Toyota is “all in” on fuel cell electric vehicles

Toyota is “all in” on fuel cell electric vehicles

Company Loves Its Hybrids But Likes Hydrogen Better Than Electricity.

The race to provide the car of the future is heating up and it should surprise no one that one of the world’s largest car companies, Toyota, is right in the middle of chase to provide it. For Toyota, that future car is powered by a fuel cell that produces electricity on-board from hydrogen.

Craig Scott, Toyota’s national manager of advanced technologies, brought that message recently to a meeting of the Western Automotive Journalists, a Northern California-based group of auto writers.

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Scott points to the future

Scott’s message was clear–the car’s are real, they’ll be on sale next year and they will deliver what consumers want in a car while helping the automaker to meet tightening emissions regulations around the globe. Toyota’s fuel cell story is in sync with its competitors Hyundai and Honda, who are also ready to enter the market, as well as other companies that will follow–Daimler/Mercedes, Ford, Nissan, General Motors and BMW. The cars will offer a range comparable to gas models and a similar fill up time (both advantages cited for offering a fuel cell electric car as opposed to a battery electric one). The catch, of course, is where those fill ups will take place. As Scott reported, the state California has dedicated $20 million a year for the next decade to put 100 stations in place, augmenting the meager network of nine that exist right now.

Because fuel cell vehicles have no emissions of either criteria pollutants or greenhouse gases (GHG), they fit California’s quest for zero emission vehicles and help the automaker meet U.S. federal and other countries’ goals for reduced GHGs.

Zoomy Concept Shown

The concept fuel cell FCHV (for Fuel Cell Hybrid Vehicle to remind of Toyota’s bread-and-butter advanced technology) sedan Toyota has been showing was unveiled at the Tokyo Auto Show last year and most recently showed up at the Consumer Electronics Show in Las Vegas. Scott indicated that next year’s production car would use the zoomy styling of the concept, though not all of the details of the show car would make it to the

toyota,fuelcell,future,FCHV

An aggressive alternative fuel

street. Costs of the fuel cell “engine” hardware have dropped significantly in the last few years, Scott said, meaning the cars that go on sale in 2015 may still be more expensive than their petroleum-powered cousins, but they won’t cost automakers the $1 million the prototypes did during the past decade. Costs and prices are expected to drop further as production volumes ramp up in the 2020s and other advances in technology, such as reducing the amount of exotic metals like platinum, come on board.

The advances and volumes are expected to come not just because consumers are expected to snatch up great numbers of fuel cell cars when they get to the market, but because automakers have banded together to share costs and collaborate to move the technology forward. Toyota is working with BMW, Ford, Daimler and Nissan are working together, GM and Honda have formed an alliance while Hyundai is going it alone and Fiat-Chrysler appears to be sitting out this round.

The Market Begins

Although both Honda and Mercedes have been leasing limited number of their fuel cell cars for a couple years, Hyundai will be the first on the retail market with a real push. Michael O’Brien, Hyundai’s vice president of corporate and product planning, told the Governor’s Office Summit on Zero Emission Vehicles (March 7, 2014) that the first load of Tucson FCEVs (Hyundai uses the more conventional Fuel Cell Electric Vehicle

Honda,fuelcell,refueling,future

Future fueling too?

nomenclature) will ship from Korea in 3-4 weeks, arriving in April and going on sale mid-May at four dealerships in Southern California. Hyundai previously announced it would offer a $2,999 down, $499 lease that includes free fuel and maintenance for the three years of the lease. Hyundai’s also going to make the Tucson FCEV available for rent through Enterprise Rent-a-Car.

Scott said Toyota isn’t ready to talk pricing on its fuel cell sedan, but it can be expected to be competitive. We’ve seen the same dynamic at work in the electric car space, where the limited market has driven all the automakers to offer very similar discounted leases. Toyota executives have also said they will approach their fuel cell vehicles with the kind of patience they showed with the Prius hybrid introduction. That technology took almost a decade before it took hold in the market, but Toyota has said they’re in it for the long haul and will be able to continue investing in the technology until the market catches up with it.

