There was a time when embracing sustainability or “green” initiatives meant sacrificing the bottom line in an effort to “do the right thing.” Clearly this is no longer the case. In fact, as we’ve seen with solar and wind companies, organic retailers and eco-friendlier vehicle manufacturers, embracing eco-sensibilities has proven to be a recipe for success. This has certainly been the case for major automakers.
Although no major automaker has walked away from this economic downturn unscathed, it doesn’t take a rocket scientist to see which car manufacturers have struggled the most.
Detroit automakers (excluding Ford) that long relied upon gas-guzzling SUVs and the soccer moms and urban transplants who bought them, skated across the very thin ice of bankruptcy and bailouts this year, while Japanese automakers – with their more fuel-efficient vehicles – managed to get by… albeit with the harsh reality of a full-blown recession putting the kibosh on growth.
Of course, a lot has changed over the past year or two. And today, you’ll be hard-pressed to find a single major automaker that’s not developing more fuel-efficient models.
In fact, last week we got word that Hyundai announced its plans to spend $3.2 billion to develop environmentally-friendly vehicles, as well as reduce carbon emissions from its factories. Management hopes this investment will make it one of the world’s largest manufacturers of green cars.
Will it work?
It’s hard to say. But while I certainly applaud any automaker seeking to “green” up its fleet – it’s really going to come down to specifics.
According to reports, Hyundai will spend $1.76 billion to develop hybrid and hydrogen fuel cell vehicles, and $1.12 billion will go towards improving the fuel efficiency of its engines and transmissions.
My first concern with this is the company’s focus on hydrogen fuel cells. While fuel-cell vehicles offer significant advances in zero emissions, there is nothing in our current energy infrastructure that is compatible with hydrogen. And if we decided that this was the way to go, it would cost billions, perhaps trillions to build up such a solid infrastructure that catered to hydrogen-fueled vehicles. So until that exists, how can we expect folks to even consider buying these things? In comparison, we do currently have the infrastructure in place to support electric and plug-in hybrid electric vehicles. Just something to consider when analyzing our options.
It should also be noted that there are quite a few energy analysts who actually believe most folks will never even drive a hydrogen-fueled car, due primarily to the inefficiencies of a hydrogen economy. Energy expert, Chris Nelder broke this down in his 2007 article, Fuel Cells and Hydrogen Are No Panacea. If you want an eye-opening analysis of hydrogen – this is it!
Now all that being said, I would certainly love nothing more than for Hyundai to prove everyone wrong, and deliver a hydrogen fuel cell vehicle within a reasonable price range and a solution for the infrastructure issues associated with hydrogen fuel cell applications. So we’ll have to wait patiently to see what happens there.
As far as Hyundai’s hybrid offerings, I’m curious to see what kind of fuel economy these will provide. Hyundai is expected to have a hybrid vehicle similar to the next-generation Sonata sedan in the U.S. next year. This vehicle will utilize a lithium-ion polymer battery that the company claims weighs 35 percent less than the current nickel-metal hydride cells used by Toyota and Honda. The batteries are also said to be 40 percent smaller. Certainly this kind of battery advantage could give Hyundai a significant leg up in future hybrid development. Also, back in April, the company gave us a look at its Nuvis Concept hybrid crossover, which offers 34 mpg/city and 35 mpg/highway. It’s actually a pretty slick-looking vehicle. Although I’m not doing cartwheels over its fuel economy or its timing. Especially when you consider what the Korean automaker already has to contend with. . .
- GM’s Plug-In Hybrid-Electric – The Volt – due out next year
- 3 new electric vehicles Ford will be pumping out in two to three years
- Subaru’s new Stella electric vehicle which is available to Japanese consumers this year
- Mitsubishi’s i-MiEV electric car, which is available in Japan
- Toyota Prius, which is available now and boasts an average 50 mpg with a $22,000 price tag
- Honda Insight, which is available now and boasts an average 41 mpg with a $19,800 price tag
- Chinese manufacturer, BYD began sales of its first Plug-In Hybrid-Electric last year. With a 62-mile all-electric range, the vehicle is expected to hit the U.S. market by 2012
- Tesla plans to deliver its new electric sedan (potentially with 300 miles on one charge) in about 3 years.
While most of the electric and plug-in electric offerings here do carry price premiums – they also represent the first line of electrification for personal transportation on a mass scale. So what we’re talking about here is Hyundai delivering a conventional hybrid, albeit likely with a very reasonable price, while most of the other automakers are introducing the first in what will be a long line of next-generation electric and plug-in hybrid electric vehicles.
Now understand, my intention here is not to downplay Hyundai’s investment. The fact is, when it comes to auto manufacturers, this is not a company I would bet against over the long-term. After all, it wasn’t long ago when Hyundai was considered an inferior vehicle for those with limited budgets. Today, the company is consistently ranked in the top tier of quality surveys by industry and consumer organizations. And it has actually become one of the fastest growing automakers in the U.S.
So we’ll continue to follow Hyundai closely to see what they bring to the table. I suspect it’ll be progress. But as far as how much progress…well, the ball’s in their court.