U.S. automakers shifting focus to flex-fuel autos

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General Motors is one of the U.S. automakers that is beginning to promote flex-fuel vehicles.

Major U.S. car manufacturers are focusing on flex-fuel cars, trucks and SUVs to increase flagging sales and meet customers’ concerns about rising gasoline prices.
Every major U.S. manufacturer plans to release more flex-fuel cars in 2007. And while automakers have sold the flex-fuel vehicles since 1998, many consumers are driving flex-fuel light pickup trucks without knowing they can use E85, a mixture of 85 percent ethanol and 15 percent gasoline, in addition to regular gasoline.
“You could say it’s one of the best-kept secrets,” said Bob Ottolini, General Motor’s executive director of product development and quality. “But we’re trying to get people to understand the concept of ethanol and how it works. It’s a way GM sets itself apart from the competition: we’ve been interested in this for years, but now we’re really pushing the concept.”

GM has 14 models that run on either fuel, and sells about 400,000 units each year. Ottolini said the cars are especially popular in Colorado, where 2 million flex-fuel vehicles are on the road. GM plans to add SUVs to its flex-fuel fleet next year.
“Our line includes most of the full-sized trucks, and now we’re offering the option in SUVs such as the Yukon and Suburban,” he said. “It’s a different type of energy, and people are looking for something different.”
At Chrysler, the plan is to increase production — and sales — of the flexible-fuel vehicles during the next two years, said Max Gates, a spokesman for DaimlerChrysler Corp.
“We sell about 200,000 a year, which means there are about 1.5 million on the road right now,” he said. “We’ll sell about 250,000 for the 2007 model year (which starts Sept. 1) and the following year, we plan to sell about 500,000 — a quarter of our total inventory.”
GM provides bright-yellow tank covers for ethanol-friendly vehicles, Ottolini said. The new marketing tool is part of an effort to separate GM from foreign manufacturers, such as Toyota, whose hybrid Prius is a big seller.
“We are focusing on practical ways to cut energy consumption,” he said. “Some people don’t want a hybrid, but they want the option of doing something different. This gives them the choice: either use ethanol, or if it’s not available, use regular gasoline.”
Ford Motor Co. also is introducing new flex-fuel vehicles. It started promoting the cars and trucks in 2005, saying that the move would accelerate the transition to alternative fuels. But Ford has offered flex-fuel cars since 1993, when the Taurus became the first flex-fuel car on U.S. roads.
“Short term we are very concerned about fuel diversity for such reasons as fuel prices and energy security,” said Curtis Magleby, public policy manager for Ford’s governmental affairs department. “In the long term, alternative fuels like ethanol will accelerate the transition toward more efficient biomass fuels and are an important part of sustainability and greenhouse gas reduction.”
But despite the popularity of flex-fuel cars, only one service station in Colorado Springs offers the fuel. Acorn Petroleum, at Cimarron and 8th Street, is owned by Ken and Harlan Ochs and has been selling the blend for more than eight years.
Across the country, the number of E85 fuel stations is on the rise — more than 400 have been added this year, said Michelle Kautz, director of communications at the National Ethanol Vehicle Coalition.
“It’s a small part of our business,” Harlan Ochs said. “But it’s growing slowly. When the energy bill passed incentives to create more ethanol last year, companies started building factories across Colorado that wouldn’t otherwise be built.”
Ford officials agree that the move to ethanol won’t be quick or inexpensive. Without more ethanol manufacturers, the number of flex-fuel vehicles will not rise, Magleby said.
“The infrastructure for a fuel involves production, distribution and retail marketing,” Magleby said. “Any effort to expand the current infrastructure requires the involvement of all the stakeholders — fuel producers, suppliers and government as well as the automakers.”
That lack of infrastructure is one reason Chrysler is just now marketing the flex-fuel cars it sells, Gates said. Because ethanol was not readily available throughout the country, the corporation did not push the E85 cars and trucks.
“But now, people are asking for alternatives,” he said. “And the availability is growing. The spike in oil prices led to interest in other alternatives. Flex-fuel is just one of the things we’re doing.”
U.S. manufacturers seem to be leading the way, Gates said. Foreign car manufacturers, such as Nissan and Toyota, only offer one or two flex-fuel options, while the U.S. corporations offer several models of cars, trucks and SUVs that will run on E85.
Both the state and federal governments offer incentives to car owners, according to the National Ethanol Vehicle Coalition. In Colorado, state law requires that 10 percent of all state-owned flex-fuel vehicles be fueled exclusively with an alternative fuel during the next four years.
Cars that meet the Environmental Protection Agency low-emission classification can be used in carpool lanes in Colorado without fees and regardless of how many people are in the car. The flex-fuel cars could also be exempt from state sales tax, according to the group’s Web site.
But not everyone is on board with the ethanol solution.
While Shell says it is dedicated to “having a substantial business in at least one alternative energy technology,” Exxon’s CEO remains unconvinced that ethanol is the best alternative energy solution.
Shell President John Hofmeister said his company has spent $10 billion since 2000 on alternative energy research, focusing on solar and wind for electricity; and hydrogen and biofuel for transportation.
“In the area of biofuels, we’ve been investing in the development of more advanced biofuels to find ways to produce second-generation ethanol from straw, wood chips and from corn husks instead of corn itself — to produce energy sources that don’t deplete our food sources,” he reported during a speech early this year at the Orlando Chamber of Commerce.
Exxon says that ethanol is neither an economic, nor energy efficient, choice.
“It can require more energy to produce than it generates in the end. And it relies upon using significant land areas, land that would otherwise go to food crops or forest cover,” said CEO Lee R. Raymond during a speech at the Woodrow Wilson International Center for Scholars in Washington, D.C. “To give you some perspective, if we tried to replace just 10 percent of the gasoline the U.S. will use in 2020 with corn-based ethanol, we would need to plant an area equivalent to Illinois, Indiana and Ohio solely to grow the grain needed as feedstock. The difficulty of that can be appreciated when you realize that this area is about one-sixth of the land we currently use in the United States for growing all our crops.”
But at GM and other large car manufacturers, ethanol and alternative fuel sources remain a way to stay ahead of the competition.
“We’re trying to adopt a new focus,” said Ottolini. “Adopt a new energy strategy — provide the vehicles customers want and lower their energy costs.”