Ford of Europe Exec Highlights Need for Near-Term, Volume Solutions to Reduce Automotive CO2: Efficient Powertrains and Biofuels

28 March 2007

Speaking at the Automotive News Europe New Powertrain Technologies Conference, Lewis Booth,  Executive Vice President, Ford of Europe and Premier Automotive Group, called global warming “one of the biggest challenges facing our planet” and said that it is also one of the biggest challenges facing the car industry today.

Although the most efficient means of reduction would be to treat all CO2 molecules equally, and then create incentives and disincentives for the carbon intensity of human activities, he noted, this will take too long.

The urgency of the challenge requires us to work within our sector; but the scale of the challenge also requires an integrated response if we are to maxim ise the opportunities to reduce CO2. In our sector that means a partnership between the motor industry, fuel suppliers, government and consumers.

As I’ve said, the challenge of global warming requires a broad and integrated response from many sectors. But let’s now focus on what we in the auto industry can do. We should recognize that the customer will choose the solutions that best meet their needs. We do not exist in a command economy and it won’t be the European Union, national governments, nor even OEMs that make the final decision. It will be our customers.

So we have to ensure that any solutions are acceptable for the customer. And first and foremost for the majority of customers, this means making sure that solutions are affordable. We also must recognize that iconic solutions do not address the overall CO2 problem. A few expensive hybrid cars with limited customer uptake concentrated in a few metropolitan areas is, quite frankly, no answer. That’s a luxury neither we nor the environment can afford.

We need volume solutions that can be rapidly adopted. This remains Ford’s thinking when it comes to CO2 reduction. Our aim is to bring environmental motoring into the mainstream and our product strategy firmly supports this goal.

Meeting the CO2 challenge means moving ahead with a range of technologies simultaneously, Booth said.

In the short-term, that means a focus on improved engine technology, with a shift somewhat from diesels to more fuel-efficient, advanced gasoline engines. Ford’s coming generation of gasoline engines will feature, selectively, direct high-pressure injection; efficient turbocharging; advanced valve actuation; and stop-start technology, with re-start effected through fuel injection. These advanced gasoline engines will offer CO2 levels comparable to diesels.

The power and efficiency of these new generation petrol engines will mean we can downsize our engine families. Tomorrow’s smaller, advanced petrol engines will deliver equivalent power to today’s conventional petrol engines, but with significantly improved fuel economy and CO2 emissions. We believe we can see fuel economy and CO2 savings of around 20 percent through the use of this technology, and we consider that these new, advanced petrol engines will represent a completely new family of powertrain technology.

Booth estimated that in five years, the advanced gasoline engines will account for about one-third of all European sales, the other two-thirds being diesel engines and existing, more conventional, gasoline engines “which are likely to find their place as entry level derivatives.”

On the diesel side, Ford plans to launch three new engines in the next few years with further CO2 improvements of 5-10%, “probably more with the addition of additional powertrain technologies, such as the Belt-Integrated Starter Generator system.” The challenge for diesel will be controlling increasingly stringent tailpipe emissions standards without eroding the affordability of the platform.

While acknowledging the complementary role of biofuels, Booth said that it seems certain that in most markets, biofuels will not entirely displace fossil fuels.

At Ford we continue to work with partners, such as BP, to explore how we can get the most out of bio-fuels and reap their CO2 benefit. We look forward to advanced, second-generation bio-fuels which can be used in the existing car fleet without special modification. Future bio-fuels will resolve many of the sustainability questions by using feed stocks which can be grown non-intensively on marginal land. But we recognize that these fuels are unlikely to be commercially-available for some time.

Nevertheless, just having the amount of biofuels targeted in the EU Biofuels Directive could reduce a CO2 saving equivalent to 20g/km, he said.

As to hybrids, Booth said he did not expect wide-spread uptake of full hybrid systems, and said that plug-ins, while conceptually attractive, still are not a truly viable proposition due to battery limitations.

Rather than full hybrids in Europe, we expect to see the widespread adoption of component parts of hybrid technologies. For example, stop-start systems and regenerative braking will provide a cost-effective way of better combating CO2.

Although Ford continues investing in hydrogen and fuel cell technologies, it is also focused on the hydrogen internal combustion engine. But, Booth said, “we believe that the hydrogen economy is a much longer term proposition.

