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GM Wants Federal Support for Alternative Fuels

By Joe Benton
ConsumerAffairs.com

January 17, 2007

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General Motors is urging Congress and the Bush administration to get behind auto industry efforts to produce alternative fuel sources for U.S. motorists.

That means money and tax breaks for automakers to produce alternative fuel vehicles and incentives for consumers to buy and drive them.

GM CEO Rick Wagoner said that this year he plans to aggressively push the alternative fuels agenda despite declining interest in the issue on Capitol Hill. Congressional attention to alternative fuel technology tends to rise and fall with gasoline prices.

"We are going to try to spend adequate time in Washington and hopefully we can do it as an industry," Wagoner said. "In terms of advanced battery research, I think the government could play a big role and in advanced fuel cell research."

Wagoner also thinks the government ought to provide incentives for alternative fuel vehicles to encourage consumers to buy into the technology.

"One of the things that government has to do to really promote energy diversity is proactively support the development of alternative fuel technology," Wagoner said. "Incentivize consumers through tax credits, fuel subsidies and so on to adopt these exciting new technologies."

GM will lobby for continued support developing ethanol as an alternative to gasoline. Wagoner also said many government officials also have shown interest in GM's electrically driven concept car, the Chevrolet Volt, recently unveiled at the Detroit auto show.

The Volt is designed to run for 40 miles on pure electric power but GM executives concede the main delay in production of the Volt is development of adequate batteries.

GM's program relies on lithium-ion battery technology that is extremely costly and heavy and the company is looking for federal help to develop batteries to power electric vehicles.

"With the price of oil at its lowest level in 19 months, we run the risk of reverting back to our traditional energy policy," Wagoner said. "Relying heavily on the lowest-cost energy available on world markets, including imported oil, without providing adequate support for developing alternative sources.

Ford Motor Co. is considering a plug-in hybrid to provide alternate energy sources. Like GM, the biggest challenge at Ford is in development of battery technology.

Battery technology is key to the next generation of hybrid vehicles as automakers seek ways to lower the cost of batteries and increase their power and storage capacity, according to the head of Ford's hybrid program, Nancy Gioia.

She said that plug-ins will be more expensive than other vehicles and she suggested people will likely not buy them without big federal tax breaks.

Ford currently makes hybrid powertrain versions of its Ford Escape and Mercury Mariner SUVs but Gioia said Ford has scaled back its previous hybrid strategy because to limited appeal for such vehicles.

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