Wednesday, 14 November 2007

Is Henry Ford’s entrepreneurial drive alive and well?

Defining the car of the future is undoubtedly on the minds of most – if not all – mainstream automakers. Consumers today are seeking solutions that will alleviate energy consumption and pollution concerns far better than the current crop of vehicles comprising dealer lots across the country. So who’s going to make the first big move?

An article over at the The New York Times examines the possibility that a mainstream player may not pioneer tomorrow’s big winner. Many start up companies – led by zealous entrepreneurs and often backed by big venture capitalist dollars – are attempting to launch cars that will catapult drivers into an era of thrifty emissions-free motoring.

We’re already aware of some fringe manufacturers, including Tesla Motors and Th!nk Global. But others such as Venture Vehicles and Wrightspeed are up and coming as well. All promise alternatives to the conventional internal-combustion engine vehicle, despite that fact that many of the companies’ leaders are admittedly not “car-people.”

It comes down to price and functionality. Sure, the three-wheeled motorcycle/car hybrid being developed by Venture Vehicles is cool and may target “automotive enthusiasts, early adopters and environmentally conscious consumers” who often travel alone, but purchasing a new car usually smacks the wallet hard enough to require at least some rationality. And if a vehicle can’t seat at least four passengers, it probably won’t resonate with any type of authority.

Source: The New York Times
Image: Venture Vehicles

Posted by industry at 3:03 PM in Alternative energy
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Friday, 26 October 2007

Car dealers specializing in green transportation as consumers consider environmental impact

American consumers are increasingly attempting to engage alternative fuel vehicle to replace their conventional gas burning vehicles. The problem is, very few retailers selling neighborhood electric vehicles, converted electric cars, used hybrids and biodiesel-ready reliable transportation exist. Getting all of these vehicles under one roof, so customers can effectively cross shop, is the major challenge.

An article over at MSNBC, however, indicates that such dealerships are coming to fruition, albeit in small numbers. Across ten states, 16 “green car dealerships” have the capacities to provide test drives in more than just gasoline, diesel or gas-electric mainstream manufacturer supplied models.

For example, Eco Auto Inc. of Bozeman, Montana is currently converting a 2008 Subaru Forester to run entirely on electricity. The Green Car Company of Kirkland, Oregon keeps the latest stock of alternative fuel vehicles, no matter the “segment.” The commitment is certainly out there.

For more information on electric vehicles or to find new and pre-owned mainstream environmentally sensitive vehicle inventories, be sure also to visit Earthcars.com.

Source: MSNBC

Posted by industry at 12:58 PM in Alternative energy
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Wednesday, 17 October 2007

David Kiley at BusinessWeek asks a critical question: will truck buyers pay for fuel efficiency?

Quite a lot of chatter has been resonating in the auto industry lately about higher fuel economy standards going into effect, and plenty of speculation has occurred regarding their potential effect on automakers. In June of this year the U.S. Senate approved a bill requiring a 35 mile-per-gallon average standard for passenger cars and light trucks combined by 2020. General Motors, Chrysler, Ford and Toyota all oppose the bill, and instead support a less stringent increase that would maintain unique standards for cars and trucks. The White House seems to agree, indicating a veto would be in order if a fuel economy bill makes it to the executive branch without differentiating trucks from cars.

Over at BusinessWeek, David Kiley asks a question that is surely worrying auto manufacturers who rely on the profits of large trucks: will truck buyers pay for fuel efficiency? Kiley asserts that car companies can build vehicles that satisfy the requirement, but at significant costs that will be passed onto consumers. He uses the example of a Chevy Silverado 1500 pickup, which now costs around $26,000 well equipped. Efficient enough to meet gas mileage standards, the same truck could cost $34,000. Of course, drivers may realize fuel bill savings of $1,000 per year, but truck buyers tend to analyze one-time prices more than long-term costs, explains Kiley.

Research company Global Insights says that in order to meet the proposed standards by 2020, 2 out of 3 cars would need to employ direct fuel injection, smaller displacement engines and turbochargers. Approximately one third would have to run on diesel fuel, and half should be hybrid-electric (some of these technologies overlap, for example, a turbo-diesel hybrid). BorgWarner predicted the same trend back in March of 2007, seeing direct injection and turbos as major factors in increasing efficiency while maintaining performance.

