Considering the Alternatives
It isn’t easy going green, but despite falling gas prices and disappointing sales, automakers keep plugging away at the low- and zero-emissions market
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The new year is set to get off to an electrifying start. Barely five years after it introduced the world’s first mass-produced plug-in hybrid, General Motors will unveil an all-new version of the Chevrolet Volt at the North American International Auto Show this month.
But GM won’t have the spotlight all to itself. The show will bring a flood of new battery vehicles to Cobo Center.
When Volt debuted in 2010 you could count the number of plug-based cars, trucks, and crossovers on one hand. Five years later, you wouldn’t have enough fingers and toes.
And the tally will keep growing throughout the year as makers as diverse as Tesla, Volkswagen, and Mercedes-Benz roll out their own green machines. Add new fuel-cell vehicles from Honda and Toyota, along with the hydrogen-powered version of the Hyundai Tucson launched last summer.
But to massage a line from the classic film Field of Dreams, “If they build them, will they come?”
Not So Electric Demand
Even as more and more new low- and zero-emissions vehicles reach market, few buyers have been plugging in. Demand for the Volt actually declined last year, and automakers like Ford, Chevy, and Honda have had to slash prices just to maintain their meager sales numbers.
The situation has become even more dire in recent months as gas prices have fallen to four-year lows, encouraging many American motorists to return to the big cars and trucks that long dominated the market.
“We have to get the operational and material costs down so it makes people willing to try” vehicles like the Volt, concedes Mark Reuss, executive VP of global product development at GM. Nonetheless, Reuss is certain that there has been “a permanent change” in the public mindset against “wasteful” vehicles. The current respite from the record fuel price spikes of recent years is only temporary, he warns. So GM — like its competitors — is intent on being ready with alternatives once petro prices resume their inevitable upward climb.
Left: The Chevy Volt’s drive unit is assembled in Warren. Right: GM will unveil the all-new Chevy Volt at this year’s NAIAS.
Reviving the Volt
In the weeks leading up to the 2015 NAIAS, GM was trying to save some details for their big news conference, but senior officials — and a few well-placed sources — have offered some tantalizing hints of what’s to come. Critically, the 2016 Chevy Volt will remain true to its original mission, which is to provide a way for motorists to not only improve their fuel economy but also operate entirely on battery power for much of their day-to-day driving.
In fact, the second-generation Volt will get a much-improved lithium-ion battery pack that will be smaller — yielding more room for passengers and cargo inside the compact sedan — lighter, and more powerful. Working with its South Korean battery partner LG Chem, the pack is expected to deliver significantly more than the current 38 miles of electric-only range, even as the new Volt will boost its performance.
If the new version of the plug-in can approach 50 miles on battery power alone, it would potentially expand its appeal to those who might otherwise buy a pure battery-electric model, such as the smaller Chevrolet Spark Electric, Nissan Leaf, or Ford Focus Electric, suggests Detroit-based auto analyst Dave Sullivan of AutoPacific Inc. The reality is that this would cover the day-to-day needs of nearly 80 percent of American motorists.
But Volt would still retain the advantage of being able to fire up its internal combustion engine for longer drives. Chevy also plans to replace the old 1.4-liter gasoline engine with a slightly larger — but markedly more fuel-efficient — 1.5-liter four-cylinder “range extender.” Don’t be surprised to see EPA-rated fuel economy increase by anywhere from 5 percent to more than 10 percent, according to sources.
The debut of the 2016 Volt will be particularly good news for Michigan. GM now plans to produce virtually all the key drivetrain components in the state, from the batteries LG Chem manufactures at a plant near Grand Rapids, to the all-new drive unit — which includes the electric motors, transmission, and electronic controls — it will assemble in Warren. The suburban Detroit facility is undergoing a $240 million upgrade and will gain 160 new jobs.
The Cost/Benefit Tightrope
Still, the number that will likely prove most important to potential Chevy Volt buyers is the 2016 model’s MSRP. In sharp contrast to traditional industry trends, Volt’s price has come down steadily since its late 2010 introduction at around $41,000. It is now available for just over $34,000, and if Reuss’ comments were any indication, that may drop yet again.
GM is by no means the only maker cutting costs in the hope of boosting battery-car sales. Last October, Ford slashed $6,000 off the sticker of its Focus Electric — and that was on top of an earlier, $4,000 reduction in the pure battery-electric-vehicle’s MSRP. With only a few exceptions, most notably the Tesla Model S, plug-based vehicle prices have come down sharply, a trend all but certain to continue over the next several years.
