• Jun 12th 2008 at 8:26AM
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In these days of nearly nonexistent profits for every one of Detroit's Big Three automakers, R&D funds must be allocated very carefully. In contrast, Japanese manufacturers such as Toyota and Honda have been earning profits on a yearly basis. Not long ago, a mild spat arose regarding whether or not the Japanese government helped fund the development of Toyota's Hybrid Synergy Drive. Even if they didn't do it in the past, Ford's President of the Americas Mark Fields indicated that they are doing it now at a conference held today in Washington, D.C. by Brookings and Google.org titled Plug-In Electric Vehicles 2008: What Role for Washington?
Fields called on the U.S. government to step up to the plate, mentioning tax breaks and incentives as one option to aid consumers who'd like to purchase these ultimately expensive vehicles one day. On the manufacturing side, Fields suggests that plug-in hybrids should be a "national priority", with Washington needing to allocate funds for research and development. Another area singled out is a domestic supply of batteries, since most of the units used in today's hybrids are being manufactured overseas.

It should be noted that General Motors already has a head start towards PHEVs with its upcoming Chevy Volt. As far as we're aware, the development costs for this vehicle and its batteries has been moving forward without direct assistance from the government. Feel free to read Field's entire speech after the break.

[Source: Ford]


Good afternoon. It's a pleasure to be with you today as we look at the business case for a technology that holds great promise and poses many questions.

Plug-in hybrids offer a compelling transportation solution – one that will only achieve its full potential through a shared commitment to innovation and collaboration.

Pursuing this and other advanced technologies requires us to collectively address the toughest challenges we face today: our economy, our environment and our security. These are significant concerns for every sector represented here today.

The auto industry and our customers have been hit hard by rising commodity prices. Record-high fuel prices and continued difficulties in the housing market have further accelerated the shift away from large pickups and SUVs to small and mid-size cars and crossovers. Concerns over climate change and energy security also must be addressed.

Responding to this daunting range of challenges will require all sectors of the economy and society to join forces and work toward common goals. As we continue to push the frontiers of vehicle technology, we must strive for solutions that are sustainable in the truest sense – socially, environmentally and economically.

At Ford, we're working to be part of the answer. As we accelerate the development of products and technologies people want and value, "driving green" is at the heart of our business and our plan to achieve profitable growth.

We're committed to finding technology solutions that will deliver meaningful fuel economy improvements – reducing CO2 emissions and petroleum consumption, and allowing our customers to spend less at the gas pump. We allocate more than two-thirds of our $7 billion annual Research & Development budget to that challenge alone.

There's no silver bullet solution, so we're pursuing multiple technology paths – recognizing that commercial viability is an essential component for success. To affect change and reach beyond the experimental realm, innovation must be sustainable for the company as well as affordable and accessible for our customers – a democratization of technology, which is part of our heritage.

Ford's comprehensive sustainability strategy involves developing near-, mid- and long-term solutions to benefit millions of customers – without compromising their expectations for quality, safety, fuel economy and performance. We are committed to delivering technology that will be affordable to our customers and can make a real difference by being applied to millions of vehicles.

The cornerstone of our near-term sustainability plan is EcoBoost. This high-volume turbo-charged, direct-injection engine lineup will allow us to offer customers engines that deliver up to 20 percent fuel economy savings, up to 15 percent CO2 reductions and a boost in driving enjoyment.

EcoBoost delivers the performance of a V8 with the fuel economy of a V6 – or the performance of a V6 with the fuel economy of an I-4 engine. The new Lincoln MKS luxury sedan will be the first with this new engine next year, followed quickly by the new Ford Flex and F-150. It will migrate across the lineup so that by 2013, we'll build up to half a million vehicles annually with EcoBoost.

It's affordable technology with a high-volume impact. Importantly, for our customers, these engines will pay for themselves years faster than small diesels and full hybrids.

Our plan includes literally hundreds of product actions as we strive to squeeze everything we can out of improvements in vehicle aerodynamics, engine efficiency, and lightweight materials – all geared to improving what customers are demanding: increased fuel efficiency.