Let me repeat, we believe that the best way we can contribute to the global priority of stabilizing concentrations of CO2 in the immediate future is through more efficient powertrain technologies, plus an increasing contribution from biofuels as these fuels become more widely available and even more CO2-efficient on a well-to-wheel basis. This is where we need to focus our powertrain imagination, ingenuity, and investment in the near term.

Other factors of importance that Booth highlighted include reducing vehicle weight, advanced transmissions, and technologies to improve driver behaviour, such as driver information systems and selectable driving modes that will allow the driver to optimize the operation of the vehicle to maximize the benefits of the fuel economy technologies.

For policy makers, Booth urged harmonization of standards across the different markets. He also urged a focus on the outcome, not the technical solution.

Government should not try to second-guess the motor or fuel industries as to specific technical solutions or customer preferences. For government to promote one technology over another would lead to market distortion and could stifle both innovation and customer acceptance.

...Several countries have tax incentives for specific technologies, regardless of CO2 performance. For example, a hybrid vehicle with above average CO2 emissions in Sweden, Greece and Ireland receives substantial tax breaks, whilst non-hybrid vehicles but with lower CO2 emissions do not.

Finally, all of this comes down to what the consumer and we as an industry can afford. Meeting the challenge of climate change is going to require a great deal of investment. To innovate on such a broad front as I have outlined today is inevitably expensive; and this at a time when our industry has never been so competitive.

This is why I am convinced that within our industry we need to explore new ways of working together for the benefit of our planet, our customers and, indeed, our shareholders. We all need to adopt a mindset change and put environmental concerns at the top of our agenda. The size of the challenge requires all stakeholders to work together like never before.

Resources:

• Full text of Booth speech

If CO2 reduction just invites the policy that we need a tweak here and a tweak there and, at the same time, we insist on the same level of power, usage,and size of vehicles, and if we insist on being dependent upon liquid fuels, regardless of the source, we might as well just pack it up and figure out ways to live on a much,much warmer planet. This is, of course, even more true within the United States, as U.S. citizens continue to drive their humongous automobiles while at the same time supposedly supporting higher CAFE standards.

Neither Ford not any other auto company can fix the CO2 problem because a real fix will require, at a minimum the virtual abolition of the ICE only engine and a massive downsizing of the number of vehicles sold and miles driven.

I do agree with one thing he said, however, the Government shouldn't be focusing on specific technical solutions. However, at this time, serious requirements for reductions in CO2 and other greenhouse gases will probably result in a much greater hybrid, PHEV, and EV mix.

While it is obvious that Government cannot dictate consumer preferences, it can make it more likely that some of these preferences will change. The apparent prefernces of Europeans for smaller cars with better gas mileage than found in the U.S. is primarily a function of higher taxes. They did not possess the historical base of indigenous oil that Americans did and, early on, recognized the prudence of discouraging the import of oil and the export of their respective currencies. Generally speaking, Europeans also have better opportunities to use alternatives to the auto, so simply rasing carbon or gas taxes may not be sufficient to cause the necessary changes in American consumer behavior.

For most indivual consumers, it will not be more expensive to shift to a lower carbon automobile alternative. Even in the U.S. there are a lot of reasonably priced smaller vehicles out there that could make a dramatic difference in the amount of oil consumed and the amount of carbon emitted.

All the technology improvements over the last 25 years in the auto industry has resulted in zero improvements in average mpg. As long as the bar for size and performance keeps being raised, improvements in the mpg area are hopeless.

Tom -

I don't share your pessimism on the ability of taxes to change consumer behavior. Provided you set it up as a slow but relentless ramp up to a permanently high level and then spend the proceeds on income tax cuts, buy-to-crush programs for old gas-guzzlers and universal broadband access, demand can and will adapt.

Moreover, local governments will figure out how to provide new forms of public transportation, e.g. dynamically routed buses/vans.

The important point, which you make eloquently, is that lawmakers need to adjust market externalities such that consumers voluntarily buy the goods and services that achieve the stated public goals of reduced dependence on OPEC and/or reduced national CO2 footprint. Forcing manufacturers to produce something for which there is insufficient demand at untenable price levels doesn't work (cp. Soviet 5-year plans).

