Do US carmakers need a jump-start?
Japan's hybrid cars are eating Detroit's lunch. Now the Big Three want $500 million in federal aid for battery research to help them leapfrog Toyota and build US-made "plug-in" hybrids that can be "refueled" at local AC outlets such as a home garage.Skip to next paragraph
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The automakers' proposal has all the appearance of dinosaurs pleading for help to become mammals just before the asteroid hits. Yet the idea may have more merit than a casual glance suggests – especially if the industry is willing to match the feds' contribution.
At last week's auto show in Detroit, General Motors unveiled the Volt – a highly efficient hybrid that is years away from showrooms. GM officials said it would be tough to market it without additional help from taxpayers in battery R&D. In fact, a white paper the Big Three sent the administration in December lays out a need for a type of battery that can unleash enough power for quick acceleration, retain large amounts of energy for 40 miles or more of driving, and continue working for 15 years at a range of temperatures from Fairbanks to Ft. Lauderdale. The chemistry for each function is different and hard to blend in one battery. Another major focus involves R&D to build an adequate production base to help keep costs down.
To be sure, the US dug itself into the hole it's trying to escape. For example, from 1993 to its end in 2001, the industry-government Partnership for a New Generation of Vehicles set a goal to develop mid-sized hybrid vehicles that by 2004 could get 80 m.p.g. To some observers, few within the Big Three took the program seriously. Others argue that they took it seriously, but the criteria were too ambitious. By 2001, the National Research Council concluded that the mileage and affordability goals couldn't be reached by 2004. Japan, on the other hand, saw the US program as a significant threat. Toyota and Honda designed hybrids that fell short of several of the US program's goals. But they were reliable and affordable.
The US now stands as the single largest market for Toyota's Prius. Toyota also bought a majority share in battery giant Panasonic EV Energy Co., giving it another competitive edge. US auto companies now say they have a hard time sharing development information with Japan's battery suppliers.
US companies missed the initial wave of customer interest in the first generation of hybrids. They also lack Toyota's profits or its cozy relationship with Japan's Ministry of Economy, Trade and Industry, which reportedly spends some $80 million a year on battery research.
Last July, the Big Three and the US Department of Energy agreed to a cost-sharing program that could pump as much as $195 million into lightweight-materials and battery research over the next five years, or just under $40 million a year if the program runs its full five years. But that may not be enough for Detroit to catch up with Japan's technology.
Toyota's inroads on hybrids, combined with efforts in Congress to boost fuel-economy standards, are not lost on US automakers. It's unclear where any additional federal R&D money for battery research would come from, given the Democrats' revenue-neutral stance on federal spending. But the proposal deserves a fair hearing.