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Experts: Automakers need one fuel technology

/ Source: The Associated Press

Automakers need to form some consensus on the technology they will use to improve fuel economy — whether it's diesels, hybrids, electric vehicles or hydrogen fuel cells — and do a better of explaining those options if they want consumers to buy in, auto industry experts said Wednesday at a conference for engineers.

"It is imperative that consumers believe there is a plan, that you know where you're going," said Scott Miller, chief executive officer of Synovate Motoresearch, which does market research for automakers and others. "You have to give them peace of mind that you're not going to yank the rug out from under them in five years."

The government also needs to consider more tax credits for fuel-efficient vehicles, carbon taxes to penalize gas-guzzlers, and mandates to promote cleaner fuels such as ethanol, which are some of the approaches that have successfully changed consumers' driving habits in Europe, according to Scott Bailey, vice president of powertrain systems at auto supplier Delphi Corp.

The executives spoke to an overflowing crowd at the SAE International World Congress, where the industry is grappling with how to meet tough new federal fuel economy standards that will require automakers to improve fuel economy by 40 percent by 2020.

Miller said consumers rate manufacturers lower now than they did in 2002 on how well they're doing at improving fuel economy, despite a rash of new hybrids and diesels on the market and test fleets of electric and hydrogen fuel-cell vehicles. Consumers also believe state and federal governments aren't doing enough.

Miller said consumers' frustration is growing as gas prices rise, and automakers need to cut through the clutter that consumers are hearing about various technologies. He added that consumers need a lot of education, since most don't even realize that their vehicles are powered by an internal combustion engine.

"We don't make doing the homework as easy, as an industry, as we probably should," Bailey said.

Tom Stricker, Toyota Motor Corp.'s director of technical and regulatory affairs, said building consensus will be a huge task since there are so many options. He pointed out that Toyota, which is known for its hybrids, will soon bring out diesel versions of its full-size Tundra pickup and Sequoia sport utility vehicle.

"There isn't going to be a lot of either-or. There's going to be a basket of solutions," he said.

Automakers also expressed concern over whether consumers will pay for the technology. Bob Lee, vice president of powertrain at Chrysler LLC, predicts automakers will lose billions in development costs in the short term, but in the long term, vehicle prices will rise dramatically.

"We've seen this in Europe. We're going to see it in the U.S.," he said.

Consumers already pay a premium of around $4,000 for a hybrid. Miller said a December survey showed 25 percent of consumers were willing to add $2,000 or more for a plug-in version of a hybrid, which would go farther on electric power. But the cost to convert a hybrid to a plug-in hybrid ranges from $6,000 to $10,000, although that cost could fall if plug-ins were mass-produced, according to The California Cars Initiative, a plug-in advocacy group.