We're expanding the use of fuel-saving 6-speed transmissions. Late this year, we're launching two new hybrid sedans – the Ford Fusion and Mercury Milan – expanding our full-hybrid fleet to five vehicles. And we're planning clean diesels for the F-150 and our large SUVs.

But other technologies will be necessary to reach the long-term goals of CO2 reduction and energy security. Among the most exciting are the focus of today's discussion: vehicles that offset carbon-intensive petroleum use, operating on domestically sourced electricity that, with the proper support, could be made accessible to customers nationwide.

Last July, we formed a unique new partnership with Southern California Edison – the first time our two industries have formally committed to work together to accelerate the commercialization of plug-in hybrids. After all, we now share a common customer in an all-new way. One of the first things we have learned is that our industries know very little about each other, and developing a common language was one of our first goals.

We have now jumped into a number of specifics, including things like: identifying all of the stakeholders required for success; PHEV total life-cycle analysis; helping develop appropriate electricity rate proposals; and myriad other technical standards required to realize the full potential of PHEVs.

Through our partnership, we're beginning to understand the very complex issues at hand – regional and national – and are working to lead our collective industries forward in developing solutions to the technical as well as economic challenges.

SCE is one of our country's largest utilities with more than 25 years experience testing electric and plug-in electric vehicle batteries. We're working together to figure out how best to accelerate the commercialization of plug-in hybrids and reshape our respective businesses for the future.

Earlier this year, the partnership was expanded to include the Electric Power Research Institute. EPRI brings tremendous experience and expertise in electric transport and also provides a national perspective – to ensure that our program addresses any regional differences related to plug-ins and the electric grid on a nationwide basis.

To advance this technology, we're already road-testing the first of our 20-vehicle Ford Escape Plug-in electric hybrid vehicles. Imagine getting up to 120 miles per gallon for the first 30 miles following a full charge. Those are the kind of numbers that our Escape Plug-in Hybrid can achieve.

Its reduced fuel consumption comes from a 10 kW-hr high capacity, lithium-ion battery that can be charged from a standard 120V electrical outlet and then discharged during driving. It's recharged overnight from a standard home outlet. Based on typical American driving, a fleet of vehicles such as our Escape Plug-in Hybrid have the potential of displacing 60 percent of fuel consumption nationally.

And range restrictions don't pose a problem. When the battery charge has been partially depleted, the vehicle continues to operate as a standard hybrid electric vehicle – or what's known as a blended Plug-in HEV.

A recent addition to our demonstration fleet is a plug-in hybrid electric vehicle that is capable of operating on E85. As a leader in both hybrid and flexible fuel technology, Ford is well-positioned to bring the two together in a plug-in vehicle to demonstrate the potential for CO2 reduction and energy security.

We also have many partners on the stage today. I'm pleased to announce that our partner – Johnson Controls-Saft – will provide the batteries for our 20-unit fleet of Escape Hybrid Plug-ins. Partnerships and collaboration are critical to bringing emerging technologies from the laboratory onto the street.

Plug-ins are not without their challenges. While the basic architecture is similar to our current hybrid electric vehicles, there are engineering challenges. Solutions need to be found for systems that traditionally would rely on a conventional engine – things like emissions control, transaxle lubrication and even cabin features like window defrost and heating.

We've been working on these and other technical hurdles, and we're confident that we have the expertise to properly design a robust plug-in hybrid.

But in order to deliver plug-in hybrids to the mass market, challenges that lie outside of the automotive realm must be addressed. Viable solutions to these issues can only come from partnerships with other sectors of the marketplace.

First, there's the battery. The advancement in lithium-ion technology is what makes plug-in hybrids possible, but the technology is still new for vehicle applications.

Will lithium-ion batteries prove durable – especially when they're subjected to the vibrations and bumps of 150,000 miles of real-world use? Will they meet customer expectations in the extremes of a Minnesota winter and an Arizona summer? Will the packaging and controls provide the level of quality and safety that consumers demand, and expect, from our products?

While they are getting closer, battery manufacturers have a ways to go before they can commit to providing batteries that meet OEM safety and durability requirements at a cost and volume necessary to support substantial production – and at a level that would affect national petroleum consumption and carbon dioxide emissions. Will the batteries be able to do all that and be affordable to the average consumer?

