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Is 54.5 mpg achievable... and what will it cost?



Ask the average driver whether he or she would like better fuel economy from they car they're driving now, and the answer will, of course, be "Yes!" Ask whether the feds should continue forcing automakers to improve fuel economy on a very aggressive schedule, and most will, again, agree. But many people have little real understanding of what that will take... or what it will cost.

The lasting legacy of America's first major fuel crisis in 1973 remains the federal government's response to it: Corporate Average Fuel Economy (CAFE) laws. The first one required automakers' 1978-model "sales-weighted fleet averages" to be at least 18 miles per gallon. This was no challenge for imports selling mostly small cars, but a tall order for domestics at the time. It meant U.S. makers would have to balance sales of profitable larger vehicles with (usually loss-making) smaller ones, whether or not anyone wanted to buy them. Light truck standards followed for 1979, beginning at 17.2 mpg for 2WD and 15.8 for those with 4WD.

Critics contend CAFE is a sorry substitute for reducing fuel usage through higher fuel taxes.

Critics contend CAFE is a sorry substitute for reducing fuel usage through higher fuel taxes, as other countries have done, because it puts the onus on automakers, regardless of market demand, and drives up vehicle prices. Still, CAFE was toughened each year through the early 1980s, softened slightly in the mid-'80s, then leveled off at 27.5 mpg for cars for 20 years, from 1990 to 2010. The truck number accelerated slowly to 20.7 mpg (combined for 2WD and 4WD) for 1996, stayed there through 2004, then climbed again to 23.5 mpg for 2010.

Then, on May 19, 2009, President Obama announced a new "national fuel economy program" mandating a fleet average of 35.5 mpg for by 2016 – a daunting 29-percent increase that moved the requirements of an existing 2007 law forward by four full years. Since 2012 models were essentially done, automakers would have just four model years to achieve it.

Mazda is a small Japanese car company – fifth in Japanese-brand U.S. sales behind the "Big Three" of Toyota, Honda and Nissan and just behind distant-fourth Subaru – that prides itself on being different, more youthful and more fun to drive. Hence its "Zoom-Zoom" marketing theme and the goofy toothless grin on the faces of most recent Mazda products.

Now Mazda is taking a very different approach to meeting government and customer demands for fast-increasing fuel efficiency that may (or may not) pay off. Instead of betting billions on plug-in and hybrid vehicles, Mazda's approach is a comprehensive effort to substantially increase the efficiency of every element of every vehicle, beginning with engines and transmissions and continuing through bodies and chassis.

Mazda has been working on these efficiency-enhancing technologies for half a decade and is now applying them – beginning with new powertrains in its revamped 2012 Mazda3 compacts (pictured), which join the vaunted 40-mpg highway economy club – under the marketing name "Skyactiv." Some critics say the name is dumb. To some it may conjure images of flying cars or clear, blue skies over active lifestyles. Mazda says it means, "The sky is the limit."

But what really matters is, how well will it work? And will it sell more Mazdas?

I wrote last time that I had done two recent stories for popularmechanics.com having to do with the Chevrolet Volt. The first was on Volt (and Nissan Leaf) sales – both still limited by supply, not demand, as production and distribution ramps up. For the second, I was asked to clean my crystal ball and predict the future for Volt, and extended range EVs in general.

There are good reasons why the Volt was 2011 North American Car of the Year and has earned numerous other awards. An arguably attractive 5-door, 4-seat hatchback with appeal to environmental and technology enthusiasts alike, it runs on exhaust-free grid power for 30-40 miles, then seamlessly switches to gasoline when more miles are needed.

But to do that, it needs to tote around both a gas engine and an electric propulsion system, including a 435-lb lithium-ion battery pack, plus a multi-clutch planetary gearset and 10 million lines of sophisticated software to efficiently and transparently marry the two. That makes it both heavy and pricey for its size, with a $39,995 base sticker price for 2012.

There's no end to people's emotions surrounding GM's Chevy Volt. Those with hate-GM and/or hate-Obama agendas are duty-bound to rage against it because they resent the bailout and see the Volt as a direct result of that money (even though it's not). Those who can love only "pure" battery electric vehicles must disapprove because it burns some fossil fuel on days when it runs out of battery juice.

