The Powertrain Dilemma

So what’s the biggest challenge that vehicle manufacturers face going forward?

So what’s the biggest challenge that vehicle manufacturers face going forward?

While you might answer, “Recalls,” that, while certainly an important issue, is not the one that has them most perplexed, suggests Dr. David Cole, chairman of the Center for Automotive Research.

In Cole’s opinion, the most vexing issue is determining the future price of gasoline. The simple reason: Cost. No, not the cost of the fuel necessarily, but the costs associated with developing and then selling the various powertrain technologies. Turbocharged internal combustion engines. Diesels. Hybrid-electrics. Extended-range electrics. Full electrics. Fuel cells.

 

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None of these is inexpensive, especially compared to what consumers have become used to at their local dealer (“Whaddaya mean ten-grand extra for that engine? I don’t care if you throw the mats in for free!”). This means that when the vehicle manufacturers try to recoup their development and manufacturing costs, there could be significant resistance by the buying public (“Gimme the standard engine. And I’ll take the upgraded audio.”).

While it might seem as though the increase in gasoline prices in the future might be a foregone conclusion, Cole says, in effect, not to jump to that conclusion. That is, he posits that the petroleum companies, not wanting to see alternative powertrains slice into their lucrative sales, might temporarily cut the price of gasoline, thereby making it economically, difficult for the OEMs to develop and sell the alternatives. And as politicians of any hue are unlikely to institute a tax that would act as a floor on gas prices, thereby providing the OEMs with some certainty, this would lead to a question regarding the hefty price tags associated with advanced powertrain development.

Quite a quandary, indeed. Guess this is why the auto execs used to make the big bucks.