported that SAIC Motor Corp., one of China’s biggest state-owned automakers, is turning to American technology suppliers to engineer its hybrid. China could eventually solve its safety and quality problems, but that could take a decade or more.
Chinese electric cars are too expensive for domestic markets.
The Tianjin-Qingyuan Electric Vehicle Company will begin offering its all-electric Saibao midsize sedan this autumn—using a car body from a gas-powered sedan that normally sells for $14,600. But the battery pack and electric motor for the vehicle is expected to cost $14,000. At nearly $30,000, the Saibao EV will be out of range for Chinese consumers, even with generous government subsidies.
China will face safety and cost obstacles for many years. Meanwhile, Toyota, Honda, and Nissan are more likely to become unstoppable forces in the hybrid and electric car market. If U.S. automakers can compete against those hybrid giants, then China will be of little concern.
Hybrids in Motorsports Shift into High Gear
The past few weeks have brought a number of green developments in the world of motorsports, from NASCAR and Formula 1 to Champ Car and Le Mans.
After more than a year of effort, Toyota received approval from NASCAR to use its Camry Hybrid as an official pace car. The Camry Hybrid will make its debut in next month’s Coca-Cola 600 in Concord, N.C.
Corsa Motorsports and the Zytek Group will unveil the Corsa Zytek hybrid at this month’s Utah Grand Prix, part of the American Le Mans Series. The car is powered by a 625-horsepower, ethanol-burning V8 with an electric motor—and has a top speed is more than 200 miles per hour. Scott Atherton, chief executive of American Le Mans, told The Wall Street Journal last year, “I think hybrid power will soon be part of the automotive fabric across the board.”
Champ Car driver Nelson Philippe announced that he will enter the first carbon neutral team to compete at the Indianapolis 500. Philippe is working with the National Arbor Day Foundation to plant trees to offset the team’s carbon output—and he will hold a series of events to educate people on how they can drive the cars they currently own in a more efficient manner.
Researchers at the University of Warwick in England are trying to build a Formula Three race car entirely from sustainable products. Formula Three is like the farm league of Formula 1 racing. The WorldFirst F3 prototype racer uses composite materials traced back to carrots, potatoes, flax fiber, soybean oil and other natural products.
As you can see, hybrids and other green cars continue to be a hot topic—despite tough times in the auto industry and $2 a gallon gasoline. Just imagine what’s going to happen if and when the economy picks up, oil prices lift, and car companies deliver on at least some of their plans. We’ll be there when it happens. Thanks for following along with these developments.