In an extended interview with Fareed Zakaria this weekend, GM CEO Dan Akerson repudiated a lot of GM’s previous optimism about hydrogen fuel cell cars, saying

We’re looking at hydrogen fuel cells, which have no carbon emissions, zero. They’re very expensive now, but we’ve, just in the last two years, reduced the price of that technology by $100,000. The car is still too expensive and probably won’t be practical until the 2020-plus period, I don’t know. And then there’s the issue of infrastructure

The DetN points out that GM had previously said that it would have anywhere from 1,000 to “hundreds of thousands” of fuel cell cars on the road by 2010, and most recently said (in 2009) that the technology would be “commercialized” by 2015 and “cost-competitive” by 2020. So, if hydrogen is moving to the back burner, what’s moving up? Akerson revealed that

soon we’ll be introducing “bi-fuel” engines which can burn both compressed natural gas and liquid gasoline.

We’ve seen GM take early steps towards bringing a natural gas-powered car to the road, but this is the first sign from a top executive that a dual-fuel car is a certainty in GM’s near future. By talking down hugely expensive hydrogen cars and talking up cheap natural gas powerplants, Akerson sends a strong message that GM’s green car efforts are moving in a more pragmatic direction. Hit the jump for part two of the interview, in which Akerson talks gas tax and green cars.
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Today’s wild-ass rumor of the day really lives up to its wild-ass billing, combining equal parts conspiracy theory and ressentiment for a high-proof cocktail of crazy. In a blog (i.e. not very well thought-through) item at Automotive News [sub], Industry Editor James Treece primes the loco pump with an intriguing proposition:

Some commentators and bloggers assume that ownership explains what goes on in the auto industry. They argue that GM and Chrysler management have repeatedly bowed to the desires of their government and union owners over the last two years, and that government ownership has perverted the market in other ways as well.

Well, if that’s so, it’s fair to ask the same question about the latest fuel-economy rules — and the companies that oppose them.

Already the crazy is starting to show: the Detroit automakers are widely recognized to be the chief beneficiaries of the “compromise” modifications to Obama’s proposal. So if government-owned automakers didn’t actually roll over for regulators, why legitimize the crackpot theories of “some commentators and bloggers”? Because Treece has a crackpot theory of his own…
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With the high political drama surrounding America’s debt ceiling crisis, last Friday’s CAFE announcement received much less attention from the media than it might have. But, flying even further beneath the radar is an attempt by Republicans to undo the fuel economy agreement that was the result of long negotiations. According to the NYT, some 39 “anti environmental” riders were attached to an Interior Department and EPA appropriations bill, including one which reads

Sec. 453. None of the funds made available under this Act shall be used— (1) to prepare, propose, promulgate, finalize, implement, or enforce any regulation pursuant to section 202 of the Clean Air Act (42 U.S.C. 7521) regarding the regulation of any greenhouse gas emissions from new motor vehicles or new motor vehicle engines that are manufactured after model year 2016 to address climate change.

Though one rider, which would have prevented any new listings on the Endangered Species Act lists of threatened and endangered species, was defeated, the NYT reports that the fuel economy rider is still pending. Politico adds that the bill is scheduled to go to the House floor today, but that President Obama is already threatening to veto the bill. Having worked with California, environmental groups and the auto industry to hammer out a compromise, it’s unlikely that the White House will approve any final bill that includes a measure to gut the new 2016-2025 standard… but the fact that Republicans are trying to eliminate the EPA’s ability to regulate fuel economy indicates that someone, somewhere wouldn’t mind seeing the newly-approved CAFE standard gutted.

With congress deadlocked on the debt ceiling, President Obama used today’s ceremony announcing (although not fully revealing) a 2025 CAFE standard to contrast fuel economy standard negotiations with the chaos on Capitol Hill. ABC quotes the President saying

You are all demonstrating what can happen when people put aside differences.  These folks are competitors.  You’ve got labor and business.  But they decided:  We’re going to work together to achieve something important and lasting for the country. So when it comes to tackling the deficit or it comes to growing the economy… the American people are demanding the same kind of resolve, the same kind of spirit of compromise, the same kind of problem solving that all these folks on stage have shown. They’re demanding that people come together and find common ground… That’s what I’m fighting for.  That’s what this debate is all about.  That’s what the American people want.