Kiley calls the pickup truck buyer “the most difficult consumer in the country.” He points to Toyota as validation, since the manufacturer just released the journalist-acclaimed second-generation Tundra which has yet to be embraced by widespread customers. While true that manufacturers must control costs passed on to consumers – government subsidy anyone? – it’s also likely that pickup buyers will come around and start to appreciate $60 fill ups as opposed to $100 refueling sessions.

Sources: BusinessWeek, The Detroit News and Earthcars.com
Image: Dealer.com at the 2007 North American International Auto Show [2008 Toyota Tundra CrewMax]

Posted by industry at 12:33 PM in Alternative energy
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Thursday, 13 September 2007

Vermont auto emissions case settled: State can regulate CO2 emissions independently from Federal government

In April of 2007, The View from Inside reported on the Vermont court case in which members of the automotive industry (General Motors, DaimlerChrysler, Alliance of Automobile Manufacturers and several Vermont car dealers) sued Vermont, claiming the state did not have the right to regulate carbon dioxide emissions from vehicles. The argument went that since the federal government determines fuel economy standards, and CO2 output is directly tied to fuel economy, only the Fed can mandate CO2 emissions limitations. States doing so would override the federal government’s authority, argued automakers.

Well, U.S. District Court judge William Sessions disagreed. In a 240-page decision, Sessions ruled that Vermont does have the right to limit CO2 emissions from automobiles, and that automakers have the means and ability to comply with the legislation. Much of the testimony in April consisted of industry experts and auto company engineers arguing that if the proposed 43.7-mpg car and 26.9-mpg truck/SUV fleet mileage standards were implemented, General Motors and Chrysler would be unable to sell most of their vehicles in Vermont.

The Environmental Protection Agency still must grant Vermont (and other states) waivers to legalize the tough CO2 limitations, but under the Clean Air Act U.S. states, led by California, believe that they have the right to that waiver.

Source: CNN Money

Posted by industry at 3:21 PM in Alternative energy
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Wednesday, 1 August 2007

Earthcars.com is new comprehensive resource for green vehicle shopping

The process of researching, comparing and buying an environmentally friendly green vehicle online just got a whole lot easier, as Earthcars.com has been launched to provide consumers an integrated solution that both educates the shopper and connects him or her with retail dealers currently stocking earth-friendly cars, trucks, SUVs and Neighborhood Electric Vehicles. At present the site includes over 28,000 new and pre-owned cars in inventory across the United States, with approximately 750 unique trim models going back to the mid-1990s listed.

Earthcars also provides a blog, collection of articles and Frequently Asked Questions section as tools for research, allowing customers to familiarize themselves with the green vehicle industry and stay up-to-date. Dealers are able to join the site and have their inventories listed.

Several parameters exist in order for to a vehicle to qualify as an Earthcar. Fuel economy, electric range, pollution emissions, powertrain design and the “Green Factor” of each manufacturer are considered in assigning ratings on a zero to four "globe" basis. When matches are found in participating dealer inventories, both new and pre-owned models are displayed.

Go to Earthcars.com or read the press release.

Posted by industry at 11:56 AM in Alternative energy
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Wednesday, 6 June 2007

Lexus LS 600h L hybrid may be challenged by Mercedes S-class diesel-electric

Flagship luxury sedans priced in the six-figure range make few compromises. Power, technology, comfort, design and safety are all emphasized as if each attribute is the primary concern. As a result, opulent four-door models often showcase the best and most-advanced efforts by manufacturers, indicating exactly which carmaker rules the upper echelon of the automotive world. In the realm of alternative energy, Lexus’s hybrid-electric LS 600h L provides the thrust of a 12-cylinder engine via a 430-horsepower hybrid-electric V8 powertrain with a Super Ultra-Low Emission Vehicle (SULEV) rating. Lexus boasts that the hybrid LS emits 70-percent fewer smog-causing emissions than its competitors.