On the other pole is just about everyone who has spent time in a Volt, including virtually all automotive media and the few thousand owners, including a local gas service station owner who bought the second one in my area and flat-out loves it. An eco-minded businessman who also paid big bucks to install the only E85 pump in our town a couple years ago, he drives it daily and encourages customers to take it for a spin.

Volt critics seem delighted that Chevy's range-extender EV has been selling in the low three digits monthly. This is a sure sign, they chortle, that the plug-in hybrid is too pricey and/or nearly no one wants one. No doubt it's expensive ($40,000 for the 2012 model, minus the $7,500 federal tax credit), which doesn't help. But Volt sales (like the Nissan Leaf's) are still limited by short supply, not lack of demand. There are waiting lists for both.

Al Gore melted down recently while speaking in Aspen, CO, swearing repeatedly while accusing evil non-believers of doing dastardly deeds to refute human-caused "climate change," a theory he refuses to debate. "They pay pseudoscientists to pretend to be scientists to put out the message," he railed. "'It may be volcanoes.' Bulls**t! 'It may be sunspots.' Bulls**t!... There is no longer a shared reality on an issue like climate" (listen to the clip here).

It must be terribly frustrating to him and faithful followers that, despite near-universal media, political and even industry lip service, impartial polls increasingly show that more and more Americans are no longer buying the anthropogenic global warming (AGW) mantra that has made him a very wealthy man.

Frustrating that one Arctic scientist's oft-cited report that polar bears were drowning as their habitats melted has proven bogus. "A new government investigation into the supposed science surrounding this...has revealed that it was likely nothing more than a pseudoscientific hoax propagated by faulty math and perfunctory observations," the International Business Times reported on Aug. 19. Charles Monnett of the U.S. Bureau of Ocean Energy Management is currently suspended and being investigated for scientific misconduct, while the polar bear population has swelled by 400 percent in the last four decades.

De Lorenzo is a name well-known in auto circles. When I was a rookie writer in the early 1970s, Anthony De Lorenzo was GM's public relations vice president. He apparently believed his responsibilities to be wining, dining and schmoozing a handful of top reporters while ignoring the rest of us and trying to make sure that none of us found out whatever we were trying to find.

His son, Tony, Jr. was a talented sports car racer who, along with business and driving partner (and Chevrolet engineer) Jerry Thompson, won a lot of races and championships in high-powered Corvettes in the 1960s and '70s. His nephew, Matt, is a highly respected auto journalist who worked his way up from small trade magazines to Detroit editor for Road and Track to RT's editor-in-chief, where he is doing a terrific job.

Then there is Peter De Lorenzo, Tony Sr.'s other son. Not only did he choose the opposite side (journalist vs. PR) of his father's former business, but for many years has channeled his energies into one of the most successful automotive blogs, Autoextremist, where more often than not he has been a royal pain in the ass to his father's former employer. I recently found his thoughts on the Chevy Volt most interesting, as you can read after the jump.

I recently visited "Maximum Bob" Lutz at his home to interview him for the summer issue of the quarterly Motor Trend Classic and found the 79-year-old energetic and outspoken as ever six months beyond retirement from General Motors. We talked mostly product stories from his long auto career, which began at GM Overseas Operations in 1963 and progressed through ever-higher responsibilities at BMW, Ford and Chrysler, then back to GM ten years ago. But we touched on other interesting topics, too, including the effect of corporate average fuel economy (CAFE) requirements on domestic automakers.

"The feds basically handed our market to the Japanese," he contended in his memorabilia-filled office adjoining the garage where he keeps his most important historic cars. "American automakers had to tear up their entire product lines, downsize, go from full-frame to unitized bodies, V8s to V6s, rear- to front-wheel drive with transverse transmissions. It was the biggest technological tear-up in history, and it triggered a lot of subsequent problems, like poor quality and reliability. You can't re-engineer that much that fast, test it properly and get the technology matured without dropping a lot of balls, and we clearly did.

