Sunday, January 11, 2009

"It’s a gamble not to do it"

Lower gasoline prices have been a relief to all commuters whether they drive themselves or rely upon public transportation. Four-dollar-a-gallon gas proved to be a hardship for one and all.

Towering gasoline prices did, however, have its benefits. It forced us to conserve and to seriously explore options to the internal combustion automobile. Ford motors in particular went out on a limb with the development and marketing of its totally electric, battery-powered Volt.

Everyone knows that the current gasoline prices are temporary. But can that knowledge overcome our economic short-sightedness? The near-term future of the electric car may depend on it. (GW)

Detroit Goes for Electric Cars, but Will Drivers?

DEARBORN, Mich. — Inside the Ford Motor Company, it was called Project M — to build a prototype of a totally electric, battery-powered car in just six months.

When it was started last summer, the effort was considered a tall order by the small team of executives and engineers assigned to it. After all, the auto industry can take years to develop vehicles.

But Ford was feeling pressure from competitors, and decided it could not afford to fall behind in the rapidly expanding race to put electric cars in dealer showrooms.

“Frankly, I think it’s a gamble not to do it,” William C. Ford Jr., the company’s executive chairman, said in an interview. “It’s clear that society is headed down this road.”

Certainly, Ford and other carmakers are betting billions of dollars on this new direction, at a time when they can ill afford it and when Detroit is facing government scrutiny after the $17.4 billion bailout of G.M. and Chrysler.

Throughout the cavernous Detroit auto show hall, typically the high temple of brute horsepower, auto companies will be competing this week to establish their green and electric credentials. On Sunday, when the show opens, Ford will announce plans for its electric vehicle, including a goal to start selling them by 2011.

These are risky bets. There are no guarantees that consumers — for all their stated concerns about global warming, dependence on foreign oil and unpredictable gas prices — will buy enough of them. They may balk, for example, at the limits on how far they can drive on a single charge.

But the companies could get some help from President-elect Barack Obama. He has said he is committed to promoting cleaner cars, and may propose incentives to encourage consumers and businesses to buy them.

Ford plans to make only 10,000 of the electric vehicles a year at first — very few by Detroit standards — to test the market cautiously.

Still, Mr. Obama’s interest, and the scope of projects by Ford and others, is convincing some environmentalists that the industry is serious about electric cars.

“I think the days of the gasoline engine are numbered, even if we don’t know exactly what that number is,” said Daniel Becker, head of the Safe Climate Campaign, which is part of the Center for Auto Safety consumer advocacy group in Washington.

The competition over electrics is picking up speed and players. Toyota, which has so far focused its efforts on hybrid models, will display a battery-powered concept car at the Detroit show. Nissan’s chief executive, Carlos Ghosn, has promised to sell an electric car in the United States and Japan as early as next year.

Two Japanese automakers, Mitsubishi and Fuji Heavy Industries, the parent company of Subaru, are also testing electric cars. And Chrysler, the most troubled of Detroit’s three auto companies, has vowed to produce its first electric car by 2010.

The surge toward electric vehicles also appears to be jump-starting investments in advanced-battery production in the United States. General Motors will announce plans at the auto show to build a factory in the United States to assemble advanced batteries for its Chevrolet Volt model, which it expects to start selling next year.

American auto executives have warned that without homegrown suppliers, the country could potentially become as dependent on Asian-made batteries as it is on oil from the Middle East and elsewhere.

“Automakers cannot afford the batteries until they are produced in a certain volume,” said Brett Smith, an industry analyst at the Center for Automotive Research in Ann Arbor, Mich. “But they can’t be produced in volume until companies make a big manufacturing investment.”

Strong consumer demand has to be part of that equation, too. And it remains unclear whether consumers will be comfortable with the idea of buying an electric car, or whether these vehicles will priced to compete with comparable gas-powered models.

Ford would not say what its electric car will cost. The Chevrolet Volt is expected to cost around $40,000.

“It’s the right time to take this step, but it would be presumptive to try and predict what the market is ultimately going to look like,” said Derrick M. Kuzak, Ford’s chief of global product development.

So far, consumers have proved to be fickle about how much they care about fuel economy. When gas prices soared above $4 a gallon last year, sales of the market-leading Prius hybrid surged so quickly that Toyota could not build them fast enough. But demand sagged when gas prices dropped below $2 a gallon.

Industry analysts also note that electric models could be a harder sell than hybrids, which have a gasoline engine to assist and recharge battery packs, freeing them from the need to be plugged in.

Most of the prospective electric models need to be charged for several hours to cover a day’s worth of driving. Ford estimates that its car will need at least a six-hour charge to travel 100 miles. The Volt can get 40 miles on battery power alone, and it has a small gasoline engine that drives a generator to extend its range.

Americans, on average, drive their cars less than 35 miles a day, according to the latest federal statistics, and the industry is likely to play up that fact in its advertising campaigns. With so many families owning two cars, they may see an electric vehicle as an attractive choice for short commutes and running errands.

One way to potentially take the worry out of being stuck with a spent battery is to allow consumers to change them on the fly. The firm Better Place, of Palo Alto, Calif., is working with Nissan and other carmakers to set up stations to offer quick battery exchanges or plug-in charging outlets in Japan, Israel, Denmark and elsewhere. The company has also signed partnership deals in Hawaii and California.

“What will determine the market is not going to be how far your battery can go, but how far your infrastructure is spread so power is available,” said Shai Agassi, the chief executive of Better Place.

The American auto industry’s most notable previous foray into electric vehicles came in the late 1990s, when G.M. introduced the EV-1. That car, which was available in limited numbers only through leases, was pulled from production before it could build a following (though a 2006 documentary about the EV-1 — “Who Killed the Electric Car?” — has developed a following of its own).

Now most of the major car companies have years of experience with hybrid vehicles and their electric systems. While Ford’s Project M was started last year, executives said the company had been moving in this direction since early this decade. Ford first started selling its Escape hybrid S.U.V. in 2004.

Mr. Ford recalled how he used to drive an experimental electric Ranger pickup truck to work each day. “The reason we used a Ranger was because the whole back bed was full of lead-acid batteries,” he said.

The advent of smaller, more advanced lithium-ion batteries has also allowed the car companies to develop electric cars that look, feel and handle much like conventional vehicles.

Ford and its supplier partner, the Canadian firm Magna International, built the Project M prototype in the body of a Ford Focus compact car. It is planning a more distinctive design for the finished product when it goes on the market in two years.

The modest expectations for initial sales are reflected in Ford’s plan for introducing the car at the auto show Sunday. There won’t be the usual dry ice, flashing lights and pounding music.

Instead, there will be a simple announcement at a news conference, and the car will be parked on the street in front of the convention center, available for short test drives by journalists through downtown Detroit.

Lindsay Brooke contributed reporting from Detroit.


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