Auto giants announce five-year joint effort
to develop environmentally friendly cars
Two of the world's automotive giants are combining their efforts to develop fuel cells and other advanced environmental technologies as the race to replace the internal combustion engine picks up speed.
General Motors Corp. and Toyota Motor Corp. announced the five-year joint effort yesterday, trumping DaimlerChrysler AG and Ford Motor Co., which will unveil a deal today to test 10 fuel-cell-powered light vehicles and five buses on the streets of California. The California agreement will showcase fuel cell technology developed by Ballard Power Systems Inc. of Vancouver, in which DaimlerChrysler and Ford hold a combined 35-per-cent stake.
GM, the world's largest auto maker, and Toyota, the No. 3 producer, crank out about 25 per cent of all vehicles made annually and hence bring tremendous resources and leverage to the effort to develop cars and trucks that are more environmentally friendly, GM vice-chairman Harry Pearce said.
"It just made eminent sense to put these companies together," Mr. Pearce said, although he pointed out that there is no plan for an equity tie-up.
The enormous cost of developing the alternative technologies is what is driving such link-ups as the GM-Toyota pairing, said David Cole, who heads the University of Michigan's Office for the Study of Automotive Transportation.
"We are increasingly going to see technology drive things and that's going to be expensive," Dr. Cole said.
"One of the reasons that Chrysler made the move to Daimler-Benz was that they were short on technology and they knew it."
Mr. Pearce said GM and Toyota will devote "hundreds and hundreds of engineers" to developing:
Electric traction and control components for alternative vehicles;
Systems design, fuel selection and processing for fuel-cell-powered vehicles;
Batteries, battery testing and vehicle safety requirements for battery-powered vehicles;
Powertrain and control systems for the next generation of hybrid electric vehicles.
"We are both very humble about the cost challenges, the technology challenges and the market challenges in front of us," Mr. Pearce told reporters at a news conference in Detroit and those listening in by telephone from elsewhere.
GM and Toyota have enjoyed successful links in the past, including a joint venture car assembly plant in California and the creation of a new charging systems for electric vehicles, said Akihiro Wada, executive vice-president of technology development for the Japan-based auto maker.
The race to develop an alternative to the internal combustion engine is being driven mainly by pollution concerns in California, which requires that by 2003, 2 per cent of an auto maker's sales in the state be zero-emission vehicles.
Both Toyota and GM sell battery-powered electric vehicles in the Golden State now, but Mr. Wada acknowledged yesterday that that technology is highly unlikely to replace the internal combustion engine.
He pointed out that any alternative technology must equal the performance and cost that consumers have come to take for granted with vehicles powered by gasoline.
That's the key challenge for the GM-Toyota group and the DaimlerChrysler-Ford pairing. Fuel cells, for example, which turn hydrogen into electricity to drive an engine produce no emissions, but the costs are prohibitive.
Ballard says costs have dropped dramatically in recent years and its auto maker partners say they plan to have a fuel-cell-powered vehicle available for fleet use by 2004.
Toyota spokesman John McCandless said Ballard is not involved in the GM-Toyota projects.
The two companies have developed several alternative vehicles separately, including GM's EV1 battery-powered car, which was the first battery-powered vehicle available.
Toyota sells a battery-powered sport utility vehicle, and plans to start selling another vehicle called the Prius in North America next year. It's a sedan powered by a hybrid gasoline-electric engine.
At the moment, the Prius doesn't generate a profit for Toyota, but Mr. Wada said it's
expected to do so by the time it hits the roads here next year.
GREG KEENAN
Auto Industry Reporter