Gauging The Demand
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Saturday, January 6, 2007
With great hoopla, automakers will unveil futuristic prototypes next week at the Detroit auto show, including advanced hybrids and a gas-electric sports car, the FT-HS, from Toyota.
The only problem is that some of the technology being touted exists only as fancy fiberglass models.
The buzz machine shifts into high gear tomorrow with carmakers competing to demonstrate their concern about high gas prices, U.S. dependence on foreign oil and global warming. But despite all the glitz, what Americans will drive in the next few years will look a lot like what they drive today. Industry analysts say automakers won't have significant numbers of alternative-energy vehicles -- hybrids, diesels and plug-ins -- for sale until well after the turn of the decade.
The hype is racing ahead of consumer appetite for alternative-fuel vehicles, industry experts say. Only a small fraction of the cars on the roads are hybrids and diesels, which get better fuel mileage than gasoline-only cars and burn cleaner than they used to. While such vehicles have distinct advantages, consumers for the most part seem unwilling to pay their higher prices. As a result, carmakers will push ahead cautiously before deciding to turn out large numbers of the vehicles.
Auto companies are hesitant about the price of new technology. In hybrids, batteries and other components add $1,500 to $3,000 to the cost of each vehicle. Current cost pressures have auto companies scrounging to save as little as half a cent on some parts.
But the manufacturers are doing everything they can to be perceived as environmentally friendly.
Automakers are "investing large sums of money attacking the problem" of heavy fuel consumption and carbon dioxide emissions, which scientists say lead to global warming, said Tom Purves, chief executive of BMW's North American operations. "As an industry, I believe we've never worked as hard on these problems."
Environmental groups contend that the companies are delivering "automotive vaporware" to deflect attention from political momentum in Washington that could force them to boost fuel efficiency. The groups say carmakers are also trying to stay out of the crosshairs of a looming federal debate on global warming. The car companies have gone to court to fight attempts by states to regulate global-warming gases and have resisted attempts by U.S. lawmakers to mandate fuel efficiency increases.
"We would be much more impressed if GM were to say the U.S. needs to cap greenhouse gas emissions. That would be a wonderful new concept," said John M. DeCicco, senior fellow at Environmental Defense. "The country needs a climate change policy, and automakers need to step up to the plate."
Vehicles powered by fuels other than gasoline occupy a small corner of the U.S. auto market. Diesels have accounted for about 3 percent of the U.S. market over the past few years, and most are extra-large pickups used as work trucks. Diesels, which get 30 percent better fuel mileage than gasoline-powered cars, account for nearly half of the market in many European countries.
Though still small, hybrid sales are growing steadily. In 2006, automakers sold 255,000 hybrids, according to estimates by J.D. Power and Associates. This year, the figure is projected to be 350,000, in part because Toyota is increasing production of its popular Prius. Even with the growth, analysts don't expect hybrids to reach 1 million units, or 5 percent of the total market, until after 2011.
Plug-in technology is probably even further in the future because battery technology does not yet exist. Several sources in the industry said they expect Toyota to add plug-in power to the next-generation Prius, which is due later in the decade. Toyota declined to comment. Later this year, Toyota will bring out the Lexus LS 600h, a hybrid version of the luxury brand's flagship sedan.
