GM, DC Team for Dual-Stage Hybrids

December 14, 2004

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Slow to accept the concept of hybrid powertrains, DaimlerChrysler and General Motors are taken a bold step that they insist could “leapfrog” existing technology and put them in the lead in this small but fast-growing market segment.

The two automakers have signed an initial memo to join forces on hybrid development. In particular, they will focus on a new, two-stage gasoline-electric powertrain that is expected to be used in a wide range of vehicles, from small cars to large pickups and SUVs, that could be sold all over the world.

Leveraging the vast engineering and financial resources of DC and GM “will allow us to speed up the development” of technology that can reduce fuel consumption and minimize emissions, stated Eric Ridenour, executive vice president of product development for the Chrysler Group.

Catching up

There’s no question that the two companies need to move as fast as possible to catch up with the competition, industry analysts said. Honda is about to launch the Accord Hybrid, its third hybrid-electric vehicle, while Toyota can barely keep up with demand for its Prius. Both manufacturers plan to offer gasoline-electric drivetrains on a wide range of products.

Meanwhile, Ford has begun offering a hybrid version of its small Escape sport-utility vehicle. The Escape Hybrid was named, on Monday, as one of three finalists for North American Truck of the Year. Ford has announced plans for two more hybrid vehicles, including versions of both the Mercury Mariner sport-ute and Ford Fusion sedan.

GM has outlined broad plans for the future, but so far has only introduced a so-called mybrid, a mildly hybridized version of its full-size Chevrolet Silverado and GMC Sierra pickups. Chrysler has taken a similar approach with its Ram pickup.

That could change in reasonably short order, according to company officials, who spoke during a telephone news conference with the media on Monday.

Complements to each other

The joint venture was put in motion during an industry conference in October, where it became clear that GM and DC had a similar vision of the future for hybrids — and complimentary technology under development.

Like Toyota’s Hybrid Synergy Drive, the proposed DC/GM system will be able to operate in gasoline-only or electric-only modes, or blend power from both sources. But the fully geared, two-stage system should improve torque and performance at all speeds and applications, officials insisted.

“Our customers will experience the benefits of low fuel consumption with no sacrifice in performance or safety,” said Tom Stephens, head of GM’s powertrain operations.

Current hybrids generally perform best at lower speeds and in urban driving cycles. In some instances, they can actually yield lower mileage than gasoline-only vehicles when driven at freeway speeds. And because vehicles like the Prius and Escape Hybrid downsize their internal combustion engines to maximize mileage, they sacrifice payload and towing capacity.

Trio of hybrids

Together, DC and GM plan to develop three versions of their new technology, and expect them to be usable with a breadth of internal combustion engines in a wide range of front- and rear-drive products, and possibly in all-wheel-drive vehicles. Diesel and gasoline versions may be developed as well, suggested DaimlerChrysler board member Thomas Weber. This would permit the technology to be used all over the world, though the partners see the U.S. as their primary market.

As both partners were already working on the new form of hybrid propulsion, versions of the drive could hit the road as early as 2007, when DCX rolls out a hybrid Dodge Durango. That same year, a GM version will show up in the Chevy Tahoe and Yukon models.

While a number of specific details have yet to be worked out, the partners indicated they would individually work on fine-tuning the new hybrid systems. That will permit each manufacturer’s products to maintain “unique performance, dynamics, and brand calibrations,” stressed Weber.

By sharing development costs and by expanding economies of scale, the new technology will hit market sooner, while the overall cost of the program will be substantially reduced.

New way of doing business?

The DC/GM partnership is an example of the new way of doing business in the auto industry, said Dr. David Cole, director of the Center for Automotive Research. “We’re evolving from competition to “coopetition,” he suggested, adding that it makes good sense in a world of such technological uncertainty.

Even with the anticipated savings, total development costs will be “in the hundreds of millions of dollars,” hinted GM powertrain director Tom Stephens.

That’s the sort of price tag that worries industry bean counters in an era of increasingly low profit margins. So far, hybrids have generated significantly more news value than profitability. Though Toyota insists it is now making money on its hybrid program, analysts remain skeptical, and believe that manufacturers continue to place hefty subsidies on each hybrid they sell.

But with growing concern about automotive emissions, as well as mounting questions about petroleum supplies, consumers and government regulators seem increasingly interested in fuel-efficient alternatives. Hybrids will have accounted for less than 0.3 percent of the 60 million motor vehicles sold around the world this year, noted Stephens, but by 2020, he added, its forecast hybrid volume could grow to anywhere from five to fifteen percent.

“The hybrid is a great technology,” said Dr. Cole. “We just don’t know, ultimately, where it will fit.”

GM and DaimlerChrysler aren’t the only automakers slow to embrace hybrid technology. Volkswagen recently reversed its position and intends to develop hybrids. Nissan has signed a joint venture with Toyota to kick-start its own hybrid program.

DC and GM said they might encourage additional manufacturers to sign on, though it was left unclear whether they could enter in full partnership or simply as customers for the new technology the venture will produce.

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