That '70s auto show: Fuel economy is back

In an era of rising gas prices and, perhaps more particularly, war in the Middle East, words not heard in decades are peppering Detroit. Words like "efficiency" and "responsibility."

Automakers from across the globe are bragging about fuel economy, rolling out a raft of new gas-electric hybrid vehicles, and touting future autos that run on hydrogen, diesel fuel - even soy beans.

To be sure, carmakers are also buzzing about horsepower numbers and zero-to-60 times. But amid the usual flash and dash that is the annual North American International Auto Show in Detroit, the mood is unusually serious.

Eight years after Toyota launched the first hybrid car in Japan, it's traditional Detroit automakers who are trumpeting their hybrid plans and technology in nearly every presentation.

"The auto industry has a responsibility to improve emissions and fuel consumption of its cars," Rick Wagoner, CEO of General Motors Corp., told a gathering here. "We want to take the automobile out of the environmental equation. This will revolutionize the industry."

The trend, driven by high oil prices, environmental concerns, and improving car technology, doesn't mean everyone will soon buy a hybrid car. But consumer taste does appear to be shifting.

One result: The industry is starting to roll out hybrid versions of mainstream cars such as Honda's Civic and Accord, as well as the Ford Escape SUV.

"What's important to [hybrid buyers] is fuel economy and being politically correct, socially responsible," says Ron Pinelli, an industry analyst at Auto Data in Woodcliff Lake, N.J. Hybrids are here to stay, he says, though if fuel prices stay flat the growth of hybrids will moderate.

Hybrids reduce fuel consumption and pollution by about 30 percent compared with ordinary gasoline cars - and more than that if they use diesel power.

Hybrid sales are expected to double this year with the introduction of six new models - the Ford Escape, Toyota Highlander, Lexus 400h, Honda Accord, Mazda Tribute, and Mercury Mariner - during the 2005 model year from last September to next, says Anthony Pratt, director of analysis for advanced powertrain systems at J.D. Power Associates in Troy, Mich.

He expects hybrid sales to grow from 80,000 in 2004 to more than 400,000 by 2008.

But it remains to be seen whether Americans will continue to be willing to pay the price premium - roughly $3,000 per car - for hybrid technology long term.

Hybrid buyers tend to be the best educated and among the wealthiest buyers of any vehicle category: 40 percent have master's degrees. And 40 percent live in California. Car-buyers in middle America seldom buy hybrids, says Mr. Pratt. In part, that's because carmakers haven't marketed as much there. It's also largely because urban coastal communities provide the most conducive atmosphere for hybrids, often with higher gas prices, worse traffic, and wealthier buyers.

And the hybrids are no longer just about efficiency. They're moving upscale. Honda's new Accord hybrid, on sale since December, is the most expensive, and fastest Accord sold, in addition to the most fuel efficient. Lexus's new hybrid SUV, the 400h, is likely to cost nearly $50,000 when it rolls into dealerships this spring.

For all the questions about how fast the market will grow, one thing that seems certain is the automakers' commitment to build them.

"My grandfather's goal was to put America on wheels. My goal is to make this company a leader socially, environmentally, and economically," says Bill Ford, CEO of Ford Motor Co., preparing to introduce a range of futuristic concept cars here that included hybrids and fuel-efficient clean diesels.

He hopes to renew the company's environmental commitment by building vehicles like the diesel-electric Meta-One crossover sport wagon and a new diesel electric hybrid airport bus. He also announced Ford will sell five new hybrid vehicles over the next three years in the two bestselling vehicle categories, SUVs and light trucks.

But the efficiency story doesn't end with hybrids. While it also displayed two diesel-electric hybrids, the Opel Vectra and the GMC Graphyte, General Motors' major push is on fuel-cell vehicles. It debuted a running prototype of the second generation fuel-cell vehicle on a "skateboard" chassis that promises to revolutionize auto manufacturing. The Sequel has an unprecedented range of 300 miles for a fuel cell vehicle, can be refueled in under 10 minutes, and warms up in less than two minutes from freezing temperatures - all technological breakthroughs for fuel-cell vehicles. Fuel cells make electricity by combining hydrogen and oxygen, and produce no pollution other than water. The Sequel is said to be as acceptable to consumers as gasoline cars today, except for its cost of over $1 million. Challenges remain: where to get the hydrogen without negating all the efficiency gains of the fuel cell and how to distribute it and refuel large numbers of cars conveniently.

Clean diesels are also around the corner. In 2006, when new government regulations lower the sulfur in diesel fuel, automakers expect to be able to meet emissions regulations across the country. (Now they don't in seven states.)

Diesel engines get hybrid mileage at half the extra cost, says Pratt. Diesels can also burn a wide variety of renewable fuels, even cooking oil. In unveiling the bank-vault-like Syn-US, Mr. Ford said it could drive from New York to Los Angeles nine times and back before emitting as much smog-forming chemical as painting a bedroom.

If 2005 is the year of the hybrid, look for 2006 to be the year of the diesel.