Honda's Hybrid plan at odds with industry and just might work

I found this article on how Honda's way of developing their Hybrid differ's from the rest of the industry, it's a good read.
Honda plan at odds with industry and just might work
Updated Thu. Oct. 16 2008 12:34 PM ET
Jeremy Cato, Autos.CTV.ca

Honda's plan for electric vehicles is daring in its simplicity, comprehensive and forward-looking in its scope, completely at odds with the rest of the auto industry and it just might work.

It just might work at making hybrid electric/gasoline vehicles affordable for the masses in the short term and work at making hydrogen fuel cell vehicles - in essence electric vehicles using hydrogen as a source of on-board electric power -- viable in the long term.

"We are trying to make hybrid cars mainstream," said Honda official Sage Marie at the recent Paris auto show. "The biggest obstacle to that right now is price. Therefore, we are trying to bring the costs down and make hybrids affordable."

In Paris, Honda showed its four-door hatchback Insight that will go on sale in the spring for about $20,000. But the Insight is just the first of three dedicated hybrids Honda will bring to market over the next four years.

A hybrid version of the CR-Z sports car is also coming, as well as a hybrid version of the Fit subcompact sold in North America (also known as the Jazz around the rest of the world). Within the next year the Honda Civic Hybrid will also get a major makeover to separate it from the Insight.

All these are so-called "mild" hybrids. None will run on battery power alone. Instead, they use technology similar to that in the current Honda Civic Hybrid ($26,350). As such, there is a much smaller, much less expensive battery pack designed to run the car's accessories when stopped and the gasoline engine is turned off to save fuel.

The electric motor also provides a power boost when accelerating. Meanwhile, the car's regenerative brakes return energy to the batteries under braking - a side benefit of which is reduced brake wear and lower maintenance costs for owners. The Insight should deliver about the same fuel economy as the current Civic Hybrid (4.7 litres per 100 km in the city, 4.3 on the highway).

All the new Honda hybrid are alike in that they are small cars designed primarily for city driving, where hybrids are best at delivering fuel economy gains and lower emissions. For now, Honda is not pursuing full electric cars or so-called plug-in hybrids. And Honda has also not committed to any one supplier for advanced lithium ion batters, in sharp contrast to rivals such as Toyota and General Motors.

J.D. Power and Associates, the market research firm, thinks Honda might succeed in attracting large numbers of buyers to its hybrids if the price premium is about US$1,250, rather than as much as US$10,000 for hybrids such as GM's upcoming Chevrolet Volt which uses lithium ion batteries.

Indeed, Honda is expecting to sell 200,000 Insights a year, 100,000 of them alone in North America. That's a bold prediction.

Honda has never sold more than about 30,000 Civic Hybrids in a single year. By contrast, Toyota sold about 200,000 Prius hybrids in Canada and the United States combined last year.

The Insight's design suggests that Honda has learned at least one lesson from Toyota: make hybrids look different than anything else in the lineup so that owners have obvious proof for the world that they are driving a "green" car. But that's marketing.

But Honda is not using technological solutions similar to Toyota or any other global manufacturer.

"Honda is doing it Honda's way," Takaki Nakanishi, an auto analyst at JPMorgan Chase & Co, told Automotive News.

But this is nothing new. Honda signaled its lack of interest in pure electric vehicles and plug-in hybrids more than a year ago. Honda CEO Takeo Fukui then expressed skepticism about plug-in hybrids, saying they offer too few environmental benefits. Such vehicles, like GM's Volt, are recharged through an electrical outlet yet are still partially powered by gasoline.

"My feeling is that the kind of plug-in hybrid currently proposed by different auto makers can be best described as a battery electric vehicle equipped with an unnecessary fuel engine and fuel tank," Fukui said at the company's research-and-development center. He was referring to plug-in hybrids such as the Chevy Volt.

Honda also is not interested in installing hybrid technology in larger vehicles and luxury models. Toyota has met with only limited success with that strategy.

Honda is not putting hybrid technology in large sport-utility vehicles, either. Toyota, along with GM, Chrysler and European makers, including Mercedes-Benz, BMW and Audi, are going down that road. So far, GM, Toyota and Chrysler have had little success with that strategy, either.

But small cars, they are ideal for hybrid technology, say Honda officials, because they are typically used for stop-and-go city driving - where hybrids deliver the most in terms of fuel economy gains and emissions reductions. In a nutshell, Honda's Fukui says his company's focus is on improving the economics of buying a hybrid.

"The price needs to be reasonable and fuel efficiency higher so the (premium) the consumer pays (for a hybrid car) can be returned in a short period of time," he says.

At the same time, Honda also is not interested in stand-alone electric vehicles, though rivals such as Nissan, Mitsubishi, Toyota, Subaru and perhaps others plan to sell them in the next few years. To get reasonable performance and range from an electric vehicles requires a huge, heavy and expensive battery pack, say Honda officials.

And while next-generation lithium ion batteries have promise, the technology is not mature enough and is not likely to be for some time to come. Honda cites safety and durability issues with this technology.

If a breakthrough happens with lithium ion batteries, Honda feels they will be available as a matter of simple economics. That is, to offset development costs, battery makers will sell to anyone and everyone.

Thus, for the foreseeable future, Honda is sticking with affordable and proven nickel-metal hydride batteries. Only Honda's limited-edition FCX Clarity fuel cell sedan uses lithium ion batteries, and while a few of these prototypes have been leased to customers in the U.S., a mass production fuel cell car is years away. Ultimately, though, Honda sees hydrogen fuel cells as a viable solution, though there is no filling station infrastructure and none planned.

Not to be lost here is the fact Honda has the resources to develop any technology it needs. This year Honda's research and development budget is US$5.75 billion, which is about two-thirds of what GM spends on R&D, though Honda sells about one-third the vehicles and has a far more streamlined model lineup.

So where does this position Honda versus its rivals?

Toyota, for one, is considering an entirely separate brand for its Prius hybrid - in essence a Prius lineup of large and small hybrid models. At the upcoming Detroit auto show in January, Toyota will be unveiling a new, bigger version of the Prius and at that time company officials may reveal more about its plans for a range of Prius models.

Toyota will also unveil a new hybrid car for its Lexus luxury brand at the '09 Detroit show. Indeed, Toyota has said it plans to make a hybrid-electric system available on every vehicle it sells worldwide sometime in the next decade.

Toyota has been clear on one thing: gas-electric hybrids will form the majority of its alternative-technology vehicles for decades to come. Toyota has said it expects to be selling one million hybrid vehicles a year early in the decade beginning in 2010.

Still, no auto maker is suggesting an imminent end to internal-combustion engines anytime soon. That technology is established and widespread.

Nonetheless, industry leaders are worried about new regulations aimed at the issue of climate change, not to mention unstable oil prices and oil supply. These factors will, they believe, force car makers to dramatically decrease petroleum use in new vehicles.

Honda thinks its hybrid strategy, clear, simple and based on viable, available and affordable technology, is the best way to get there over the next few years.

Source;
http://www.ctv.ca/servlet/ArticleNews/story/CTVNews/20081015/AUTOS_honda_081015/20081016?s_name=Autos