It's the best of times and the worst of times for fuel economy in North America.
Aluminum structures, direct-injection engines, continuously variable transmissions and fuel cells all are under development.
At the North American International Auto Show in Detroit last month, General Motors and Ford Motor Co. unveiled the Precept and the Prodigy. Developed with the help of the U.S. government, the two prototype sedans can travel 100 kilometers on three liters of fuel.
The research project - dubbed the Partnership for a New Generation Vehicle - plans to have fuel-efficient cars ready for production in 2004.
But consumers yawned. As usual, the auto show's stars were trucks. Pickups, sport-utilities and minivans now account for half of U.S. sales. Despite rising gasoline prices, consumers still prefer big trucks and V-8 engines.
Moreover, the partnership has encountered major headaches. Toyota, Honda and Volkswagen have introduced highly fuel-efficient vehicles without government subsidies. And their vehicles - the Toyota Prius, Honda Insight and VW Lupo - are already available.
Worse, the U.S. automakers have chosen powertrains that may fail to meet tough U.S. air-emission standards. And the vehicles themselves - which are designed for maximum fuel efficiency - do not meet consumer expectations for comfort and utility.
Against the tide
It wasn't supposed to be like this. Although they profit mightily from light truck sales, Ford, GM and DaimlerChrysler wanted to demonstrate their environmental awareness.
In 1993, those automakers formed their partnership with the U.S. government to channel public research dollars into fuel-saving technologies. So far, the government has spent $1.5 billion in contracts with government to develop lightweight materials, electronics and batteries. The automakers have contributed an estimated $800 million per year.
Now that Ford and GM have already shown their prototypes, DaimlerChrysler is expected to do so at upcoming auto shows in Chicago or New York.
However, the research program has not produced any vehicles that consumers can buy. Indeed, it swims against the tide of the U.S. marketplace.
'You can throw a lot of money down a deep hole trying to be on the cutting edge of something the public has not demonstrated that it wants,' says James Johnston, a resident fellow at the American Enterprise Institute, a conservative think tank in Washington, D.C.
Johnston is a former vice president for government relations at General Motors and oversaw the creation of the research consortium.
'The people who really want these cars are government regulators and environmentalists,' he says.
Actually, some environmentalists are equally critical, says Jason Mark, a transportation analyst for the Union of Concerned Scientists, an environmental group based in Berkeley, California.
Mark claims the project has 'careened off course.' The program focused on research, he says, but neglected to create a market for the cars in the United States, where fuel is cheap and vehicles are big.
'We can't really expect an 80 mile-per-gallon car to fall into the showroom without a stronger policy, such as tax incentives or fuel economy standards, to pull them along,' he says.
Too dirty for California?
Mark also questions decisions by GM and Ford to use diesel engines. Many consumers are reluctant to buy diesel-powered vehicles, and government regulators are tightening emissions standards.
'Consumers in some states such as California wouldn't even be able to buy them,' Mark said. 'It's a powertrain that is out of step with the country's emissions goals.'
Both the GM Precept and Ford Prodigy would be illegal for sale in California under its forthcoming regulations. By 2007, California will be three times as tough on diesels as the federal Tier II emissions rules. The cars also fail to meet the consortium's goal, which is to be twice as clean as the federal standard.
To even approach those standards, the Prodigy needs special fuel. Ford uses Swedish diesel fuel, which contains just 10 parts per million of sulfur. By contrast, ordinary North American diesel fuel contains up to 1,000 parts per million of sulfur. Fuel that dirty would choke the Prodigy's experimental catalyst and particulate trap.
Even with Swedish fuel, the Prodigy is not clean enough. 'With zero sulfur and a particulate filter, you can just make it,' says Vince Fazio, director of Ford's PNGV program. 'What we still need is a more efficient catalyst.'
Fuel economy versus practicality
As if that weren't enough, the prototypes' designers sacrificed utility to improve fuel economy.
For example, the GM Precept meets the consortium's mandate to provide space for five passengers. But with a rear-mounted hybrid powertrain and a traction motor up front, it has no room for cargo.
Some practicality was sacrificed to performance, acknowledges Robert Purcell, executive director of GM's Advanced Technology Vehicles department. 'This vehicle is designed to push the envelope on technology,' he says.
Critics also point out that rival carmakers are introducing fuel-saving technologies without any government subsidies.
Both the Toyota Prius and Honda Insight feature hybrid powertrains, advanced batteries and flywheel starter-generator motors.
The Audi A2 pioneers the high-volume use of aluminum space frames. And Volkswagen's modestly priced Lupo subcompact and Seat Arosa - equipped with 3-cylinder turbodiesel engines - can travel 100 kilometers on three liters of fuel.
Defenders of the Big 3 point out that high-mileage vehicles from Toyota, Honda and VW are significantly smaller than the partnership's proposed sedan. The consortium's target is a sedan about the size of a Ford Taurus, Toyota Camry or Honda Accord.
Big 3 executives also point out that Toyota and Honda are losing money on every Insight and Prius being produced. Both companies publicly acknowledge that their cars - which carry retail prices of $20,000 or so - cost thousands of dollars more to produce.
GM, which says it has spent $50 million to develop the Precept, says it has not determined what the price tag of a production version would be. Likewise, Ford says it is too early to say what a Prodigy would cost.
Despite all its flaws, the American Enterprise Institute's Johnston says the PNGV program offers at least one major benefit.
'It's been an education for government people,' he says. 'I think they now understand that there's no silver bullet for increasing fuel economy that has been sitting around on the industry's shelf. It's a lot of hard work and sweat.'