"Prior to CAFE, American quality was as good as any anywhere in the world," he asserted. "We were still selling a decent quantity of American cars in Europe because Europeans considered a Buick or a Chevrolet or a Ford to be superior in reliability to European products, which they were. The Japanese experience was no disruption whatsoever. They were way on the good side of the CAFE fleet average, so they didn't have to change a single product. They just continued to build what they had always been building." Continue reading...

In 2006, with the Ford Motor Co. losing boatloads of money, little cash on hand and little of interest in its product pipeline, then-CEO Bill Ford, Jr. announced a major restructuring and brought in Boeing executive vice president Alan Mulally as its new president and CEO. One of Mulally's first moves was to mortgage virtually all of the company's assets, including its buildings and the logos on them, to raise $23.4 billion for much-need product development.
This was seen by nearly all observers as extremely risky, and many wondered whether the company would survive. But that move – borrowing billions when corporate credit was still available – would ultimately enable Ford, unlike its Detroit rivals, to avoid the embarrassment of bankruptcy and government loans when the economic tsunami struck two years later.

Since then, the PR benefit of avoiding bankruptcy and a string of appealing new products, Ford has recovered very well. And, despite still-substantial debt and higher UAW wage rates vs. post-bankruptcy General Motors and Chrysler, it's doing fine today.

No surprise, then, that Mulally has been named 2011 Automotive Executive of the Year by a group of auto industry media, analysts and supplier CEOs. Past recipients of the award, which is sponsored by DNV Business Assurance, Johnson Controls, DuPont and Visteon, have included Elon Musk, James O'Sullivan, Jim Press, Carroll Shelby, Bill Ford, Jr., Dieter Zetsche, Henry Ford II, Rick Wagoner, Bob Lutz, Carlos Ghosn, John DeLorean and Lee Iacocca.

"We are fighting for the soul of American manufacturing and competing with the best in the world," Mulally told the April 13 award luncheon at the Detroit Athletic Club. He said he feels good about having joined his fellow Detroit automaker CEOs in testifying to that (incredibly ignorant and arrogant) Congressional committee in 2008 and would do it again, because the future of the industry was at stake. "If GM and Chrysler had gone down, they would have taken the suppliers with them. We would have gone from recession to depression."

Then he opened the floor to questions. Among the first was his take on the industry's future. "Clearly, we're going to be paying more for gas," he responded, "so our focus on fuel efficiency is of utmost importance. Plus more alternate fuels: cellulosic ethanol, CNG, diesel, hydrogen and electrification with options – battery electrics, hybrids, plug-in hybrids – all built on the same assembly line to keep costs down." He added that battery size, weight and cost will have to come down from the current 700-800 pounds and $15,000.

Continue reading Detroit CEOs speak up on efficiency and electrification...

First, let me get this off my chest: With General Motors reporting just 1,210 Chevy Volts sold in the first three months of 2011, including 608 in March, and Nissan showing only 452 Leafs out their U.S. dealers' doors in the first three months, including 298 in March, critics are chortling that there is no market for plug-in cars. But what these idiots don't know – or pretend not to know – is that both cars' sales so far have been severely limited by lack of supply, not demand.

While GM and Nissan have been very slow to ramp up production and distribution, primarily to ensure flawless quality, both EVs have thousands of would-be buyers cooling their heels on waiting lists. And GM (maybe Nissan, too) is telling Chevy dealers to retain (not sell) a Volt demonstrator at a time when some of them probably still haven't received their first one.

That said, with literally dozens of new EVs expected to hit the U.S. market (and others) in the next few years, I'm wondering how many start-up EV makers will survive.

Continue reading "So many electric vehicle start-ups – which will survive"...

As you probably know, Ford Motor Co. has big plans for electric vehicles (EVs) beyond its current excellent Escape and Fusion parallel hybrids. We've already got the Transit Connect Electric, a small commercial van upfitted by Azure Dynamics and will have a Focus BEV by the end of 2011 and two Focus-based C-MAX compact minivan hybrids in 2012 – one with Ford's next-generation hybrid system, the other a C-MAX Energi plug-in hybrid.

"This is a significant beginning of the 'Power of Choice,'" said Ford group vice president of global product development Derrick Kuzak last December, where two of those three – the Focus EV and C-Max Energi PHEV – were unveiled to the media. All of these will use lithium-ion batteries, and all except the Transit Connect Electric will be built on Ford's global C-platform in Ford's Dearborn, MI assembly plant on the same assembly line as conventional Focus and C-Max vehicles.

