Column: Rising gas prices fuel alternatives
Wednesday, May 19, 2004
By Rick Haglund
With oil prices surging to a record high, I thought it would be a good time to check in with Bob Stempel.
For the past decade, the retired General Motors Corp. chairman has been leading Rochester Hills-based Energy Conversion Devices Inc., which is trying to decrease our dependence on the gasoline-fed internal combustion engine.
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While his former company insists that $2-plus-a-gallon gas isn't putting a dent overall in the sales of fuel-slurping sport-utilities, Stempel says wallets will stretch only so far.
"I haven't found any SUV buyers who won't take higher gas mileage," Stempel told me during a recent visit to his office.
Even potential buyers of the once-hot-selling Hummer H2, which gets about 12 miles to the gallon, are shying away. H2 sales are off 24.6 percent so far this year.
Conversely, sales of the Toyota Prius and Honda Civic gasoline-electric hybrids rose 25.8 percent last year from 2002, according to R.L. Polk & Co., a Detroit-based automotive data research firm.
"The Big Three will really have to put on a push because Honda and Toyota have turned the hybrid into a marketable product," said Stempel, ECD's chairman and chief executive officer.
GM and Ford Motor Co. will offer their first hybrids in several truck models later this year. Hybrids can increase fuel efficiency by more than 50 percent.
Founded in 1960 by inventor Stanford Ovshinsky and his wife, Iris, ECD is involved in the development of advanced batteries for electric and hybrid vehicles, and hydrogen storage systems for fuel-cell vehicles, among other things.
There's even a small, electric-powered prototype delivery van that Stempel developed with former Chrysler Corp. Chairman Lee Iacocca hidden in ECD's factory. Stempel said the van is being shopped around to delivery companies in crowded European cities.
ECD has long been about scientific discovery, which Stempel, an engineer, said is "one of the things that keeps me here." Even the place mats for a box lunch served at ECD for Stempel and me were adorned with the periodic table of elements.
Over the years, science has brought in enough money to fund operations and pay the bills at publicly held ECD, but not much has been left for stockholders.
In fact, the company has never posted an annual profit in 44 years. Stempel says he's trying to change that by, among other things, installing some hard-nosed business executives.
But it hasn't been easy -- even for a guy with Stempel's connections. ECD and other suppliers must take huge financial risks to convince automakers that they're capable of supplying batteries and other sophisticated hybrid components.
"It is really tough to introduce a new technology," he said.
Nevertheless, Stempel says he believes hybrids and hydrogen fuel cells will eventually supplant the internal combustion engine, which he spent decades refining and promoting at GM.
And the way the world is going, automakers have a strong incentive to accelerate alternative-fuel development efforts.
The oil-rich Middle East isn't getting any more stable. China's exploding economy is gobbling up increasingly tight oil supplies. And even automakers say the rapid, worldwide growth in auto ownership is spewing too much pollution into the air.
Those factors render "academic" arguments that hybrids will be too costly to become mainstream, Stempel says.
Yes, the Ford Escape hybrid will likely cost about $3,000 more than a gasoline-only powered Escape when it hits showrooms in August. But 30,000 people have told Ford on its Web site that they want to buy one.
As an engineer, Stempel says he also used to think hybrids would be too expensive because they have two power sources: a gasoline engine and an electric motor. But he says technological advances are closing the gap.
And if gas prices keep rising, as many experts expect, the gap could narrow considerably. |
