Electric Cars Spark Debate

Electric Cars Spark Debate

Suppliers suggest clean diesel holds more promise in the near future, while OEMs push onward with hybrid and electric developments.

The Dow Chemical Co. estimates that its proposed lithium-ion battery manufacturing plant for Midland, Mich., could create as many as 885 jobs. The company says the facility will fall in line with President Obama's goal to put 1 million new plug-in hybrid vehicles on the road by 2015. (Dow, along with partner Townsend Kokam LLC, received a $161 million federal grant on Aug. 5 to build the plant.)

In April, battery and auto interior parts producer Johnson Controls Inc. and European battery manufacturer Saft SA said they planned to build a lithium-ion plant in Holland, Mich., that will employ approximately 500 people.

The developments coincide with U.S. automakers' efforts to bring more hybrid and electric vehicles to the market. But not everyone across the automotive supply chain agrees that hybrid or electric vehicles are the answer to the nation's immediate energy and environmental issues.

"Hybrids are not as attractive as the PR hype seems to be," said Tim Manganello, CEO of powertrain parts supplier BorgWarner Inc., while speaking in June at the National Summit economic conference in Detroit. Manganello claims that 70% of hybrid vehicle owners don't purchase another one. He says clean diesel technology is a more realistic option.

Ford Motor Co. Chairman Bill Ford believes there's a future in hybrid/electric vehicles, such as the 2010 Ford Fusion hybrid pictured above. Pictured below is a diesel 2009 Volkswagen Jetta TDI. Powertrain suppliers BorgWarner and Robert Bosch LLC are more optimistic about diesel technology advancements.

Diesels are 30% more fuel efficient, produce 25% less CO 2 emissions and provide 50% more torque than gasoline engines, says Manganello. Diesels also may provide an investment payback, whereas a hybrid vehicle may never pay for itself because of battery replacement costs, Manganello says.

Robert Bosch LLC President and CEO Peter Marks agrees that the auto industry needs to ramp up diesel technology production. He referred to hybrids as a "bridge" technology to fully electric vehicles. He noted during the same panel discussion as Manganello that the industry needs to avoid misleading consumers by telling them electric vehicles are around the corner.

Ford Motor Co. Chairman Bill Ford disagreed with his fellow panelists, saying his company has not experienced the same type of hybrid sales degradation cited by Manganello. Electric vehicles release zero emissions and fit into the Obama administration's energy plan, he said. "I think there will be disappointments in terms of expectations others watching this industry may have, but the vehicles themselves we're very pleased with," Ford says. "The initial applications will be limited... but we have to get going with it, and we have to get going now."

Volatile fuel prices and the prospect of tougher CO2 standards may be the reason Detroit automakers are shying away from diesel technology, says Philip Gott, director of automotive consulting at IHS Global Insight. "We've always felt that diesel is a bit of a risk in terms of emissions, and if the standards get tougher, that will be the case," Gott told IndustryWeek.

Powertrain suppliers such as Bosch and BorgWarner have already made investments in diesel technologies, which could be why they're pushing its benefits, according to Gott. Meanwhile, Ford and other OEMs have held back on diesel developments in the United States and may see entrance into the market as a big gamble, Gott says.

Manganello contends the diesel market continues to grow in Europe and is expanding into developing economies, such as India and China. "The U.S. has been a little bit of a laggard on diesels, and somebody has got to take the initiative," he told IndustryWeek. "And right now it looks like the Europeans are taking the initiative to bring clean diesel vehicles to the United States." But Gott says diesel popularity is starting to wane in Europe as emissions standards tighten over there and mild-hybrid and direct-injection technologies continue to advance.

No matter what route U.S. automakers take, Ford said the entire industry needs to collaborate more with universities, technology providers and the federal government to make electric and alternative fuel technologies a reality. He cited how Europe made diesels work by getting all the stakeholders involved in the decision-making process to agree on emissions targets.

The conference panelists pushing the benefits of diesel say there needs to be more "technology neutrality" when it comes to energy legislation. "You get a tax credit for diesel and hybrid. Hybrid gets a higher tax credit," Manganello says. "And there is a perception that diesels don't have much benefit, especially in this administration, which is fine in the long-term, but there are things that can be done in the short-term to lower our fuel consumption and decrease our dependence on other countries."

Automotive consultant and BorgWarner board of directors member Richard Schaum says there needs to be an equal standard for all auto energy technologies. "I would prefer that we basically write a standard that says this is the carbon footprint we're trying to achieve over time, and let the engineers sort it out," says Schaum, general manager of 3rd Horizon Associates LLC. "Let the people throughout the industry and the supply base come up with the solutions."

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