Friday, November 04, 2005

Hybrids: Will they or Won't they?

An interesting piece in the IHT titledAt auto show, all the talk is of fuel:
As one automaker after another made clear at the auto show, which continues through Sunday, Toyota is not setting a universal standard for new technologies. It may be setting the pace, but mostly what it has shown is that high gasoline prices have made buyers more open-minded to alternatives.

"There is not going to be a one-size-fits-all solution," Ford's chief technical officer, Richard Parry-Jones, said when asked if an industry standard would emerge for hybrids. "We are in for a fairly confusing decade."
I would argue that we are in for at least a couple of confusing debates. Emergence of new generation of Hybrids and Diesels by the end of this decade, potential entry in to the market of Plug-in Hybrids around the same time, developments in fuel cell and battery electric vehicles, volatility in petroleum markets, and increasing concerns about climate change: These along with steady improvments in mainstream ICE gasoline vehicles are all going to work together to create (excuse the term) a perfect storm in the auto markets.
GM still has the audacity to claim that they will have a market competitive fuel cell vehicle by 2010, when most others have agreed that it will be hard to do before 2015, but much more likely in 2020.

"We believe we can design and validate a competitive fuel cell propulsion system by 2010," GM's vice president for research and development, Lawrence Burns, said before showing reporters the prototype.

In an interview, he sniped at hybrids, citing their expensive price tag and the limits to their efficiency.

"Hybrids could be another niche, low-volume technology that is nice to have," he said. "But is that going to make an impact if you are not penetrating the 64 million new cars and trucks?"

Even then, the question whether Hybrids will or will not become a mainstream technology, and by mainstream I mean present in at least a third of new vehicles sold, is up for grabs.
Toyota and Honda want to persuade buyers to pay a premium for hybrid technology.

"Toyota is looking to do with hybrids what Volvo did with safety, trying to get people to pay more for hybrids," Christopher Richter, an auto industry research analyst at CLSA Asia Pacific Markets, said after touring the motor show. "It is very similar to the debate a couple years back: whether you want to have air bags or not. American automakers were fighting it tooth and nail. Volvo got people to pay for it."

Some Americans are already paying several thousand dollars more for the cachet of driving a car powered by what is seen as a technology of the future.

*Some* is the key word. As GreenCarCongress reported, Honda may be offering some incentives on its Accord Hybrid. Overall, the picture is really murky at this point in time, with the sales of hybrid vehicles in August and September being really distorted by very high gasoline prices in US. A much clearer picture will start to emerge from Nov-Jan. sales data, but as I said above it's unlikely that the dispute will be solved any time soon.


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