Bloomberg reports that Toyota’s engineers have reached an “advanced stage” of research on a new “induction”-type electric motor which holds the promise of freeing the Japanese automaker from dependence on so-called rare-earth materials. These elements, including neodymium and dysprosium, are used to strengthen the magnets used in traditional electric motors and generators, and are crucial to the production of everything from electric and hybrid cars to wind turbines and guided missiles. China currently controls over 90 percent of the world’s supply of rare-earth materials, and has recently cut exports quotas, raising tensions between China and Japan.

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Yesterday’s release of the Congressional Oversight Panel report on the auto bailout pointed out several fundamental problems with the government’s intervention in the auto industry, all of which stem from what the report termed the “mutually exclusive” goals of the Treasury in overseeing its investment in the industry. But that report focused entirely on the post-bailout management decisions by Treasury, ignoring the decisions made during the bailout itself. And though the White House has, in recent months, redefined its goals in bailing out GM and Chrysler to focus on the improved financial performance of the bailed-out automakers, this is clearly a recent recalibration of its political message. As I pointed out in my latest New York Time Op-Ed,

what Mr. Obama called his “one goal” — having Detroit “lead the world in building the next generation of clean cars” — is nowhere near being achieved.

And, as it turns out, the Administration’s actions in the bailout will inevitably come up well short of that goal in at least one important respect.
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Reuters reports that GM is upping its sponsorship and promotional spending, as it seeks to re-establish its media presence which retracted considerably during and after its bailout and bankruptcy. In addition to boosting sports sponsorships and

co-producing TV shows, like a documentary about a year in the life of a Detroit fire station or a three-part Discovery series on the city,

GM has another strategy in mind as well: product placement for the Chevy Volt. According to the report

GM also is in talks with a reality TV producer about the inclusion of the automaker’s new plug-in hybrid Chevrolet Volt car in a show under development

but what about movies? After all, if Chrysler (which has plans for only one niche electric vehicle, the Fiat 500 EV) can feature heavily in a movie which was promoted using the line “Electric cars are gay” (see video above), surely GM could get a movie made called “Range Anxiety” in which the Volt rescues the President’s daughter from an evil, but range-limited foreign car by driving farther than 100 miles. Subtle, right? Why don’t I just stick to blogging and let you come up with Volt product placement ideas.

The last time we checked in on the Renault EV Spy Scandal, the French automaker appeared to be backpedaling the seriousness of the affair, claiming all technical secrets were safe. But be that as it may, the WSJ reports that the firm has still filed a criminal “complaint against persons unknown” in the case

for acts constituting organized industrial espionage, corruption, breach of trust, theft and concealment.

The complaint comes after Renault met with its three suspended managers, who tell the press they are accused of “serious wrongdoing” but insist that they are innocent. A lawyer for at least one of the accused Renault employees says she is not even aware of what exactly Renault is accusing her client of. Reuters adds that “a private company in a foreign country” is named in the complaint, which now goes to the State Prosecutor of Paris, who will determine whether or not to investigate the complaint. In an effort to backpedal Renault’s apparent suspicion of a Chinese-based conspiracy, the Prosecutor’s office demurred

We never within the government mentioned such a possibility… It’s Renault’s position. They don’t cite a foreign power, they only cite private persons.

China has already denied any involvement in the affair, and Renault’s Chief Operating Officer alleges that the case involves

an organized international network and that technology leaked involved the architecture and economic model of electric vehicles.

Recently the ethanol industry has “suffered” from a problem that epitomizes the problematic nature of government subsidies. Known as the “blend wall” this obstacle was created not by negligence on the part of the industry, but by the fact that its lobbying efforts have been far more effective than its marketing efforts. The problem, in a nutshell, is that the 2007 Renewable Fuel Standard mandates a steady increase in the amount of ethanol blended into the national fuel supply, from 9 billion gallons per year (BGY) in 2008 to 36 BGY in 2022… but with gasoline consumption falling and with standard pump gasoline capped at a maximum of ten percent ethanol (recently raised to 15% for vehicles built after 2007), the industry that’s supposed to get America off gas needs more gas to blend its ethanol into. As a study in the American Journal of Agricultural Economics puts it

Total national consumption of gasoline in the United States has been about 140 billion gallons in 2010 and is expected to fall over time due to increasing fuel economy standards. Thus, at present, if every drop of gasoline were blended as E10, the maximum ethanol that could be absorbed would be 14 billion gallons. In reality, 10% cannot be blended in all regions and seasons. Most experts consider an average blend of 9% to be the effective maximum, which amounts to about 12.6 billion gallons. U.S. ethanol production capacity already exceeds this level. Thus, our ability to consume ethanol has reached a limit called the blend wall.

The solution: well, the EPA’s ruling allowing 15% ethanol blends was supposed to fix the problem, but according to this report, that “fix” would only buy some four years before the industry is back to bumping against the blend wall. The solution?

With ethanol as the primary biofuel and either blend limit (E10 or E15), a substantial increase in E85 would be required to fulfill the mandate.

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One of my favorite features of my beloved Z3 M Coupe is that it offers a snug, driver-oriented coupe cabin without the hemmed-in claustrophobia of most sporting two-doors. But not everyone (or, more precisely, almost no one) is willing to put up with a honking hatchback on their sportscar in order to add an airy ambiance to its cabin. Which is where Mercedes’ new SLK comes in. Not only does it offer a retractable hardtop, which sends it from confined coupe to open-air roadster in minutes, but it even offers a glass roof for maximum top-up natural lighting. And that’s not all: the 2012 SLK, which skipped NAIAS to debut at Mercedes’ 125 year anniversary gala, even offers a “magic roof” option, which electromagnetically darkens the glass roof at the touch of a button. Necessary? Not exactly. But it does help break the perception that sporty coupes must make their owners feel like bunker-dwellers.

