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Economist/Newsweek/Time on Plug-In Cars; Accenture on Biofuels vs. PHEVs

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  • Felix Kramer
    In the past few days we ve seen some very positive articles in leading mainstream publications. The Economist surveys the scene and sees plug-in cars emerging
    Message 1 of 1 , Sep 9, 2008
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      In the past few days we've seen some very
      positive articles in leading mainstream
      publications. The Economist surveys the scene and
      sees plug-in cars emerging as the dominant trend.
      Newsweek has a long story about the role
      industrial sectors and government in that
      country's major focus on green cars. Though the
      story begins with hydrogen fuel cell cars from
      Honda, it quickly moves on to the plug-in cars
      that will arrive years or decades sooner. And
      TIME profiles the options for conversions of hybrids to PHEVs.

      Finally, we post a report on a new study by
      Accenture saying that "the biofuels market will
      need to become as global and efficient as
      possible within the next 10 years, before
      competing technologies such as plug-in hybrid
      vehicles or non-agriculture alternatives like
      algae or biotechnology become mainstream."


      THE ECONOMIST: The road ahead: The world's
      carmakers have mapped out their route to a
      greener future Sep 4th 2008
      http://www.economist.com/business/displaystory.cfm?story_id=12070722
      (excerpts)

      THERE is nothing like high oil prices,
      panic-selling of big cars and the prospect of
      swingeing new penalties on carbon-spewing
      vehicles to concentrate the minds of the world's
      carmakers. In less than two years something
      remarkable has happened. Technologies once
      regarded by horsepower-obsessed marketing
      departments as politically correct
      public-relations fluff, never likely to see the
      light of day, are entering the mainstream just as
      fast as the car firms can get them there.

      Only 18 months ago it was common to hear Toyota's
      pioneering Prius hybrid joked about as a
      funny-looking niche vehicle with which Hollywood
      stars could painlessly flaunt their green
      credentials. Although General Motors (GM) had
      exhibited a plug-in hybrid concept car, called
      the Chevrolet Volt, early in 2007, hardly anyone
      took seriously the claim that it might reach
      production in 2010. And just ten months ago
      carmakers in America were lining up to lobby
      Congress against proposed legislation that would
      oblige them to achieve a fleet-average fuel
      consumption of 35 miles per gallon (mpg) by 2020.
      It simply could not be done, they wailed.

      In Europe a similar campaign, with the German
      carmakers to the fore, was being waged against a
      plan by the European Commission to impose
      financial penalties by 2012 on companies if their
      fleets emitted, on average, over 130 grams of
      carbon dioxide per kilometre (g/km). It was, they
      said, technically impossible to comply with the
      new rules, which they saw as a wicked plot to
      emasculate a proud and successful industry.

      The grumbling about tighter emissions laws will
      continue, but spurred on by rocketing prices at
      the pump and changing customer preferences, the
      manufacturers have quietly got on with the job of
      transforming the fuel and CO2 efficiencies of
      their vehicles. Moreover, the blue-sky thinking
      of the recent past which, encouraged by large
      government subsidies and conveniently elastic
      time horizons, appeared to favour the hydrogen
      fuel-cell, has been dumped for the practical and
      achievable. Although carmakers differ over the
      details of the coming revolution in efficiency,
      there is now a consensus across the industry
      about its thrust, and about both the role of the
      underlying technologies and when they will be on sale.

      And they're off

      The first stage, happening now, is an effort to
      wring efficiency from the internal-combustion
      engine. "It is important to recognise that there
      is not a single solution, and that the
      internal-combustion engine will continue to
      dominate for at least 20 years," says Jürgen
      Leohold, head of group research at Volkswagen (VW).

      The second stage of the journey will begin about
      two years from now. Despite his conviction that
      the internal-combustion engine will remain, VW's
      Mr Leohold concedes that the car industry needs
      to start moving away from mineral energy and
      towards electric-powered vehicles. After deriding
      Toyota's Prius for its complexity, expense and
      slightly dubious environmental benefits (on
      highways it is less efficient than powerful
      modern diesels), almost every carmaker is now
      planning hybrid powertrains of one kind or
      another within a few years. These are no longer
      seen as a niche market, but as central to the
      carmakers' survival. GM's Volt has gone from
      being an interesting sideshow to the model that
      could do more than any other to secure the ailing car giant's future.

