The car that once represented General Motors' future gathers dust in a garage north of Detroit.
'Welcome to the toy store,' jokes a company employee as she ushers us into the storage room. It is cluttered with stacked chairs, forgotten clay models, random car parts, an old EV1 body shell and a pile of cardboard boxes. Amid the automotive debris sits the GM Precept, the hybrid-powered concept car that had been unveiled with great fanfare just one year ago.
It is an unglamorous setting for General Motors' original answer to the energy crisis, a diesel-electric hybrid family sedan that gets 28 kilometers per liter. It also is a vehicle that consumers will never see. The Precept's high-tech features would make it prohibitively expensive to mass produce. Instead, General Motors will market an affordable hybrid powertrain - called ParadiGM - which it can sell at high volumes for a profit.
In a high-profile January press conference at the Detroit auto show, GM Vice Chairman Harry Pearce unveiled its ParadiGM strategy. The automaker designed ParadiGM to work in everything from compact cars to city buses. Sales volume could reach 100,000 per year by 2010, according to one company estimate. Other automakers in Japan, Europe and North America are racing to develop their own hybrids. But the hybrid strategies of the various automakers differ in three crucial ways:
Trucks and cars. GM, Ford Motor Co. and the Chrysler Group are going to install their first hybrid powertrains in trucks. By contrast, Japanese and European automakers are designing hybrids for cars.
Full hybrids and partial hybrids. GM and Chrysler have designed partial hybrids - powertrains used mostly to enhance acceleration. Other automakers favor full hybrids that offer better fuel economy but require heavier, more costly battery packs.
'Green' marketing. GM and Chrysler will emphasize the enhanced performance of their vehicles. Honda Motor Co. Ltd., Toyota Motor Corp. and others have emphasized the environmental virtues of enhanced fuel economy.
Although their strategies differ somewhat, Ford and General Motors clearly want to sell large numbers of hybrids in North America. If the two automakers produce the quantities of vehicles they envision, they could set a technological precedent for the entire industry.
'The path to high volume is affordability,' says Larry Burns, GM's vice president of research and development. 'High volume (in hybrids) will only happen if it's affordable and if it has been truly, rigorously proven in the market.'
Ford's Gurminder Bedi agrees. 'We wanted to do a mainstream vehicle that would have an impact in the marketplace,' says Bedi, who is vice president of Ford North America Truck and worldwide truck development. 'With the electric Ranger pickup, we were first on the market with a very nice environmentally friendly vehicle. But it didn't do much for the environment because nobody bought it.'
Though hybrids are hot now, the concept is not new. General Motors, for example, has 70 years of experience manufacturing diesel-electric hybrid locomotives. Moreover, two Japanese hybrids - the Toyota Prius and Honda Insight - have been on the market for two years.
European automakers Fiat S.p.A., PSA/Peugeot-Citroen SA and Renault SA also are developing hybrids for the market. But those vehicles likely will not be built in the numbers Detroit is aiming for in North America. With pickups, minivans and sport-utilities accounting for half of U.S. vehicle sales, General Motors, Ford and the Chrysler group believe that introducing their hybrid technology first in sport-utilities will ensure higher sales.
No niche vehicles
General Motors is dropping the strategy it adopted for its low-volume EV1 electric coupe. The company leased only 700 units to motorists in California and Arizona. GM learned that consumers expect alternative-fuel vehicles to be as affordable as conventional cars and trucks. It was an expensive lesson. One GM executive says the automaker spent at least $1 billion on the technology that powers EV1, the Chevrolet Triax and Precept concept cars. Ford learned a similar lesson with the electric Ranger pickup, a vehicle that netted only 1,000 sales.
In this particular market segment, General Motors and Ford are finished with costly niche vehicles. That is one reason why you will never see the Precept in any showroom. The Precept carries five in reasonable comfort, but the car has no trunk and almost no room for luggage. General Motors never could sell it at a profit.
American automakers believe they will reach volume production with their hybrid vehicles if they achieve three goals:
The vehicles must perform as well as their conventional counterparts. Consumers must be able to load hybrid sport-utilities with cargo, take them off-road and use them just as they would a normal car or pickup.
Hybrids must offer significantly better fuel economy and lower emissions to justify their slightly higher costs.
They must be affordable to consumers and profitable for automakers.
These goals will be put to the test in 2003, when Ford introduces the Escape HEV. That same year, Chrysler will unveil the hybrid Dodge Durango TTR. And in 2004, General Motors will unveil its hybrids, the first of which will be a midsized sport-utility based on the automaker's Epsilon car platform.
