Toshiba International Corp.'s hybrid electric motor plant in Houston seems like something out of the future. But for Matthew Bates, plant manager, the future is now.
The 45,000-square-foot plant, which only opened a year ago, more closely resembles a laboratory than a typical factory. A highly automated assembly line churns out HEV motors and generators, producing 125,000 sets per year for Ford's (IW 500/6) hybrid vehicles.
"It's a very lean operation," Bates says, wearing the standard uniform for all employees of the HEV plant: khakis and a blue button-down shirt.
The rhythmic precision by which the fully automated line creates the powertrain systems is in stark contrast to even the traditional induction motor plant housed next door. In becoming green, Toshiba (IW 1000/38) is indeed embracing lean.
Toshiba's relocation of its HEV plant from Japan to Houston last year signals not only a commitment to North American manufacturing but also to the alternative-fuel vehicle market. Once a warehouse, the high-tech hybrid plant is capable of producing motors for Ford's Fusion Hybrid, Escape Hybrid and CMax models.
Across the country, similar plants are being built to fuel the alternative-fuel vehicle revolution that is already under way on the roads of the U.S.
And just in time.
Taking Control of the Market
The U.S. Energy Information Administration predicts alternative-fuel vehicles will control 50% of market share by 2035, a number that will surely be buoyed by the new fuel-efficiency standards put in place by the Obama administration. The standards, which were finalized in 2012, call for the U.S. auto fleet to average 54.5 mpg by 2025.
Yet, while alternatives to gasoline-fueled vehicles are cropping up at the major OEMs, no one technology is leaving the competition in the dust. Instead, companies are exploring a portfolio of new technologies, investing in a diverse eco-friendly future on the roadways.
Even Toyota Motor Corp. (IW 1000/8), known for its popular Prius, which was a hybrid breakthrough on the automotive scene, isn't committed only to one technology. Rather, the Japanese company is exploring plug-in hybrids, pure electric vehicles and even fuel cell cars, in addition to hybrids.
And that's because all of those technologies are intertwined, Toyota says.
"It all starts with hybrid technology as far as we're concerned," says John Hanson, national manager of environmental safety and quality communications at Toyota Motor Sales USA. "It gives us an edge, a competitive edge, to branch out into other areas."
Toyota is using the hybrid platform to develop each of its new technologies. The plug-in hybrid, what Hanson calls the super hybrid, adds one more element (battery charging) to the classic hybrid design. And the company's fuel cell car, a four-door midsize sedan slated for the market in 2015, replaces the battery on a hybrid with a fuel cell.
"It's a technology that we think will become our mainstream powertrain and will become the mainstream powertrain of all OEMs," Hanson says of the hybrid platform.
Leading the Pack
Hyundai Motor Co. (IW 1000/54) sees opportunity in the alternative fuel vehicle market to gain a competitive edge.
The South Korean company, which didn't bring its first hybrid model -- the Sonata hybrid -- to market until 2012, is looking to pull ahead of its competitors by taking an aggressive stance on fuel cell technology.
"From the technology front, we're trying to transition from being a fast follower to being a leader. That's why we're focusing on fuel cell technology," says Gil Castillo, senior manager of brand and product strategy for Hyundai Motor America, who sees Hyundai as taking the lead among other OEMs on fuel cell vehicles. "We are heavily investing in fuel cell technology."
Hyundai sees fuel cell vehicles as having the most promising opportunity for scalability. Because electric vehicles are limited by range, there needs to be a breakthrough on the battery front, allowing vehicles to drive more than 100 miles per charge before electric vehicles will be widely accepted.
"Without a breakthrough, it's really difficult to foresee any spike in battery electric demand," Castillo says.
Fuel cell vehicles, however, don't face the same challenges.
"For fuel cell, it's more of increased production and cost," Castillo says. "From a technical standpoint, there's no need for a breakthrough."
To that end, Hyundai in February started mass production in Korea of a hydrogen fuel cell vehicle, the ix35. The vehicle, which still costs roughly $100,000, is being manufactured for lease to countries such as Denmark, which are investing in the hydrogen infrastructure needed for the fuel cells.
