So Why is Ford Backing Away from Hybrid Commitment?

David Roberts at Gristmill may have well summed up all of our responses to the news that Ford Motor Co. is moving away from recent "keen interests" in hybrid technology, and choosing to focus on "flex-fuel" vehicles: WTF? During the taping of the most recent theWatt Podcast today, host Ben Kenney came across a line in the New York Times' article on this development that may hold the key: "Car companies receive a credit for each vehicle they produce that is capable of running on ethanol or a similar bio-fuel." Did you know that? We certainly didn't.

It turns out that Alternative Motor Fuels Act of 1988, which was renewed as the Alternative Fueled Vehicles Rule of 2004, does just that. According to the US Department of Energy's Alternative Fuels Data Center, these laws create an incentive for auto makers to build cars capable of using alternative fuels by "[giving] a credit of up to 1.2 mpg toward an automobile manufacturer's average fuel economy which helps it avoid penalties of the corporate average fuel economy (CAFE) standards." The Union of Concerned Scientists calculates that this results in a "...roughly a 65 percent bonus in credited fuel economy" (see their table for exact figures). While Ford denies this credit played a role in its decision, it is clear that cars running on biofuels automatically raise the company's corporate average fuel economy. While hybrids would help here, too, almost any car in Ford's fleet can be made a flex-fuel model with relatively simple modifications, while hybrids would require major new investment in the manufacturer's infrastructure.Of course, developing cars with flex-fuel capacity could be a major step towards reducing automobile emissions, but the key here is the "flex" part of the equation: if a driver has plain old gasoline available conveniently, but has to drive across town for E85 or other biofuels that might work in his/her car, which option do you suppose s/he'll choose? Yeah, exactly... UCS notes "More than a decade after the program was introduced, government data showed that dual-fuel vehicles used an alternative fuel less than one percent of the time." (my emphasis) Couldn't be a case of doing the same old thing and calling it a change, could it...?

Interestingly enough, Toyota's taking a different approach: while they'll also be working with flex-fuel technologies, their major initiatives involve a doubling of the number of hybrid models by the early 2010s, and a push for development of plug-in hybrids. Given the Japanese car maker's renowned track record for anticipating and responding to market developments, we'll bet that the US' Big Three will be wondering what hit it again in the next decade. :: The New York Times


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