In Europe, a shift in tactics

October 24th, 2007

FRANKFURT

First-time visitors to Frankfurts International Motor Show in September could be forgiven for questioning whether they had wandered into the wrong convention center.

Gone were the displays of high-octane German and other European cars that have long made Frankfurt a virtual shrine to horsepower. In their place were earnest placards about CO2 emissions, hybrids, fuel cells, hydrogen and other themes that would be at home at an environmentalists gathering.

Frankfurts extreme makeover is the clearest signal yet that European carmakers have gotten religion on green technology. Although the Europeans have been reluctant converts to the hybrid gasoline-electric engines pioneered by Toyota, partly because of their investment in diesel, they recognize that they must rethink the way they build cars to respond to concerns about emissions and climate change.

“If we focus only on power and performance, its not good enough,” said Norbert Reithofer, the chief executive of BMW.

With the European Union considering mandatory cuts in carbon-dioxide emissions, and American drivers flocking to hybrids like Toyotas Prius, European carmakers are feeling pressure to show the same environmental йlan in cars that other European companies have long shown in windmills and solar panels.

Last winter, Mr. Reithofer dismissed the clamor surrounding CO2 and global warming as hype. In Frankfurt last month, he conceded: “The hype did not go away. This will not disappear as a subject.”

BMW has responded to the new environment with initiatives that, taken together, almost seemed designed to recast the “ultimate driving machine” as the “ultimate green machine.”

It is rolling out a full range of diesel-powered vehicles that it says will emit less carbon dioxide than existing models, using technical innovations it calls “efficient dynamics.” It introduced a sport- utility vehicle, the X6, with a hybrid engine developed jointly with DaimlerChrysler and General Motors. It also introduced a coupe version of its compact 1Series, which would meet Europes proposed restrictions on CO2 emissions.

Rather than promoting new models by how fast they accelerate from zero to 100 miles an hour, BMW lists the number of grams of CO2 they emit per kilometer Д prompting an executive from Porsche to declare grumpily that the Frankfurt show was no fun anymore.

Yet even Porsche is falling in line. The celebrated sports carmaker has built a hybrid engine, developed with Volkswagen and Audi, which it will put in its Cayenne S.U.V. The engine, it says, will increase the fuel efficiency of the Cayenne by as much as 36 percent over the conventional gas-powered model and emit 20 percent less carbon dioxide.

“Europeans went in a different direction than the Japanese initially by focusing so much on diesel,” Wendelin Wiedeking, the chairman of Porsche, said. “But that solution is not sufficient.”

Still, Wiedeking voiced a frustration held by many European executives that the auto industry is being unfairly singled out in the general drive to curb greenhouse gas emissions. Passenger vehicles, he said, account for less than 12 percent of total carbon-dioxide emissions.

“The environment is obviously Topic A, but it is also misused,” Wiedeking said. “We need to be a little realistic. People need transportation; were not all going to start riding bicycles.”

Automakers are particularly vexed about Europes proposal to limit the average CO2 emissions of new cars sold after 2012 to 120 grams per kilometer (192 grams per mile). While carmakers say such a goal is not impossible, they say there is no way they can achieve it by 2012. In 2004, the average emission of European cars was 163 grams per kilometer (260 grams per mile).

Sergio Marchionne, the chief executive of Fiat of Italy, said that if such a proposal was adopted in 2009, as is likely, “a minimum of six to seven years is appropriate before it could be enforced.”

Germans, who build the most powerful cars, and therefore most emissions-intensive ones, are also worried that the new law will not distinguish between carmakers that specialize in smaller vehicles, like Fiat or Renault of France, and luxury carmakers, like BMW or Mercedes-Benz.

They also insist that the reductions in emissions of automobile engines must be coupled with greater use of alternative fuels, like biodiesel, and better training of new drivers.

“We will carry the main burden Д that is fine, that is O.K. Д but we shouldnt be carrying the only burden,” said Dieter Zetsche, the chief executive of Daimler.

In the long run, Zetsche said, electric motors powered by fuel cells will replace the internal combustion engine. For now, the challenge is to achieve greater efficiency and reduced emissions by tweaking existing technologies.

Municipal Wi-Fi Spending Estimates Down

October 24th, 2007

(10-24) 09:38 PDT New York (AP) —

A leading industry analyst on municipal wireless projects is revising its 2007 spending estimates as cities find their projects costing more and drawing less interest from residential customers than expected.

In an annual State of the Market Report, MuniWireless estimates U.S. expenditures at $329 million for the year, down from the $460 million projection made for 2007 last year. MuniWireless founder Esme Vos cited several factors, including cities and service providers changing their strategies and technical hurdles requiring additional hardware.