That’s a tough equation for industry bean counters — who are quick to note they’re already in the red on most of their plug-based models. Fiat Chrysler CEO Sergio Marchionne made headlines last year when he all but pleaded with potential customers to steer clear of the company’s new Fiat 500e battery car. “I hope you don’t buy it because every time I sell one it costs me $14,000,” he lamented, adding, “I’m honest enough to tell you that.”
Readouts on the Ford Focus dashboard
Costs, Charge Times Down; Range, Performance Up
The good news for both automakers and auto buyers is that material costs are, indeed, coming down. The current Chevrolet Volt uses a 17.1 kilowatt-hour lithium-ion battery pack to drive its twin electric motors. When the project was first conceived, the batteries were running as much as $1,000 a kwh.
Manufacturers are notoriously tight-lipped when it comes to specific details, but industry sources suggest lithium battery prices are sliding down toward the $400 kwh mark — on the Volt that would shave as much as $15,000 off GM’s production cost. But the Boston Consulting Group says the target is closer to $200. At that price, the drivetrain of a vehicle like Volt or the Nissan Leaf would be relatively comparable to a conventional, gasoline-powered vehicle.
Price isn’t the only challenge. To increase the appeal of green technology, manufacturers need to reduce charging times — while making chargers more widely available — and improve both range and performance.
Early battery-electric vehicles could take a full day to recharge, especially if plugged into a standard household outlet. Newer 220-volt chargers trim that to four to eight hours — and many local utilities now offer subsidies for homeowners who want to put a charger in their garage.
Public chargers are also becoming more commonplace. And some makers now offer free use charging as part of a vehicle’s purchase price — Nissan is offering two years’ free to Leaf buyers in cities including Chicago.
The real breakthrough may be a 440-volt DC charger that can deliver an 80 percent recharge within as little as 30 minutes. So-called Level III systems are rare but beginning to show up in larger numbers, especially in states that have put a priority on promoting electric propulsion, such as California.
Tesla Motors has decided to set up a network of what it dubbed “Supercharger” stations across the U.S. and parts of Canada to allow owners to drive cross-country nearly as quickly and easily as in a conventional, gas-powered vehicle. By the time the network is in place, there should be a Supercharger within 50-100 miles of just about any location in the country.
Left: Tesla’s Model S can be ordered with a 300-mile battery pack. Right: The BMW i8 launches 0 to 60 in barely four seconds.
Tesla is out to prove range and performance aren’t insurmountable obstacles, either. The maker’s Model S can be ordered with an optional 300-mile battery pack. And a new all-wheel-drive version of the sedan will give pause to those who think “slow” is a synonym for battery power.
“Taking the technology to the next level,” says Elon Musk, means the top version of the Model S will be able to launch from 0 to 60 in a mere 3.2 seconds, in line with a McLaren P1 supercar. “It’s like having your own personal roller coaster,” says the South African-born entrepreneur, who also started the SpaceX private space launch company.
The Model S is more the exception than the rule among pure battery-electric vehicles, where 80-to-100 miles range per charge is the norm, and 0-to-60 times are more often along the lines of 8 to 11 seconds. But a growing number of makers are working up more exciting — and functional — alternatives, taking advantage of the fact that electric motors deliver maximum, tire-spinning torque the moment they switch on. Audi, for example, is developing an all-electric version of its R8 roadster.
Under new regulations that went into effect for the 2014 season, Formula One race cars use an advance hybrid system kicking in 160 additional horsepower. And lest you think this is limited to track use, that McLaren P1, as well as the flagship LaFerrari and Porsche’s 918 Spyder, all use hybrid systems to deliver blinding speed on the street.
Then there’s the new BMW i8 — part of a new brand within a brand focused on “electrified” vehicles. This exotic, carbon-fibered sports car launches from 0 to 60 in barely four seconds, while delivering up to 76 mpg, according to the EPA. At the heart of this high-tech beast is a complex drivetrain that pairs a pint-sized 3-cylinder turbocharged gas engine with two electric motors.
The BMW i8 drivetrain package can operate in a variety of modes, from pure electric to sport, the latter combining all three sources of power to produce an impressive 357 horsepower and 420 pound-feet of torque. When using the batteries alone, BMW claims a range of 22 miles.
Left: The 2014 Dodge Ram 1500 EcoDiesel. Right: Hyundai’s Tucson has a fuel cell “stack” that uses hydrogen.
More Fuels for Thought
Battery power isn’t the only way to go green. Last autumn, the Dodge Ram 1500 EcoDiesel was named Green Truck of the Year by Green Car Journal. The well-respected alternative-energy publication has also given its Green Car of the Year trophy to several diesel models in recent years.