But getting a bunch of auto CEOs in the same room to agree on one 2025 “number” is a lot easier than breaking a political deadlock: after all, the standard could well be changed during the 2017 review period, so nobody is agreeing to anything set in stone past 2016. And the saber-rattling continues, as industry consultants predict doom for the post-2016 period, when the truck standard hits the same 5% annual improvement rate as cars. Besides, Volkswagen and Daimler are the equivalent in this situation of holdouts in the congress, refusing to appear at today’s ceremony and protesting the proposed standard in the media. And when the final rules is announced, this coalition of exemplary compromise could fall apart, as the Sierra Club threatens

As the administration moves forward to finalize the standard, it is critical that they avoid weakening loopholes and giveaways for the industry, and we look forward to working with them to ensure the strongest 2025 fuel efficiency and pollution standards possible to benefit American families and workers.

Defections on the right and left? Continued saber rattling? No concrete agreement yet in any case? Sounds a lot like congress, actually…

The announcement of President Obama’s proposed 54.5 MPG 2025 CAFE standard was hailed nearly unanimously today in a ceremony attended by many auto industry executives as well as government officials. Volkswagen and Daimler were conspicuous by their absence, as the Bloomberg quotes VeeDub spokesman Tony Cervone arguing

The proposal encourages manufacturers and customers to shift toward larger, less-efficient vehicles, defeating the goal of reduced greenhouse-gas emissions,

while Reuters notes Daimler’s response

Mercedes-Benz, the luxury car line owned by German car and truck maker Daimler, did not back the new program, saying it “clearly favors large SUVs and pickup trucks.”

“Our customers expect a range of vehicles from which to choose so this program creates a very real disconnect between government regulation and customer demand,” the carmaker said in a statement.

But are these concerns well-grounded? We don’t know yet, as the details of the proposal (specifically the loophole details) have not yet been released. Instead of publicizing the full rule, the White House released a report [PDF], highlighting the easy-to-like aspects of the proposed rule. But how easy-to-like is the standard really?

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When you talk to industry insiders about BMW, they most typically identify the brand’s great strength as it’s deep institutional knowledge about how to create satisfying road cars, an attribute that explains a lot of the brand’s previous conservatism about its product line. But expanding to include SUVs, hybrids and front-drive MINIs is one thing… starting a new brand as a completely clean sheet of paper, with hardly a trace of previous BMW technology, is quite another. And yet here they are: the i3 and the i8, the former of which launches in about two years. For a projected price of around €40k (BMW is also talking about car-sharing schemes), the i3 offers a 170 HP and 184 lb-ft of rear-drive electric power, wrapped up in an innovative construction concept that’s almost a throwback to body-on-frame (more like body-on-drivetrain) and is unique to the i brand. The whole thing is executed in carbon fiber reinforced plastic, hits 60 MPH in under 8 seconds, can reach 93 MPH and offers 80-100 miles of range. The i8 is further off, and is intended to be a four-door plug-in hybrid halo car, with a 5 second 0-60 time and front, rear or all-wheel-drive, depending on driving mode.

It’s all very Buck Rogers, like a set of Motorama cars of the future, and though the versions being shown now are called concepts, they’re supposed to be very, very close to the real thing. All we have to do now is wait, save our pennies and wait for the future to catch up.

After the apocalyptic warning from the industry about a proposed 56.2 MPG 2025 CAFE standard, the auto industry seems to be backing the White House’s latest proposal, which reduces the 2025 target to 54.5 MPG, slows the rate of efficiency improvement for trucks and increases advanced technology credit loopholes. Another key consideration: the White House agreed to a mid-term review of the 2025 standards to ensure they reflect the market. Plus, the DetN points to a previously unheard-of compromise to keep big trucks cheap:

The plan is also carving out special rules for “work trucks” — heavier light duty vehicles used for construction.

