Is the age of Internal Combustion over?
If you have a personal attachment to your gasoline- or diesel-powered vehicle and are worried that the tidal wave of electric vehicles will make your choice of propulsion go the way of the vinyl record, take hope.
While Tesla appears to garner every other automotive headline (except those announcing profitable financial returns), much of the rest of the car business has a bifurcated approach to the future. Companies are preparing electrified vehicles to meet a combination of government regulations and consumer expectations. But, alongside those activities, advances in the traditional internal combustion engine indicate that we won’t be leaving our beloved mode of propulsion behind anytime soon.
Electrification Is Happening: Deal with It
The consensus of the automotive industry is that electrifying existing drivetrains is the most cost-effective way of reaching greenhouse gas reduction goals (often expressed as fuel efficiency goals) in the near term. It’s not just Americans who care about Corporate Average Fuel Economy; the European Union, Japan, China and other countries all have adopted regulations that are driving toward lower emissions and better fuel economy.
The world is not in complete sync in those regulations, but is generally heading toward a 140 grams/CO2 per kilometer standard in the next decade. That works out to about 39 mpg, not that big of a challenge for automakers. The issue, though, is that countries will keep ratcheting down those standards or, as has already been done, institute zero- or low-emission zones where only certain vehicles are permitted.
The Industry Response
As always, the industry has two reactions to imminent regulations (after doing everything possible to stop them, of course):
Comply in the most cost-effective method possible in the short-term, or develop long-term strategies that put the company ahead of the curve and position it as a leader in the industry.
Variations on these tactics abound in industry, but most companies appear to be pursuing a mixture of the two. They make these moves in a challenging period worldwide, where sales may increase enough to support continued spending growth.
The worldwide Big Three – General Motors (GM), Toyota, and Volkswagen (VW) – are in a virtual tie for worldwide car sales. And all three have committed to building more electric vehicles while continuing to rely on gas and diesel sales to maintain their bottom line.
GM is now selling its breakthrough Bolt EV, beating Tesla to the market and hoping for a boost to its industry stature. In the United States, though, GM’s profits continue to come from its strong truck and SUV lineup.
Toyota is the hybrid company but at the end of 2016 signaled that not only would it remain committed to hybrids and fuel cells, but it would also invest substantially in pure EVs.
VW is still reeling in the United States and Europe from its diesel emissions cheating scandal, but overall sales and income have not suffered dramatically. Its recent announcements in the United States have been focused on a wave of electric vehicles coming to market in the next few years.
The next tier of vehicle makers – Ford, Nissan (Renault/Mitsubishi), FCA, Honda, Hyundai-Kia – have all made similar commitments to electrification and have varying levels of products either on the market or ready to enter.
Diving Deeper into Alternative Paths
A closer look at the “electrification” trend indicates that automakers are hedging their bets on the move to EVs. Ironically, all of the investment in electric vehicle technology may have paved the way to a lower-cost solution to the regulatory hurdles companies face.
Battery costs have decreased this decade even as their power density has increased. The result is the coming revival of 48-volt mild hybrid systems hitting the market this year and in following model years. Auto makers have found that they can cost-effectively deliver significant fuel economy improvements with these new systems, negating the need to move to more expensive full hybrid systems – much less plug-in hybrid or full-electric drivetrains.
Other advances – such as dynamic cylinder deactivation, advanced boost systems for smaller engines (like Ford’s EcoBoost and Hyundai’s GDI), and 10-speed transmissions – provide other avenues that car companies are exploring that are cheaper than building a new electric car.
Autonomy & “Other” Wild Cards
Beyond tinkering with current powertrain technologies while hedging bets with longer-range solutions, automakers are also looking at other options that may forestall radical changes.
Every new advance in technology, such as taking us toward autonomous cars, is subject to some negotiation with regulators. If the technology can lead to increased fuel economy because it more precisely controls the vehicle, or can lead to fewer on-road deaths, maybe there’s a quantifiable benefit to society that can lead to a break for automakers deploying the technology.
Before you scoff, check out the American regulations that up until this year allowed car companies to get “extra credit” on their corporate fuel economy for building vehicles capable of running on E85 (an 85% ethanol blend) because theoretically it would reduce petroleum usage and imports (as well as support domestic corn production). Few of the hundreds of thousands of vehicles capable of running on E85 ever have, and automakers have been able to cut back on spending on more expensive efficiency technology.
The Headwinds
It’s one thing to pass regulations; it’s another to see them have any effect. Low fuel costs during the past few years seem to have encouraged buyers to move up to larger and/or less fuel-efficient vehicles. After all, at $2 a gallon, the penalty for having a 15 mpg SUV doesn’t seem too severe. Yet, in spite of this trend, and thanks to the worldwide move to reduce greenhouse gases from vehicles, even those big trucks have been getting more fuel efficient. The U.S. car market for the 2016 calendar year just wrapped with under 3% of the 17 million vehicles sold being hybrids, plug-in hybrids, or full electrics. The other 97% of the car universe got the best fuel economy ever – and promise to keep getting better. The internal combustion engine promises to be around to enjoy for decades to come.
by Michael Coates
Photos courtesy of Mazda,