      Nearly all the coming hybrids are "plug-ins".
      That means their batteries can be recharged from
      an ordinary power socket. They will use
      industrial-strength versions of the lithium-ion
      batteries that power mobile phones and laptop
      computers, giving them greater staying power and
      performance than the older nickel-metal-hydride
      battery in today's Prius. Under pressure from car
      firms, the battery-makers have rapidly increased
      the energy density, robustness and stability of
      their products. The next generation of hybrids
      will be closer to all-electric vehicles than
      today's Prius: its petrol engine cuts in at speeds above about 10mph (16kph).

      The carmakers disagree about which kind of hybrid
      technology is best. The familiar approach is the
      "parallel" hybrid in which an electric motor and
      an internal-combustion engine combine to improve
      fuel-efficiency and boost power. This is the
      system in Toyota's Synergy Drive, found in the
      Prius, and the "bi-mode" jointly developed by GM,
      Daimler and BMW to reduce the fuel consumption of
      their biggest vehicles. The electric motor is
      used at low speeds, and to give extra
      acceleration at higher speeds. VW has a
      variation, called Twin Drive, that reverses this
      idea, using the electric motors as the main
      propulsion, with a diesel engine to provide a boost when needed.

      An alternative is the "series" hybrid, in which
      the internal-combustion engine does not drive the
      wheels directly, but runs at a constant, optimal
      speed, acting as a generator or "range extender"
      when the batteries have almost run out. This
      system, which GM calls E-Flex, will be in the
      Volt and, from 2011, in other GM cars. It should
      enable drivers to go 50 miles a day using
      electric power alone. As long as the car is
      recharged overnight, the average commuter should
      rarely have to use its internal-combustion
      engine. Bob Lutz, GM's product supremo, reckons
      that within a decade E-Flex vehicles will be
      coming off the production lines at the rate of 1m
      a year. He says the battery pack, being developed
      for GM by CPI, a joint venture between LG and
      Continental, is "new core knowledge for the auto industry".

      Almost nobody disputes that hybrids are a
      bridging technology, however, and that eventually
      most cars will be powered by batteries alone.
      Given today's progress, by 2020 batteries should
      have a range of more than 200 miles--enough for
      the bulk of journeys. In short most carmakers
      think mainstream all-electric vehicles are still more than a decade away.

      Bucking this consensus is the Renault-Nissan
      alliance. Encouraged by the fruits of its
      partnership with NEC, an electronics giant,
      Renault-Nissan wants to have all-electric cars
      ready for mass production by 2010. Renault will
      supply an all-electric Mégane to Better Place, a
      start-up that is building a network of 500,000
      battery-charging points in Israel, and has
      similar plans in Denmark and Portugal. Nissan has
      promised to launch an electric car in America in
      2010. It will have the performance of a V6 petrol
      engine, a range of 100 miles and should be
      capable of an 80% recharge in one hour, the company says.

      Carlos Ghosn, who runs both Renault and Nissan,
      sees the chance to steal a march on slower
      rivals. Although he sidesteps the question of how
      the power for millions of electric vehicles would
      be generated, Mr Ghosn recently declared that "we
      must have zero-emission vehicles--nothing else
      will prevent the world from exploding." The car
      industry now knows where it is going. The race is
      on to be the first to get there.