It's also important to note most battery supply is currently being developed in Asia. For those looking to plug-ins to answer our energy security concerns, we must ensure a domestic battery supply. Moving from imported oil to imported batteries clearly would not address this growing concern.

The other major pre-requisite for commercial viability is a robust recharging infrastructure. Recharging is as simple as plugging in the vehicle – not much different from any other appliance. But the infrastructure to provide that plug needs a lot of work.

Among the factors to consider: Access. Nearly everyone has electricity, but how many potential consumers have garages? Access to overnight charging isn't readily available for most people who live in apartments or condos. Or for that matter, for suburban families with teenagers, or simply too many outdoor "toys" stored in the garage.

One-hundred-plus years of experience with gasoline has ensured a nationwide infrastructure that allows you to drive cross country without worrying about where to get fuel, but a public recharging infrastructure for plug-in hybrids simply does not exist at this time.

Payment. Perhaps the most perplexing issue is: When you're not at home, how do you pay for the electricity you use to recharge your vehicle, or for that matter, how do you know how much that electricity will cost? Rates vary from region to region, and soon – from hour to hour.

The utilities. The petroleum industry involves only a handful of participants. But in the U.S., there are literally thousands of utilities which would need to unite in recharging protocols and billing to provide the seamless infrastructure needed for a mass market.

We're working to find the right answers. Through our partnership with Southern California Edison and the Electric Power Research Institute, we're looking at the charging infrastructure, how the vehicle connects to the home and how the vehicle connects to the grid if not charged at home – as well as opportunities to advance the battery market to bring costs down and perhaps provide distributed energy storage to strengthen the grid.

Through this collaboration, we will gain real-world experience with customers throughout the country. That experience and the data we gather will help us do the necessary business analysis to determine the viability of plug-ins.

We would all agree that we want to reduce carbon dioxide emissions and improve energy security. But how do we achieve these goals in a sustainable way – making a business case that provides value to the customer, the utilities, and the manufacturer?

Based on the necessary research and development costs, manufacturing and production investments, the lack of a national refueling infrastructure, and the lack of domestic battery manufacturing, it seems clear that a business case will not evolve, in the near term, without support from Washington.

Government policy can be effective in accelerating commercialization of new technologies. Tax breaks for hybrid technology proved to be an incentive for early adopters of hybrid vehicles leading to greater customer acceptance. In the same manner, incentives for plug-in hybrids will need support if they are to be developed for commercial viability. Domestic battery production must be prioritized.

The Energy Independence and Security Act of 2007 went a long way toward developing research, development and demonstration programs for plug-in vehicles and batteries. We now need to execute this and ensure the programs get the appropriate funding.

Just as the Dept. of Energy recently placed nearly $400 million with various ethanol producers to hasten commercial applications, bold and dramatic incentives are needed to accelerate the commercial development of high-energy power batteries in the U.S. It's a critical factor that requires support – and there are others that without subsidies simply cannot advance.

Plug-ins hold the potential to dramatically reduce CO2 emissions, help address energy security issues and contribute to economic stability and employment.

Setting the stage now is critical to move beyond low-volume manufacturing cost penalties and advance to full-scale production – with cost efficiencies making the benefits of plug-in hybrids accessible to customers nationwide.

In order for us to succeed, we must make this a national priority. We are doing our part to transform the industry and invest in new technologies. However, in a global environment, a substantial government partnership is required.

The governments of Japan, China, Korea, and India are significantly funding the research development and deployment of plug-in hybrid vehicle technologies. This is a race that we must win. We should not trade one foreign energy dependency for another.

For us, the energy future vision for success is clear: We must achieve the most economically efficient carbon reductions and fuel economy improvements possible. And, whatever we do, our actions must be affordable for our customers and our business. We can't do it alone.

Government should be a key partner in promoting American manufacturing and the fight against global warming – and for energy security. We won't be successful unless industries and governments are all working together.

Key actions the government can take include: creating a new industry/government partnership to aggressively advance battery research, development and commercialization; injecting significant federal funds into advanced plug-in vehicle technologies and into facility retooling to produce these vehicles; enacting comprehensive climate change legislation; requiring regulatory policies that stimulate innovation, rather than just imposing new mandates; and, enacting one national standard for fuel economy – rather than allowing a patchwork of state and federal regulations

We will only be successful if we work together toward our shared goals. Industry. Utilities. Battery suppliers. The government. We all play a critically important role in driving the development of successful plug-in hybrids that people really want.