As a result of these compromises, the WSJ [sub] reports:

As of Wednesday, Toyota Motor Corp., General Motors Co., Ford Motor Co., Chrysler Group LLC, Honda Motor Co., Hyundai Motor Co., Nissan Motor Co., BMW AG and Volvo had told the administration they would support the plan

With the industry now largely on board, the Obama Administration has a green light to announce its new standard at a ceremony planned for tomorrow. But not everyone is happy with the new proposal…

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After a lot of prototypes presented at Chinese car shows with hoods closed and long cables going to mock charging stations, EV development appears to get serious in China. Yesterday, Nissan announced that it is developing an EV for the Chinese market that will be sold under the Venucia brand by 2015. Daimler of all people could be further ahead. Read More >

Between Nissan’s Leaf racer and a new EV-only racing cup, electric auto racing has been coming along in recent months, although significant challenges remain. For one thing, batteries are still extremely heavy, and for another, they take a long time to recharge. Finally, thermal management issues conspire with both of these battery challenges to force EV races to be quite short. And in search of a solution, one team that’s entered into the EV Cup is looking to the original EV racers for inspiration: slot cars. Rather than getting hot and heavy with big batteries, figures Drayson Racing Technologies, why not charge the car as it’s racing at speeds upwards of 200 MPH? Luckily HaloIPT has come aboard the project, bringing its eponymous wireless Inductive Power Transfer technology to bear in order to create life-sized, wireless, slot-free slot cars.
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Over a month ago now, I was told by several people who should know that the 2025 CAFE standard “number” would fall between 60 MPG and 50 MPG. When I pressed for details, the only answer I got was “at or slightly under 55 MPG.” So when the Obama Administration opened the haggling at 56.2 MPG, I wasn’t sure if he would stand fast by that number or come down a little. Certainly the auto industry and its allies have been portraying the 56.2 MPG proposal in apocalyptic terms, running attack ads against it like this one hosted at the Freep [MP3]. And apparently the opposition paid off, as the WSJ [sub] reports that the Obama Administration has caved, reducing its proposal from 56.2 MPG to 54.5 MPG… and that’s not all. According to the report

The plan calls for a 5% average annual increase in fuel economy for cars and a 3.5% increase for light trucks through 2021. After 2021, both cars and trucks face a 5% annual increase… Included in the plan are credits for hybrid vehicles—including large trucks —and measures that will give big pickup trucks and sport-utility vehicles more leeway in meeting the target.

We’ll have to wait to see the proposal in detail before we know for sure what happened here, but it seems that the industry has largely gotten what it asked for. Not only is the overall number decreased, but truck compliance has been slowed and “advanced technology credit” loopholes appear to have been expanded. This is fantastic news if you sell a lot of trucks and SUVs, and not so fantastic if you care a lot about dramatically reducing fuel consumption over the next 10 to 15 years. But again, we’ll just have to see what specific proposals are included in the new deal, and how automakers react before we jump to too many conclusions.

At a press conference in Beijing’s tallest building, Nissan’s CEO Carlos Ghosn announced today that the Nissan-Dongfeng joint venture will build an EV in China, and that it will be ready by 2015. No, it will not be the Nissan Leaf. It will be a plug-in that will sail under Nissan-Dongfeng’s “Chinese” brand, Venucia. Said Ghosn: Read More >

California has backed up its strict emissions standards for years now with a $5,000 tax credit for electric, hybrid and fuel cell vehicles, which when combined with a $7,000 federal tax credit can often make those vehicles nearly as affordable as “regular” cars. But, reports Automotive News [sub], that state credit has fallen victim to California’s budget woes and oversubscription, and has been cut in half from $5,000 to $2,500. According to the report:

high demand exhausted the program’s funding last month. The Los Angeles Times reported Thursday that about 500 consumers who bought electric cars such as the Nissan Leaf or Tesla Roadster are on a waiting list and will collect the $2,500 rebate.

To deal with growing demand, the pool of money to fund the rebates was increased to between $15 million and $21 million for CARB’s current fiscal year ending June 30, 2012, according to CARB’s announcement. A total of $11.1 million was allocated in the program’s first two years, according to CARB spokeswoman Mary Fricke.