      NEWSWEEK: Get Your Green Motor Running: Japan's
      automakers are zooming ahead in the eco-car race.
      Their lead may turbocharge their country. By
      Christian Caryl and Akiko Kashiwagi, Sep 6, 2008
      http://www.newsweek.com/id/157508 (excerpts)

      The Clarity is also just one of a number of
      next-generation green automobiles that are
      beginning to come off assembly lines in Japan.
      These vehicles, whether powered by fuel cells,
      long-lasting batteries or renewable biofuels,
      have been around for years, but almost always as
      one-off utopian designs or experimental models
      that were designed mainly to attract good green
      press. Now Japanese automakers are going to the
      next level, entering the green-car mass market,
      in many cases years before their competitors.
      Nissan plans to introduce an electric vehicle to
      the United States and Japan by 2010, with a
      global rollout in 2012. Toyota is road-testing a
      plug-in hybrid in Japan, the United States and
      Europe and plans to launch it in 2009 (there's a
      buzz, unconfirmed by the company, that this
      hybrid car could use solar power as well). Honda,
      a distant second to Toyota in the hybrid market,
      is preparing for the launch of a new car highly
      anticipated for its innovative green
      technologies, including its state-of-the-art
      battery. Mazda will offer the world's first
      hydrogen-gasoline hybrid in Japan by next March.
      All of these companies are benefiting from close
      cooperation with electronics manufacturers,
      component makers and suppliers that are helping
      to push Japan to the forefront of green-car
      technologies. "Globally, Japanese companies are
      definitely at the top right now, and I expect
      them to remain No. 1 in the future," says Mike
      Omotoso, an auto analyst for California-based
      J.D. Power and Associates. "It's definitely
      having a positive impact on the Japanese economy."

      In large part, Japan's lead in green-car
      technology is an outgrowth of its old austerity.
      Japan was obsessed with energy efficiency long
      before global warming made it a worldwide
      obsession. For decades Japanese companies have
      struggled to cope with their oil-poor country's
      sky-high energy costs by placing a premium on
      energy-saving technologies, and it has paid off.
      Even old Japanese industries are cutting-edge in
      cutting energy costs. Japan continued to make
      batteries long after U.S. rivals quit, and now
      makes the most efficient batteries in the world.
      Japanese steelmakers have ceded ground to cheaper
      emerging-market rivals but are still unsurpassed
      in the fine niche art of making superlight steel
      for car bodies. The hidden strength of Japanese
      smokestack industries helped create its green
      cars, and now the success of those cars is
      pushing more and more Japanese
      industries--electronic-motor and control-unit
      producers, all sorts of material companies--to innovate faster.

      It's impossible to tally the direct economic
      effect of the green-car race at this point, but
      it's huge and likely to grow. The Prius is
      already the most popular green car in the world,
      and Toyota plans to raise domestic output of the
      Prius by 60 percent to 450,000 a year by 2009. By
      2015, Goldman Sachs expects the hybrid-vehicle
      market (including plug-in hybrids) to grow to 2.5
      million, up from half a million in 2007, with
      Toyota and Honda in the lead. Analysts say
      plug-in hybrids, which run on a battery alone for
      a short range, are the vehicles that will
      gradually ease drivers out of the gasoline age
      and into the electric era. Goldman analyst Kota
      Yuzawa says hybrid vehicles could account for 5
      to 10 percent of operating profits for Honda and
      Toyota in 2010. And the potential markets look
      likely to grow as oil prices hit new highs and
      environmental regulations get tighter.

      The focus on green cars reveals the kind of
      industrial vision that Japan is often criticized
      for having lost decades ago. Toyota launched the
      G21 Project, which ultimately produced the Prius,
      back in the 1990s, when oil prices were low and
      America's love of SUVs was still growing. The
      idea was to create a model car for the 21st
      century, and counter Toyota's reputation for
      "boring" vehicles. Toyota simply saw the long
      view before others, assuming that the
      petroleum-based economy was becoming unviable for
      a variety of environmental and economic reasons,
      according to Noriyuki Matsushima, analyst at Nikko Citigroup in Tokyo.

      Toyota has since dramatically cut the costs of
      producing the Prius by achieving economies of
      scale. Toyota has already reached the break-even
      point on sales of its hybrids; by contrast, its
      foreign competitors, like GM, still have years of
      bleeding red ink ahead of them. Toyota says the
      parts in its next line of hybrids, due for
      release next year, will cost about half the
      current bunch, allowing it to drop prices and
      raise profits. While the company is estimated to
      have lost about $10,000 on each car produced when
      the line was launched back in 1997, "the new
      Prius is going to be hugely profitable," says
      Nikko's Matsushima, bringing in thousands of
      dollars per car. And Toyota aims to cut hybrid
      production costs over the next decade. With so
      much more manufacturing experience than its
      rivals, Toyota will be "the price leader" for the
      next generation of hybrid vehicles, says Matsushima.