Today, we're at an important juncture. Continued government investment, incentives for industry to continue pushing on research and development of this emerging technology and rewards for customers who incorporate it into their lives are the keys to real and lasting change – and a future of greater energy independence in which we can all thrive.

Thank you.

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    • 1 Second Ago
      • 7 Years Ago
      US Gov has already given plenty of incentives, tax breaks, and plain old tax payer money to foreign companies here in the states such as Honda, Nissan, and Toyota. While I like all those brands, enough is enough. Let's do the same for some American Companies. Then again I don't feel the US Gov should have to bail out corporations....
      • 7 Years Ago
      People seem to be misconstruing Fields’ comments.

      He is not talking about govt. incentives for Ford specifically, but rather govt. incentives for research and development in the area of alternative energy technologies (in addition to helping start a domestic battery industry) – which is a smart thing to do.

      Europe and Asia are all ahead of the US w/ regard to windmill, geothermal, solar, tidal turbine, etc. technologies, due to govt. incentives (not to mention govt. mandate).

      After Germany, the US is the 2nd largest producer of power from wind energy. However, many of the wind-turbines used on American wind farms are manufactured in Europe (Stateline uses Vestas turbines from Denmark and 1/3 of Horse Hollow turbines are Siemens – the other 2/3rds are GE, however).

      The US should be a LEADER in these technologies, but we are not.

      As for people not liking govt. getting “involved” - think of the BILLIONS in tax incentives going to big oil (not to mention all the tax deductions which went to purchasers of large SUVs) or the govt. subsidizing of corn-based ethanol (not to mention all the govt. funding of development of new drugs – in which the benefits go to big pharma).
      • 7 Years Ago
      Somebody call the waaaammbulance. We misread the market and tried to push our vehicles down buyers' throats without regard to anything but short term gains and now we want good 'ole Uncle Sam to bail us out.

      Sorry, but GM is getting it right, finally.
      • 7 Years Ago
      he's a duh,
      but I also wonder if a plug in hybrid is the way to go...ie. lately its been hot and humid, had A/C 's going in the house, and I try to be careful and do laundry/dishwasher late at night when the main a/c is off and only the bedroom a/c's are on.... If i plug in something like my car isnt that another huge strain on my electric?
      Power company already has the brown out warnings, and tells you to go easy.
        • 7 Years Ago
        ...who put my tab and return buttons there?

        Anyhow. *was simple, and relatively easy. Just a matter of pulling the control rods further out, which should increase the amount of heat the reactor produces almost instantaneously, with a corresponding increase in steam pressure/volume not long thereafter... So I don't see why they can't function in the role that I think you're describing some more conventional powerplants functioning in now.
        • 7 Years Ago
        I'm not a nuclear physicist by any means, but I was under the impression that varying the power output of a nuclear reactor to compensate for load was simple, q
        • 7 Years Ago
        The difference between daytime and evening electric load is pretty huge, so I don't think the night-time charging of plug-ins will be an issue for a long time.

        And actually, adding a consistent night-time load would be a good thing for utility companies, because they could run more baseload power plants, like nuclear reactors, instead of relying on smaller, and relatively less efficient stop-gap plants during the day, such as gas-fired turbines.
      • 7 Years Ago
      Yes, lets take tax payer dollars and give them to the Domestic auto industry to pad the wallets of union members and flush down the drain of a pipe dream called the "affordable plug in hybrid"...sounds like a great idea to me...
        • 7 Years Ago
        Well, we kinda already did that w/ the federal subsidizing of the freeway system.