The key comment here is "focus on the outcomes" and don't tell industry how to acheive them.
Focus on CO2 (and local pollution) reduction and let the boys get on with it.

Tax relief (such as we have in Ireland) on hybrids is missing the point - what we want is tax relief on low CO2 cars.

As I've said before, what the United States needs RIGHT NOW is another dollar or two in gasoline taxes.  That'll change the vehicle market, all right.

If the US would raise their gas taxes that would allow us to do the same. We tried to do it unilaterally and everyone started driving south to get their gas. If taxes are raised then every extra penny should go into an endowment fund so that the government doesn't get addicted to the revenue.

I'm with a bunch of smart (and wealthy) folks who think that the money should go into payroll tax reductions, so the total amount of money in people's pockets stays about the same.  Only the incentives would change.  But as people responded to the incentives, the rebate would go down and squeeze the laggards.

There is going to have to be a major shift to make a difference. But as soon as you tell every one that they have to give up what they enjoy for the good of everyone, you lose them. It is up to us and others to show everyone that they can have a very good lifestyle and be more sustainable at the same time.

Detroit shill: We should recognize that the customer will choose the solutions that best meet their needs.

Translation: Through the exploitation of customer insecurities, we can sell huge numbers of SUVs, regardless of negative impacts on the customer, the country, or the world. Don't you dare make us stop.

Detroit has no intention of producing the Volt or any vehicle resembling a PHEV. The improved performance and simplicity of electric traction systems removes the income stream provided by spare parts for existing vehicles and replacement of vehicles when complex powertrains wear out.

Without significant pressure on the consumer from gas taxes or increased fuel prices there will be no change from Detroit. Even with the fuel price shocks of 2005-2006 and the resulting sales losses big three automakers are refusing to see the light.

The pretense that ethanol is somehow going to save ICE fueled vehicles flies in the face of everything we know about physics and climate change. Enough bio-fuel to replace oil depletion simply cannot be produced from climate stressed agricultural systems.

The US needs a carbon tax ASAP in order to get it's priorities straight and remove the deliberate fog created by old tech holdouts.

Pangolin,

I agree with everything you said with one exception.

"Detroit has no intention of producing the Volt or any vehicle resembling a PHEV. The improved performance and simplicity of electric traction systems removes the income stream provided by spare parts for existing vehicles and replacement of vehicles when complex powertrains wear out."

If this thinking is true then how do you account for technology changes such as radial tires? Tire makers had to downsize because radials last longer. But individually they had to compete, so they raced to make the longer-lasting tires. It was a painful adjustment for them, but they did it.

Likewise the electrification of the automobile will proceed, unless you believe Toyota, Honda, GM, Ford, BMW, etc have all colluded to stiffle competition. That would be highly unlikely, and illegal.

JamesEE.

With respect to GMs EV1, why did they order that all those electric vehicles be crushed? It certainly appears that they were trying to kill the electric autombile as implied in the title of the movie. They also pressured CDOT to drop their requirement for EVs with the promise that we could fix the co2 problem in the future with hydrogen. This time, however, GM and others will stall at their peril. EVs are not coming off the assembly lines in India and China. Unless they can get these autos banned, they may be in trouble in the future if they don't come up with their own PHEVs and EVs.

GM, by the way, also killed the streetcars in cities throughout the U.S. They have a history of killing or slow rolling technology that would be a threat to their ICE dominated world. If things have changed, they have only changed because they are threatened by competition. But is all the PR now about the Volt just an attempt to get the lawmakers and regulators off their backs. Frankly, there is nothing in their history that makes me trust these bastards.

Tom,

I don't know why GM crushed the EV1 proto's (and there were so few of them that they should be considered prototypes). There are many possibilities. Here's one you may not have thought of.

I used to work in laptop development for a major computer OEM. Accounting got after us engineers for keeping prototype parts and systems to build our own computers. The company wrote off the equipment (typically around 500 systems) as an R&D expense. That means it's worthless and must be scrapped. If you continue to use it then it still has value. Since prototypes for a $2000 computer may cost over$20,000 each it was an important expense writeoff. And it was causing problems with the auditors.

