Auto makers are angling to carve out their own niches in fuel-efficient design, from expansion of the gasoline-electric hybrid technology already available in the Toyota Prius to the new plug-in hybrid vehicle known as the Volt under development by General Motors Corp.

The Chevrolet Volt will be able to go at least 40 miles on its lithium-ion battery. Above, GM CEO Rick Wagoner rides in a Volt at a Las Vegas trade event last January.

Hot off its success with its Prius sedan, Toyota Motor Co. said Friday that it would make hybrid engine systems available on all of its models by 2020. Ford Motor Co., which has few hybrid options among its vehicles, plans to double its hybrid-vehicle lineup and production next year.

And Honda Motor Co. said last week at an industry conference in Traverse City, Mich., that in 2009, it will import a new hybrid to compete directly against the Prius in the U.S. market — and at a lower price.

The Chevrolet Volt still is scheduled to go on sale in 2010, and its chief designer, Bob Boniface, gave the Center for Automotive Research’s management briefings seminars an early look at the most recent styling changes adopted to create a sleeker front end and to extend its range on battery power through better aerodynamics.

The Volt will be able to go at least 40 miles on its lithium-ion battery, but the vehicle also will contain a small gas tank that would recharge the battery if necessary. Consumers would be able to recharge the vehicle at home using a conventional household outlet.

The auto industry has scrambled to meet shifting U.S. consumer demand toward small, fuel-efficient cars and away from trucks and sport-utility vehicles. Even though gasoline prices have recently retreated from above $4 a gallon, most auto makers have said they consider the shift toward small cars to be more or less a permanent change in the overall mix of vehicles customers want. And the companies intend to build them.

Toyota and Ford have said they haven’t been able to build enough hybrid vehicles to meet consumer demand. Though most auto makers are assumed to lose money on hybrids, Toyota’s Bob Carter, head of North American sales, said in an interview that his company makes a profit on its Prius hybrids, which recently exceeded sales of one million units globally.

In another sign of the shifting market demand away from trucks, Toyota confirmed last week that the Japanese auto maker abandoned its plans to resume pickup-truck production at its plant in Indiana this fall. Originally, the company planned to restart production of its Tundra pickup there in November after a suspension earlier this year. Production instead will be revived only at its Texas facility this fall, and the plant in Princeton, Ind., will take on production of the Sequoia and Highlander, which are both SUVs..

A good news, bad news saga regarding auto companies and fuel efficiency

Posted Aug 18th 2008 1:25PM by Joseph Lazzaro
Filed under: Consumer experience, Competitive strategy, Ford Motor (F), General Motors (GM), Toyota Motor Corp. (TM)
There’s an upside and a downside regarding major auto companies and the quest to develop vehicles with increased fuel-efficiency.

The upside: Auto makers are positioning themselves to carve out niches in fuel-efficient technology and design, The Wall Street Journal reported Monday (subscription required).

The downside: Auto makers appear to be exhibiting a ‘herd mentality’ on the current propulsion technology — hybrid engine cars with both a modest electric power source and a mainstay internal combustion engine.

An electric hybrid focus

Following up on its successful electric-gasoline Prius hybrid, Toyota (NYSE: TM) announced it will make hybrid engine systems available on all models by 2020, The Journal reported. Meanwhile, Honda said it would import new hybrid technology to the U.S. to compete with Toyota and Ford (NYSE: F) plans to double its hybrid lineup next year, and Chevrolet’s (NYSE: GM) Volt hybrid that will go on sale in 2010.

Economist David H. Wang said investors and consumers should not be overly optimistic or pessimistic regarding the sector’s concentration on electric-fuel hybrids.

“On the one hand, consumers, when looking for a hybrid, will have a wide variety of body styles and vehicles to choose from,” Wang said. “Also, the auto makers will be monitoring each other’s cars, and look to better each other. That should advance the electric hybrid platform quicker.”

“On the other hand, all of this concentration runs the risk of leaving other, new, fuel-saving technologies behind, delaying their development,” Wang said. “Automakers should allocate more dollars to other technologies, such as hydrogen-powered cars.”

Hydrogen, whether powered by an in-car fuel cell or via hydrogen filling stations (which are similar to gasoline stations) appear to be the most attractive, alternate fuel technology, Wang argued. “Ethanol used to hold that title, but it’s losing favor as its impact on food prices and the environment become more-clear.” Still, there are fewer than 100 hydrogen filling stations in the U.S., and in-car fuel cell technology has not advanced enough for mass application.

“Focusing on electric hybrids will delay hydrogen technology development, and that would be a mistake, in my interpretation,” Wang said. “We would be putting too many eggs in one basket, from a car transportation technology standpoint.”

Auto Sector Analysis: Given oil’s long-term supply / demand fundamentals, flexibility dictates that auto makers not leave hydrogen — and other technologies — by the wayside. Hybrids represent the quickest way to increase auto efficiency, but not necessarily the best. Absent a battery technology breakthrough, electric remains a short-trip technology. That fact, combined with oil’s price uncertainties, suggest other technologies should not be ignored.