        Not to mention all the tax incentives for big oil and a big chunk of the defense budget spent in the Middle East.
      • 7 Years Ago
      Thank God this bunch was not around at the outbreak of WWII. They would have been racing the French to surrender to Germany. We have an energy crisis in this country, and our solution is to plug our cars into a wall socket? You got's to be joking. What ever happened to the American can do spirit that took us to the moon?
        • 7 Years Ago
        Geeky 1,

        +1 on that!
        • 7 Years Ago
        Well, some still argue that the moon shot was staged. Go figure.
        • 7 Years Ago
        That spirit more-or-less died (or more accurately, is dying) with the generation that fought WWII. Their children were and are, in large part, complacent, ignorant, lazy individuals with a strong sense of entitlement, no real work ethic, little common sense and even less ability to think critically. THEIR children (my generation) are, by and large, even worse.

        Anecdotal example: I was in college during the '04 presidential campaign; I tried to engage a number of my fellow students-and several of my professors (ex hippies, for the most part) in intelligent discourse about the election. I'd ask people who they were voting for and why. Regardless of who they were voting for, their answer was almost universally the same: "candidate x good. I vote for them. Candidate y evil, no vote for." And god forbid I ask them to define what made their guy good and the other guy bad. They'd either get the deer in the headlights look or get mad at me. Why? Because they hadn't thought about it, and they had no ability to discern between the candidates and the issues and then construct a logical, rational argument to defend their position.

        And those people are the ones that are going on to run this country; complacent, lazy individuals that either don't realize or don't care that a lot of the world wants the standard of living that we've become accustomed to since the end of WWII, that they're going to fight for it, and that if we don't make a concerted effort to maintain the position that we used to have as one of the top intellectual, scientific, engineering and military powers in the world, WE'RE going to be the ones assembling VWs for the Mexican market, manufacturing motherboards for computers sold in Asia, etc.
        • 7 Years Ago
        I'd like to take this opportunity to thank Mr./Ms. Yoda for illustrating my point about a lack of critical thinking skills almost perfectly.

        Congratulations, Mr./Ms. Yoda. Have a cookie, you've earned it.
        • 7 Years Ago
        You're right Bill!! To hell with this bunch of Frenchy Wusses. Let's use the American Can Do Attitude to Can Do the Invasion of Iran and Can Do the Invasion of Saudi Arabia and Can Do the Invasion of Canada to get our Can of Oil. We Can Do It!! You go first.

      • 7 Years Ago

      Some good points, but there are answers to a lot of them. For instance, you say: "instead of us buying gas for the cars, we're paying the electric company to buy it for us."

      So, don't you think the electric company can buy a million gallons of oil for a lower price per gallon than you can buy 10 gallons? And isn't it cheaper to deliver that million gallons to one place than to 100,000 different places?

      Consolidating individual demand into a single large purchase is a classic way to reduce per-item cost. Transport efficiency is another classic way.

      Oh, and nickel is hardly so hazardous a material. Else don't count your change.
      • 7 Years Ago
      This is basically a round-a-bout bailout. It's a better idea than the US government subsidizing ethanol production, but this isn't a good idea either.

      Maybe if Al Gore were president though, the money would have already been handed out to the auto companies to develop this technology.
      • 7 Years Ago
      Ford is approaching the energy problem in a far more practical, step-by-step manner than GM. GM is shooting for a game changer in a few short years and sacrificing everything else to achieve it. Maybe it will work. But I think we all know that slow and steady usually wins the day. Toyota spent years, years, years, with little or no publicity, developing the Prius, and 10 more years convincing people it was practical. GM's trying to make a bigger leap with more limelight in a shorter time. After all this, if it isn't perfect, it fails, and what do they have to fall back on after that?

      Unless Volt is an unmitigated success, I think Ford is going to whup on GM over the next 10 years because they are focused on immediate problems on a variety of fronts; not betting it all on one roll of the dice.
      • 7 Years Ago
      The simplest, cheapest, easiest way to save gas is to drive less.

      There are hundreds of thousands of people in my area who commute three plus hours and two counties a day, five days a week, 50 weeks a year. Because they chose to prioritize a more luxurious house over living anywhere near their workplace.

      Nobody is willing to talk about this and offend these voters, so instead we pretend salvation is only a matter of mileage which is being kept down by a conspiracy of "big oil" and "big auto". It's a NATIONAL PRIORITY to find a way for these people to affordably drive 25,000 miles a year for the rest of their working careers?

