Car makers cautiously increasing their bets on clean fuels

The popularity of electric cars and hydrogen-fuel automobiles will gain traction in the near future, but price and fuel availability remain crucial barriers.

Porsche has a potential solution: a synthetic fuel it claims will drastically cut the harmful emissions of any petrol engine, without any modifications required.

The company’s sports car vice-president Frank-Steffen Walliser recently announced that such a fuel could be produced close to wherever it is needed with green energy.

“At full scale, we expect a reduction in the CO2 impact of around 85 per cent. If you consider well-to-wheel, where we have to transport fuel, we have a global supply chain, everything around that … it is on the same level as an electric car.”

The reality though is that even if it could match electricity for overall emissions, the synthetic fuel costs around $US10 a litre. Porsche says it might fall to $US2 as economies of scale improve. But that’s the production cost, with taxes and retail margins still to be added.

Toyota is putting faith in hydrogen, having recently launched a second generation of the Mirai, a FCEV (fuel cell electric vehicle) first seen in 2014. It says this stylish sedan has a range of 640 km, can be refilled in three to five minutes, and emits only pure water.

There are many challenges though, including the fact there is only one public hydrogen refuelling station in the country (in Canberra). Nonetheless, Toyota says it will sell the Mirai here later this year, first to corporations with private hydrogen infrastructure.

Hyundai launched its NEXO, a hydrogen SUV, here last week. However, all three companies are covering their bets with conventional electric models. Porsche has already launched the Taycan BEV (battery electric vehicle) in Australia. It’s a high-performance sedan priced from $190,000, plus on road costs. It will soon add a BEV version of its small Macan SUV.

A battery Lexus SUV, based on the small UX model, will be seen this year, and possibly a cheaper Toyota sibling too. Hyundai has done well with its Kona and Ioniq BEVs in this country, though everything is relative. Electric car numbers are very small; Tesla is the runaway bestseller yet recorded just 3400 Australian sales last year.

Australia’s Electric Vehicle Council is an industry body that represents more than 60 companies, including major car makers, and covers all zero emission vehicles. The CEO, Behyad Jafari, tells us on current technology, batteries are the surest bet and that’s why the organisation is concentrating on them.

“I think the reality is that for cars, vans, buses, everything of that weight and below, electric is the one now. The industry has invested enough to bring the prices down and set up the manufacturing for it, so there’s really not much more need for looking around for a new technological solution. It’s about scaling it up.”

The Electric Vehicle Council fears Australia is falling behind in a world that is transforming to electricity. “The good news,” says Jafari of BEVs, “is that Australian sales are rising from a quite low base. The bad news is that that low base is probably among the lowest in the entire developed world. The global market is very heavily driven by regulations to reduce CO2 emissions, and incentives to encourage people to buy electric vehicles … Australia has neither of those things.”

Jafari admits that the relatively narrow range of electric cars on sale here means there isn’t a model to meet every need or price point. But he says only 0.7 per cent of Australian car sales are battery, while Europe is tracking above 10 per cent. “There’s no reason why 10 percent of the cars that we’re selling couldn’t already be electric.”

Irrespective of the Australian situation, there is enormous change happening throughout the industry, inspired largely by Tesla’s vibrant sales and stratospheric share price.

Audi said this month [March] it would not develop any all-new combustion engines. Other companies have announced electric vehicle targets, and billions in expenditure. VW wants to be the world’s number one EV maker by volume by 2025.

Jaguar says it will make only electric cars by 2025, Volvo by 2030. General Motors, still the biggest American car maker (though no longer the world’s largest) has expressed an “aspiration” to produce only zero emission vehicles from 2035. GM, however, isn’t the global player it once was and some more international car makers are reluctant to set targets – even targets as far out as GM’s.

Many believe PHEVs (plug-in hybrid vehicles, which run purely on batteries when needed and use petrol for longer trips) will be the interim step for most motorists. So another advantage of a green synthetic fuel, if made affordable, is that existing cars could swap over immediately, including those PHEVs.

Porsche admits to an additional incentive: keeping its sportiest models alive without having to add heavy battery packs. CEO Oliver Blume says: “Looking ahead, there is no alternative to electric mobility in order to achieve the CO2 targets quickly and sustainably [but] we want to be a pioneer in demonstrating that synthetic fuels can be an environmentally sound approach for vehicles that are already on the road.

“This opens up a future perspective for our icon, the 911 [coupe], either with a combustion engine or as a very sporty hybrid. We could continue to drive the car for many years into the future, which will certainly make our customers and fans happy.”

Extracted from AFR

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