Rumor has it, however, that Lexus will not be the only manufacturer to field a full-size luxury hybrid for long. Mercedes-Benz is apparently considering the application of a diesel-electric powertrain for its newly updated S-Class. However, the German automaker would take a slightly different approach than Lexus, favoring efficiency first rather than the supplementation of existing V8 muscle. The proposed 2.2-liter four-cylinder would only deliver around 200 horses, although combined fuel economy would be an incredible 35 to 36 miles-per-gallon. Expected to retail over $100,000, the diesel S-Class should appear at the Frankfurt Auto Show this September and in dealerships late in 2008.

Sources: Leftlane News, eGMCarTech and Lexus
Image: DaimlerChrysler media [Mercedes-Benz S600]

Posted by industry at 2:24 PM in Alternative energy
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Thursday, 12 April 2007

Testimony from Vermont auto emissions case highlights challenges car companies face in meeting greenhouse gas regulations

The legal battle pitting General Motors, DaimlerChrysler, three Vermont auto dealers and two automotive groups against the Vermont Agency of Natural Resources and various environmental groups continued today in Burlington, Vermont's U.S. District Court with Judge William Sessions presiding. Under consideration is whether or not Vermont has the right to impose greenhouse gas emissions regulations based on California standards but independent from the federal government. Since the quantity of gasoline burned is directly related to the amount of carbon dioxide released, the case essentially revolves around who – states or the Fed – has authority in determining fuel economy requirements.

Taking the oath this morning was Reginald R. Modlin, Director of Environmental Affairs for DaimlerChrysler. With a background in both law and engineering, Mr. Modlin testified in regard to the feasibility of DaimlerChrysler meeting the proposed emissions legislation that would go into effect in 2009 and eventually require passenger car fleets to average 43.9 miles per gallon and light truck fleets to achieve 26.9 mpg on average by 2016. These numbers are based on California’s policy, adopted by Vermont, that would require a 30-percent reduction in greenhouse gas emissions such as carbon dioxide by 2016. The current Corporate Average Fuel Economy standard for cars is 27.5 mpg and for trucks is 20.7 mpg, but the truck standard will gradually increase to around 24 mpg by 2011.

Highlights of Mr. Modlin’s testimony include:

1) The assertion by the California Air Resources Board that meeting new vehicle emissions will only cost an additional $1,000 per vehicle is invalid. Modlin defined several engineering reasons for this, indicating that CARB underestimates the cost, overestimates the benefits of new technology and does not allow sufficient lead time for developing these technologies. Previous testimony by Alan Weverstad, General Motors' Director of the Environment and Energy department, indicated a cost more along the lines of $5,000 to $6,000 per vehicle.

2) The clause awarding credits for flexible-fuel E85-capable vehicle sales is impossible to administer. E85 (85 percent ethanol/15 percent gasoline) blends are preferable in reducing CO2 output since mile-for-mile studies indicate a slight – approximately five percent – decrease in carbon emissions compared with regular gasoline. Based on Modlin’s testimony, however, it appears that the credits are only valid if the auto manufacturers can prove that consumers are using the ethanol fuel at all times. Not only are there currently no E85 pumps in Vermont, but also there is no way that a car manufacturer can be asked to monitor customers’ behaviors when fueling their vehicles. Modlin emphasized that Chrysler is not in the business of refining or distributing fuel, nor does it guide its consumers in making fuel purchasing decisions.

3) A “cap and trade” emissions regulation system would not be effective in the automotive industry. Also known as “emissions trading,” a cap and trade emissions system establishes a threshold of acceptable pollutant output and then assigns companies allowances up to that threshold of compliancy. Clean companies that produce fewer emissions earn credits, while dirty manufacturers must buy these credits from the clean competition or face penalties established by the regulators. Obviously, staying on the clean side ensures a competitive advantage, and the idea is that this incentive will result in an overall reduction of pollution.

As Modlin pointed out, however, the availability of emissions credits on the market can not be ensured, since clean car companies may decide to save the credits for future use. For example, an automaker’s vehicle lineup could pollute less than what is allowed for a couple years and thus earn credits. But for the next few years as regulations get tougher, maybe the technology would not be available yet to meet the standards. In that case, a company would simply pull from its reserve, without penalty assuming enough credits exist, until a later date when a new wave of technology catches up to the modern standards.