Ford and General Motors will market their hybrids in different ways. Ford will aim at fuel-conscious buyers interested in saving the environment. That approach is similar to the 'green' marketing strategies of Honda and Toyota. By contrast, General Motors will emphasize the superior performance of its vehicles. Company executives say hybrid sport-utilities built on the Epsilon platform will accelerate from 0-to-100 kilometers per hour in less than 8 seconds. That is sprightly performance for a truck that gets 12 kilometers per liter. In effect, the vehicle's electric batteries will act as a supercharger for its gasoline motor.
'We have designed this system for more than just fuel economy,' says Robert Purcell Jr., executive director of GM's Advanced Technology Vehicles. 'We have put some unbelievable performance in these cars as well. We call it guilt-free performance.'
Which marketing approach is correct for North America? Environmental-minded consumers purchased few electric cars, says automotive consultant Jim Hossack of AutoPacific in Santa Ana, California. That is why General Motors prefers to promote superior performance. 'I wouldn't be surprised if GM is right,' he says. 'Not many people are interested in the environmental message. It's a vocal minority. People are interested in something unique.'
But what about the Toyota Prius and Honda Insight? GM's Burns argues that small, lightweight cars are not well suited to the U.S. market. Both vehicles were created for Japan's congested urban streets, which require stop-and-start driving at low speeds. 'If you are in a city driving with a whole lot of stopping and starting, those kinds of cars may make sense,' Burns said 'But that typically isn't the situation most drivers in the United States are faced with.'
Small battery packs
With that in mind, GM set out to design a hybrid powertrain optimized for sport-utilities. Two features distinguish ParadiGM: It uses two electric motors in the transaxle instead of one, and the battery pack is small. In fact, the batteries weigh only one-fifth as much as the batteries used in the EV1. The two motors give ParadiGM extra torque for hauling heavy loads or accelerating quickly. In the Epsilon family of vehicles, the powerplant can deliver up to 250 horsepower, Purcell says.
Like other hybrids, ParadiGM runs on batteries alone at low speeds.That is when conventional internal combustion engines are least efficient. When the vehicle is at a stoplight, the internal combustion engine shuts off without affecting the air conditioning and power steering. General Motors is likely to brag about that feature.
By contrast, the Dodge Durango TTR's gasoline engine will run all of the time, says Lawrence J. Oswald, Daimler-Chrysler's vice president of hybrid electric vehicles. Like General Motors, DaimlerChrysler will emphasize the Durango's improved performance. Oswald believes the vehicle will be successful because the electric motor adds four-wheel drive. A gasoline engine will drive the Durango's rear wheels, while an electric motor will power the front wheels.
ParadiGM will not deliver the outstanding fuel economy of an Insight or Prius, or even of the hybrid Ford Escape. Ford hopes to deliver an Escape capable of 14 kilometers per liter. But GM's Burns claims that it actually makes more environmental sense to improve the fuel economy of a large truck from 7 kilometers per liter to 10 kilometers per liter. 'We think a natural place to utilize the technology is on those vehicles that get lower fuel economy today, but are in very high demand because of the functionality they offer.'
But Ford's Bedi says General Motors underestimates the appeal of vehicles with high fuel economy. The Escape - Ford's answer to the Honda CRV and the Toyota RAV4 - competes in North America's fast-growing compact sport-utility segment. The hybrid Escape's outstanding fuel economy will be a major advantage if a fuel crisis makes gasoline more expensive.
While Detroit's Big 3 automakers like to promote their environmental credentials, they have minimized the role played by political pressure. Hossack, the auto industry consultant, says hybrid technology will allow General Motors and Ford to soften pressure by Congress to improve Corporate Average Fuel Economy (CAFE) standards. These standards require automakers' truck fleets to average 9.7 kilometers per liter. Ford and General Motors have had trouble meeting CAFE standards for trucks, in part because they sell so many jumbo-sized Expeditions and Suburban sport-utilities.
Meanwhile, California regulators also have pressured the auto industry to produce hybrids. In 2003, automakers will have to sell thousands of electric vehicles in that state, according to a mandate by the California Air Resources Board. Companies that market hybrids can reduce the number of 'pure' electric vehicles they must sell. But GM's Purcell insists that the automaker did not develop ParadiGM in response to pressure from California.
What does the future hold? GM's Purcell predicts hybrids will spread quickly if motorists have fun driving. 'To us, that is going to become the contemporary performance statement,' he says. 'That's what this is about.'
E-mail writer Richard Truett at [email protected]