Now those EV1 prototypes probably had a book value of at least a million bucks each. If you don't crush them you can't write them off. That's my speculation. Maybe somebody else knows more about it.

Lastly, I worked with battery vendors, all Japanese companies, and visited their factories many times in the mid '90's. So I have some experience with battery technology around the time of the EV1. I believe GM killed the EV1 because the batteries weren't ready for a mass-produced vehicle. A lot of development has happened since then, and this time the leaders are American companies (A123 and Altair Nano). Their batteries are way better, and other technologies (power control, traction motors, etc.) have advanced as well.

GM was too early, but only got bashed for the effort. I have frequently criticized GM in my GCC posts, but not for killing the EV1. They may have developed the EV1 just to comply with the ZEV mandate in California, which was also way too early (another case of well-intended but counterproductive government interference). This time nobody is going to stop the electrification of the automobile, IMO.

#1 This is the EVP of Ford Europe talking about the European market.

#2 Europeans are not as enamored as Americans are of revolutionary technology, especially when it comes to personal infrastructure like their cars. Dependability and affordability come first, so a series of modest but worthwhile steps over a number of years of product evolution makes perfect sense. Many of these incremental innovations are developed pre-actively by the European supply chain, a big reason why Mr. Booth can afford to announce future product features that are currently only available from high-end brands.

Moreover, few Europeans are willing to pay through the nose just to stand out from the crowd wrt things that benefit society generally, e.g. improved environmental characteristics. Instead, most want everyone else to do their part as well. Wheras Americans pride themselves on individual action, Europeans instinctively look for collective solutions.

what you have to remember is that this guy is working for a psychpathic corporation
whos one aim in life is to sell us cars by which by their very nature are slowly but surely destroying life on the planet that we live on . He does not care about you , he does not give a f**k about anybody , his aim in life is to return income to shareholders, though in fords case hes not doing a very good job , he will be delighted to sell you a car that is less efficient than Henry Fords tin lizzy of 1921 despite the decades of funding and a world war that have gone into the ICE, he will spend hours elabourating over the wonder of fuel cells , he will tell us that ethenol an biodiesel will free us from the dependance on foriegn oil, and the wars that that brings, in fact he will tell you anything you want to know , but if you just mention the word" electric car" in his company just watch for the mood swing !
GM have shown their colours with the EV1 , and none of the large companies are any better, all of the worlds major car companies are fighting to stay in buisness ,and you know if someone told me that they had all got together to remove the electric car from the loop , I might just believe them !

Rafael:

Still, European (and Japanese) automakers are way more innovative than American automakers. GDI, DSG, small diesel, etc. come to mind. I believe that lagging it technical sophistication (plus poor long-term reliability) are the roots of current US automaker’s problems.

Andrey -

There is actually already a lot more co-opetition between brands than Joe Average is led to believe. For example, GM Powertrain is a global division that employs 85,000 people and is responsible for the engines, transmissions etc. regardless of the target market. Weaknesses in engineering expertise and inadequate economies of scale are routinely compensated for via outsourcing and/or joint ventures with other manufacturers.

IMHO, the real reason that European and Japanese manufacturers tend to offer more sophisticated (and expensive) drivetrains are rooted in the long-term impact of the externalities of their respective home markets: higher fuel taxes, vehicle license fees based on engine displacement or rated power etc. Consumers there trade off initial purchase cost against operating expenses, so these externalities mean fancier technology is economically viable IFF the products also features high life expectancy.

When governments also raise emissions, crash safety and recycling standards in short order, one consequence is that it takes a long time for those improvements in the law to be reflected in the vehicle fleet. Another is that auto makers try to compensate for lower unit volumes by upselling customers to even more expensive engines, trim levels and other features. This applies especially in Germany, where strong unions make shedding excess production capacity almost impossible.

By contrast, Americans expect low prices for both their cars and their fuel but tend to upgrade to newer models sooner. Rising fuel prices and competition from Japanese manufacturers has actually led US auto makers to focus on build quality in recent years. Unfortunately, it's much easier to lose a good reputation than it is to regain it, especially when you are burdened with sky-high pension and health care overheads.

Some would say, why not do that here in the U.S.? American auto executives would say what they have said for the last 30 years..."Americans do not want to buy small cars"...and so it goes.

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