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Hyundai Requests Subsidies to Catch Up with Hybrid Technology

6 November 2006

Korea Times. Hyundai Motor’s head of hybrid research has requested that the South Korean government give subsidies to manufacturers and buyers of hybrid vehicles because Korean companies are about 10 years behind Japanese makers.

Kim Min-jin, Senior Vice President of Hyundai, said that hybrid cars will become a market standard after 2010 and that financial support from the government is desperately needed for Korean automakers to commercialize their vehicles in time.

“We cannot make a profit in hybrid cars because imported parts, such as batteries, are too expensive,” Kim said in an e-mail interview with The Korea Times. “Cost is the largest obstacle to their commercialization”

The Japanese government supports about a half of the additional cost in manufacturing hybrid cars, Kim said. In the United States, the federal government offers buyers up to a $3,400 tax deduction on a hybrid.

Hyundai introduced its first hybrid—the Click/Getz Hybrid— in 2004, and last year showed a mild hybrid Accent at the Guangzhou International Automobile Exhibition. (Earlier post.)

Hyundai has provided 780 Click Hybrid cars to various government agencies such as the Ministry of Environment. So far, there is no plan for commercial sales. Kim said that Hyundai will deliver 3,390 more units to the government by 2008.

“After that, we will launch a new vehicle that is superior to Japanese cars in both price and performance,” he said.

November 6, 2006 in Hybrids, Other Asia | Permalink | Comments (17) | TrackBack (0)

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While you're at it get some subsidies for GM, Ford and DAMILER/CHRYSLER -- boom-bita-bang!!!

Good luck to Hyundai. Subsidies for stupidity (such as refusing to do your R&D far enough in advance) are not very popular in the US, that's for sure.

We already have some subsidies in the U.S., the consumer tax credit. We'll see how much it matters as the credit for Toyota hybrids falls off. CNN has a story today about Prius sales slowing a bit that mentions the phase out of the credit as one possible reason.

Lack of domestic energy supplies and high energy prices helped drive the development of hybrids in Japan. Oh, yeah, and a government program with subsidies. See an outline here: http://www.evaap.org/japan.html

We subsidize many many industries in the U.S., billion upon billion, and so do most nations. We should ask why most governments are not following Japan's lead by lowering the cost and the risk of comercializing fuel-saving technologies.


Last month, I rode several hundred miles in a Hyundai rental car. I was impressed.

If they can do well, maybe it will help bring the cost of hybrids into a range where more can afford to buy them.

That will result in some benefit to the environment and reduce fossil fuel demand.

Daewoo (GM subsidiary) could benefit.

Hyundai can take a tip from Ford. If you're behind in a technology - license it 'til you catch up. The Ford Escape has no Ford hybrid technology in it - they bought it from Toyota.

To factory rat: You are not understanding what this story is about apparently when you say "We have the same thing in the US." No, no we don't. Honda did not get any money from the US federal government. Toyota did not get any money from the US federal government. They funded their programs on their own. If you're talking about the point of sale tax credit, it is for ALL automakers, including Hyundai.

"The Ford Escape has no Ford hybrid technology in it - they bought it from Toyota."

That is a patently false assertion.

http://www.businessweek.com/innovate/NussbaumOnDesign/archives/2005/11/is_ford_innovat_1.html

Mary Ann Wright, Director, Sustainable Mobility Technologies and Hybrid Vehicle Programs, Ford Motor Company:
"The Ford Escape Hybrid (and now the Mercury Mariner Hybrid) was engineered, validated and is manufactured in the United States. There is NO Toyota technology or parts in our vehicle. We received NO technical support from Toyota when designing our hybrid system.
We entered into a business arrangement with Toyota where we EXCHANGED patent licences. We licensed 21 patents from Toyota because our hybrid system design was close enough in design to what Toyota did that we wanted to ensure there were no accusations of infringement. At the same time, Toyota licensed several patents from Ford for emissions technology."

Oh my, there is no shame in licensing technology from a competitor - it's what the big boys do to stay in the game. OEM sales of technology and equipment amount to 40% of revenues for many businesses. Toyota gambled correctly in the mid 1990s that there would be consumer demand for a high mileage four seat vehicle and they won. The first generation Prius was released in 1997.

