The Hybrid Electric Vehicle Odyssey

Power Efficiency Guide

Ultimate Guide to Power Efficiency

Get Instant Access

The greatest electric-drive success story to date, apart from China's electric two-wheelers, is hybrid electric vehicles, or hybrids. In hybrids, an electric motor is mated to a combustion engine. The basic principle is to sever the direct connection between engine and wheels so that the combustion engine can operate at a steady load near its maximum efficiency. The engine is downsized, with onboard energy storage devices such as batteries or ultracapacitors assisting the power surges needed for hill climbing and passing. And because the vehicle makes use of onboard electricity storage, braking energy can be captured, resulting in much greater energy efficiency.

The first hybrid electric vehicle was a prototype built by Porsche in 1899. Nearly a century later, hybrid electric technology was featured in the Partnership for a New Generation of Vehicles (PNGV), an alliance of the Detroit automakers with the U.S. government launched in 1993 under President Clinton.29 This collaboration gave the Detroit companies access to a trove of scientific research in the country's national laboratories and directed substantial government dollars (about $250 million per year) toward advanced vehicle technology. The goal of the PNGV program was to build production prototypes with a threefold improvement in fuel economy, what amounted to an 80-mpg car. The three U.S. companies quickly settled on diesel hybrids as the technology of choice.

European and Japanese automakers, alarmed by the 1993 coupling of the world's wealthiest nation and world's largest automakers, leaped into action. But the grand rhetoric of PNGV turned out to be just that. The Detroit automakers dawdled, and although all three eventually unveiled prototype vehicles in early 2000, none of these prototypes was put into production.30 Meanwhile, the ambitious American collaboration boomeranged as automakers elsewhere forged ahead.

Daimler-Benz (which subsequently bought and sold Chrysler, and is now named Daimler AG) was the first to act. It selected fuel cells as a technology to pursue, announcing an ambitious plan in 1997. Toyota was next, jolting the automotive world in October of that same year with the unveiling of a gawky hybrid car for the Japanese market. This first Prius, followed by a slightly upgraded version for the U.S. market in January 2000 and a significantly enhanced version in 2004, was an engineering marvel—and eventually a huge marketing success. It won the 2005 Best Overall Value of the Year Award from IntelliChoice magazine; the 2005 European Car of the Year Award; the 2005 President's Circle Award from the American Lung Association; the Innovation Award in Energy from the Economist magazine; and the Transportation Technology and Innovation Award for 2004 from the Wall Street Journal. Sales started slowly, in part by design. By the first half of 2007 the Prius was the number 8 selling car in America (and number 13 for all light-duty vehicles), ahead of such mainstream models as the Ford Focus and Dodge Caravan.31

Initially, Toyota saw the Prius as an experiment with only a 5 percent chance of success.32 The company pushed ahead and commercialized its innovative product despite difficulties and uncertainties. Shocking even its own executives, Prius sales quickly jumped to 2,000 per month in Japan.33 Toyota's U.S. division prepared to market the novel Prius but worried that it would have to explain to consumers why it didn't come with an extension cord. The Prius made its U.S. debut in July 2000. Despite poor reviews about its rough handling and sluggish acceleration, it caught on. As in Japan, sales were much stronger than Toyota dared hope. Leadership and perseverance paid off, with a boost from Hollywood stars, California's zero-emission vehicle mandate, and unrest in the Middle East. In June 2007, worldwide sales of Toyota's hybrid cars surpassed one million vehicles. Wired magazine recognized Shigeyuke Hori, chief engineer for Prius, with its 2005 RAVE Award aimed at "mavericks and dreamers" who change the way people think about culture, business, and science.34

Honda was the other company to embrace hybrid technology early. It unveiled its super-efficient $20,000 two-seater Insight in December 1999 (rated at 70 mpg for highway driving). It was the first hybrid to enter the U.S. market, just before the Prius, and was soon followed by hybrid versions of the company's Civic and Accord models.

Meanwhile, the European companies, obsessed with diesel technology, largely sat on the sidelines. They saw diesel as a cheaper and easier way to reduce fuel consumption. Initially, the Detroit companies also hesitated, dismissing hybrids as an expensive experiment that would appeal to few buyers. Their oft-stated interest was in mass-market vehicles. GM insisted that it was going to leapfrog hybrids and go right to fuel cells—the alternative that GM's chief executive officer, Rick Wagoner, was fond of calling "the Holy Grail."

Even though GM publicly stated that consumers wouldn't see value in hybrid vehicles, Toyota proved them wrong. By 2002, Toyota was announcing that it was breaking even on hybrids. This assertion was impossible to confirm, but plausible. The extra cost was large, about $5,000 per vehicle according to academic studies.35 This cost estimate depended on various assumptions, including whether R&D was counted only against the first generation of cars or spread across the full range of hybrids sold in the future. In any case, Toyota and Honda both priced their vehicles about $4,000 above what an equivalent gasoline car would cost. The cost gap was filled by savings in advertising and financial incentives. Because hybrids sold themselves, Toyota saved close to $500 per car in advertising, the average spent by the industry (some advertising was done initially but it was mostly to create a broader halo for the company).

And because waiting lists were long, Toyota didn't need to offer discounts and incentives, at a time when U.S. automakers were offering an average of $3,000 for every passenger car and truck sold. All told, Toyota's 2002 break-even assertions were probably about right. Given that Toyota was making decisions at that time to ramp up hybrid vehicle production across other product lines, they clearly saw a profitable future for hybrids.

