TCS Daily

Do Hybrids Have Legs?

By Ralph Kinney Bennett - January 14, 2005 12:00 AM

At the Detroit Auto Show this week, Toyota was displaying one of its Prius hybrid cars and boasting that it had hit 130.7 miles per hour at the Bonneville Salt Flats last August during National Speed Week. It was evidence of Toyota's vigorous and optimistic view of hybrids, which combine internal combustion engines with electric motors.

While high gasoline prices have caused many people to take second and third looks at hybrid cars they still account for less than 1 percent of the 16.5 million vehicle-per-year American auto market.

They are niche cars for those who want to be technologically hip and/or environmentally "responsible." Whether or not these cars make economic sense in the long run, the big automakers now appear to see them as a valid - and growing - part of the market.

Toyota sees them capturing almost half the market in the next 20 years - a bold vision indeed. General Motors sees about 15 percent market penetration. Many other automotive market people see a timid 3 percent.

In December, General Motors and Daimler-Chrysler announced they are teaming up to produce their own proprietary technology in hopes of taking hybrids beyond the very sophisticated levels already achieved by Toyota and Honda.

Their ultimate goal: greater economy with the power needed to move the bigger cars and light trucks Americans love. In other words, hybrids that can tow boats over the Rockies and pass a gas station at the same time.

A tall order. But there is growing evidence it can be filled.

Right now the hybrid du jour is the Toyota Prius, but rival Honda is coming up fast on the inside with a new hybrid sedan - an intriguing iteration of its best-selling Accord.

The Accord Hybrid builds on Honda's experience - six years with its two-seater Insight and two years with its hybridized Civic sedan - but instead of appealing to granola-munching greenies, it aims for those who want luxury and performance, but with surprising economy.

No backdoor effort to give Honda more "eco-cover," the Accord Hybrid is, in fact, Honda's fastest, most powerful production car, combining its superb 3-liter, 240 horsepower V-6 with a12-kilowatt electric motor. Unlike the Prius, in which the gasoline engine and the electric motor more or less share tasks, the Accord employs the electric motor mainly to enhance the gas engine's performance. Honda calls this IMA or "integrated motor assist," boosting the car up to 255 horsepower.

Although the hybrid's $30,000 base price is $3,000 more than the standard Accord V-6, the car is loaded with goodies like leather seats and XM satellite radio mated to a 120-watt sound system.

Honda claims 37 miles per gallon on the highway and 30 mpg in city driving - whopping 38 and 23 percent improvements over the regular Accord V-6. The economy is delivered not just from the electric motor but from the use of "variable cylinder management," Honda's name for a system that shuts down three of the Accord's cylinders at cruising speeds

Motorheads remember the stumbling attempt GM made at a similar system in Cadillac V-8s back in the early '80s. Those cars, with their so-called "V-8-6-4" engines, really did stumble. But huge improvements in engine computers and electronic controls make Honda's VCM technology more viable.

Meanwhile, the list price of the Prius - between $21,000 and $26,000 depending on options etc. - makes it quite a bargain considering the multi-million dollar technology packed into it. But at least for now the list price is academic. Dealers around the country have reportedly tacked on "fair market adjustment" mark-ups of from $5,000 to $8,000 on the cars.

Toyota, unprepared for the overwhelming reception Prius has received, is now planning to boost production from the present 10,000 per month to 15,000, in an effort to meet American market demands. It also plans to build a Prius factory in the states.

Toyota has already delayed introduction of its luxury hybrid SUV - the Lexus RX400h - until April of this year, hoping to build up inventory of the vehicle to avoid the long waits for delivery that have plagued Prius. It already has 11,000 orders for the RX400h.

The Prius' biggest customer segment is men aged 35 and older. Techno types appreciate the car's advanced systems, but an unmistakable aura of Hollywood enviro-phonies and trail mix-munching poseurs still surrounds it. Honda's Accord seems a surer bet for attracting drivers beyond the enviro-geek crowd.

Enthusiasts can drink in the details of these cars at numerous sites on the web. But the true importance of the Prius and the new Accord is that while Detroit was hemming and hawing and in the end remained faint of heart about hybrids, the two Japanese automakers embraced the concept with all their engineering genius.

Toyota, in particular, staked hundreds of millions of dollars on making an old concept - mixed propulsion - not just feasible, not just reliable, but attractive and therefore marketable. Now it appears that Honda is doing the same thing with its Accord Hybrid. (More about the history of "mixed propulsion" in TCS next week.)

Both GM and Ford are expected to introduce their versions of hybrid power in some SUVs and even pickup trucks within the next two to three years. In an important tribute to the Toyota system, Ford announced earlier this year that it is licensing the Toyota hybrid patents for use in Ford vehicles. The technology will also be available to Nissan Motor Co. beginning in 2006. Although Ford has introduced one hybrid, its mid-sized Escape SUV, the rest of the automakers are playing catch-up.

Make no mistake, ICE, the internal combustion engine, is going to be around for a long time, producing a lot more innovation and efficiency than many dream. And there are a number of small high-mileage cars available now that rival the Prius in overall performance at a lower price. A strong case can be made as well for some of the super diesels now in the works.

It remains to be seen whether hybrids will really have the legs to supplant a significant portion of the pure ICE market. They are still plagued by a common public misconception that they have to be "plugged in" like an electric car every night. All the hybrid displays at the Detroit Auto Show take pains to point out that this is not the case.

To win in the marketplace hybrids will have to prove that they can provide performance over a wide range of demands and prove as forgiving as ordinary cars are to the general level of abuse meted out by motorists. How durable will the exotic technology in these vehicles prove to be? How costly to replace? (Both Honda and Toyota hope to obviate this last question with their hefty warranties).

With fuel cell dreams still unfulfilled and the search for the holy grail of the "super battery" in its usual state of frustration, we may be witnessing with hybrid technology a turning point in automotive history. And it is a rare display of entrepreneurial courage by two large Japanese corporations to boot.


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