From the GM Summit 2003: Larry Burns

In the coming weeks we'll chat to Rick Wagoner, CEO of General Motors and its next chairman. We'll talk with Vice Chairman Product Development and CEO of North America - and champion of the Aussie Monaro - Bob Lutz. We'll also interview Holden Chairman and managing director Peter Hanenberger.

This week CarPoint talks to Larry Burns about future drivetrain technology, specifically petrol/electric hybrids like the 12 announced at the 2003 Detroit show, and fuel cell vehicles like the Autonomy and Hy-Wire concepts.

How relevant are these technologies for you and I? When will we be buying and driving affordable alternatives to the internal combustion engine?

Larry Burns - Head of Research and Development, Advanced Powertrain. General Motors

A. "We look at the challenges on powertrains in three time frames, the near term, the mid term, and long term. Long term we've been very clear about our commitment to hydrogen and fuel cells and we remain very enthusiastic about the potential of the kinds of vehicles we can develop using fuel cell propulsion.

"Autonomy took fuel cell technology and -by wire technology, married them up and asked the question: 'What kind of car would you do given where these technologies might head?' We got quite enthused with what we concluded. We'd have potentially cars that could perform better; cars that had better ride and handling; cars that had very exciting packaging alternatives and the potential for quite different styling; cars that could be safer; and we also believe cars that could become more affordable.

"Our challenge then was to show that this type of vehicle could be made drivable quickly. We made a challenge to ourselves to have it drivable within a year and in fact at the Paris auto show we revealed HyWire which was the world's first drivable drive-by-wire fuel cell vehicle.

"That vehicle gives us a lot of confidence from a technical viability standpoint that fuel cells can power automobiles in a package and size that makes sense. We've made a lot of progress on range and on cold start and the challenges that remain for us are really commercial-based challenges. Can we get the cost of this technology low enough? The goal has to be in the order of 50 dollars per kilowatt, so that it becomes truly a high volume alternative to the internal combustion engine for the automotive industry.

"We know that technically we can make this happen.

"The goal now is to focus the research agenda on how might you run a business making millions of these rather than a few of them in the laboratory. What are the kinds of material substitutions and the kinds of manufacturing processes? What kind of supply base will we need?

"We're still stretching hard for 2010 for compelling an affordable fuel cell vehicles to be available in the market. From 2010 and beyond we'll see how fast that can penetrate and get into big volumes.

"These technologies only matter if you can save fuel and reduce emissions and that's only going to impact if the world's 55 million new vehicles a year suddenly begin to see a major penetration of fuel cells.

"Since we can't be absolutely certain on when fuel cell vehicles will be prevalent, we needed a way to bridge from today's internal combustion technology to the fuel cell car of the future. The hybrid vehicles we announced at the Detroit Show in 2003 is a reinforcement of how we are going to make that transition.

"Hybrids have advantages which become greater the higher the cost of the fuel and the more the 'stop-and-go' characteristics of your travel patterns. In the United States people spend 60 per cent of their time on highways, so hybrids aren't nearly as attractive as they may be in Tokyo, for example.

"So, we needed to aim hybrid technology initially at US buyers and driving patterns, on the kinds of products US customers like which are bigger and higher performing products. So we announced a portfolio of hybrids from full size trucks to mid size cars to sport utility vehicles like the Chevrolet Equinox and the Saturn Vue.

"We have a very strong version of hybrid in the Vue, one that can improve fuel efficiency by 50 per cent, and also improve performance via the 50 hp electric motor we have on the car, which is essentially used as an electric turbocharger. So we're hoping the combination of fuel saving, range extension and performance will lead Saturn Vue customers to look at this as an engine option that might make a lot of sense to them. They'd have a four-cylinder, continuously variable transmission vehicle, but you'd have the power characteristics of a six cylinder and 50 per cent improvement in fuel economy.

"At the other end we have what we call a very mild hybrid. It's a belt alternator starter system that goes into the Equinox and Malibu. It does have regeneration and is married up with our four cylinder ecotec engine and continuously variable transmission as well. That'll get 12 - 15 per cent fuel economy improvement. What's nice about this one is it is far less costly. It uses conventional lead acid batteries. It's a 42 volt system.

"So now we're going to have a good sized American test out there. We have the Equinox with this more mild version which isn't nearly as high priced as the engine option on the Saturn Vue - another compact SUV.

"At the same time we'll be able to see whether full-sized truck buyers have a strong interest in hybrids. In this instance we're giving them an added feature, which is a 110 volt power generating capability so they can use their truck as an electric generator, a source of power on a construction site, or camping, or whatever. We'll see what kind of value our customers place on that feature.

