Hybrid: the motor of change?

Lexus is to become the first car manufacturer in the UK to offer a hybrid version of every model in its range (MW last week) but not everyone in the car industry shares its faith in hybrid technology. While Lexus, parent company Toyota and fellow Japanese marque Honda pioneer hybrid engines – which switch between petrol and electric power – many of their rivals are eschewing the technology and championing alternative methods of reducing carbon dioxide (CO2) emissions.

The need to cut emissions is one of the most pressing issues facing the car industry after the European Commission set an average goal of 130 grams of CO2 per kilometre for all new cars by 2012 – down from its current average level of close to 170g per km.

Hybrids use less petrol and emit less CO2 than conventional cars because they are powered by electricity at lower speeds, switching to petrol only at higher speeds. They are also becoming more mainstream, with sales in London alone doubling to more than 1,100 last year.

Toyota is very much in the vanguard of the hybrid revolution, selling more than 500,000 Prius hybrids worldwide. Sales more than doubled last year, helped by celebrity endorsements from the likes of Gwyneth Paltrow and Leonardo Di Caprio, but director of the Institute of Automotive Industry Research, Professor Garel Rhys, believes growth in the US, where hybrids are particularly popular, is beginning to tail off.

"People buying hybrids are concerned about value for money and lack of return," says Rhys. "Hybrid is an attempt by the industry to do something about CO2 but it is probably an intermediate solution. It is filling the gap before eventually, in a couple of decades, there will be a move towards hydrogen or alternative fuel."

Rhys is not alone in believing that hydrogen is the long-term answer to the emissions problem. BMW is building 100 hydrogen-powered 7 Series cars this year to "kickstart the process". But the company – which along with fellow German luxury marques Mercedes, Audi and Porsche would be particularly affected by the EU’s proposals – admits that the lack of refuelling infrastructure means that hydrogen-powered cars for consumers are still a long way off.

Diesel dilemma
BMW has so far shown little more than a cursory interest in hybrid technology. It claims many of its diesel cars are more efficient than the equivalent hybrid and a spokesman says/ "That raises questions about why we would need to go down a hybrid route. If we can produce a diesel-powered car that gives better performance using intelligent technologies that costs less, then that’s a fairly compelling argument."

The other major players are working on a host of different technologies to cut emissions. Audi is focusing on TDI engines and biofuels, which it believes is a more "sustainable long-term proposition" than hybrids, while Mercedes says it has put most of its energy into its "cleaner diesel" Bluetec, which cuts fuel consumption and exhaust emissions.

Saab unveiled its latest 9-5 BioPower car, which runs on biofuel ethanol – an alcohol made from plants – at last month’s Geneva Motor Show, and General Motors has set a target of 2010 for the production of an all-electric car based around its Vauxhall Volt prototype. Citroën thinks diesel hybrids are "the way forward" and will launch its C4 Hybrid HDI, which has a diesel-electric engine, in 2010. Volkswagen is pushing BlueMotion, the designation the company uses for the most fuel-efficient variant of each of its cars, and Ford says it is "looking into most things" in Europe but does not think hybrid is the long-term solution. Even Ferrari has announced plans for a lighter-weight, more fuel-efficient supercar.

Guy Masters, UK managing director of global motoring consultancy and executive search company Courland Automotive Practice, likens the situation to the battle between Betamax and VHS in the 1980s. "Everybody will come up with their own idea but eventually they will default to one particular solution," he says. "Hybrid is the most feasible solution today but we don’t know how technology will develop and that will ultimately be the driver."

Honda, which was the first manufacturer to offer a hybrid in the UK when it launched the Insight in 1999, says it is committed to hybrid technology in the short term but hydrogen in the long term. The company launched its third-generation hybrid, the Civic Hybrid, in April last year and UK environment manager John Kingston says: "We feel that the most effective way to reduce CO2 emissions for this generation is hybrid. There are different options such as biofuels, but the beauty of hybrid is that it’s accessible for everybody because you don’t need new infrastructure."

Honda has unveiled a hydrogen fuel cell-powered concept car called the FCX, which only emits water. Kingston plays down safety fears – hydrogen was the flammable gas that was blamed for the Hindenburg airship disaster in 1937 – and says that the infrastructure issue is easily fixable.

"The current FCX is fully certified in the US," adds Kingston. "It has gone through all the usual tests that any other road vehicle will undergo, so it’s just not a consideration or a concern. The job that we have to do is manage the public perception. These vehicles are just as safe as a Ford Focus. The infrastructure is a barrier but it isn’t something that is insurmountable. When the combustion engine was introduced we didn’t have an infrastructure. If we can develop the product the infrastructure will follow."

Kingston says Honda is still at least eight years away from mass-producing hydrogen-powered vehicles and, for now, will continue to focus on hybrid technology. The company is looking to increase the number of hybrid products it offers and is planning to launch a global hybrid that will be smaller and cheaper than the Civic in 2009 in a bid to increase the mass-market appeal of hybrids.

Hybrid hubris?
Hybrids have an unglamorous image and, while manufacturers believe they are no longer seen as "weird", they acknowledge that there is a need for models that will appeal to a wider market.

A spokesman for the Society of Motor Manufacturers and Traders says: "Hybrids are creating a lot of interest but the motorist is still unsure. Hybrids are a step in the right direction because they help reduce CO2 emissions and also make people more aware of the issue. But manufacturers have been making vehicles that emit less than 120g per km for years and they have never caught people’s eyes. The industry has the capability but the motorist doesn’t necessarily want these vehicles."

It is here that marketing has an integral part to play. Car manufacturers that are backing hybrids – even as a short-term solution – must commit to the technology and make it more appealing to a wider public beyond the green movement if they are to recoup their substantial investments. To this end, Toyota’s move to make its luxury brand Lexus synonymous with hybrid engines looks like a sensible move.

In the longer term, it seems that an alternative fuel such as hydrogen is the industry’s favoured solution. Once again, the role of marketing will be crucial if a sceptical public is to reappraise hydrogen as the "green" fuel of the future.