The Congressional Oversight Panel, which oversees the TARP program on behalf of the legislative branch, has released an update on the auto bailout [full PDF here] acknowledging the successes of the government intervention, while airing a number of important concerns. As has been typical of mainstream media coverage of the auto bailout, the good news has already been well-reported. The report, for example, notes that the bailout brought GM and Chrysler’s capacity utilization up, labor costs down, and allowed them to “[start] to reverse” their decades-long declines in market share. Furthermore, estimated government losses on the bailout have been halved, from $40b to $19b. The report’s summary concludes

While it remains too early to tell whether Treasury‟s intervention in and reshaping of the U.S. automotive industry will prove to be a success, there can be no question that the government‟s ambitious actions have had a major impact and appear to be on a promising course. Even so, the companies that received automotive bailout funds continue to face uncertain futures, taxpayers remain at financial risk, concerns remain about the transparency and accountability of Treasury‟s efforts, and moral hazard lingers as a long-run threat to the automotive industry and the broader economy.

Which brings us to the concerns that have received considerably less media attention…

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Audi’s A6 was one of the bigger single-model unveilings at this year’s NAIAS, and was rewarded with the “Eyes on Design” award for best production car design, beating the Bentley Continental GT, BMW 6-Series Convertible and Hyundai Veloster. The new A6’s dimensions are hardly changed from its long-serving predecessor, but the stance is closer in line with Audi’s current, long-hooded look. Audi hasn’t released fulls specs for the US market, but the 2.0 TDI version will weigh in around 3,472 lbs thanks to more use of aluminum. That engine will make 177 HP, and is the most efficient option in a global engine range that tops out with the 300 HP 3.0 TFSI supercharged V6. If Audi doesn’t bring the diesel stateside, our most efficient option will likely be the A6 Hybrid, which adds 45 HP and 156 lb-ft of electric power to the 2.0 TFSI engine. That option gives the A6 fewer than two miles of EV range, but allows it to use electricity at speeds up to 62 MPH… and is visually almost indistinguishable from gas-only variants (the silver model in the gallery is a hybrid). Oh, and those LED headlights that everyone instantly latches onto? Optional.

One of the most pervasive memes that seemed to unite the independent thinkers covering the North American International Auto Show was that this year’s Detroit extravaganza offered “no surprises.” The lesson of this  “Detroit Consensus”: clearly the motoring press doesn’t spend much time in the current, unloved Chevy Aveo.

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Having earned its place in the American market by launching focused products at its biggest segments, Honda’s 2010 sales performance proved the danger of chasing niches. In his remarks at the North American International Auto Show, Honda’s John Mendel insisted that

sales of the sporty and stylish CR-Z are also exceeding our expectations with sales of more than 5-thousand vehicles in the first four months. It’s great to see our customers embrace this vehicle … and our effort to push hybrid technology in a sporty direction

but besides proving that expectations for the CR-Z were extremely low, it’s hard to see what he meant. Expectations for the 2012 Honda Civic, on the other hand, are considerably higher.

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From Tesla’s stand at the NAIAS. Ironic counterpoint after the jump.
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Direct injection. Dual-clutch transmission. 40 MPG highway. Three doors. 2,580 lbs. A $17k-ish price point. That might just be one of the most unconventional sets of numbers to come out of this year’s NAIAS, and the Veloster is certainly one of the more unconventional cars to launch here at Cobo. From a more cynical perspective, it is based on the Accent platform, rear headroom seems a bit cramped, the third door seems a bit unnecessary, and its marketing is a bit overly drenched in Gen Y-centric nonsense (also, official EPA numbers aren’t out yet). Still, the Veloster is a huge step from the Tiburons that came before it, and it adds an intriguing new facet to Hyundai’s American assault.

Rather than host its event at a booth-side stage, Ford booked the Cobo Arena for its highly-produced (yet not without its stumbles) presentation. It began with the usual corporate propaganda, centering around the “One Ford” theme and highlighting the Blue Oval’s global operations. Then Alan Mulally zoomed into the middle of the arena in a 2012 Focus ST and, to gales of spontaneous sycophantic applause, began introducing the K-Car-like range of future products based on Ford’s Global Compact platform.

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Chevy’s Volt and Ford’s Explorer won North American Car and Truck of the year, a result which surprised precisely nobody here at Cobo Hall. The Volt beat out Nissan’s Leaf and Hyundai’s Sonata, while the Explorer beat out Dodge’s Durango and Jeep’s Grand Cherokee. But forget the well-fed journos who make up the NACOTY jury… what is your car and truck of the year… and why?

How’s this for a way to kick off a car show? The Porsche 918 RSR looks tastier than the complimentary breakfast that preceded its launch this morning, all gullwings and gleaming sidepipes. Its direct-injected V8 makes 563 HP at a dizzying 10,300 RPM, and electric torque-vectoring motors on the front wheels add a combined 150 kW, for a total power output of 767 HP. Porsche says the interior is more “gentleman’s racer”-oriented than the 918 Concept… but what gentleman makes his consort sit atop the energy-storing flywheel that replaces the passenger seat? And don’t get us (specifically Jack Baruth) started on the copious 917 references in Porsche’s promotional literature. Still, this Porsche is hard not to like… right down to the giant orange “Hybrid” splashed across its rear wing.