Taking a page from the Tesla playbook, Scott also said Toyota is planning to augment any public hydrogen stations with a network of its own, which may be a key way of reassuring new buyers that they will be able to refuel.  In the same vein, Honda recently demonstrated a quick refueling station that reduces the fill time to about three minutes, more than comparable to the time spent with a gas or diesel car.

While Toyota and Honda both showed off concept versions of their upcoming fuel cell cars, Hyundai introduced theirs as a Tucson-based model, virtually indistinguishable from the gas version except for badging. Hyundai corrected that by introducing the Intrado FCEV concept at the Geneva Auto Show.

Expect the drumbeat of fuel cell announcements to continue through the year as automakers gear up for more of the cars appearing on the market. Much of the news will be California-centric, but other centers of fuel cell infrastructure and vehicles can be found in Germany, Japan and Korea with England, Denmark and Singapore also in the mix.

Photos by Michael Coates & the manufacturers

Published March 8, 2014

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Hyundai, Honda, Toyota Lead With Zero Emission Contenders

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Hyundai First Fuel Cell In The Showroom

Story & Photos (except Toyota) By Michael Coates

Electric cars running on hydrogen, creating their own electricity as they drive, are officially no longer the cars of the distant future. As Hyundai Motor America president and CEO John Frafcik said last week: “The future is much closer than you think.” Come spring, you can go to a select Southern California Hyundai dealer (one near the growing hydrogen station infrastructure), put down $2999 and drive away in a Tucson fuel cell car, a compact SUV with water as its only tailpipe emission, a 300-mile range on a tank of free (for the life of the $499/month loan) fuel, and free Concierge Service (like that offered with the Equus model). In other words, Hyundai is ushering in the hydrogen age and doing its best to make it an easy transition for the early adopters who choose to shift to zero emission driving. It made the announcement at the Los Angeles Auto Show, creating a stir among the more mundane introductions of conventional cars and trucks.

Hyundai, which has made a commitment to produce several thousand Tucson FCEVs on the same assembly line as its gas-powered cousin, is not alone as both Honda and Toyota will have their own fuel cells on sale in 2015. Both companies showed off concept cars hinting at the look of their 2015 FCEV sedans. Honda’s car, shown at the LA Auto Show a few hours before Hyundai’s announcement, was a futuristic design that will probably be tamed down for production, but clearly takes a page from its initial foray into hybrids with the 2000 Insight. Toyota’s FCEV, which was introduced at the Tokyo Auto Show, featured more conventional styling but carried the same promise as Hyundai of a consumer-friendly market approach.

Others Will Join In The Fuel Cell Parade

 

Of course, Mercedes, General Motors, Nissan, Ford, BMW and Volkswagen are not far behind the three leaders. All have their fuel cell cars ready to roll out (and some have done limited marketing as have Hyundai, Honda and Toyota) and are expected to hit the market prior to 2020.

The big hang up for fuel cells has been the refueling infrastructure. Unlike pure electric cars, which can rely on the ubiquity of electricity for easy, if slow, refueling, FCEVs need a network of stations to truly become a technology that can replace the internal combustion engine. Governments in Germany, Japan and Korea (and a few other spots in the world) have committed to build that infrastructure and California fell in line this year when it passed a bill to fund up to 100 stations, most of which will be located in Southern California where the cars will see their initial rollout.

Early adopters opting for the 2015 Tucson FCEV will get quite a deal. For comparison, we ran the numbers for a base gas-powered 2014 Tucson in Southern California. A 36-month lease with $2,999 down would give you $544/month payments – and you’d have to pay for your own gas and service!

Honda and Toyota didn’t have the retail details that Hyundai offered, but they made it clear that 2015 would be the introduction date of their fuel cell vehicles, which in the U.S. also will be targeted to the Southern California region with an infrastructure to support the cars.

The Hyundai Fuel Cell Deal

 

At the introduction, Hyundai’s Krafcik ticked off the advantages his company sees in fuel cell vehicles, compared with pure battery electrics. He also said there was plenty of room in the market for both types of zero emission vehicles, but FCEVs offered:

  • Driving range of 300 miles,
  • Capable of refueling in less than 10 minutes,
  • Minimal reduction in daily utility compared with its gasoline counterpart,
  • Minimal cold-weather effects, and
  • Extensive crash, fire and leak testing.

