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What's Driving Future American Auto Development?

By Jim Offner
Jan 22, 2009 4:00 AM PT

Hybrid cars now produced by Toyota, Honda and other mainstream automakers are veritable gas hogs, says Felix Kramer, founder of California Cars Initiative. Not that he doesn't appreciate the technology that has led to mileage ratings in the range of 40 to 50 miles per gallon of gasoline.

What's Driving Future American Auto Development?

Still, that amounts to child's play, compared to Kramer's dream of plug-in hybrids that squeeze out 100 mpg or better. While gasoline has powered the automotive age since the turn of the 20th century, its days as a car's chief fuel are numbered, he maintains.

So far, there are test vehicles that run on hydrogen fuel cells, natural gas and alternative fuels. Honda has been testing its hydrogen-powered FCX Clarity. Chevrolet's Volt, a plug-in that General Motors purports can drive 40 miles on pure battery power, is due out next year.

They're merely scratching at the periphery of the real solution, though, says Kramer, which is closer than many people might think.

Electricity, he says, is the future of automobiles.

Electricity Rules

"The best way to think about it is by considering the characteristics of electricity," Kramer told TechNewsWorld. "It needs no new infrastructure or technology, which contrasts with all other alternative systems. You just have a 120-volt plug that just gives you electricity. It's going to be improved, but it's good enough to get started."

Electricity is clean, cheap -- and, perhaps most importantly, domestic -- power, Kramer said.

"We're not worried about particulate emission; we're worried about CO2," he explained. "An electric car has zero carbon. An electric mile on a national grid is 50 percent less than a gasoline mile for CO2. That's the cleaner part of the equation."

A vehicle powered primarily by electricity costs 2-4 US cents a mile, Kramer continued. That compares to 18-20 cents a mile for a gasoline-powered car when gas costs $3 a gallon, and 40-50 cents when it reaches the $5 horizon.

A nation that fuels its cars with gasoline will never achieve energy independence, Kramer said. "That's a fantasy. Gasoline is an international fuel. Energy security is a different matter. Right now, we're limited to that one fuel. If we power our cars from electricity, we can generate all our vehicles from that."

An electric motor is about 80 percent efficient, Kramer pointed out, compared to an internal combustion engine's 20 percent.

"So, you're still way ahead," he said. "That's the idea of energy security. You add to that the idea that this is going to save the car industry."

The Drawbacks

The problem with plug-ins, so far, has been cost. Chevrolet's Volt, which would be the first automobile designed and engineered as a plug-in hybrid, will bear a sticker price of more than $40,000, according to preliminary estimates.

The price on any plug-in hybrid might be a little jolting, but "the thing to recognize is the cost of ownership to own a plug-in is lower than any other car," said Kramer. "The government has given incentives of up to $3,400 ... Congress passed, as part of the first bailout, enough money to give $7,500 for the first 50,000 cars. It could go up to $15,000 for larger cars."

Consumers drawn to plug-ins "want to feel like they're being smart -- preparing for a time when energy is expensive," he added.

In any case, prices will come down as the market matures, Kramer predicted, and in the meantime, "there's no shortage of buyers."

Alternative fuels such as hydrogen won't reach a commercially ready stage nearly as soon. "The others all have scaling problems or infrastructure issues," said Kramer. "Hydrogen is probably the furthest off; we'll probably never have that in a mobile application. It's not a fuel, but a storage concept."

Nor will natural gas or biofuels "scale out," he said. "Those are all additives to plug-in cars -- the plug-in hybrid, as distinct from an all-electric vehicle."

Electricity will play a major role in the future of the automotive industry, Charles King, principal analyst for Pund-IT, told TechNewsWorld. "Hybrid cars are obviously here to stay, and plug-in/chargeable vehicles should be available in the next couple of years. In addition, increasing numbers of communities are building charging stations."

In addition, biofuels are gaining some traction, "and converting traditional diesel engines to use biodiesel fuel is relatively easy," he noted.

However, liquid fuels simply serve as a range extender for the true plug-in hybrid, maintains Kramer. "You fill that fuel tank with electricity at night when electricity is cheap, and you use it the next day. The main fuel is all or part electric. That's where we're heading. Coming in 2010 through 2012, every carmaker says they're going to build at least one that way."

Volt Is Coming

General Motors will be the first to reap the practical rewards, among the major automobile companies, when its Volt hits showrooms, according to Kramer.

"I think they'll sell as many as they can build," he said.

While electricity offers significant potential, it's not yet the clear-cut winner in the auto fuel sweepstakes.

"Plenty of people seem to agree we can't rely on oil much longer, but there appear to be many different options and possible ways to go," Rob Enderle, principal of the Enderle Group, told TechNewsWorld. "We're seeing a hint of that with hydrogen cells and electric-powered cars on the drawing boards.

Cost is a major hindrance to fuel-cell technology, he noted. "The most eco-friendly is probably hydrogen, and the easiest to deploy is likely natural gas -- very expensive to build, limited range, and refueling can be problematic because of a lack of infrastructure."

Plug-ins have hurdles of their own, however, said Enderle.

"Off-grid power, or pure electric, comes down to the cost of the generating source -- solar panels, wind generators -- and the efficiency, capacity, life cycle of batteries," he explained. "In use, this stuff is potentially the greenest, but often it is offset by the ecological impact of the batteries, which tend to be full of toxic metals and chemicals, and can use non-eco-friendly manufacturing and transportation technologies. On-grid electric is more common, but a lot of the generating plants are oil- or coal-fired, offsetting the ecological benefits even more."

Biodiesel's problem, Enderle said, is that although it's the easiest and a relatively green alternative, "it currently relies on resources ... that force choices between food and fuel in a world that doesn't have enough food, either -- and the fuel can be costly to produce." What biofuels do have is a ready infrastructure through existing fuel stations.

Off-grid electricity is the most problematic alternative fuel, Enderle said.

"It is too dependent on things like sunlight and wind you can't depend on, and batteries just don't have the price [or] energy-density they need to make the vehicles viable. ... Refueling infrastructure would be the most difficult to roll out, he added. "It would be far easier, and it is vastly more likely, that we would use on-grid electric combined with nuclear power for a national solution than off-grid."

New Grid Needed

A new type of electrical grid could accommodate a surge in plug-in hybrids, Jonah Stein, principal with ItsTheROI.com, told TechNewsWorld. That could take five to 10 years to develop.

"I would guess we are looking towards a combination ... 'smart grid' that uses plug-in hybrids to meet peak demand, a 10-20-times improvement in battery capacity, and next-generation biofuels that use bioengineering to grow fuels in an agricultural process," Stein speculated.

Will motorists who have traditionally powered their vehicles with petroleum-based fuel turn around full circle and end up settling on one power source in the future?

That's tough to predict -- all the alternatives have their own potential glitches, said Enderle. "A clear choice has yet to emerge. A lot of folks will be watching the Honda FCX Clarity test later this year."

There will likely be some fragmentation in the types of fuels consumers prefer in the years to come.

"I expect the fragmentation will fall into two camps: How you drive and where you live," said King. "Statistically, the vast majority of people in the U.S. drive 20 to 30 miles per day, well within the range of many current-generation electric cars. But for some, that would require driving with a certain amount of planning and foresight -- not strong characteristics in American drivers.

"That's one reason hybrids have found a toehold in the U.S. and other markets," he observed. "They get significantly better gas mileage than traditional vehicles but require no changes in driver habits. Next-gen electric vehicles are expected to travel 80-plus miles per charge, making them far more flexible and attractive for conventional driving habits."


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