      To be sure, virtually every car company in the
      world is ramping up intriguing green-car
      projects. Even slow-moving GM plans to debut the
      plug-in hybrid Volt in 2010, but it is racing
      from behind against Japanese rivals that work in
      often exclusive national supply networks, as they have for decades.

      Japanese companies have been plugging away at the
      green-car challenge for years, in a slow and
      steady way that plays to the strengths of their
      manufacturing tradition. While U.S. automakers
      have spent as much on R&D as top Japanese makers
      do, the former have been pursing totally
      different priorities--still sticking money into
      bulky SUVs while the Japanese were already well
      down the hybrid road. That money is filtering
      into other areas of Japanese industry,
      reinforcing technological progress. "We are now
      seeing the result of numerous companies'
      ferocious effort to innovate technologies" to
      meet carmakers' demands, says Masahiro Ohta,
      analyst at Fuji Chimera Research Institute.

      Since the batteries that power cars could also
      someday be used to heat homes, a lead in the area
      has vast implications for the broader Japanese
      economy. Nobuaki Yoshioka is a senior executive
      at Automotive Energy Supply Corp. (AESC), a joint
      venture between Nissan and NEC. His company has
      been pushing the envelope of battery technology
      by developing lithium-ion batteries with
      manganese components--something NEC has been
      working on since 1990. "I think [the potential of
      this technology] is enormous," says Yoshioka. "We
      know that oil is going to be depleted, and that's
      going to make it indispensable to somehow store
      energy that is generated. Today we're focused on
      cars. But it's clear that the number of possible
      applications as storage of energy is huge."

      For example, superefficient batteries might store
      electricity generated at times of low demand for
      use during peak hours. Batteries could be used to
      change the infrastructure of the energy industry
      not just in Japan but also throughout Asia.
      Fumikazu Kitagawa, an auto-sector consultant at
      Nomura Research Institute, believes that
      combining the new generation of batteries with
      solar-power generators will completely
      revolutionize household energy systems. "This
      sort of system will be available at reasonable
      cost, and fairly soon," says Kitagawa.

      Other materials makers are also scampering to
      develop new products for high-tech cars. Toray, a
      pioneer of high-tech materials like the carbon
      fiber it puts into aircraft wings and into the
      fuselage of the Boeing Dreamliner, too, is just
      one of them. The company recently set up a new
      automotive research-and-development center for
      advanced materials in Nagoya, just down the road
      from Toyota and suppliers. Toray holds 34 percent
      of the world carbon-fiber market, and aims to
      develop a carbon fiber cheap enough for use in
      car bodies. It hopes to more than double its
      sales to the auto sector to $3.5 billion by 2015.
      Teijin, another high-tech-materials maker, aims
      to "cut the weight of a car by half" by using a
      variety of new materials like polycarbonate
      resin, and a bubble-shaped prototype is on
      display in its Tokyo showroom. Meanwhile, a
      superlight sports car produced by Ken Okuyama
      Design is set for sale this fall in Japan. Using
      carbon fiber and aluminum generously, the model weighs only 750 kilograms.

      Even the popular hybrids are still a niche
      product. But as far as Japanese carmakers are
      concerned, gasoline is no longer where the action
      is. Hillebrand believes that green technologies
      are changing the industry in an unprecedented
      way. If Ford invented modern car manufacturing
      when it built the first assembly line for the
      Model T, says Hillebrand, then the emerging green
      technology represents "the second invention of
      the auto industry. And it's the Japanese who are leading the charge."