What fuel cells share with battery electrics is instantaneous torque from its electric motor, good daily reliability and long-term durability, few moving parts, quiet operation and zero greenhouse gas emissions from operation. Krafcik noted that a UC Irvine study done this year found the well-to-wheels emissions of fuel cell vehicles to be lower not only than gas or diesel vehicles, but also battery electrics.

In addition to the straight sales pitch, Krafcik also said that the Tucson FCEVs will be available as rentals through Enterprise.

Honda Fuel Cell Concept

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Honda Gets Zoomy With Its Next Fuel Cell

 

Honda, while adamant about the 2015 launch of its next generation fuel cell car, was less committal about planned volumes or price at the LA Auto Show. Honda has been leasing its FCX Clarity fuel cell for several years, but in very small volumes. Honda reviewed its history getting the public into its fuel cell cars, noting that the next generation’s fuel cell stack (the “engine” for an FCEV) will have a 60 percent power density improvement over the one used in the Clarity. The stack also is 30 percent smaller than its predecessor and costs have been reduced.

The Honda FCEV is a five-passenger sedan, similar in exterior size to its current FCX Clarity, but with a more spacious interior because of the smaller fuel cell stack. Honda didn’t release exterior dimensions of the concept, but said its stack would yield more than 100 KW of power output and would deliver a driving range of more than 300 miles.

Toyota Fuel Cell Concept

 

Like Honda, Toyota chose an auto show to unveil a concept version of the fuel cell sedan it will launch in 2015. The Camry-size four-passenger sedan, unveiled at the Tokyo Motor Show last week, is a less radical design than Honda’s, appearing to be much closer to the production intent for the production version. Its released dimensions indicate it is slightly longer overall than a Camry (191.7 inches compared to 189.2 for for the Camry), has a wheelbase that is almost identical and is about a half-inch narrower. Toyota said its new fuel cell stack has a power density similar to Honda’s at 3 kW/liter, which they said represents more than twice that of its current stocks. The company also claimed reduced size and costs. Automotive News quoted Toyota officials as saying that fuel cell cars by 2020 will cost roughly the same as a plug-in hybrid to produce.

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Toyota’s 2015 FCEV Concept

 

 

 

 

 

 

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Suddenly, Hydrogen Cars Are Back

Suddenly, Hydrogen Cars Are Back

honda,clarity,fuel cell, hydrogen, zero emissions

Honda Clarity fuel cell vehicle

Of course, they never left, but the relentless focus on pure battery electric cars and plug-in hybrids as available zero emissions transportation solutions has overshadowed the technology that many automakers consider the most “elegant” solution to the challenge of replacing the internal combustion engine.

The most recent news is the announcement of a joint venture in hydrogen-powered fuel cell electric vehicles (FCEV) between General Motors and Honda. This follows by a couple months a similar alliance between Daimler (Mercedes-Benz), Ford and Nissan. BMW and Toyota have also banded together on fuel cell development.

While the deals sound a lot like pre-competitive alliances that automakers often pursue, the commercial horizon is much sooner for fuel cells than many might realize. Hyundai, one of the few major companies, along with Volkswagen, who is going it alone, has already started series production of 1,000 FCEVs (to be completed by 2015). Toyota’s FCEV goes on sale next year; Honda has built and leased 100 of its Clarity FCEVs; Daimler has built and deployed several hundred of its F-Cell cars. That said, the leap to the next level (thousands of cars instead of the current hundreds) is now expected by 2020.

The Hydrogen Joke

The inside-the-industry joke has been that fuel cell vehicles are the cars of the future—and always will be—with the subtext that the future is perpetually 20 years away. Based on the recent activities in the field, that 20 years may have shrunk to about five.

The attraction of fuel cell vehicles for automakers is clear.

  • The cars work just like electric cars;
  • They’re quiet,
  • They use proven electric motors that provide quick acceleration,
  • They present configuration opportunities since the fuel cell is smaller than an engine and can be placed virtually anywhere on the car,
  • They don’t have the range issues of battery electric cars because instead of relying on stored electrical energy from a battery, the FCEV creates its own electricity from the hydrogen passing through the fuel cell.

