More automakers are moving toward using lithium batteries in their
standard hybrids. This week, GM said it will use lithium batteries
from Hitachi in its hybrids and Mercedes said it will use electronics
from Continental AG and lithium batteries from Johnson Controls-Saft
in an S-Class luxury sedan hybrid. (Standard hybrids need "power
batteries" that stay in the mid-range of charge. PHEVs need "energy
batteries" that discharge more deeply. Both optimizations are
possible with lithium and with nickel-metal hydride.)

These developments come at a time when carmakers are recognizing that
battery progress further undercuts the case for fuel cells as energy
storage systems, as seen by comments reported below by the Wall
Street Journal at the Geneva Auto Show from Toyota and GM. At the
same time as both companies continue to acknowledge the near-term
potential for PHEVs, they continue for strategic reasons to promote a
hydrogen future, but the case continues to weaken.

We haven't commented on the Lutz statements on global warming, but
his comments and the defenses made at the GM Fastlane blog don't
address the entire issue. If climate change is a key driving factor
for strategic planning by automakers, then the well-to-wheel CO2
emissions of different energy solutions moves to the center of future
decisionmaking.

March 5, 2008
GM, Toyota Doubtful on Fuel Cells' Mass Use
By EDWARD TAYLOR and MIKE SPECTOR
March 5, 2008; Page B2
http://online.wsj.com/article/SB120468405514712501.html

GENEVA -- Top executives from General Motors Corp. and Toyota Motor
Corp. Tuesday expressed doubts about the viability of hydrogen fuel
cells for mass-market production in the near term and suggested their
companies are now betting that electric cars will prove to be a
better way to reduce fuel consumption and cut tailpipe emissions on a
large scale.

Speaking at the Geneva auto show, GM Vice Chairman Bob Lutz told
reporters that recent advances in lithium-ion batteries indicate that
future electric cars might be able to travel 300 miles, or nearly 500
kilometers, before they need to recharge, making them much more
practical as a mass-market product.

"If we get lithium-ion to 300 miles, then you need to ask yourself,
Why do you need fuel cells?" Mr. Lutz told reporters. He added that
fuel-cell vehicles are still far too expensive to be considered for
the mass market. "We are nowhere [near] where we need to be on the
costs curve," he said.

At a separate event at the show, Toyota President Katsuaki Watanabe
echoed the concern about the high costs of fuel cells and noted the
lack of an infrastructure to produce and distribute hydrogen fuel to
a wide swath of consumers. These factors leave him with the
impression that "it will be difficult to see the spread of fuel cells
in 10 years' time," Mr. Watanabe said.

The comments indicate a shift in the auto industry's tone regarding
fuel cells, especially at GM, which has spent the past two years
highlighting its fuel-cell technologies as one of many initiatives it
is pursuing to reduce petroleum consumption.

Fuel cells use hydrogen to create electricity, and have been hailed
for years as the technology that will power no-emission cars of the
future. Several years ago, GM essentially dropped its work on
battery-powered cars to focus on fuel cells. Since then, Toyota has
taken the lead on gas-electric hybrids, although it is working on
fuel cells, too.

In the past two years, GM has been trying to improve its image with
increasingly green-minded consumers by playing up its work on green
vehicles, often with Mr. Lutz -- sometimes referred to in Detroit as
Mr. Horsepower for his love of big, powerful cars -- as its chief spokesman.

The centerpiece of the effort is an electric car called the Volt,
which includes a small gasoline engine to charge its battery on the
go. GM hopes to launch the first Volt by 2010. Future versions may
use fuel cells to charge the battery. The campaign has won fans among
environmentalists for GM, a company previously scorned by many in the
green crowd.

Mr. Lutz's comments in Geneva come at an awkward time for him. A few
weeks ago, he told a reporter that he thinks global warming is a
"crock of s -- ," raising questions about his commitment to GM's new
green path. After news of his global-warming position spread on the
Internet, he posted a response on GM's blog saying his personal views
don't affect the company's direction.

Not all auto makers are backing away from fuel cells. Daimler AG
expects to begin producing fuel-cell cars in limited quantities in
2010, Chief Executive Dieter Zetsche told reporters in Geneva. If
demand takes off, Daimler could get the technology "into the cost
range of conventional power trains," Mr. Zetsche said.

--John D. Stoll contributed to this article.
Write to Edward Taylor at edward.taylor@... and Mike Spector at
mike.spector@...

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Felix Kramer fkramer@...
Founder California Cars Initiative
http://www.calcars.org
http://www.calcars.org/news-archive.html
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