EcoBoost steers US towards a greener future

By Bernard Simon in Toronto
Published: May 19 2009 16:53

As President Barack Obama outlined new rules at the White House on Tuesday to toughen US fuel-economy and vehicle-emission standards, Ford Motor executives were celebrating the reopening of a mothballed plant in Cleveland, Ohio, that will produce the carmaker’s new EcoBoost engine.
The timing of the Ford event was a happy coincidence. EcoBoost uses turbo-charged direct-injection technology to improve fuel economy by up to a fifth and lower carbon-dioxide emissions by 15 per cent.

The engine is an example of the investments that carmakers are likely to make on a growing scale over the next few years to comply with the new rules.
Under the regulations, each carmaker’s fleet will be required to achieve an average fuel economy of 35.5 miles per gallon by 2016, four years earlier than the current law requires. The new rules will also for the first time require a reduction in greenhouse-gas emissions.
Motor industry executives and their supporters, who had previously resisted an acceleration of the targets, have reacted enthusiastically to the tighter rules.
Chrysler, which is forging an alliance with Italy’s Fiat through court-supervised bankruptcy proceedings, said that “with regulatory clarity and certainty, Chrysler and Fiat will now be able to concentrate their resources on developing a nationwide fleet of clean, fuel-efficient vehicles that will help support its revitalisation”.
John Dingell, a Michigan Congressman who is one of the Detroit industry’s closest allies in Washington, described them as “aggressive, but obtainable”.
One big benefit for the carmakers is that the new standards will replace the threat of a widening patchwork of regulations drawn up by two federal agencies – the National Highway Traffic Safety Administration and the Environmental Protection Agency – and various states, led by California.
Furthermore, Eric Fedewa, analyst at CSM Worldwide, predicts that the new regime will bring “huge opportunities” for parts suppliers to win business with a wide range of newly designed components – from transmissions to pumps and hoses.
Another relatively inexpensive way to reduce petrol consumption, vigorously pursued by the three Detroit carmakers in recent years, is to build more biofuel-enabled cars.
Several General Motors, Ford and Chrysler models are already equipped to run on an ethanol-petrol mixture, known as E85. But these vehicles have been slow to catch on. Only a few thousand filling stations carry E85.
The new standards will accelerate the push towards electrification not only of vehicles, but also of components and systems in petrol-powered vehicles.
As Mr Fedewa puts it: “if you make 15, 20 or 30,000 plug-in hybrids a year with 100 miles per gallon, that’s going to be a very effective way of bringing your fleet into compliance”.
Copyright The Financial Times Limited 2009