The basic technology is old (more than 150 years old), but it has been honed by automakers and innovators during the past two decades (or in GM’s case, more than four decades) so that its durability and deliverable range is comparable to a gas engine while it is much more efficient and environmentally benign at the tailpipe (the only thing coming out is water vapor). And automakers also can count on extra credit in the CAFE fuel economy game.

Challenges Remain

Of course, hydrogen fuel cells also have challenges, which are alluded to in the “car of the future” joke. While fuel cell costs are down, they’re still significantly more than that of a traditional gas or diesel engine. Hydrogen, too, even when steam-reformed from currently cheap natural gas, carries a premium. Storing the hydrogen involves having a tank that needs to be of a material that can hold the gaseous fuel in a highly compressed state compared with a gas tank that can be made from relatively cheap composite material. Infrastructure has to be built, unlike ubiquitous gasoline and diesel stations and electric plugs that can be found everywhere.

But that infrastructure is being built around the world. California just offered $20 million for companies to continue to build stations needed for the initial vehicle launches and Korea, Japan, Germany and other countries have active government-industry coalitions ramping up stations.

While it still has some significant hurdles, the hydrogen future appears to be closer than ever with the new alignment within the auto industry. These alliances give them an edge on cost issues and presents a more unified front to skeptics who have written off automakers’ fuel cell focus as a diversion from other technologies like battery electrics. In reality, no automaker can afford to pass on any zero emission technology, particularly one this developed  and seemingly ready-to-go. But, as with predictions of battery breakthroughs and magical alternative fuels produced from waste, it would be wise to file these latest announcements and check back in a couple years to see what real progress has been made.

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GM’s last fuel cell project, the Chevy Equinoz

Hyundai Making 2,000 Hydrogen Fuel Cell Electric Vehicles

Hyundai Making 2,000 Hydrogen Fuel Cell Electric Vehicles

By John Addison (9/6/11)

The most popular way to extend the range of an electric vehicle is to add a small gasoline engine coupled with a generator as done in the Chevrolet Volt plug-in hybrid. The most popular way to extend the range of an electric bus is to add a fuel cell that generates added electrons. During the Winter Olympics, 100,000 riders were transported up Whistler’s 12 percent grades on 20 hydrogen fuel cell electric buses. Now SUVs made by Hyundai-Kai, General Motors and Toyota are also testing Fuel Cell Electric Vehicles (FCEV).

So far, hydrogen vehicles have been following the adoption path of natural gas vehicles. They do well in specific fleet applications, but they have not been ready for consumers at competitive prices, complete with 100,000 mile warranties and a network of public fueling stations. Hyundai, Mercedes, Honda, Toyota, and General Motors are all working to make FCEV mainstream commercial success. Linde, Air Products, Praxair, Shell and others are installing more private and public stations.

When my wife and I drive our Nissan LEAF, we charge the lithium battery with electricity and go. We do not suffer energy loses of using electricity to electrolyze water creating hydrogen and further energy loses of converting hydrogen back to electricity. The LEAF with its 60 to 100 mile practical range meets 80 percent of our needs, but not 100 percent. If we were driving hundreds of miles daily, or on a heavy bus driven 300 miles daily up and down hills, we would need a clean way to extend the range of our electric vehicle. Hydrogen fuel cells extend the range of electric vehicles. Neither battery-electric or fuel-cell vehicles provide 100 percent of the solution. We need a portfolio of solutions to achieve fuel economy, energy independence, and clean air.

Mercedes Fuel Cell Vehicles Drive 18,000 Miles Around the Globe

After 70 days of driving and more than 18,000 miles, three B-Class F-Cell’s circled the globe and returned home to Stuttgart becoming the first round-the-world drive with fuel-cell vehicles. The three F-CELL hydrogen-powered cars crossed through 14 countries on four continents. Even a no-fault accident in Kazakhstan was unable to stop the B-Class F-CELL.

Now Mercedes is putting 200 of these F-CELL hatchbacks into fleets for daily use. I was impressed with my test drive. The F-CELLs smooth ride and quite cruising reminded me of driving my LEAF. The Mercedes deployment of 200 FCEV follows GM’s successful Project Driveway where 100 Equinox FCEV were driven for two-years.

