An old English proverb says, “Adversity makes strange bedfellows,” and so it could be with both Ford and GM-owned Opel/Vauxhall, which are respectively eying alliances with others to more effectively tackle automobile electrification challenges.
In Ford’s case, this week it was reported it and Toyota have signed a memorandum of understanding (MOU) to co-develop a hybrid light-duty truck powertrain this decade.
Fast on the heels of that news, yesterday Automotive News reported that Opel/Vauxhall is also looking for someone to team up with to share development costs for more gasoline-electric cars.
The aforementioned “adversity” now compelling partnerships could be any or all factors adding up to high costs automakers must face as they attempt to prepare for challenging conditions.
What conditions are those? They could include altruistic intentions toward making the world a cleaner, less wasteful place, and helping humanity solve environmental and energy hurdles in light of waning petroleum and increased pollution.
Or, short of voluntary compliance with such noble ideals, the reality is they have to, regardless, as various legislative bodies are tightening the screws on automakers with efficiency mandates.
Yes, the writing is clearly on the wall pushing manufacturers to make expedient business decisions to stay ahead of the curve, if at all possible.
One specific looming incentive for the U.S Ford-Toyota deal is pending CAFE rules that by 2025 will mandate a “54.5 mpg” standard (equal to around 40 mpg on the window sticker).
Ford and Toyota
This week the two companies said they’d been talking for months since a chance meeting took place in an airport between Ford CEO Alan Mulally and Toyota President Akio Toyoda.
The exact airport and date wasn’t reported, but the story has it that they began discussing ideas, exchanged cards, and kept the dialogue going. Now, months later, the two companies are expected to announce a formal agreement next year.
The East-meets-West collaboration could very well see Ford putting something like a Prius drivetrain into its best-selling F-series pickups, and possibly other light-duty trucks. Toyota at the same time will hybridize its own Tundra and Sequoia-sized vehicles, and possibly others.
“We expect to create exciting and socially beneficial technologies with Ford, and we can do so because our two companies have enough experience to create a synergy effect in hybrid technology,” said Takeshi Uchiyamada, a Toyota executive vice president.
Note that his chosen words included two out of three of the proprietary words Toyota uses to describe its “Hybrid Synergy Drive.”
The timing for a formal Ford-Toyota agreement may be about when the Obama administration settles the details of its proposed doubling of current CAFE mandates.
As it stands, the CAFE plan calls for 5-percent annual increases that won’t immediately affect pickup trucks until 2019, unless a mid-year review to the plan in 2018 changes the mandates for those vehicles.
Whether the rules change mid-way or not, as tentative plans are now written, after 2019 annual efficiency increases would be required for pickups at a rate yet to be determined. By 2022, pickup trucks are expected to be mandated to achieve the same 5-percent annual increases as passenger vehicles will.
The CAFE rules also say light trucks other than full-sized pickups would have to make 3.5 percent increases in mileage standards in the 2017-21 model years and 5 percent annual increases in the 2022-25 model years.
In the months of talks prior to the rules being settled, the major thrust of objections by auto industry stakeholders to the Obama CAFE clamp being tightened was it would cost a fortune, and make their vehicles uncompetitive.
It was also said consumers would bypass potentially expensive-to-make vehicles in favor of what they wanted, further jeopardizing the profitability of automakers forced to improve efficiency for their vehicles.
Ford and Toyota appear to have found a way toward deflecting this threat by splitting development costs.
“By working together we will be able to serve our customers with the very best affordable, advanced powertrains, delivering even better fuel economy,” Ford CEO Alan Mulally said in a statement. “This is the kind of collaborative effort that is required to address the big global challenges of energy independence and environmental sustainability.”
While it is being said Ford F-Series pickups and possibly E-Series vans would be beneficiaries, Automotive News reported the companies did not release financial details or identify which specific vehicles will be involved.
What is known, according to Derrick Kuzak, Ford’s vice president of product development, is that product development teams from Ford and Toyota began meeting on the collaboration in April.
“This agreement brings together the capability of two global leaders in hybrid vehicles and hybrid technology to develop a better solution more quickly and affordably for our customers,” said Kuzak.
If it goes through, the deal looks like it could help Ford a lot, as Toyota knows how to squeak out efficiency. Its 2012 Camry Hybrid, for example, was just announced as gaining a 24-percent improvement in city driving efficiency, now pegged at 43 mpg. Not bad for a mid-size car. Merging that technology, combined with lessons yet to be learned in the next several years into a Ford truck might be just what the doctor ordered.
Incidentally, this will make the second hybrid/plug-in-tech collaboration for Toyota in recent news, as the company has also been working with Tesla in developing solutions, with a one $100 million contract already made, and reports of a $1 billion deal also having been discussed.
The dealings between Toyota – for now still the world’s largest automaker – have definitely been a leg-up for Tesla.
There is less to report about this GM-controlled company as it is only now looking for a dance partner – but looking, it is.
“Hybrid technology is becoming increasingly more important. We are not holding any concrete talks but a cooperation would be certainly a good way to cut costs,” Opel CEO Karl-Friedrich Stracke told the national German newspaper, Frankfurter Allgemeine Zeitung yesterday.
In this company’s case, the motivation to partner is essentially the same as it is between Ford and Toyota, but on a different continent, and considering different legislated mandates.
Stracke said European law insists by 2020 carmakers’ offerings must emit no more than 95 grams of CO2 per kilometer.
Note he calls the Apera a “pure electric vehicle.” That’s a bit more bold than trying to call it an “extended-range electric vehicle.”
“We need hybrid technology starting with compact cars and upwards,” Stracke said.
Opel will begin selling the U.S.-made Ampera in November for a pre-grant price of 42,900 euros As we previously reported, the vehicle is already well on its way toward being pre-sold for 10,000 initial units, and the company would like GM to cut loose some more.
“Maybe we even hit 12,000 or more,” Stracke said.
One advantage Europeans have that facilitates acceptance for plug-in vehicles is that ordinary household electric current is 230 volts, instead of the 120 found in the U.S..
This means recharging with the included charger will replenish a Volt or Ampera’s 16-kwh battery in under three hours, according to Vauxhall (see video).
How well the Ampera (and European Volt) does sales-wise will determine whether the company moves forward to begin assembly in Europe.
“We need a business case for maybe 40,000, 50,000, 60,000 vehicles a year, then maybe it makes sense to locally manufacturer it on the Continent or even in the UK,” Stracke said.
In the mean time, Opel/Vauxhall is weighing all options, including doing a deal like Ford and Toyota are working toward and which appears well underway toward settling.
This entry was posted on Thursday, August 25th, 2011 at 5:55 am and is filed under General. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.