      TIME MAGAZINE (story may be online only) Giving
      Your Hybrid an Extra Charge Sep. 02, 2008 By
      Anita Hamilton http://www.time.com/time/business/article/0,8599,1838193,00.html

      Chris Cox of Derry, N.H., got tired of waiting
      for the electric car of the future. In August, he
      took matters into his own hands and had his 2008
      Toyota Prius converted into a plug-in hybrid,
      which doubled its gas mileage -- Cox now gets up
      to 100 miles per gallon for 30 to 40 miles at a
      stretch. Although the Prius is already a hybrid
      gas-electric model, the additional battery that
      Cox had installed enables him to travel more than
      20 miles on all-electric power (compared to just
      two miles without it) before the gas engine kicks in.

      Until now, such after-market auto modifications
      were the exclusive purview of fearless
      do-it-yourselfers (check out their work at EV
      Album or CalCars). But now many car dealers and
      repair shops will do the job for you -- and
      consumers are lining up. Typically customers
      order the kits directly from one of a handful of
      makers, who in turn ship the components to an
      installer near you. At least for now, an
      after-market conversion is the only option if you
      really want to rev up your fuel economy -- short
      of ditching your car altogether and plunking down
      $109,000 for the all-electric Tesla Roadster or
      settling for Zap's barely street-legal
      three-wheeler. "I wanted something real today,"
      says Cox, 50, who works as a database administrator.

      Don't expect a bargain, though: Conversion kits
      range anywhere from $5,000 for lead-acid
      batteries to more than $30,000 for lithium-ion
      technology. The more expensive kits buy you a
      longer all-electric range, don't need replacing
      as often, and take up less space. The catch is
      that the additional battery has to be recharged
      by plugging your car into an electric outlet for
      several hours every time the battery gets
      drained, which can be inconvenient. Cox paid
      $9,999 for a 207-lb. Hymotion lithium-ion battery
      module, which fits into the spare tire well
      behind the back seat of his Prius and takes about
      six hours to charge. Aside from the black
      rubber-capped electrical outlet installed on the
      rear left bumper, Cox's Silver Prius looks
      exactly as it did before the conversion. "I don't
      think I'll make the money back," admits Cox, who
      estimates that it will take 10 years to recoup
      the cost in saved gas. "I bought it so I could
      put the word out there and say, 'Hey, this is possible,'" he says.

      Until now, the steep price of conversions and
      most car owners' lack of technical know-how have
      kept consumers at bay. And while the cost is
      still prohibitive for most folks, some of the
      safety concerns and technical hurdles have been
      alleviated. Hymotion's conversion kit comes with
      a three-year warranty and has been crash tested.
      Those worried about voiding their original
      warranty should know that it is illegal for a
      carmaker to do so solely because an after-market
      product has been installed. If that product
      causes any malfunction or damage to the
      factory-installed parts, however, the warranty won't cover the damage.

      Hymotion, owned by A123 Systems and based in
      Watertown, Mass., has at least one advantage over
      its competitors: The company is one of two
      finalists being considered by General Motors to
      produce the lithium-ion battery for the Chevy
      Volt, which is widely expected to be the first
      commercially available plug-in hybrid in the U.S.
      when it goes on sale in 2010. (GM says the Volt
      will be able to travel up to 40 miles in
      all-electric mode before switching over to its
      gas or ethanol-powered engine.) But there are at
      least half a dozen other companies that sell
      conversion kits for the Prius, Ford Escape and other hybrid models.

      Like Cox, many Americans are desperate to get
      better gas mileage, feel frustrated with fuel
      prices and are impatient with the pace of
      auto-makers' change. "Toyota could produce this
      [plug-in hybrid] in a heartbeat, but they are
      just not there yet," says Charles Tonelli, owner
      of Westboro Toyota in Westboro, Mass., which
      performed Cox's Prius conversion and has a
      waiting list of 96 other customers who want the
      same service. (Click here to see what's involved
      in a conversion). In the meantime, non-profits
      like CalCars and Plug-In America are lobbying for
      tax credits and other incentives that may help
      speed adoption of the new technology. But if you
      can't wait until 2010 for a brand-new plug in,
      you can still get all charged up today.


      BIOFUELS: following is one of many reports on an
      important new study by Accenture -- also see the
      company's press release at
      http://newsroom.accenture.com/article_display.cfm?article_id=4747
      . We haven't found the actual study.