“With the F-CELL World Drive we have shown, that the time for electric vehicles with fuel cell has come. Now the development of the infrastructure has to pick up speed,” said Dr. Dieter Zetsche, Chairman of the Board of Management and Head of Mercedes-Benz Cars. “For only an adequate number of hydrogen fueling stations enables car drivers to benefit from the advantages of this technology: high range, short refueling times, zero emissions.

So far, there are only approximately 200 fuel stations worldwide at which fuel cell vehicles can be refueled. According to expert calculations, a network of around 1,000 fixed fuel stations would be sufficient for basic nationwide coverage in Germany. The exclusive partner for hydrogen supply on the F-CELL World Drive was the Linde Group.

The World Drive vehicles drove not only in downtown areas, on country roads and lengthy stretches of highway, but also proved their capabilities driving on unfinished surfaces, for example on stages in Australia and China.

Hyundai’s Fuel Cell SUV with 400 mile range

Last week, I looked at Hyundai’s third generation Tucson ix FCEV and talked with some of their product engineers and managers. 48 of these 400-mile range electric vehicles are being put on the roads now. It’s cousin, the Kia Borrego has a 466 mile range. By the end of 2014, 2,000 of these vehicles will be in service in the United States, Europe, and Asia. By 2015, Hyundai has hopes that this roomy and fully-featured SUV can be priced as low as $40,000.

Hyundai is now driving the Tucson FCEV from San Francisco to New York, traveling 4,500 miles in less than 30 days. Fueling will be a Hyundai dealers where various industrial gas distributors will deliver compressed hydrogen tanks. Along the way, Hyundai Hope on Wheels will award $7.1 million to 71 children’s hospitals.

New battery-electric and plug-in hybrids have benefitted for the design progress and fleet tests of fuel cell vehicles. A Honda engineer told me that 75 percent of the parts had been eliminated. A Volkswagen manager told me that with volume manufacturing using vapor deposition equipment, over 90 percent of the platinum needed for fuel cell catalyst could be eliminated. A Hyundai research scientist told me of 76-percent range improvements in the latest Tucson FCEV.

The new Tucson ix stores 144 liters of hydrogen compressed to 700 bar. Energy storage includes a 100kW hydrogen PEM fuel cell integrated with 100kW supercapacitor and 21kW of lithium battery pack. The vehicle is propelled only by a 100kW induction electric motor.

McKinsey Report: Portfolio of Power-Trains for Europe

A report well worth reading is A portfolio of power-trains for Europe: a fact-based analysis. The study compares outcomes for Europe with 273 million vehicles by 2050 if they follow a path dominated by increasingly efficient internal combustion vehicles (ICE), or battery electric and plug-in hybrid, or 50 percent fuel cell. The report forecasts that the cost of all powertrains converge, benefitting from technology improvements and volume manufacturing learning curve. The Report states, “The cost of fuel cell systems is expected to decrease by 90% and component costs for BEVs by 80% by 2020, due to economies of scale and incremental improvements in technology…. The cost of hydrogen also reduces by 70% by 2025 due to higher utilization of the refueling infrastructure and economies of scale.”

The Report states, “Medium/larger cars with above-average driving distance account for 50% of all cars, and 75% of CO2 emissions. FCEVs are therefore an effective low-carbon solution for a large proportion of the car fleet. Beyond 2030, they have a TCO advantage over BEVs and PHEVs in the largest car segments.”

Pike Research Forecasts 2.8 Million Fuel Cell Vehicles by 2020

Pike Research forecasts that light duty FCVs will be commercialized by mid-decade.  According to the Pike Research “Fuel Cell Vehicles” cumulative sales of fuel cell cars and trucks will surpass 2.8 million vehicles globally by 2020.

Pike identifies the best contenders for light-duty fuel cell commercialization to be Daimler (Mercedes), Honda, Toyota, Hyundai-Kia, and GM. “Fuel cell vehicles have been an elusive goal for the automotive industry,” says industry analyst Dave Hurst, “but they are on the verge of commercial reality.  With substantial support from the largest automakers, the pressure is on gas companies and governments to make sure that hydrogen fueling stations are available to support this emerging market.”

Pike Research forecasts that fuel cell transit buses will be at the vanguard of the FCV movement, with sales growing at a compound annual growth rate of 31.7% by 2015. Fuel cell light vehicles will be commercially launched in 2014 predicts Pike, and their sales will reach almost 670,000 vehicles per year by 2020.

