In 1939, New York City hosted both the future-gazing New York World's Fair (pictured below) and the founding of what would later become the history-focused Automotive Hall of Fame. The latter's mission, then as now, was to honor and perpetuate the memories of auto industry pioneers.

It moved to Washington, DC in 1960, then 11 years later to the Northwood Institute (now Northwood University) in Midland, MI, where its first permanent building was built in 1975. It relocated again in 1997 to a new 25,000-sq.-ft. facility next to the famed Henry Ford Museum in the Detroit suburb of Dearborn.

I was hoping to hear their thoughts on the industry's CAFE challenge and the resulting vehicle electrification trend.

Today's Automotive Hall of Fame attracts visitors from around the world and each year inducts a new class of automotive movers, shakers and difference makers. The 2013 inductees included industry icon Bob Lutz, Formula One racing multi-champion Jackie Stewart, and David E. Cole, one of the best and brightest minds in this business. Officially retired but still plenty active, Cole is a University of Michigan mechanical engineering PhD (and former professor), founder of the Ann Arbor, MI. Center for Automotive Research (CAR) and former director of the Office for the Study of Automotive Transportation. He is also, incidentally, the son of Ed Cole who, as Chevrolet Division chief engineer, fathered the Chevrolet small-block V8, and later rose to General Motors president.

I know Cole and Lutz (and used to know Stewart when he was working with Ford PR), so I took advantage of an opportunity to attend the reception. I was hoping to offer congratulations and hear their thoughts on the industry's Corporate Average Fuel Economy (CAFE) challenge and the resulting vehicle electrification trend. 1939 New York World's Fair

David Cole, chairman of the Center for Automotive Research,Cole was happy to discuss that subject. He began by relating how a recent meeting with some Chrysler VPs and an EPA official raised the ever-present issue of cost. "One thing that became quite clear," he said, "was that government estimates of the cost to achieve these very high standards were about a third of what the industry's are."

If future CAFE levels can be achieved at the low cost that the government forecasts, he explained, they will not be that big a deal. "But if it's going to be what the industry forecasts, then you trade off the savings in improved fuel economy against the cost to achieve it. That's where you run into economic reality." Whose estimates does he believe? "I tend to believe the industry people because they understand the technology.

"If you have a deck of cards with technologies and costs on them, which will you play first? The most expensive ones? No, you'll play the most cost-effective ones. But pretty soon you'll get to the point where it's getting more and more expensive."

They also discussed electric vehicle battery cost. "Energy Power Systems has a reconfigured lead-acid battery that will be inexpensive and is very good at taking power because it has low internal resistance, which lithium batteries don't. So we may see some combination of batteries emerge with the high-energy content of lithium coupled with the high-power (energy in-and-out for acceleration and deceleration) of lead acid, a bipolar system with roughly twice the energy capacity of conventional lead acid, but nowhere near lithium."

"I think plug-in hybrids have spectacular potential" - David E. Cole

Cole emphasized that he is highly supportive of vehicle electrification, especially plug-in hybrids, but less enthusiastic about pure battery electrics. "The plug-in gives you the ability to operate on electricity for a lot of your driving, and you can switch to liquid fuel when you want to take a trip. I think they have spectacular potential," he said.

"Customers are driven by economics more than anything else," he continued. "You may have 50,000 absolutely enthusiastic customers who want a Tesla no matter what. But are there 50,000 more? As long as the battery cost is $600-800 a kilowatt hour, how large is that segment beyond first-on-the-block types and zealous environmentalists with money?

"For the broader segment of people who want good styling, performance, fuel economy and all those other things, economics is a very fundamental issue. Batteries need to get down to about $200 a kilowatt hour to really go mainstream. Then you still have the problem of range anxiety, which is huge. Ultimately, economics and the marketplace will rule."

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One of Cole's concerns about fast-accelerating fuel-economy standards is that they will drive the costs of compliant new vehicles beyond where most consumers will be willing or able to buy them. "If the cost benefit is not positive," he asserted, "one reaction that we think is a real possibility could be Cubanization of the fleet."

By "Cubanization," he means a situation where the majority of vehicle owners decide simply to preserve and maintain their current cars and trucks (as people have been forced to do in Communist Cuba since the 1950s) instead of buying more-fuel-efficient but too-expensive new ones. "That would be a catastrophe in terms of production," he said. "With today's zinc-coated steels, corrosion protections and overall durability, were talking 200,000-mile vehicles. If we get to where the industry can't deliver value in the eyes of the consumer, we've got a problem."

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Then Bob Lutz walked up and joined our conversation with a positive note:

"Stage II lithium, with twice the energy content, is almost here," he enthused. "So battery packs will get smaller. You need ranges of over 200 miles for people to get over range anxiety, and a few years from now, a battery pack the size of what's in the Volt will store about 300 miles worth of energy. Then you can forget the IC engine."

"I'm not so sure," Cole countered. "What is the cost for that higher-energy battery?"

"I think the battery cost will come down," Lutz responded. So Stage II lithium, which will double the energy of today's lithium-ion batteries, is almost here? And at lower cost? Really?

"Yes," Lutz responded, "with better anodes and cathodes. A lot of the losses now are at the anode and cathode." How soon? I asked. "A year, maybe two," he answered with a grin.

"It's going to be interesting to see how that plays out," Cole concluded.

Then we had to break for dinner.

(It turns out that Lutz was referring primarily to recent advancements in anode technology from Seattle start-up EnerG2, which says it can increase lithium battery capacity by up to 30 percent. Sounds promising, but hardly twice the capacity, and no mention of cost.)

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