"Building in-house expertise and leveraging our global scale is critical to developing electrified vehicles that are affordable, connected and fun to drive," said global electrification director Nancy Gioia. Kuzak added that vehicle electrification in real volumes will require "affordability, accessibility and connectivity" and that sales of Ford EVs should be two to five percent of total sales by 2015 and 10-25 percent by 2020, though most of those "electric" vehicles will be hybrids.

I caught up with Focus EV marketing manager David Finnegan at the February Chicago Auto Show and asked what volumes he expected. "All we can look to right now is what we've learned from hybrids," he responded, "which at one point got up to about three percent of the industry, then dipped back down last year. I think it will grow, but play a small role initially." (This post continues after the jump.)

Robert "Bob" Stempel, semi-retired at an energetic 78, is one of the good guys. Armed with a mechanical engineering degree from Worcester Polytechnic Institute in Massachusetts, he joined General Motor's Oldsmobile Division in 1958 as a chassis detailer and 29 years later was GM president and chief operating officer under then-CEO Roger Smith.

In 1973, Stempel led development of the catalytic converter used around the world to control exhaust emissions. A couple years later, as Chevrolet's engineering director, he was wowing journalists with encyclopedic knowledge of every Chevy product delivered at press events in his booming voice without written notes. After that, he ran Pontiac Division, Adam Opel AG (in Germany) and Chevrolet Division, then the newly-formed Buick-Oldsmobile-Cadillac group as part of Smith's massive 1980s reorganization of GM's North American automotive operations.

When finance guy Smith – probably one of the worst CEOs in history – retired on August 1, 1990, product guy Stempel took the corporation's tattered helm. For two years, he labored to fix the mess that Smith had left. At the same time, he nurtured and championed GM's fledgling electric vehicle program and was instrumental in recruiting Ken Baker (head of Advanced Vehicle Engineering for Chevrolet-Pontiac-Canada group) to lead the effort. (This post continues after the jump.)

Following my session with General Motors North America President Mark Reuss at Detroit's January North American International Auto Show (NAIAS), I caught up with two technology leaders playing key roles in GM's vehicle electrification process: Volt chief engineer Andrew Farah – a hard-working, no-BS positive thinker whom I knew and worked with on GM's 1990s EV program – and Micky Bly, who is executive director for electrical systems, hybrids, electric vehicles and batteries. The question on my mind: where is GM headed with its Voltec EREV technology?

"We're already looking at other portfolio opportunities," Farah responded cautiously, "but nothing to announce just yet. We're also looking into what Generation II might be. Among other things, we need serious cost reductions."

Bly pointed out that the most important objective is keeping quality up. "The supply chain is very long," he said. "You can have quality issues if you try to go too fast. The complexity is higher than on any other vehicle, so we have to ramp up very carefully."

I asked whether GM can keep up with demand over the next couple of years. Farah confirmed the then-official production numbers of 10,000 units in calendar 2011 and 30,000 in 2012, which will include some 15,000 Opel and Vauxhall Amperas (and some right- and left-hand-drive Volts) for Europe. (This post continues after the jump.)

General Motors North America president Mark Reuss looked tired on the first morning of Detroit's North American International Auto Show (NAIAS) press days. His face showed the weight of heavy responsibilities as president of post-bankruptcy General Motors' U.S. operations. During a small group press conference, he also showed little tolerance for dumb questions.

Q: How important is Chevy Volt to GM?
A: It's very important in the market and to our customers, and it's great for everyone who worked on it. But it's not the only thing that's important. In this business it's, "What have you done for me today?" It's a long-lead business that can flip bad, and quickly. You take what you know today and try to project where customers are going to be, then decide how you're going to win. We cannot return to some of the things we did in the past, period.

From a product standpoint, the soul of the company has to be things like the Volt – high desirability, technical leadership, breakthrough technology in some cases. I don't want to do things that are "competitive" any more, in product or in service. We're going to do it best, or we're not going to do it.

(This post continues after the jump.)