Pike Research forecasts that Western Europe will be the leading region for FCV sales with a 37% share of the world market, followed closely by Asia Pacific with 36%.  FCV sales in North America will represent approximately 25% of global sales during the period from 2014 to 2020.  The cleantech market intelligence firm anticipates that FCV revenues will reach $23.9 billion annually by 2020.

Renewable Hydrogen

Energy security advocates like the fact that hydrogen is already produced from many sources. Often the most cost effective way is to reform natural gas (CH4) into hydrogen. In Oakland, AC Transit uses the city’s natural gas pipeline to reform CH4 into hydrogen at the facility where they fuel 12 hydrogen buses.

For the Winter Olympics, hydrogen was produced by electrolysis where H2O separates hydrogen and oxygen. Canada used hydropower for the electrolysis. Waste hydrogen from a chemical plant was also used. In Torrance, a Shell station delivers hydrogen from the pipeline that runs from Torrance to Carson. In that area, pipelined hydrogen is mainly used in refining oil into high-octane gasoline and low-sulfur diesel.

Orange County Sanitation District opened world’s first to source hydrogen from wastewater. The Fountain Valley wastewater facility uses waste gas from water treatment and fuel cell technology to create electricity, heat, and hydrogen—a tri-generation system. As the stationary fuel cell generates heat and 250kW of power for facility use, it also produces 100kg of hydrogen for the vehicle fueling station operated by Air Products.

On October 13, the California Hydrogen Business Council will host an all day meeting about renewable hydrogen. The author of this article, John Addison, will present a scenario to reduce transportation greenhouse gas emissions by 80 percent. The presentation will include a portfolio of solutions including transit-oriented development, reduction of vehicle miles travel, hydrogen and electric vehicles. 80/2050 Scenario Paper

Will the Electric Car Kill General Motors?

Will the Electric Car Kill General Motors?

e-cooter

By John Addison (December 29, 2006)

A recent movie and several books asked the question “Who killed the electric car?” then answered GM. Indeed, the major auto makers successfully defeated California’s attempt to mandate that 10% of car sales be electric vehicles (EV). GM retrieved the EV1 at the end of their lease periods and crushed almost all. Yet, GM and other auto makers have continued to pour billions into electric motors, advanced batteries, hybrid-electric propulsion, and electric vehicles where hydrogen fuel cells supply electricity to electric motors.

The more relevant question is this, “Will electric vehicles kill General Motors?” Most people on the planet cannot afford gasoline powered cars. Increasingly they can save $200 for an electric scooter. Over 30 million people drive electric vehicles.Jonathan Weinert reports on the exploding popularity of e-bikes in China.

As incomes increase, early adopters in China, India and other emerging nations will upgrade to new generations of light electric vehicles (LEV). Most of these vehicles will have 3 or 4 wheels and carry increasing numbers of passengers and loads. One is the three-wheeler made by Shandong Jindalu Vehicle Company in a joint venture with U.S. Zap Motors. The Xebra can reach 40 mph with a range of 40 miles. One model includes a solar panel roof for recharging the batteries. The small car is a four door sedan. Because of its drivetrain in the U.S. it is classified as a 3-wheel motorcycle.

Another of these vehicles is a new Chinese 4kW electric all terrain vehicle (ATV) that Zap will distribute in the U.S. The vehicle will have two electric wheel motors. China is developing several EVs that will be far less expensive than anything GM builds in the USA. China’s research and development group has developed a hydrogen fuel cell vehicle named Spring Light 3 with a go to market target price of $5,000.

In the U.S., there is slow development of a network of hydrogen fueling stations. There is a massive investment in gasoline stations. The oil industry exerts tremendous political power in the United States. China, however, does not have a massive investment in gasoline stations. China does have a significant network of natural gas stations where onsite reformation of hydrogen can be added. In fact, China will transport millions of 2008 Olympic visitors in buses and taxis running on hydrogen blended with natural gas.

Established market leaders commonly ignore or sarcastically dismiss low-cost and under-powered alternatives to their market leading products. The low cost 3-wheel Xebra appears to be a zero threat to the luxury Cadillac’s that General Motors executives drive. Initially, downloaded music in MP3 players had poor sound quality and was illegal. Now the music industry is transformed as people listen to high-quality music downloaded to their iPods and smartphones.