      RED HERRING: The March of Biofuels: More Uphill
      than Down by Justin Moresco, 08 September 2008
      http://www.redherring.com/blogs/24843

      Amid rising fuel costs and calls for fuel
      independence, dramatic growth of the biofuels
      industry seems inevitable to many. But a report
      released Monday by consulting firm Accenture
      identifies several hurdles that could slow, even
      reverse, the march of biofuels.

      Biofuels champions want to see gasoline and
      diesel, produced from oil controlled by a small
      number of countries, replaced by renewable fuels
      produced from widely available corn or sugarcane
      and as-soon-as-possible from even more abundant
      non-food sources, like grasses or agricultural waste.

      The respected research firm Clean Edge predicts
      the worldwide biofuels market will triple by
      2017, reaching $81.1 billion from $25.4 billion
      last year. Mountains of money have poured into
      biofuels research and development at
      universities, large corporations and venture-backed startups.

      But the Accenture report, titled "Biofuels' Time
      of Transition: Achieving high performance in a
      world of increasing fuel diversity," says the
      creation of a global biofuels industry will be
      "much more difficult to achieve" than is widely believed.

      Distribution and infrastructure development are
      partly to blame, according to the report. In the
      U.S., for example, most gasoline is piped around
      the country from refineries to large storage
      facilities, called terminals. From there the fuel
      is trucked to local fueling stations. The system
      is highly efficient, which drives down costs.

      But today in the U.S., as elsewhere save perhaps
      Brazil, biofuels have no such countrywide
      distribution system in place. Producers generally
      sell directly to fueling stations, which explains
      why ethanol has taken root in the Midwest, center
      of U.S. corn production, or send it by rail to
      terminals to be blended with gasoline. This is
      far less efficient than the more consolidated gasoline distribution network.

      If biofuels are to be a serious replacement for
      gasoline, then challenges in the distribution
      chain, including storing, blending and
      accommodating different grades of fuels, will
      need to be overcome. It's still uncertain if
      biofuels can be sent through the same pipelines
      used for gasoline. New pipelines may need to be
      built. Even dispensers at fuel stations need to be retooled for biofuels.

      What's clear is that the development of an
      efficient biofuels market requires enormous
      investment in the infrastructure needed to
      support large-scale operations and trading. That
      financial commitment is difficult to justify,
      according to the report, when the ultimate
      returns and size of the market are uncertain.

      The growth of biofuels also has an enemy lurking
      in the distance. It's called plug-in hybrid
      vehicles. Plug-ins will run on electricity and be
      recharged through standard home or office
      electrical outlets. Unsurprisingly, they will
      pose a direct threat to the growth of biofuels
      when they start rolling off production lines in
      2010, a widely used date that may or may not prove true.

      Whether they come in 2010 or 2020, the cost per
      mile for plug-ins is expected to be dramatically
      lower than that for exclusively gasoline or
      biofuels-powered vehicles. For one thing, the
      "fuel" generation and distribution network--in
      this case for electricity--is already in place.
      That's why the Accenture report says that the
      biofuels market will need to become as global and
      efficient as possible within the next 10 years,
      before competing technologies become mainstream.

      Still, biofuels will have their place in the
      global tapestry of transportation fuels. The
      Accenture report says they could make up 10 to 15
      percent of the fuels mix in 10 to 20 years.

      Biofuels will be especially attractive in
      developing markets, for example in Africa, where
      rising gasoline prices have brought real
      suffering and not just the cancellation of summer
      vacations. Developing countries could become fuel
      producers themselves, driving the local economy.
      And their weak electricity infrastructure will be
      an obstacle for the introduction of plug-in
      hybrids, not to mention the high upfront costs
      that go along with the early adoption of any new technology.


      -- -- -- -- -- -- -- -- -- -- -- --
      Felix Kramer fkramer@...
      Founder California Cars Initiative
      http://www.calcars.org
      http://www.calcars.org/news-archive.html
      -- -- -- -- -- -- -- -- -- -- -- --
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