When It Comes to Cars, ICE Is Still Hot

Such technologies represent a significant business opportunity for the auto industry's biggest suppliers -- companies like BorgWarner, Eaton, Johnson Controls, Navistar, TRW, and Visteon -- as well as dozens of startups -- firms with a far, far lower profile than electric-vehicle darlings like Tesla and Better Place, among them Achates Power, EcoMotors International, Pulstar, Fallbrook Technologies, Transonic Combustion, and Zajac Motors.

And then there's the question of what to do with the current stock of cars on the road. Is there a way to retrofit them with enhanced technologies, or to convert them to hybrids, plug-ins, or other EV technologies?

Felix Kramer believes there is. The founder of the California Cars Initiative, better known as CalCars.org, last year launched an initiative "to 'fix' a large fraction of the 250 million U.S. vehicles and 900 million globally to run partly or fully on electricity, thereby gaining millions of cleaner, more efficient vehicles that are cheaper to drive, while creating many jobs and providing new revenue streams to automakers from vehicles they've already sold."

Kramer and his team point to a a dozen or so companies and organizations already in the process of converting ICE cars to hybrids, including ALTe, Bright Automotive, ElectraDrive, Linc Volt, and Poulsen Hybrid. It's a market that's scarcely tapped, with blue-sky potential -- literally and figuratively.

What will it take to turn this potential into real business -- and jobs? It won't likely happen through individual consumer purchases of these upgrades. More likely will be fleet buyers -- the thousands of government agencies, taxi companies, rental car companies, and corporations that own hundreds or thousands of vehicles -- that will create a demand for ICE upgrades and retrofits. (My colleague, Tilde Herrera, recently reported on the billions in fuel savings fleet buyers will enjoy from the new Obama emissions standard.) But what will motivate them? Tax incentives? High gas prices? A price on carbon? Public pressure?

Another key challenge is how to accelerate the pace of innovation in the design of new cars, shortening the long product cycles now typical of the major car companies, thereby allowing more rapid adoption of new technologies. The Chevy Volt, for example, an EREV that will be in the market this fall, was first unveiled in late 2006  and formally announced in early 2007. Assuming its conception goes back at least a year earlier, that suggests the Volt took fully half-a decade to get to market. Even then, Chevy plans to make only about 10,000 of them in the first model year. How can tomorrow's cars get to market in half that time?

That will be a challenge for car makers going forward: creating scale and speed. We know how to make cars, even green cars, accelerate wicked fast. The next hurdle will be to bring new, clean technologies to market at similarly impressive 0-to-60 speeds.

Of course, all of this addresses only automobile technology -- the nature of the vehicles themselves. That omits the larger picture -- the notion of buying mobility services, as opposed to owning vehicles. There's vast opportunity for innovation in business models that provide alternatives to owning vehicles in the first place.

Until entrepreneurs and big companies focus their sights on that part of the transportation picture, all these techno-fixes will drive us to making good time going in the wrong direction.

Joel Makower is Executive Editor of GreenBiz.com, and author of Strategies for the Green Economy.

Photo CC-licensed by Flickr user william c hutton jr.