Lutz on fuel efficiency & hydrogen fuel cell-powered vehicles

Remarks from Robert A. Lutz , Global Product Development, General Motors

That’s more than anyone else — the next closest is 14.

We’re working to improve even more, by refining internal combustion technology in the short term. We’re making our engines compatible with a variety of fuels, using lighter and more efficient materials, and improving our vehicle aerodynamics, for example.

We have 9 FlexFuel vehicles equipped to run on E85, which is 85 percent ethanol and 15 percent gasoline. We have a million and a half such vehicles on the road right now, and the capacity to build 450,000 units per year more.

E85 costs less than gasoline; it’s clean-burning, reducing sulfur and aromatic hydrocarbons; and it’s domestically sourced and renewable, since it’s corn-based. If you compare a vehicle using E85 to a typical hybrid vehicle, the hybrid may get better gas mileage but the E85-powered vehicle saves hundreds more gallons of gas per vehicle per year, because only 15 percent of what you put in the tank is gasoline, compared with 100 percent in the hybrid’s tank.

So we plan to push for greater acceptance of these vehicles. And those who say, “but we don’t have the infrastructure to support them”… well, those people are mostly right. There are 500 E85 retail refilling stations in the U.S. , concentrated mainly in the Midwest .

We need to expand the infrastructure, because the potential benefits are staggering. If market conditions supported unconstrained ethanol supply and infrastructure… we could save 45 million barrels of oil annually, and reduce greenhouse gas emissions by 6.9 million metric tons per year.

Right now ethanol represents just 2.5% of our fuel supply. Some research suggests that, by 2020, ethanol has the potential to replace as much as 25% of our fuel supply on an energy-equivalent basis. That’s a tenfold increase.

Such an amount could help offset future growth in oil demand, act as a hedge to future oil supply and price shocks, and help diversify our transportation energy supply. The real future here will be with cellulose-based E85 production. If there’s some kind of corn crisis, all bets are off.

To be on the safe side, I’ve increased corn production at the Lutz farm, and will continue testing it on the still in the barn until it reaches or betters gasoline quality!

E85 is just one element of the near-term component of GM’s multi-pronged energy strategy. For the near-term, we will continue to introduce technologies to improve the internal combustion engine, like Displacement on Demand… six-speed transmissions…Variable Valve Timing and Actuation…Spark Ignition Direct Injection… and advanced diesels.

The whole point of our energy strategy is that we see a number of solutions to the energy equation, and we’re planning for all of them, so that we will be ready when the market decides which way to go. We’re not putting all of our eggs into one fuel tank.

Hybrids are an important part of that strategy. There is no denying the huge impact hybrids have had on the national energy discussion. And there is little question that hybrids will remain an important part of the automotive landscape. But let’s keep in mind that we’re talking about a very small and very young market that is just now developing into higher volumes, and there is much to be discovered as to how big this market will get and how far it will grow.

Given the high investment and high cost of componentry inherent in the technology, we’ve embarked on a strategy that taps innovative approaches and high volumes to give us the best footing possible in this growing market. We’ve also targeted traditionally higher consuming vehicles to make the fuel savings equation more attractive to the consumer.

For instance, the hybrid system in the Saturn VUE Green Line that will be introduced next year provides double-digit percentage improvements in fuel economy at a reasonable cost.

In 2007 the new fullsize SUVs will be available with our patented next-generation two-mode hybrid system, increasing their fuel efficiency even more, about 25 percent, with very little loss in performance. The addition of a second hybrid mode to the drive system improves efficiency, and reduces the need for large electric motors found in typical single-mode systems.

To make this new two-mode system the best system it can possibly be, and to get it into the hands of as many customers as possible, we have entered into a number of partnerships to develop it and make it more widely available. We already have DaimlerChrysler and BMW on board. The combined development and market power of this group of companies — each with its own significant and unique strengths — is moving our two-mode hybrid system into the technology-of-choice for the industry.

And we may add some more companies to the partnership before all is said and done… maybe even some that I haven’t worked for! …

Our long-term strategy, as you know, is the hydrogen fuel cell. That’s the logical next step to reinventing the automobile… and to transforming our entire industry.

We have recently developed a novel stack concept that enables an additional 50 percent reduction in size over the stack that debuted in our Sequel show car. That 50 percent reduction represents an improvement by a factor of 14 in just seven years. What’s more, we are making excellent progress on durability, cost reductions and hydrogen storage.

We are on the cusp of breakthrough technology. We are going to get this new mode of propulsion developed to the point that it provides the same performance, range and cost as today’s internal combustion engine, which is the key to realizing high volume sales.

Our fear at this point is that we’ll be all dressed up for the party with nowhere to go. We need cooperation from government and industry to get the world’s infrastructure ready for the hydrogen economy.

To help motivate that, we are prepared to take the same tack that we’re taking on hybrids: being open to partnerships with other automakers, suppliers, oil companies, governments and universities, whoever and whatever it takes, to develop the technology and implement the change more quickly, and more broadly.

By working together as automakers, we can get the hydrogen ball rolling, and that will be to the benefit of everyone — a lot sooner than any one company going it alone.

I’ve seen a lot of changes since I’ve been in this industry but they pale in comparison to the implementation of hydrogen fuel cell-powered vehicles. It’s a huge opportunity for whoever has the knowledge and guts to take the leap — it will be this industry’s moon shot.