Hit by fuel prices motorists look to alternatives

|PIC1|With oil prices near $140 a barrel, motorists are starting to look seriously at both alternative fuels and electric vehicles as a way to be able to keep driving their cars.

But experts say it will take five to 10 years for these alternatives to take root, given the capacity challenge for an auto industry that is adding 65 million new cars a year to a fleet of 1 billion.

In the meantime, car and parts makers, oil companies and even electricity generators are left guessing which way motorists will turn and what technology will win.

"We don't know at the moment whether it's battery-based electricity technology or sustainable biofuels that will be successful," said James Smith, chairman of Shell UK, speaking at a climate change seminar hosted by Reuters.

"The strategic issues confronting us are very significant."

A range of options will emerge as motorists pick between "plug-in" electric cars, longer-range gasoline-electric "hybrids," or simply downsized, more efficient gasoline and diesel models, and as governments, worried by global warming and energy security, give more or less support for biofuels.

Hybrid vehicles, which have both a conventional internal combustion engine and electric motor and battery, are already popular. Toyota Motor has sold 1.5 million Prius hybrids since 1997 and it wants hybrids to reach one tenth of its total sales by 2011.

In a hybrid, the electric battery and motor aid stop-start city driving, while the gasoline engine allows longer trips, together cutting energy use and carbon emissions.

Hybrids accounted for 3 percent of U.S. car sales in 2007. Makers absorb most of the extra $5,000 (2,500 pounds) engine cost, leaving the street price only $1000 to $2000 higher.

Hybrids could be "broadly present" in the auto industry in five years, said Vlatko Vlatkovic, head of electrification research at GE, which has much to gain from widespread electrification of road transport.

Paul Nieuwenhuis, automotive researcher at Cardiff University in Wales, said that hybrids like the Prius are soon likely to be overtaken by plug-in hybrids, which will have the extra option to charge from the grid.

General Motors wants its plug-in hybrid, the Chevy Volt, to reach showrooms in 2010. European brands including Mercedes, Volkswagen and BMW and Japan's Honda plan rivals.

Pure plug-in electric cars, meanwhile, have no combustion engine at all and have struggled to shake off a quirky image - with tiny sales of fabulous cars at prohibitive prices or else economy-sized "golf carts," both with limited range.

Tesla Motors of San Carlos, California, advertises a Roadster with a top speed of 125 miles per hour and a range of 220 miles. But Linda Nicholes, president of electric car pressure group "Plug in America," is still awaiting delivery two years after ordering hers at a price of $100,000.

"We've been waiting eagerly ever since. I've been told September (2008)," said Nicholes, who is nonetheless still excited. "It's sleek, snazzy. All will be forgiven."

For those who can't wait, Monaco's privately held Venturi is marketing a 297,000 euros (235,000 pounds) electric car with a top speed of 160 kilometres per hour (100 mph), called 'Fetish'.

"It's the pleasure to drive which will make it someone's favourite object," a spokeswoman said, explaining the name and adding it had sold five models on an expected 25-unit run.

Meanwhile, specialist car producer Think, based in Oslo, plans a run of 8,000 full electric cars in 2009 at 20,000 euros each.

And a Renault-Nissan alliance plans to start deploying full electric cars from 2010.

Electric car developments hinge on batteries which are light but pack enough power to travel more than 100 miles. Aggressive conversion of the global fleet to electric alternatives may take 30 years, said Charles Gassenheimer, chairman of lithium-ion battery supplier Ener1, based in Fort Lauderdale, Florida.

Alternatively, you can keep your car but switch the fuel, up to a point. Sugar-based biofuels are making serious headway against gasoline in Brazil, where nearly 90 percent of new cars have flex-fuel engines, which burn any combination of the two.

In the United States, tax breaks help biofuels made from corn supply about 2 percent of the domestic fuel mix.

But biofuels made from crops such as corn aren't the near-term replacement for gasoline, either. A finite supply of farm land has pitted them against food, inflating grain prices.

A tank of standard, U.S. corn biofuel blend, called E10, contains enough calories to sustain an adult man for 11 days. That underlines the problem of using food to make car fuel while 850 million people in the world are hungry.

Limited scope for global crop yields improvements will limit such "first generation" biofuels. Further off, sustainable biofuels which come from algae or woodchips and don't compete with food, may reach 10 percent of U.S. road fuel by 2022.

While some experts say that cars fuelled by hydrogen fuel cells, which rely on the conversion of hydrogen and oxygen into water and which don't have harmful emissions, are promising, the technology is still in its infancy.

Honda Motor, began production on June 16 of a new fuel-cell car, the FCX Clarity, but has plans to sell only 200 in the United States and Japan in the next three years. The biggest hurdles for proliferation of hydrogen cell vehicles are a lack of fuelling stations and the high cost of development.