Detroit eventually followed Japan—but slowly. Reversing course in late 2003, GM announced that it would also start building hybrid vehicles. It did this for two reasons: the media was beginning to mock GM for its lack of innovation, and GM belatedly realized that mastery of hybrid technology was a critical step on the way to its favored longer term electric-drive option, fuel cells. Ford, with technology licensed from Toyota, entered the hybrid market with its small Escape SUV in 2004. Chrysler sold a few hybrid Dodge Ram Contractor Specials as a fleet vehicle, and GM sold some relatively inexpensive "mild" hybrids before releasing its first full hybrid models in 2007.36 Total U.S. hybrid sales grew steadily, increasing from 7,800 for two models in 2000 to more than 300,000 for 11 models in early 2007 (see figure 2.3).

50,000 0

FIGURE 2.3 U.S. hybrid market historical sales (2000-2007). Source: Data from Toyota, Wards Auto. com, and U.S. Department of Energy, "Historical U.S." Hybrid Vehicle Sales," Fact #462, March 26, 2007 (Washington, DC: U.S. Department of Energy), wwwl.eere.

50,000 0

FIGURE 2.3 U.S. hybrid market historical sales (2000-2007). Source: Data from Toyota, Wards Auto. com, and U.S. Department of Energy, "Historical U.S." Hybrid Vehicle Sales," Fact #462, March 26, 2007 (Washington, DC: U.S. Department of Energy), wwwl.eere.

The future of hybrids is difficult to predict. Companies are likely to follow different marketing and technology strategies as they navigate the future. The range of possible technologies and designs is large, from mild hybrids to plug-in hybrids. Mild hybrids have only a very small battery that allows recapture of braking energy and shutdown of the combustion engine when idling; they reduce energy use only about 10 percent. A full hybrid, such as the Prius, has a larger battery (86 pounds in the 2004 model) and reduces fuel consumption by about a third (more in urban driving). A plugin hybrid will tend to have a smaller gasoline motor than Prius-style hybrids and a larger battery and electric motor. It will plug into the electric grid for much of its energy.

Plug-in hybrids provide a bridge back to battery electric vehicles. The technology for plug-ins is ready to go; it's not much different from that of conventional hybrids. The problem is that it costs still more, due to the larger batteries and electric power recharging system. What holds automakers back is this higher cost, as well as uncertainty about what type of plug-in vehicle consumers really want and are willing to pay for. For instance, what do consumers value more: a vehicle with a large battery that operates in all-electric mode for 40 miles, or a vehicle with a smaller battery and little or no all-electric capability but that gets 100 miles per gallon? If they prefer the all-electric driving range, the cost will be higher due to the larger batteries and motor systems. If they value cars that get 100 mpg (or more), the vehicles will be designed as blended hybrids, with the combustion engine operating in unison with the electric motor. Automakers lean toward the blended design since it uses a smaller battery and is thus cheaper. But it's still more expensive than the already expensive Prius-style hybrid. Will many people be willing to pay still more? Automakers, even Toyota and Honda, remain skeptical.

In any case, hybrids are an intermediate step between conventional gasoline vehicles and pure electric fuel cell and battery vehicles. Hybrids have some advantages over conventional gasoline vehicles, with better energy efficiency, easier-to-control emissions (since engines are operating at a steady load), and, like all electric-drive vehicles, a superior driving feel. Plus, except for the plug-in version, they require no change in fuel distribution and no change in consumer behavior. In the bigger scheme of things, hybrid vehicles are a relatively simple technical fix, in that no changes are needed beyond manufacturing and service. The principal downside is higher cost, due to redundant onboard power plants. Hybrids will also be less reliable than combustion vehicles, though the difference may prove to be very small.

Automakers remain cautious about hybrids. Most have followed the lead of Toyota and Honda more out of defensiveness than conviction. They can't afford to be left behind in case hybrid technology really does take off and becomes the preferred technology (whether because of market demand or policy requirements). Plus, hybrid technology is the foundational technology for fuel cell vehicles. Carlos Ghosn, CEO of Nissan and Renault, argues that all-electric vehicles make more sense—environmentally, politically, and economically—than hybrids, provided there are advances in lithium-ion battery technology.

The unanswered questions are how fast and how much costs can be reduced and how many people are willing to pay how much for the image and fuel savings of hybrids. We address the consumer issue in chapter 6, suggesting that a paradigm change in consumer behavior may be under way in which more consumers take societal benefits into account in their purchase decisions. As for costs, Toyota said in 2005 that its goal was to cut the cost premium in half, to about $1,500 per vehicle (for a Prius-type hybrid) and perhaps lower. At that point, hybrid technology will likely supplant conventional gasoline and diesel technology since the short-term fuel savings by themselves will more than offset the extra purchase cost.37

The larger question is whether hybrids will become entrenched as the dominant technology, with growing numbers of plug-ins, or whether hybrids will prove a middling technology superseded by fuel cells and battery electrics.

Was this article helpful?

0 0
Electric Car Craze

Electric Car Craze

Electric Cars Are A Savior From Pollution And Can Be A Laudable Investment For You. Find Out How Electric Car Conversion Shrinks Your Driving Expenses.

Get My Free Ebook

Post a comment