The increased cash pool and lowered rebate amount are aimed at making the incentive available to more consumers, according to CARB’s Web site. The changes are projected to fund about 6,000 rebates for consumers who apply for the program on a first-come basis, Fricke said.

Now California “green car” intenders not only get a reduced tax credit, but they also don’t get free access to the HOV lane anymore. It’s almost as if California wants “green” vehicles to succeed or fail on their own terms…

The Michigan Congressional delegation’s letter, stating that the Detroit-based automakers are not technologically capable of serving the market while complying with a proposed 2025 CAFE standard seemed strange to me in light of the recent progress made by Ford and GM on fuel economy. Why, I wondered, would these firms boast of their fuel econmy efforts on the one hand while allowing their congressional representatives to portray them as unable to build a CAFE-compliant fleet on the other. Why, I wondered, don’t Ford and GM come out and angrily insist that they can build the most fuel efficient cars in the world? My guess: because they know that they can probably wheedle a loophole out of the feds if they keep pleading inability. Yes, everyone knows they can comply with CAFE… but even the UAW knows that when the government asks you to do something, you ask for something back. Which in turn made me wonder: what might the OEMs want? And, turning to the 2012-2016 CAFE Final Rule [go on, give it a read in PDF format here], I found a glaring loophole that all the manufacturers seemed to want, but which the feds turned down. I have no evidence that this is back on the table for 2017-2025, but I thought I’d put it out there to give a sense of what the OEMs may be pushing for by  pleading inability to comply with the proposed 2025 standard.

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An anonymous tipster has sent us a copy of a letter from the Michigan congressional delegation to President Obama [PDF here, or hit the jump for an embedded copy], which calls his proposal for a 56.2 MPG CAFE standard by 2025 “overly aggressive and not reasonably feasible.” The letter is remarkable in the sense that the major signatories are Democrats, and yet it attacks the President’s proposal with more vigor than many inside the industry. The letter also confirms that that the Detroit-based automakers already rely on CAFE’s “credit” loopholes in order to meet the 2012-2016 standard, a stunning admission of how far behind Detroit still lags in fleet fuel economy. And rather than taking responsibility for their situation, the MI representatives blame CAFE for Detroit’s low fleet efficiency, arguing that “manufacturers that produce primarily smaller vehicles will have an unfair advantage.” Moreover, the MI reps don’t just admit that Detroit is behind its competition, but even goes as far as to argue that “the overall targets currently proposed may exceed what is technologically achievable for the the US automakers that produce and sell the majority of the larger pickup trucks and sport utility vehicles that US families and businesses -and tens of thousands of autoworkers- depend on.”

In short, the letter strikes me as a shockingly old-school display of excuses and apologia that stands in sharp contrast to the “green car revival” narrative that Detroit and D.C. pushed so hard during the bailout. And frankly, I’d be embarrassed if I ran one of the largest automakers in the world and I was reduced to pleading my inability, on technological grounds no less, to achieve a 56.2 MPG fleet average (which in “window sticker” terms, translates to about 41 MPG EPA) within 15 years… even though CAFE is riddled with loopholes that make it easier to continue building thirsty trucks. If Detroit were actually leading the charge for a gas tax (or offering any kind of market-driven alternative), it might have some credibility on this issue, but as things stand this strikes me as nothing more than whining. So much for America’s “can-do” spirit…

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When I was a very young and very green copywriter, Dr. Carl Hahn, at the time CEO of Continental Tires and later CEO of Volkswagen, said in an agency brief: “We lose 10 Deutschmarks on every tire we sell.”

“Then we better stop advertising them,” said I.

Hahn gave me a pained look. The look was followed by real and massive pain in my left foot, because my Creative Director had kicked me viciously.

“Ouch!” I said.

“You’ve got that right,” said Hahn.

That little story crossed my mind when I read in The Nikkei [sub] that “Mitsubishi Motors Corp.’s electric vehicles and other eco-friendly offerings are expected to begin contributing to the firm’s bottom line in two years.” Read More >