The High Cost Of Going Green
Tuesday, January 15, 2008SUSIE GHARIB: Would you pay an extra $6,000 for a new car or truck that's more fuel efficient? General Motors says that's how much the new fuel standards implemented by Congress last month will add to the cost of a new GM car or truck. As Diane Eastabrook reports from the North American international auto show in Detroit, GM's not alone in chasing better mileage.
DIANE EASTABROOK, NIGHTLY BUSINESS REPORT CORRESPONDENT: A-bat is Toyota's quirky concept aimed at active consumers. The stout little pickup runs on a hybrid engine, but also has solar panels which generate supplemental power for things like interior lighting. Kevin Hunter, president of Toyota's Calty (ph) design research, says, even if the A-bat concept doesn't make it to showrooms, it could become a model for future vehicles.
KEVIN HUNTER, PRESIDENT, CALTY DESIGN RESEARCH: Energy costs are going to continue to be elevated, so we need to find better solutions and how to manage that and one way is for us being smarter as designers, as engineers -- that we can create better vehicles to address that issue.
EASTABROOK: Better fuel economy is the mantra this week at the North American international auto show in Detroit. Pressured by rising gas prices and increases in U.S. fuel economy regulations, auto makers are racing to develop more fuel-saving products. Chrysler has outfitted its funky Jeep Renegade concept with a diesel engine; the company's eco-voyager sports fuel cell technology and a battery pack. Ford equipped its Explorer America concept with a so-called eco boost engine, an internal combustion engine that uses turbo-charging and direct injection to achieve better gas mileage. And every company from Toyota to General Motors is featuring hybrid plug-in technology on car and truck concepts. John Casesa, managing partner for Casesa Shapiro Group, thinks the industry is facing a big challenge.
JOHN CASESA, MANAGING PARTNER, CASESA SHAPIRO GROUP: The industry is searching for solutions to meet the needs of consumers who want more fuel efficiency and to meet these new regulations. So we're in a very challenging period right now for the industry.
EASTABROOK: But "Motor Trend" editor in chief Angus Mackenzie thinks meeting the regulations won't be the only challenge.
ANGUS MACKENZIE, EDITOR-IN-CHIEF, MOTOR TREND: The real issue for the auto industry is how can they bring this technology to consumers at a price that consumers are willing to pay. And that is the $64 million question at this auto show.
EASTABROOK: General Motors thinks flexible fuels like ethanol provide the quickest route to fuel economy. It rolled out Hummer and Saab concepts that run on the corn-based fuel. Within the next five years, GM wants half of the vehicles it produces to run on ethanol or biomass fuel. But the company admits in order to reach that goal, the U.S. has to do a much better job manufacturing and distributing ethanol. To help get there, GM has taken an equity stake in Warrenville, Illinois,-based Coskata. The company is developing technology that will make ethanol from about any carbon-based material, like straw, wood chips and even old tires. Coskata plans to have a pilot plant operating by the end of this year and full- scale plants producing ethanol within two years. While GM Chairman and CEO Richard Wagoner is confident in that timetable, he is less confident that more stations will be selling ethanol.
RICHARD WAGONER, CHAIRMAN & CEO, GM: Even today, I hear from a lot of people, hey, I bought a flex fuel car or truck, but I can't find a flex fuel station around me, so what am I suppose to do? And it is frustrating.
EASTABROOK: Industry watchers don't think one technology alone will solve the auto industry's dependence on gasoline, but they do think some of the solutions offered this week in Detroit will lead them down that road. Diane Eastabrook, NIGHTLY BUSINESS REPORT, Detroit.
