Here’s the big picture in terms of gas, diesel and electric cars that came out of the just completed Detroit auto show.
By the way, with the return to health of GM, Ford and Chrysler, the shabby, ailing motor show also returned to vitality with more new technology displayed than probably ever before. Shame about the dump of a convention centre they hold it in, but I gather there are big plans for its transformation too. With that, on to the news.
Gas prices are holding steady thanks to the fact that North American production of crude oil is expected to hit an all-time high within the next five years and thanks to ethanol, which now makes up about 10 per cent of the fuel in your gas tank. As gas engines with turbocharging and direct fuel injection become more and more efficient, the payback period for a more expensive hybrid grows longer.
Ford has EcoBoost engines, GM has the Ecotec four, Mazda is coming with SkyActiv and Dodge has the Fiat-inspired and -engined Dart. They’re all saying they can deliver “hybrid” fuel economy without the hybrid price tag. They say they have the technology now to meet the tough fuel economy regs that come with the 2016 model year with engines that customers can fill up at the good old gas station. What they’re going to do in 2026 they’ll decide later.
“We think that the market is ready to listen to a diesel story,” said Chrysler and Fiat CEO Sergio Marchionne as he toured the Detroit auto show. He had no doubt seen the publicity from the Diesel Technology Forum, a lobbying group of which his company is a member. They’re saying there’s growing consumer confidence in diesels by pointing out that diesel car sales went up 27 per cent last year in the United States while hybrid sales slipped. Over all, diesels were 3 per cent of the U.S. automotive market last year, with all battery-electric, plug-in and conventional hybrid models combined making up just over 2 per cent.
Chevrolet is about to introduce a diesel-powered version of its compact Cruze and the rumour is that it will deliver better highway mileage than the Toyota Prius hybrid. Chrysler plans to sell a diesel version of several Jeeps, Mazda wants to be the first Asian car manufacturer to sell diesel cars in the United States and the big Mercedes-Benz S-Class is coming back with a diesel in North America after a 17-year absence.
Volkswagen is the leader in diesel cars in North America. Last year, 21 per cent of VeeDubs in the United States came with a diesel engine. That’s about half of their diesel take-rate in Canada. We don’t know if growth in diesel demand will continue to outpace that of hybrids this year, but many manufacturers are betting it will.
Before we conclude that electric cars were just a passing fancy (again) let me point out that Toyota is confident that the sub-$20,000 Prius C hybrid will be a turning point in attracting budget-conscious buyers and that Nissan is still building electric car capacity of 250,000 a year in Tennessee.
But I believe the most significant encouragement to electric cars fans came from U.S. Energy Secretary Steven Chu who was in Detroit for a speech. Chu is the Nobel Prize winner who is a champion of alternative energy. He told the Detroit Economic Club that he’s not worried by soft sales of electrics and plug-ins and that the Administration is sticking to its goal of getting a million of them on U.S. roads by the middle of next decade.
The most expensive component of all these cars is the battery and the U.S. Government has spent more than $2-billion (U.S.) on domestic battery production. Chu said batteries for plug-in hybrids cost about $12,000 four years ago. By 2015, he says it will be $3,600. “Once you get a battery that's $1,500 and much less expensive electric motors, which we are also working on, then you get to a very exciting price point,” he said. That, he hopes, will happen by 2020.