Weaving the Web
What's keeping fuel cells from becoming the go-to vehicle for OEMs is infrastructure.
Currently, there are 10 public hydrogen fueling stations in the U.S., all but one of which are in California, according to the U.S. Department of Energy.
"For us to be able to make this vehicle available to the general public, we need to get to the next level of hydrogen infrastructure," Castillo says.
But he is not discouraged. That's because he knows the infrastructure game has been played out before…a century ago.
When mass-production internal combustion vehicles entered the market, they were vying with electric vehicles even then. But, because of the range limitations of the EV, the gasoline-powered automobile as we know it won out, and the filling station network emerged.
"It's hard for us to believe there ever was a day there wasn't a gasoline station around every corner," says Castillo, who believes the development of the hydrogen infrastructure will follow much the same trajectory.
However, because of the existing competition in the market from gasoline vehicles, the development of the hydrogen fueling station network will require government assistance to gain momentum, Castillo says.
That's where the California Fuel Cell Partnership, an organization supporting the commercialization of hydrogen fuel cell vehicles, comes in. The partnership, which is comprised of auto manufacturers, energy providers, government agencies and fuel cell technology companies, has devised a road map for the development of these hydrogen fueling stations, which can be created with the aid of state funding. And California's Alternative and Renewable Fuel and Vehicle Technology Program, AB118, covers 50% to 70% of the capital cost to install a hydrogen station, as long as the station remains open for at least three years.
The partnership is targeting the creation of 68 hydrogen fueling stations by 2015, with 100 total by 2017, to service the fuel cell vehicles expected to be introduced by that time.
Hyundai alone plans to have 1,000 fuel cell vehicles, priced at around $50,000, on the market in 2015 for consumers.
Hydrogen Chicken or Egg
Once these initial stations are established, the goal is that others will follow, solving the chicken and the egg problem, Castillo says.
Likewise, globally, Korea, Japan, France, Germany and the Scandinavian countries are starting national initiatives to install hydrogen fueling networks.
Not Sold on Hydrogen
It is because of those infrastructure limitations that Volkswagen Group (IW 1000/10) is wary of the technology.
Volkswagen prefers to stay true to its roots as it develops new technologies. The German-based automaker is pouring its resources into clean diesel and biodiesel options, building upon Volkswagen's legacy of manufacturing diesel automobiles.
To Volkswagen, clean diesel remains a valid alternative to fuel cells, based on the well-to-wheel emissions of the vehicles compared to other alternative-fuel vehicles.
However, in order to continue to compete in North America, the maker of the Beetle was forced to introduce plug-in hybrid and electric vehicles into its line-up, says Oliver Schmidt, general manager of the engineering and environmental office for Volkswagen Group.
Schmidt is referring to the new U.S. fuel efficiency standards, as well as California's zero emissions mandate, which requires automakers to produce a percentage of zero-emission vehicles to sell in the state.
"It's one of the main reasons we're developing this technology for the U.S. market," Schmidt says.
Because Volkswagen doesn't have the same economy of scale in hybrid and electric vehicles as a company like Toyota, which sold nearly 250,000 Prii (the company's plural form of Prius) in the U.S. in 2012, the automaker has turned to a modular transverse matrix, or MQB, strategy. In the MQB system, vehicles have the same engine orientation and interchangeable parts.
"With this market, we're kind of not the first mover, so we have to think of a different strategy to keep the cost down for us," Schmidt says.
"The BEV (battery electric vehicle) infrastructure is nascent but it's existent," says Mark Gillies, manager of product and technology for Volkswagen of America. "It's relatively simple to put in charging stations in people's homes for an electric car."
In fact, there are 5,612 public electric charging stations across the country, according to the U.S. Department of Energy.
Yet, despite the advances in all of these technologies, each remains a long way off from achieving the kind of mass acceptance of gasoline, which is supported by stations in nearly every city across the country, according to the Bureau of Labor Statistics.