But Vos notes the revised estimate is still 35 percent above the $243 million spent in 2006 on projects to blanket all or parts of cities with Wi-Fi and other wireless Internet access.

She also expects annual growth rates of 33 percent to 48 percent until 2010. Spending for 2009 is now projected at $687 million, compared with the $1.76 billion made in last year’s report.

“It may not be the 100 percent year-over-year growth municipalities and service providers were predicting just a year ago, but it’s still a large and fast-growing market,” Vos wrote in the report issued this week.

Service providers have been questioning whether the networks will generate enough revenue to justify the multimillion-dollar investments to build and maintain them. EarthLink Inc., one of the chief evangelists of municipal Wi-Fi, has decided it can no longer afford to foot the bill by itself.

Doubts aside, Vos said she expects market demand to continue as city workers successfully use wireless systems to read electric meters and file building inspection reports remotely and as communities become more innovative in tapping federal and state grants.

She also said Wi-Fi-enabled gadgets like Apple Inc.’s iPhone should drive demand.

G.M.’s electric Dream awaits reality

October 24th, 2007

AS car commercials go, the ads for the Chevrolet Volt are a typical mix of children, blue jeans, cute dogs and folksy instrumental music.

But they are different in one respect: the small print on the screen reads, “Not yet available for sale.”

General Motors is staking a large chunk of its credibility on the Volt, a plug-in electric sedan that uses a gasoline engine only to recharge its batteries.

It is a concept car that cannot be built until the technology is available, and one that the company has not even officially announced it will build.

But given the state of the American automotive industry, with companies scrambling to be seen as green, the Volt is widely viewed as G.M.s car of the future, capable of competing with imports like Toyotas Prius hybrid.

The company is vigorously promoting the Volt and, in a new contract with the United Auto Workers union, has assigned a Michigan plant to produce it, starting in 2010.

What if it does not deliver? “It will be misery for them,” said John ODell, senior editor for Edmunds.coms Green Car Adviser.

“I think they will build it, because they are very much aware their reputation is on the line.”

The Volts most ardent supporters acknowledge that there is a lot at stake. G.M.s environmental image suffered when it backpedaled on plans to build hydrogen-powered cars and stepped away from an earlier battery-powered car, the EV1.

“The company has taken a risk,” said Tony Posawatz, vehicle line director for the Volt.

But even if it gives the Volt the go-ahead, G.M. may be overly ambitious with its timetable.

For the car to do what it is being designed to do Д run for up to 40 miles on an overnight charge from a wall outlet, and much farther if its batteries are recharged by its small gasoline engine Д it will need advanced lithium-ion battery technology.

And while lithium-ion cells are being used in many electronic devices, they will have to be made safer and more affordable and durable for use in cars.

“Ive become quite convinced that they have to do it,” said Walter McManus, an auto industry economist at the University of Michigan.

“The problem,” he added, “is the battery technology is still not ready. I would say, when they break ground on a plant to make batteries, two years later the Volt will come out.”

For the car to be built starting in 2010, he added, “a factory has to be built soon, and it doesnt look like the batteries are that near production.”

The Volts supporters concede that there are hurdles, but they say they will not be deterred.

“Ive been unbelievably enthusiastic about this vehicle,” said Robert Lutz, vice chairman for product development at G.M. and arguably the vehicles most vocal promoter, despite his reputation as a fan of cars big and fast.

“I would be surprised, shocked and dismayed if we decide not to do it,” he said.

But Posawatz is more pragmatic. “Until the product is done there is always some degree of uncertainty,” he said. “No such batteries exist today, but our confidence builds as days go on.”

Since June, G.M. has awarded contracts for development of lithium-ion batteries to several companies, and expects to have samples later this year. Testing is to begin by mid-2008.

Lutz said he would not know how many Volts would be built, nor what they would cost, until G.M. had a better handle on production costs.

“If we have to charge $40,000 for it, the volume would be less than if we can get it out for $29,000,” he said.

But that hasnt stopped Chevrolet from marketing the car.

Kim Kosak, general director of marketing, Chevrolet division, said the Volt was first marketed to younger people and affluent households. Print ads appeared in publications like Newsweek, The New Yorker and The Economist.

But now everyone is a potential customer, Kosak said.

Chevrolet has added Major League Baseball broadcasts to its list of advertising outlets.

At this summers Dream Cruise, the Detroit-areas parade-like tribute to American cars, an elaborate, giant Volt was on display.

Kosak acknowledged that she could not recall ever seeing such a marketing thrust for a vehicle that was not yet available. “I would be hard-pressed to tell you when we ran anything of this nature,” she said.