The new energy bill will require real increases of 3.5 percent a year for the next dozen years. To meet that standard, Chrysler and other manufacturers will have to use every available option including more efficient internal combustion engines, increased electrification, diesels, biofuels and new transmissions. While Chrysler may realize what they need to do, actually accomplishing it will be particularly difficult for them given their precarious finances. They also have a more fundamental problem of a vehicle lineup that contains few vehicles people actually seem to want to buy. The full transcript of the speech is after the jump. ABG will be at the SAE Congress the week of April 14 in Detroit.
Deborah Morrissett, SAE World Congress Luncheon, Detroit, Michigan
Vice President,Regulatory Affairs
SAE World Congress Luncheon
Automotive Press Association
Detroit Athletic Club
March 12, 2008
I am pleased to be here today to talk about Chrysler's support of the SAE World Congress, serving as this year's host company.
The theme of this year's Congress – "A Climate for Change" – is certainly apropos in today's political, environmental, technological and business climates. Each of us is being affected personally and professionally by the changes that are moving across the automotive industry.
As David (Amati) noted, this year marks the 75th anniversary of the SAE World Congress.
In preparing my comments today, I looked back at the history of this event, just to see how much things have changed.
And guess what....
The title of my talk today – "Legislation Affecting Motor-Vehicle Transportation" – comes directly from the first presentation given at the first SAE World Congress – held in 1933 at the Book-Cadillac Hotel across Woodward Avenue from here.
I'm glad to say that both the auto industry and the Book-Cadillac have survived and are looking toward a bright future.
And if there is one thing we know for certain about the Energy Bill – it created "A Climate for Change".
Here's a summary of what happened to us in 2007.
The courts, the Congress, California and the President all had things for us to do.
As for the Energy Independence and Security Act of 2007 – we can summarize it this way – it will require the entire auto industry to raise our average fuel economy to 35 miles per gallon. That is a 40 percent increase in fuel economy compared with today's vehicles – and that represents the greatest challenge posed to the automobile industry in the past 30 years.
What's happening in 2008?
NHTSA is writing the rules for CAFE.
The EPA will address the issue of greenhouse gases.
The Federal courts will continue to get cases involving the automobile and the environment.
New environmental legislation can be expected.
The record high price of fuel will continue to be an issue.
Oh, and there's an election later this year that might have some impact on us as well.
How is the industry going to respond to all these challenges?
First a little history – we haven't been standing still.
The fuel efficiency of automobiles has been improving at the rate of 1 to 1.5 percent a year for decades.
But a lot of that increased efficiency has been used to add features to the vehicle that customers have been demanding – increased vehicle size, towing and load capacity, utility, safety equipment, and other amenities....OK, chill zones and DVD players, too.
So a lot of that increased efficiency has not shown up as fuel economy.
But look what the Energy Bill will require – an unprecedented 3.5 percent increase in fuel economy per year – every year for the next 12 years until 2020.
So which technologies are we going to need to meet these tough new CAFE requirements? – and let me be clear, we will meet the requirements.
The answer: ALL of them. And some we haven't invented yet.
New generations of advanced gasoline and diesel engines, such as our new family of more fuel efficient V-6 engines with Multiple Displacement System.
A greater market share for modern clean diesels.
And a range of advanced powertrain technologies, such as CVTs, dual clutch transmissions and direct injection.
And we will have to move faster along the pathway to greater electrification of the automobile – starting with hybrids, moving on to plug-ins and ultimately fuel cells. We have created a new company within Chrysler called ENVI focused solely on electric drive vehicles and related advanced propulsion technologies.
Our booth at the World Congress will provide a glimpse of that future. We'll feature:
The 2009 Chrysler Aspen with a two-mode HEMI hybrid powertrain. It will improve overall fuel economy 25 percent and city fuel economy 40 percent without compromising towing and other performance factors.
• The Jeep Renegade concept vehicle, first shown at January's Detroit Auto Show, is an eco-friendly vehicle that can house a hybrid powertrain joining a lithium-ion battery and a small, ultra-clean diesel engine.
• Our GEM neighborhood electric vehicle, the best-selling zero emission, all-electric, street-legal vehicle in the country. GEM is a reminder that we will need an array of vehicle choices, meeting the needs of many different market segments, if we are to successfully address our energy and environmental challenges.
• OK, we still need to have a little fun. Remember when I said that not all the increased efficiency of our powertrains goes into better fuel economy – well, here's where some of it went – the Dodge Challenger SRT8.
And there's a whole lot of technology that didn't fit into our booth:
• FFVs capable of running on 85 percent ethanol – we have more than 1.5 million on the road and are committed to increasing production of these alternative fuel vehicles.
• More than half a million diesels that offer an average of 30 percent improved fuel economy and can run on clean, renewable biodiesel fuel – including B20 once we get a national standard.
Using diesel saves nearly 30 percent on fuel consumption over the lifetime of the vehicle – that's more than 1,600 gallons of fuel per diesel vehicle. Using biodiesel reduces consumption of oil-based fuel even further, for example, saving up to 2,700 gallons if B20 is used in our Jeep Grand Cherokee diesel.
Looking at other technologies that address fuel economy:
• Our Dodge Sprinter Plug-In Hybrid vehicles. Chrysler has more plug-in hybrid test vehicles in the hands of U.S. customers than any other automaker – up to 15 in the next year - with an array of diesel and gasoline engines and lithium-ion and nickel metal hydride battery technologies.
• Six gasoline models providing better than 28 mpg highway – all equipped with our fuel-efficient World Engines.
Where do we go from here?
As I said, this industry is committed to meeting the challenges of the Energy Independence and Security Act of 2007.
But that won't be nearly enough.
We are going to need cleaner fuels – including a National Low Carbon Fuel Standard and increased use of biofuels – ethanol and biodiesel.
And we need to be sure that our customers are involved in the energy solutions – for example, the benefits of greater fuel economy can be lost of our customers drive more.
The entire economy – including consumers – must be involved if the nation is to successfully meet its energy and environmental challenges.
As this chart demonstrates, the auto industry – in the form of passenger cars and trucks - is just one part of larger challenge. Our vehicles produce about 20 percent of all the man-made carbon dioxide emissions in the U.S. each year, the rest coming from other sectors of the economy.
So the Energy Policy Act of 2007 is a start that focuses mostly on one sector – automobiles and fuels.
There is more to be done.
The auto industry is the first to step up to the challenge of our nation's energy and environmental needs. We supported last year's energy bill and are committed to meeting its demanding timetables.
But it will take the involvement and contributions of the entire economy if we are to make lasting progress toward a sustainable energy future.