      Don't protect these people from their decisions. Don't subsidize Ford trying to make a buck protecting them. Let them pay the market price for transportation the way everybody else does, and the pain of doing that will self correct the behavior that got them into this mess in the first place.
      • 7 Years Ago
      This is typical BS...just like corn.

      We need ENERGY - we are in an ENERGY crisis. A plug-in car will still require ENERGY. We need oil to make ENERGY because we haven't built any new nuclear plants in 25 years, we can't build wind farms because the East Coast environmentalist liberals have successfully argued that they will damage the environment. But we don't have oil for ENERGY because Chris Mathews says we must get out of the Middle East and we can't drill for the 5+ decades of oil on American ground because it might damage the ground it is under.

      Oh! Good time to be Hugo Chavez or Mr. Putin - I expect - as they have plenty to sell us.
        • 7 Years Ago
        +1 to Richard

        Only thing I disagree with you on is wind power; the real estate it takes up to make any kind of a difference is too great. And like other large scale renewable energy sources (hydroelectric, solar) they DO damage the environment. Certainly not as badly as coal or gas or the like, which cause problems on a global scale, but-by necessity-they destroy the environment of the land that they're built on, which has ecological ramifications all its own.

        The answer, as you said, is nuclear fission, along with research into practical fusion power. But that's not going to happen in the US, thanks to the ignorant, pseudo-environmentalist idiots that are lobbying our politicians and trying their hardest to brainwash the public at large (a public that should be ashamed of and disgusted by its own stupidity and complacency), that have seizures at the mere mention of nuclear power.
        • 7 Years Ago

        You know, you are right. But...we haven't built a nuke in 25 years and won't have any new ones online tomorrow. Where are all the windfarms and what percent of electricity do they provide to the grid? We just had one here in New England blocked by the environmentalists who won't let us drill in ANWAR. (I thought I read that ANWAR had reserves for like 60 years supply at our current rate).

        Yes, we need to invent new energy sources - especially ones that release more energy than they consume (not corn). I am not arguing against that. What I am saying is that I live here and now, not 25 years from now when all these great things may add up to something (though Obama's "tax the evil corporations" ideas will surely kill any R&D investment in these areas).

        Now - right now, right f'ing now - we need more oil. We are an oil-based economy (ask your corn how it got to the grocery store) and we need something now that wind power (which is a really good thing) won't supply NOW.

        And that would be oil, son.

        Personally, I believe we should really be working on harnessing the energy of the tides as that is endless in supply. Unless, of course Obama raises its taxes as well and it decides to move to another planet where the cost of living is less.
        • 7 Years Ago

        No Bush is a true Conservative so they do stupid things like appease instead of lead. And Teddy Kennedy - the head of the elected eco-left socialist movement in this country - nixed a wind farm in the ocean off Nantucket because, frankly, green is good - unless it is in his back yard.


        Nuclear is fine ("nucelar" if you're Jimmy Carter or W), but you have to handle that waste issue too.

        My overall point is that there is a downside to everything so, pick the most efficient solution via good scientific analysis - not Chris Mathew's opinion - manage the downsides and get on with it!
        • 7 Years Ago
        Uhh, plug-ins would be getting their energy from coal, geothermal, wind, nuclear, solar, etc. and NOT oil.

        And there are a no. of large windmill and solar farms going online relatively soon in the US.

        Btw, it was Jeb Bush and Sen. Martinez who nixed drilling off the Florida coast.

        As for oil - CANADA is the biggest supplier to the US, not the Saudis.

        Production in Canada has gone up FIVEFOLD from 741,000 bbl/d in 2002 to 3.42 million bbl/d in 2008 and is forecast to grow to nearly 5 million bbl/d by 2020 (and yet, prices have kept going up and up).

        Corn, tho is BS - pretty much driven by agri-business (Cargill, ADM) and the sugar lobby.
      • 7 Years Ago
      In general, the idea sounds very plausible - reducing dependency on foreign oil should be on top of the national priority list. In that respect, Ford is right on with the notion of supporting such development using federal funds.

      On the other hand, should this money be given to Ford, it will blow them off on the incentives to push F150s and Explorers off the lot. Perhaps, the middle ground is to obtain federal funding and relay it to those who can apply it in the best way possible - GM (with its existing management), Toyota and Honda.
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