"Certainly with gasoline prices in the USA at $1.50 a gallon (40.5cents per litre) we don't anticipate selling a million of these systems. But who know where gasoline prices might head, or where regulations might head, and what type of tax incentives might be placed on these vehicles to encourage purchases for energy independence reasons...

"So what we have then is a continued focus on improving gas/diesel engines and our transmissions on an ongoing basis, an announced hybrid production plan, as well as a long term, very strong commitment to fuel cells. Our focus today is on making them commercially viable."

The Japanese have had hybrids on the market for some time, and they've already got fuel cells on the road. Is GM playing catchup?

A. "I don't believe we are. Yes they've had the fuel cells on the market but I think we'd all agree there hasn't been a stampede of demand to the extent where any competitor has fallen behind in real terms in sales. In 2002 35,000 hybrids were sold in the United States, that's in a market of 17 million vehicles. So that's two-tenths of one per cent.

"Our intention all along was not necessarily be the first in the market, and there's are opportunities that come with that, but also cost and investment and material cost and other things. We really felt that if there's going to be significant volume of hybrids in the United States, that would play out around mid-decade and beyond. So we've always consciously felt our goal is to be ready with passenger cars and trucks in that time frame.

"You have got to judge the fuel cell race on 'who is first to a million vehicles profitably, and that's a marathon as opposed to these little sprints of one company getting ahead for a little while versus another company. I think this race on fuel cells is probably in about mile eight of a marathon, and we've got two or three companies leading the pack. And each of us will sprint ahead for a while, but the announcer of the race shouldn't jump to conclusion of who's gonna win. The chequered flag of that race goes down when you're at a million units profitably.

"The first company that sells a million fuel cell vehicles, and they're making a profit doing it, is going to be the winner. Why a million? Well, even a million cars out of a 55 million global new car industry is only two per cent. If you're sitting here watching this marathon, I think 2015 is when the finish line will be crossed, when the million units will be reached."

So what you're saying is that the 12 hybrid cars launched at Detroit are a stop gap technology to fuel?

A. "We see that as a transition technology to the fuel cell. It's advantageous in that I think it can accelerate fuel cell development. Fuel cells are also electric drive vehicles. They have power electronics on them that aren't unlike the power electronics on a hybrid. Hybrids have electric motors, so the development of a supply base for hybrid volumes is a development of the competencies of electronics. That, and other things, are directly transferable to the fuel cell vehicle down the road."

What period of customer ownership is required to recoup the extra cost of a hybrid vehicle?

"Over what time would it take to recoup the investment? I would say like most product cycles that could be five years or so. If the demand is there and we can get a price that is competitive and properly in line with our cost.

"The goal has to be 'Give the customer a product that they really want'. And secondly do that with cost and price aligned so you can make a bit of money. The challenges with hybrids that are the strong variant (Saturn Vue/Toyota Prius) is that it require very advanced batteries, they require nickel-metal-hydride batteries and that is a major cost component, and to date no one has figured out how to get the component cost of that down lower. So that type of investment will take longer to get a return on that a more mild system."

Do you think GM is sending mixed messages to the market, with 12 hybrid vehicles in one corner of its Detroit show stand and a whopping 13.6-litre V16 Cadillac in the other?

A. "I think the message we're sending is that we're the largest automobile company in the world and we're going to be the leader on all fronts with respect to powertrain technology. We intend to provide products to all customers out there that excite them. We really do intend to take Cadillac upscale, and there are buyers out there who want to make an image statement. At the same time we have environment principles and we're going to be selling products that are more environmentally aligned."

How big a part in the development of hybrid and fuel cell vehicles are governments going to have in terms of tax breaks and concessions, etc. And where does that come in.

A. "With respect to hybrids, if governments really want hybrids to be accepted widely in the USA they're going to have to do one or two things. They're going to have to accept that fuel price have to go up significantly so that customers make a different buying decision or they're going to have to provide some kind of incentive for the customer to purchase something that they might not naturally be inclined to do.

"That's what governments are sometimes all about. They look at the public good versus the the private behaviours and they'll do things with tax incentives that try to encourage the public good. Hybrids won't sell in high volumes in the United States [while gas is] $1.50 a gallon. The payback is measured in seven...eight...nine years for a rational customer in terms of what they would save on fuel.

"Where the government helps us the most right now on fuel cells is with respect to their research capabilities. In the USA we have an extensive network of govt laboratories related to the department of energy and the dept of defence, the material science worked on in those laboratories could prove to be very beneficial.

"The other place the government play a very important role on fuel cells is standards and codes. We'll need to change a number stds in automobile operation to allow widespread use of hydrogen and fuel cell vehicles."