IBM was so dominant with mainframe computers that it suffered years of anti-trust litigation. Digital Computers sold far less powerful, but cheaper, mini-computers to labs. IBM ignored the threat of the mini-computer until the information technology industry had shifted to networked minis. Continual innovation and dropping prices of chips and networking brought another revolution with PCs replacing mini-computers. Digital did not learn from its own disruptive success and dismissed PCs as useless. Digital was later bought by Compaq, the very company that disrupted the minicomputer success. PCs are now under attack by the Internet. Microsoft is watching Google very carefully.

Just as a body’s immune system will try to reject a newly transplanted heart, successful organizations reject disruptive change. The phenomenon is so common that business schools now require the reading of Clayton Christensen’s The Innovator’s Dilemma and Geoffrey Moore’s Crossing the Chasm. Let us hope that the executives of GM are re-reading these classics. Reading my book Revenue Rocket is also recommended.

The interiors of vehicles are becoming electronic in everything from displays to entertainment systems to GPS guidance. Under the hood, it is the same story. Mechanical parts are being replaced by electronic components. In hybrid vehicles, electric motors are doing more; the companion gasoline engines are getting smaller. In the future vehicles will be primarily electronic. Internal combustion engines will be retired. Small vehicles not requiring long-range will get their power from the electric grid. Vehicles requiring more range or carrying heavier loads will be electric vehicles with hydrogen fuel cells.

Some at GM get this. GM’s CEO Rick Wagoner has stated plans to lead in plug-in hybrids, when battery technology meets its quality standards. The vehicle will use a big 3.6L engine.

GM is currently putting 100 hydrogen fuel cell Equinoxes on the road. A couple of weeks ago, I drove this exciting vehicle on surface streets and on the freeway. It is a powerful car that many would want to own. The R&D people at GM have an exciting vision that includes advanced batteries; regenerative braking; a thin “skateboard” platform common to multiple vehicles; drive-by-wire replacement of mechanical links to pedals and steering wheel; and electric motors. GM plans to start selling its next generation fuel cell vehicle by 2011.

GM is also involved in successful joint ventures in China. GM has done well in China in its joint venture with Shanghai Automotive Industry Corp. These joint ventures also have the risk of developing future competitors as seen when Shanghai Automotive recently unveiled its own brand luxury car. GM has a Chinese fuel cell vehicle development. Will the heart transplant take? Or will the patient’s antibodies reject the needed organ? In 2005, GM reported a loss of over $10 billion. Its global market share has shrunk to 13%. Thanks to its pension obligations, labor contracts and overhead, it cannot make a small car at a profit. It focuses on large SUVs and large trucks with gas guzzling engines in hopes of making money. The bulk of the corporate momentum is not in future electric vehicles but in big vehicles with engines.

While major GM competitors may not be planning on a low cost EV for the global market, they are planning on small fuel-efficient low cost vehicles. Toyota will be building a small car in China for the global market including the United States. DaimlerChrysler has signed a letter of intent with China’s Chery Automobile Co. that will allow the auto maker to build small cars in China to be sold throughout the world, including the U.S.

Toyota, riding on the success of hybrids and more fuel-efficient vehicles, is overtaking GM’s position as #1 market share leader globally. It threatens to beat GM to market with a plug-in hybrid. Within three years, Nissan Motor Co. plans to develop and market subcompact electric cars powered by self-developed lithium-ion batteries.
Honda wowed visitors at the LA Auto Show with its 350-mile range hydrogen fuel-cell Concept FCX, which it will start leasing to consumers and business in 2008. When Honda started selling motor scooters in the U.S. in 1959, GM could not have anticipated Honda’s future success in cars. Now as the global market shifts towards electric vehicles, Honda is also one of the leader’s in selling e-bikes in Asia. Is it déjà vu all over again?

In the sea of change that is beginning, tsunamis are racing to crash on America’s shores. One is Asian production of vehicles with electric drive systems. Another is the disappearance of cheap oil. Another is global demand for affordable vehicles. We will see how skillfully GM navigates in a perfect storm.