Ford and most everyone else took a different route. There is no shame in admitting their choices. The challenge for Bill Ford now is to listen carefully to the wavefront ideas - and get his company to build a 100 mpg PHEV retailing for ~$20k. Then Ford can rightly tell the world their hybrids are "Made in America."


off topic put, worth a post....

Forget Hybrids. They are too complex & costly. Skip directly to EVs.

Because EVs have far fewer moving parts, they'll last much longer.

Here is a simple plan for moving the USA to electric cars.

step 1. make EVs mandatory for personal transportation in major cities that are near the ocean and have very much to lose (their entire cities) by a rise in ocean levels. Another thing with these cities.. many of their residents are already used to paying more to live there. NYC, SF, Seattle, & LA come to mind. Get European cities like London involved too. This will involve installing charging kiosks nearly everywhere in these cities.

step 2. Once big cities have done this... the price of EVs will naturally come down. The rest of the world can then follow.

For long distance trips, roadside restaurants will offer charging capabilities. Recharge the car for 30 minutes while you much down & stretch.

We licensed 21 patents from Toyota because our hybrid system design was close enough in design to what Toyota did that we wanted to ensure there were no accusations of infringement.

OK, so Ford COPIED the Prius, then paid Toyota off. We stand corrected. It's well known that car makers tear down each others products to see how they do things. I know a former Ford engineer; he once told me: "Whenever we can't figure out how to do something, we look at how they did it in the Camry."

Subsidies for stupidity (such as refusing to do your R&D far enough in advance)

Call it stupidity^2, since Ford were dragged kicking and screaming into PNGV (which actually lends credence to their claim that their hybrid technology was developed in-house. And abandoned in-house ...) And when gov't pressure was let up, they dropped it like a hot potato and put everything into Expeditions and F150s. So they actually did their R&D well enough in advance, they just didn't have the vision to use it.

Imported batteries too expensive?

There is some world-class lithium-ion and ultracapacitor work going on in Korea.... surely these companies could help?

Big business will often ask for taxpayer handouts because it can: it employs a lot of voters and/or contributes heavily to political campaigns. That is why even in these times of plenty, the Keynesian notion of "strategic industries" is alive an well in many countries, e.g. in Europe and Asia. Examples include banking, insurance, farming, steelmaking, coal mining, oil & gas production, vehicle manufacturing, national railways & airlines etc. Privatization has sharply reduced political meddling over the past 25 years, especially in Anglo-Saxon countries, but even there it has been uneven.

Emergency bail-outs are less common in the US than in e.g. Italy, in part because chapter 11 provides an ante-chamber to stave off outright bankruptcy. However, if I recall right, Chrysler was in fact bailed out once in the early 80s.

Chrysler wasn't outright bailed out, in a sense. In other words, they weren't just given the money. What happened was basically they had bad credit to the point they could issue no further affordable bonds so the Federal government in effect co-signed their loans, assuring Chrysler could borrow money at an affordable interest rate in order to stay in business. They did, they recovered, and they repaid the loans in full.

Certainly if Chrysler had failed then yeah, the Feds would have had to pay for them, but as it worked out, the Fed paid $0, they simply promised that they'd take over payments if Chrysler defaulted on the new financing.

Sid, first, if you want to refute what I say, please do so; don't change the words and then respond.

You, I think, missed my point: The Japanese government directed and subsidized the commercialization of hybrid technology, and so should other governments. Toyota deserves credit for having the sense and the talent to leverage that support.

This support was well beyond the kind of R&D support DOE and EPA offer on, for example, clean diesel and hydraulic hybrid (btw, foreign firms participate in these efforts, which could never happen in Japan).

As for the consumer credit, it comes when one files a tax return, not at the point of sale. That is important because the lowest income consumers can not take full advantage of the credit.

dt-
I agree that the Big 3 had the chance to do hybrids beyond 1999 and chose not to. It seems like a classic case of leading a horse to water, but not getting them to drink. If that horse is a mule, then you really have problems.

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