Updating Automotive Research: Although the Bush Plan for a New Generation of Vehicles Has Merit, More Will Be Needed to Accelerate Commercialization

Article excerpt

On January 9, 2002, Department of Energy (DOE) Secretary Spencer Abraham announced a new public-private cooperative research program with the three major domestic automakers. According to a press release, the program would "promote the development of hydrogen as a primary fuel for cars and trucks, as part of our effort to reduce American dependence on foreign oil ... [and] ... fund research into advanced, efficient fuel cell technology, which uses hydrogen to power automobiles." Called FreedomCAR (with CAR standing for cooperative automotive research), the program replaces the Partnership for a New Generation of Vehicles (PNGV), which was launched by the Clinton administration with great fanfare in 1993.

The reaction to FreedomCAR, as reflected in press headlines, was largely skeptical. "Fuelish Decision," said the Boston Globe. "Fuel Cell Fantasy," stated the San Francisco Chronicle. A Wall Street Journal editorial asserted that fuel cells were expensive baubles that wouldn't be plausible without vast subsidies. Automotive News, the main automotive trade magazine, expressed caution, stating that, "FreedomCAR needs firm milestones...Otherwise it will be little more than a transparent political sham."

DOE has since released a tentative set of proposed performance goals for vehicle subsystems and components, which were immediately endorsed by the three automakers. Nonetheless, skepticism about the program continues, which is not surprising given the Bush administration's ambivalence toward energy conservation and tighter fuel economy standards. Yet viewed strictly as an updating of PNGV, FreedomCAR is a fruitful redirection of federal R&D policy and a positive, albeit first step toward the hydrogen economy. However, for FreedomCAR to become an effective partnership and succeed in accelerating the commercialization of socially beneficial advanced technology, additional steps will need to be taken.

What was PNGV?

The goal of PNGV was to develop vehicles with triple the fuel economy of current vehicles [to about 80 miles per gallon (mpg) for a family sedan], while still meeting safety and emission requirements and not increasing cost. It was in part an attempt to ease the historical tensions arising from the adversarial regulatory relationship between the automotive industry and federal government. It would "replace lawyers with engineers" and focus on technology rather than regulation to improve fuel economy. It also reflected the government's recognition that the nation's low fuel prices resulted in an absence of market forces needed to "pull" fuel-efficient technology into the marketplace. As the technical head of the government's side of the partnership said in a 1998 Rand report: "It is fair to say that the primary motivation of the industry was to avoid federally mandated fuel efficiency and emissions standards."

PNGV was managed by an elaborate federation of committees from the three car companies and seven federal agencies. The government's initial role was to identify key technology projects already being supported by one of the participating agencies. Industry teams determined which projects would be useful and whether additional or new research was needed. Throughout the process, technical decisions were made by industry engineers in collaboration with government scientists.

PNGV was high-profile. It engaged leaders at the highest levels and was championed by Vice President Gore. It was also subjected to extraordinary scrutiny, with a standing National Research Council (NRC) committee conducting detailed annual reviews.

The lofty rhetoric about and intense interest in PNGV did not, however, result in increased federal funding of advanced vehicle R&D. PNGV's budget has always been controversial, with critics dubbing it "corporate welfare." The ambitious program was realized by moving existing federal programs and funds under the PNGV umbrella. …