Successful automakers would also be foolish to sell off the credits, especially if transferring those credits to a competitor had the potential to improve – or save - that competitor’s business. But in real life these concerns would actually be irrelevant, as Modlin believes that virtually no automaker would be capable of meeting the emissions regulations of 2016 and thus everyone would be required to buy credits that barely exist.

4) Two scenarios exist that DaimlerChrysler could employ for dealing with the laws should they be upheld. The first is titled “Add Technology” and would require tens of billions of dollars of investment by DaimlerChrysler. By 2016 about 90 percent of the company’s fleet would be either hybrid-electric or diesel powered. However, even with the anticipated technology, Chrysler still would not meet the standards, according to Modlin, and would thus have to limit some vehicle offerings in marketplaces such as California and Vermont.

The second scenario is called “Restrict Product,” meaning that certain vehicles would be excluded from stricter marketplaces. DaimlerChrysler would only be allowed to sell two cars in the state of Vermont in 2016, said Modlin, assuming normal rates of fuel economy improvement. One would be the Smart ForTwo, and the other an unnamed subcompact. But no trucks, no big sedans and no SUVs. This of course is without the huge Add Technology investment outlined in scenario one.

Analysis: Although the case supposedly hinges upon the legality of states determining fuel efficiency, the testimony has concentrated on the practicality of implementing carbon dioxide emissions limits. The reasoning for the legislation is based upon concerns over climate change linked to CO2 levels, but clearly Judge Sessions is being exposed heavily to the business implications of such a mandate.

Source: Reginald R. Modlin testimony, April 12, 2007, U.S. District Court for the District of Vermont
Image: Smart ForTwo at 2007 Detroit Auto Show

Posted by industry at 8:39 PM in Alternative energy
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Tuesday, 10 April 2007

Vermont court case concerning vehicle greenhouse gas emissions begins

The discussion surrounding greenhouse gas emissions by cars and trucks intensified this week as a trial in Vermont questioning states’ roles in regulating carbon dioxide emissions from vehicles began Tuesday, April 10. Just last week the U.S. Supreme Court defined carbon dioxide as a pollutant under the Clean Air Act, thereby calling for its regulation by the Environmental Protection Agency in the interest of public health and safety. Now, state courts must decide who has the right to define CO2 emission limits.

The state of California has already set stricter emissions standards compared with federal emissions policy related to pollutants such as hydrocarbons, oxides of nitrogen and carbon monoxide. Several other states, including Vermont, have engaged these standards as well. Federal law says that individual states may choose either the California or federal policies, in order to avoid unique emissions laws in each of the 50 states.

It would follow, then, that in regulating carbon dioxide states would have a similar right to either embrace the federal law or implement California’s policy. However, since the release of carbon dioxide is tied directly to the quantity of fuel burned, automakers, represented as the Alliance of Automobile Manufacturers, contend that only the federal government may regulate CO2 output, since the U.S. Department of Transportation maintains the exclusive right to set fuel economy standards and prevents states from doing so.

Backed by environmental groups, the California-emissions states argue that the Clean Air Act of the 1970s should take precedence in determining who gets to mandate CO2 limits. When that law was written decades ago it allowed California to determine its own standards due to concerns over smog. In 2005, California made the decision to regulate automotive carbon dioxide emissions under the Clean Air Act, beginning with the 2009 model year. Since then, nine states have adopted the CO2 clause, and three others are currently considering it.

A large part of the testimony is expected to focus on feasibility, both technologically and economically, of achieving California’s greenhouse gas emissions goals. According to the car companies opposing the measures, the laws would effectively require fleet average fuel economies of 43 miles per gallon by 2016, a target that is not attainable due to associated costs and available technology. One General Motors executive declared Tuesday that meeting the proposed greenhouse gas limit would require “unbelievably extreme” measures to improve fuel economy.

The case is officially titled, Green Mountain Chrysler Plymouth Dodge Jeep et al. v. George Crombie, Vermont Secretary of Natural Resources.