“I’m a big believer in diesels,” says GM’s Reuss. The maker recently introduced an “oil-burner” version of its Cruze sedan — its first U.S. passenger model to use the technology in two decades — and is planning a diesel version of its new Chevrolet Colorado and GMC Canyon midsize pickups, which should get more than 30 mpg, it estimates. Audi, VW, and Mercedes-Benz have launched over a dozen diesels between them.
Forget everything you thought you knew about diesels, stresses Allen Schaeffer, executive director of the Diesel Technology Forum. Unlike the noisy, smelly, rough, and slow models of the 1980s, today’s versions are quiet, smooth, and quick — while retaining the same great mileage and stump-pulling torque.
Even with just a limited number of models in American showrooms, diesels are outselling all hybrids, plug-ins, and battery-electric vehicles combined — demand is expected to be up about 25 percent for the year, with no slowdown in sight.
“While diesel cars and pickup trucks make up only 3 percent of the overall U.S. vehicle market, most analysts predict … the diesel market will double by 2018,” says Schaeffer.
Green-minded motorists have another alternative to consider: hydrogen power. Last summer, Hyundai introduced a new version of its Tucson sport utility vehicle that replaces its gas engine with a fuel-cell “stack,” a device combining hydrogen with oxygen from the air to produce a flow of current that can run a vehicle’s electric motors. There’s an exhaust pipe, but just to vent a stream of water vapor. Honda and Toyota plan to launch fuel-cell vehicles this coming year.
“We aren’t trying to re-invent the wheel — just everything necessary to make them turn,” explains Bob Carter, a senior vice president with Toyota — which is surprisingly disdainful of pure battery propulsion despite its lead in the hybrid segment.
Even with a supercharger, Carter notes, a battery-car can’t match the four or five minutes it takes to refill a hydrogen tank, which can then deliver as much as 200 to 300 miles range — and why some experts refer to fuel cells as “refillable batteries.”
The basic concept for the fuel cell dates to the mid-19th century, though the technology only saw serious use providing electric power to the Apollo moon mission capsules. The latest fuel-cell stacks are smaller, lighter, more efficient, and far less expensive than those of just a decade ago. Still, there are plenty of skeptics who contend, “Hydrogen is the fuel of the future … and always will be.”
Unfortunately, while the lightweight gas is the most abundant element in the universe, it isn’t readily available in its pure form. There are only a handful of pumps available in the U.S., which is why Hyundai, Honda, and Toyota will initially limit sales to Southern California.
The Golden State has launched a $50 million program to set up a network of hydrogen-filling stations, and similar programs are under development in other parts of the country.
“We seem to be tantalizingly close to the beginning of a hydrogen transition,” says Joan Ogden, lead author of a recent University of California, Davis study and a professor of environmental science and policy. “The next three to four years will be critical for determining whether hydrogen vehicles are just a few years behind electric vehicles, rather than decades.”
Sluggish Sales Need a Spark
With all the new options, one might think that sales of alternative-powered vehicles would be going through the roof. Well, think again. While the numbers are clearly up — and plug-based vehicles were expected to finish 2014 at over 100,000 for the first time ever — demand isn’t rising nearly as fast as anticipated.
Price, range, performance — all are factors in the slow ramp up. Now add the unexpected plunge in gasoline prices, which, in the final weeks of 2014, had dipped below $3 a gallon for much of the U.S. There has been “less demand for more fuel-efficient vehicles because of the decreasing price of gasoline,” says researcher Michael Sivak of the University of Michigan Transportation Research Institute.
For automakers — and especially those here in Detroit — it has been a case of a half-empty or half-full glass. Small, fuel-efficient vehicles have rarely generated big profits, certainly not when compared to the likes of full-size SUVs and pickups, such as the Chevrolet Silverado and Ford F-150 — the latter maker’s CEO Mark Fields noting the pickup is about the single biggest contributor to Ford’s profits.
But the makers have been investing heavily in alternative power and know that only through increased volumes can they drive down costs.
They’re also facing the fact that the U.S. Corporate Average Fuel Economy standard will soar to 54.5 mpg over the next decade. Meeting that will be near impossible without increased reliance on electric propulsion. And California regulators have set an even higher hurdle, requiring all major makers to sell a set number of zero-emissions vehicles or face the prospect of being locked out of the huge market.
So, don’t be surprised to see automakers work even harder to push their alternative models in the years ahead. The good news is that will translate into more products that are more affordable, efficient, and fun to drive. h
Paul A. Eisenstein, publisher of TheDetroitBureau.com, has covered the auto industry in print, broadcast, and electronic media for more than 30 years.