Automakers Look For A Plan B From EVs

The attention of automotive executives in Asia, Europe, and North America is beginning to swing toward an unusual but promising new alternate power source: hydrogen.

Consumers continue to show decreased interest in electric vehicles, or EVs, which dominated U.S. streets in the first decade of the 20th century before being displaced by gasoline-powered cars. Despite the promise of "green" transportation - and despite billions of dollars in investment, most recently by Nissan Motor Co. - EVs continue to be plagued by many of the problems that eventually scuttled electrics in the 1910's and more recently in the 1990's.

The public's lack of appetite for battery-powered cars persuaded the Obama administration last week to back away from its aggressive goal to put one million electric cars on U.S. roads by 2015.

The tepid response to EVs also pushed Nissan's CEO Carlos Ghosn, high-profile chief executive, Carlos Ghosn to announce in December a major strategic shift toward more mainstream gasoline-electric hybrids, which overcome many of the shortcomings of pure EVs. The move was widely seen as a tacit acknowledgement by Ghosn that his all-or-nothing, multibillion-dollar bet on EVs is falling far short of his ambition to sell hundreds of thousands of battery-powered Nissan Leafs.

Instead, Nissan plans to follow rival Toyota Motor Co , the world's largest purveyor of hybrids, which now is poised to leapfrog pure EVs altogether to pursue what might be the next big green-tech breakthrough: pollution- and petroleum-free fuel-cell cars that convert hydrogen to electricity.

Vice Chairman Takeshi Uchiyamada, the "father of the Prius" who helped put hybrids on the map, said he believes fuel-cell vehicles hold far more promise than battery electric cars. "Because of its shortcomings - driving range, cost and recharging time - the electric vehicle is not a viable replacement for most conventional cars," said Uchiyamada. "We need something entirely new."

In the race to identify the Next Big Thing in automotive technology, the stakes are enormous. For example, Nissan, with French partner Renault, has committed $5 billion for development and manufacture of EVs and batteries - a risky bet that could take years to pay off - while Toyota has spent an estimated $10 billion or more over the past 16 years to develop, build and market an ever-expanding range of hybrids, led by the popular and now profitable Prius.

While neither Nissan nor Toyota is likely to pull the plug on electric cars, it is clear from their recent moves that both companies are looking beyond EVs to meet future transportation needs. Both automakers began advanced green-car engineering programs in the mid-1990s, with Toyota introducing the first-generation Prius hybrid and Nissan unveiling the battery-powered Altra in late 1997.

Toyota brought the Prius to the United States in 2000, but it took Nissan another 10 years to follow the low-volume Altra and other modest electric-car projects such as the Hypermini with the handsomely funded 2010 launch of the Leaf.

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