Let the Hybrid Battery Wars Begin

n a week we are calling - Start of the Battery Wars- Ford Motor Co. and General Motors have called upon the U.S. government to provide federal funding to accelerate the development of plug-in hybrid technology in the U.S.

Mark Fields, Ford's Executive Vice President, speaking at a conference on plug-in hybrids, warned that without immediate government action, the country could be left behind in the development of advanced vehicles.

Mr. Fields cited how the governments of Japan, China, Korea and India were all providing significant funding to help in the development of plug-in hybrids in their respective countries.

Amongst Ford's biggest concerns is battery supply, at present Asia has taken the lead in battery development for advanced vehicles. General Motors North American president, Troy Clarke, reiterated the need for federal aid, speaking at a conference in Washington, Mr. Clarke said the U.S. Government must help fund a major effort to strengthen domestic advanced battery capabilities.

Both Ford and General Motors have developed plug-in hybrid demonstration models. Ford is road testing the first of 20 Ford Escape plug-in hybrids under a partnership with Southern California Edison. The first vehicle was delivered last December - 9 additional vehicles will be sent to southern California for testing this year. Ford's plug-in hybrids will be tested at later date under a similar program with Electric Power Research Institute at east coast utilities.

The GM Board has recently given General Motor’s plug-in hybrid, the Volt, the green-light for development. GM has said it will begin mass-production of the Volt in 2010. Coming on the heels of the GM Volt announcement, Toyota have said that they also plan to rollout lithium-ion powered plug-in hybrids in 2010. Panasonic EV Energy Co., Ltd., a joint venture Toyota established with the Matsushita Group, is producing Toyota’s lithium-ion batteries. Limited production of their lithium-ion batteries will commence in 2009, moving into full-scale production in 2010.
In an effort to stay at the forefront of advanced battery development, Toyota said this week, that it will establish later this month a battery research department to advance the development of an innovative next-generation battery that can outperform a lithium-ion battery.

Yesterday, the U.S. Department of Energy (DOE) Assistant Secretary of Energy Efficiency and Renewable Energy Andy Karsner announced up to $30 million in funding would be given to Ford, GM and Chrysler over three years for three cost-shared Plug-in Hybrid Electric Vehicles (PHEVs) demonstration and development projects. The DOE have said their goal is to make PHEVs cost-competitive by 2014 and ready for commercialization by 2016.

Toyota Plans Two New Hybrids

Toyota announced today that it will show two new hybrids at the 2009 Detroit Auto Show. One of the hybrids will be sold as a Toyota and the other as a Lexus. Masatami Takimoto, executive vice president research and development, said the Toyota hybrid will be "a totally new car.” He added that it would be larger than the Prius.

In addition, the company will also show the third-generation Prius. The company did not provide further details, such as timing or cost, related to the new hybrids.

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Four is enough

As if more evidence were needed of the recent tectonic shifts in the automotive marketplace, American car buyers have begun to opt for vehicles with smaller engines, hoping to increase the fuel consumption. In May, four-cylinder engines, the powertrain of choice for almost half of new car buyers, a near doubling of its popularity in the last four years.

The hard figures are impossible to ignore. According to JD Power and Associates' Power Information Network, 45.6 percent of retail buyers in May 2008 chose four-cylinder engines for its new car or truck. This figure was only 38 percent in February 2008 and was at a low of 28, 2 percent in May 2004. Today, less than 20 percent of newly purchased cars run on eight-cylinder engines, with six-cylinder engines also declining-both were in the popularity of four last month. JD Power, says that the May figures represent the highest proportion of four-cylinder engines sold since it began the pursuit.

The change of engine choice, a strong market presence shift to smaller, more fuel-efficient cars, many of which are only with four-cylinder engines. Subcompact small cars and compact SUVs and distribution are the only bright spots in a market already beaten by a weak economy and high gas prices. This shift comes as the quality and selection of smaller engines was always better. Automobile manufacturers are introducing direction injection, turbocharging and variable value timing to boost power and fuel economy.

Given the lifetime of the vehicles and challenging economic conditions, smaller engines are likely to continue for a larger share of American vehicles in use. The market for hybrid gas-electric vehicles is constantly increasing, even if only by around one percentage point per year. Meanwhile, the transition to four-cylinder vehicles than mainstream low-cost high-end option-mpg with a greater reduction in the national oil use and environmental impact.