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Editorial Commentary:
Behind Detroit's sudden embrace of ethanol
Last updated January 27, 2008 4:23 p.m. PT
THE ECONOMIST
Two technological trends, both unimaginable a year ago, dominated the recent auto show in Detroit, the premier showcase for carmakers worldwide. One was the U-turn in the past decade's headlong pursuit of horsepower and size. The other, less apparent but possibly more significant, was the industry's wholehearted embrace of biofuels.
While carmakers wait for better batteries, gas-electric hybrids remain stuck in the slow lane -- and risk being overtaken by other technologies.
The third iteration of the Toyota Prius, with lithium-ion batteries that can be recharged from a socket at home as well as from the brakes and engine on the road, has been delayed again. Lithium-ion cells pack a far greater punch than today's nickel-metal-hydride batteries, but they continue to display explosive tendencies.
This summer, Honda will start leasing its clever fuel-cell car, the FCX Clarity. But judging from the limited numbers being made available and the steep $600-a-month leasing fee, the Clarity must be considered more a market-research exercise than an actual rollout.
In the meantime, with the global economy slowing fast and oil continuing to nudge $100 a barrel, carmakers worldwide are having to retool their wares in a hurry so as to appeal more to people's pockets than their fantasies.
In the process, diesel is becoming less of a dirty word -- a relic of Detroit's hastily converted gasoline engines that were pressed into service as passenger diesels in the aftermath of the 1973 oil shock. The noisy, smelly, lumbering brutes were ditched in the early 1980s when soaring oil prices returned to earth. But the unpleasant memory has lingered on.
Not so in Europe, where pump prices remained high, and diesel's 30 percent better fuel economy and greater torque won a loyal following. Thanks to innovations by Fiat, Bosch, Volkswagen and others, the modern turbo-charged diesel bears little resemblance to the smoky old clunkers Americans remember.
Today, one of two new cars in Europe is a diesel. In America, diesels account for less than 3 percent of cars and light trucks on the road. But that could quickly change, thanks to improvements in emission control and America's recent switch to low-sulphur diesel.
Ironically, despite their reputation of being dirty, diesel engines actually produce one-third less greenhouse gases than their gasoline equivalents. The price they pay, however, is more soot (known in the trade as "particulates") and nitrogen oxide in the exhaust pipe.
Until recently, that prevented diesels from being sold in California, one of the world's most profitable but persnickety car markets. But a change in the European Union's emission standards has forced European carmakers to produce diesels that are now even cleaner than California requires.
A month ago, Mercedes-Benz started selling a diesel version of its popular E-320 model in America -- the first diesel to meet the stringent emission standards of all 50 states. In Detroit, all the leading European, Japanese and Korean car companies had clean diesels on display. Expect them to start rolling into America later this year.
Still, the home team remains leery. While there is no shortage of state-of-the-art diesel technology in America, it mostly appears in engines for big rigs, buses, tractors and locomotives. Making clean, lightweight diesels for passenger cars is an altogether different matter.
Hence the move among American carmakers to concentrate instead on more familiar stopgap technologies. The current favorite is the "flex- fuel" vehicle that can run on either E85 (85 percent ethanol and 15 percent gasoline) or straight gas