Page last updated at 11:13 GMT, Wednesday, 13 January 2010

Detroit reaches out to auto innovators

By Jorn Madslien
Business reporter, BBC News

X-Prize competition vehicle
The aim of the prize is to come up with a vehicle that does 100mpg

With the Detroit auto show suffering from a drought of groundbreaking model launches by the city's incumbent carmakers, the focus has shifted towards an alternative motoring future based on innovation and inventions.

This year, Michigan State will host a series of competitions that offer a $10m (£6m) prize to the inventors of the world's most fuel-efficient cars.

Surprisingly, perhaps, the competition, which is run in stages, is not pitting major automotive groups up against each other.

Rather, the 41 teams teams that have entered 51 vehicles in the competition are mostly drawn from science and technology communities rather than from traditional automotive circles.

That is not to say conventional automotive skills have become redundant, however.

"As the birthplace of the American automotive industry, Michigan has the knowledge base, the talent, and the facilities to support the innovation central to achieving the goals of the prize and the future of the automotive industry," insists Peter Diamandis, chairman and chief executive of The X Prize Foundation.

Frugal and efficient

X-Prize competition vehicle
The competition aims to come up with production-capable cars

The X Prize competition models on display at the Detroit show are futuristic, to say the least, even when compared with concept vehicles unveiled in the main halls by mainstream carmakers.

Yet the organisers insist the competition "is about developing real, production-capable cars that consumers will want to buy, not science projects or concept cars".

The ultimate goal of the X Prize is to come up with a production-capable vehicle that does 100 miles to the gallon, or the equivalent energy use by electric or alternative fuel vehicles.

The organisers insist the prize's focus on "efficiency, safety, affordability and the environment" distinguishes the competitors from the conventional automotive focus on speed and design over frugality and efficiency.

Cut emissions

As such, the prize sets out to challenge industry leaders such as Nissan or General Motors.

Nissan chief Carlos Ghosn with the all-electric Leaf
Nissan's Leaf will deliver 100 miles of motoring on one electric charge

Not that either of the two is a laggard when it comes to innovation.

Nissan's all-electric Leaf, which offers a 100-mile (160km) range on a single charge, and GM's Chevrolet Volt, an electric car with a range-extending petrol engine, will arrive in US showrooms later this year.

But X Prize organisers still believe much more could be done to extend vehicle range and cut emissions from cars.

"Today's oil consumption is unsustainable," they insist.

"Automotive emissions significantly contribute to global warming and climate change."

Frugal consumers

That view is not universally shared by the great American public, however. Industry officials say that while many are keen to downsize, this shift from large to smaller cars is motivated more by fuel prices than by concerns about the environment.

Volkswagen's petrol-electric hybrid concept beams down at journalists at the Detroit auto show
Volkswagen is cautious about introducing new technology too quickly

"Consumers are being very careful about how they spend their money," observes automotive consultant Michael Robinet of CSM Worldwide.

Tighter emission regulations are also driving change. President Obama recently said the industry must build cars that deliver an overall average of 35.5 miles per US gallon (42.6 mpg imperial) by 2016, rather than by 2020 as previously planned.

"The composition of our market is going to change quickly because of the federal mandate," predicts David Zuchowski, vice-president of Hyundai in the US.

"Our industry is going to become more like the European industry in the next couple of years, with more smaller cars."

But the shift away from big "gas-guzzlers" could take a long time, automotive analyst Jeremy Anwyl says.

The number of electric or petrol-electric hybrids sold in the US "will still be modest" for some time yet when compared with overall sales figures, he reasons.

Risk of failure

Volkswagen's research and development chief Ulrich Hackenberg agrees, describing rival carmakers' electric vehicle launches as "hype".

"Some manufacturers are already releasing their e-cars on customers," he says. "We are only using test fleets."

The X Prize organisers feel the conventional automotive industry could do more to speed things up.

"We hope automakers will take another look at our mission and see just how closely it aligns with their goals of bringing new, affordable and fuel-efficient technology to drivers," says Mr Diamandis.

And there are good reasons why the industry is moving slowly, according to HSBC analysts Horst Schneider and Niels Fehre.

"Unreliable or unsafe technology would damage the image of electric vehicles and of their manufacturers," they say.

We can understand the wait-and-see stance of the mass-market leader, Volkswagen."

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