Along with Vermont, other states that have embraced California’s policy are Connecticut, Maine, Massachusetts, New Jersey, New York, Oregon, Rhode Island and Washington. Arizona, Maryland and New Mexico are the three states considering the rules.

Sources: Reuters, Burlington Free Press and The Detroit News

Posted by industry at 9:50 PM in Alternative energy
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Tuesday, 3 April 2007

Honda once again recognized by Union of Concerned Scientists as “Greenest Automaker”

Every other year the Union of Concerned Scientists (UCS) recognizes the “Greenest Automaker” based on smog-forming emissions and greenhouse gas output such as carbon dioxide, which is directly tied to vehicle fuel economy. For the fourth time in a row Honda has triumphed, indicating the Japanese manufacturer’s continued excellence in terms of fuel efficiency and clean technology.

Honda’s clean fleet of cars and trucks exceeded average “global warming scores” in every vehicle segment in which the automaker fielded a automobile for the 2005 model year, according to the UCS. In four out of five classes, Honda also achieved the best “smog score.”

Initiatives continually being pursued by Honda include improving fuel efficiency to reduce greenhouse gases, improving air quality by lessening smog-forming emissions and creating energy sustainability by developing fuel alternatives to gasoline.

Source and image: Honda news

Posted by industry at 4:36 PM in Alternative energy
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Wednesday, 14 March 2007

Big four automakers address U.S. Congress over fuel economy concerns

The issue of increasing car and truck fuel economy standards was under serious consideration today in Congress, as leaders from Chrysler, Ford, General Motors and Toyota addressed the House Energy and Commerce Subcommittee on Energy and Air Quality regarding the impact of automakers on climate change and energy security. Three out of the four executives – excluding GM Chairman Rick Wagoner – voiced support for moderate increases in Corporate Average Fuel Economy (CAFE) standards to degrees that remain cost effective for auto manufacturers. Wagoner emphasized the need for alternative fuel solutions alongside the other execs, but did not specifically acknowledge the feasibility of higher MPG standards.

While Toyota’s North American President Jim Press extolled the Japanese manufacturer’s commitment to the “elimination of waste” and “service to society,” currently highlighted by Toyota’s Hybrid Synergy Drive system, the American CEOs – Wagoner, Ford’s Alan Mulally and Chrysler’s Tom LaSorda – aggressively pushed the increased usage of flexible-fuel vehicles that run on E85 ethanol/gasoline blends. The car company executives were all keen to point out that the automotive industry is only part of the culprit responsible for climate change and energy security concerns, and that a larger effort across various industries is required to address effectively the issues of carbon dioxide output and gasoline consumption. Ron Gettelfinger, President of the United Auto Workers union, was also present.

Analysis: One issue that Representative Rick Boucher, a Democrat from Virginia and Chairman of the Subcommittee on Energy and Air Quality, brought up was the possibility of a “cap and trade” emissions law that awards credits to low-emissions manufacturers and allows them to sell or trade those credits to higher-emissions companies. Carbon dioxide output is tied directly to fuel consumption, and a cap and trade program would not only penalize manufacturers who do not meet the standards, but also benefit those who do in that the compliant companies could market their credits.

The executives did not express confidence in such programs, citing that cleaner companies could invest in better technology from the capital earned by selling credits, thus operating with an unfair advantage. Mulally postulated that a system allowing trading among several industries might function better in the interest of direct competition. Massachusetts Democrat Ed Markey argued fervently on the past effectiveness of CAFE standards, challenging the automakers who do not view them as the current solution. Markey is advocating mandatory four-percent annual increases in fuel economy beginning in September of 2009 for cars and September 2011 for trucks.

Currently the CAFE standard for cars is 27.5 mpg, a level that hasn’t been adjusted since 1990. By 2011, truck standards will be 24.1 mpg, gradually increasing from the currently mandated 20.7 mpg.

Source: Committee on Energy and Commerce and The Detroit News
Image: Subcommittee on Energy and Air Quality live video feed [Rick Wagoner pictured]

Posted by industry at 4:42 PM in Alternative energy
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