DETROIT, Michigan. – For the past seven years the U.S. auto industry has introduced new technologies and product development changes at a blistering rate. The pace of technology adoption has pushed product cadences from 6-year cycles to 2½-year cycles with modifications and vehicle enhancements virtually every year. As technology has proliferated, so today has industry volume. Some forecasts estimate that U.S. sales will reach 17.5 million in 2015, which would surpass 2000 and set the all-time record in the light vehicle category.
Meanwhile, as revenues and profits have finally been restored, a perhaps not-so-unintended consequence during this period is how the auto industry has made huge investments in and commitment to regulatory compliance and renewable energy. With impressive results the auto industry seems to have transformed itself to become the commercial standard-bearer for all things green. How could this really be?
The car has become a green symbol. It is difficult to name an industry as complex as the auto sector that’s more committed to environmental change. The advent of multiple powertrain options last decade signaled that the industry is willing to move away from solely traditional internal combustion engines, in order to achieve an aggressive CAFÉ standard of 54.5 mpg by 2025. The alternatives include electric vehicle (EV), plug-in hybrids, hydrogen cell, compressed natural gas (CNG), and, to some extent, biofuels.
This industry-wide powertrain lineup symbolizes the eco-friendly transformation that’s underway, despite lower gas prices and today’s puny demand for alternatives. Its impact is formidable: for example, even though Tesla currently has significant financial, distribution and manufacturing issues, its wide-ranging marketing strength has made its brand a status symbol. Tesla’s positive sustainability message – resonating among the highly-coveted Millennial segment – has paved the way for other automakers to increase their investments in EV and other alternatives.
Perhaps no greater symbol of green achievement is the amazing University of Michigan Solar Car, an engineering and design marvel:http://www.solarcar.engin.umich.edu/. Throughout its remarkable 25-year history, the University of Michigan Solar Car team has been designing, building, and racing America’s best solar vehicles. Its legacy of excellence includes five consecutive and eight overall National Championships, along with five top three World finishes, and one international championship.
Green transformation of the shop floor is changing how cars are built. Ford Motor’s Michigan Assembly Plant (MAP) has become 24/7 sustainable, with the use of recycled materials now standard in plant operations. Traditional lighting has been converted to DC LED lighting, while solar arrays and photovoltaic systems are now generating clean electrical power in the plant. Along with 750kW battery infrastructure in place, these improvements raise efficiency by more than 25% and offset 500 tons of carbon CO2 waste annually. In addition, Ford has EV charging stations on site, and they’ve modernized waste-laden and messy vehicle paint systems to further reduce their carbon footprint.
Many other automakers have green manufacturing plants as well. Volkswagen, for example, has made its Chattanooga, TN plant the blueprint for all its worldwide plant development, according to Dr. Jan Spies, Volkswagen’s VP of Factory Planning. VW’s Think Blue Factory concept was launched in Chattanooga, their first holistic approach to factory planning. This concept encompasses everything from materials re-use to LEED certification to greater energy efficiencies. VW emphasizes the reduction of volatile organic compounds, LED installation to reduce light pollution, innovative water processes i.e. re-use of storm waters, restoring nearby rivers and creeks, and heat recuperation, all leading to overall reduction of CO2 and other carbon emissions.
The Chattanooga plant is now VW’s bridge between leading-edge machines, equipment, standards, and best practice clean manufacturing processes, as it is the worldwide, sustainable blueprint for the Foshan, Changsha and Yizheng, China, and Emden, Germany plants as they all come on-line this decade.
Breakthrough green processes and products have found a home in the auto industry. According to Automotive News, Denso Corporation, better known for its fuel injectors and in-vehicle electronics, said it will open a cultivation and testing center this year in western Japan that will have three oval ponds for growing green-algae microorganisms. Denso has been working to produce biofuel from microalgae since 2008. Biofuels reduce dependence on petroleum products and carbon emissions.
“Proponents of microalgae biofuel say it beats biofuel based on food crops such as corn in several ways. Algae can grow faster than food crops and are seen as easier to propagate. Algae can also deliver higher oil output from a smaller footprint. Moreover, algae can be grown on land or at sea, and they can be raised on marginal land not fit for crops.” Denso, 25% percent owned by Toyota, said it aims to have established large-scale cultivation technologies by 2018, despite its high cost and lack of commercial viability.
In order for suppliers like Denso to survive and thrive, they will need to have a firm understanding of environmental opportunities and the ways in which they translate back to their business operations, finance, research and development, and sales and marketing. As more car buyers shift their preferences toward to eco-friendly options, there will be greater pressure on safety, regulatory, legal, insurance and warranty considerations for both suppliers and OEMs.
What will accelerate the greening of the auto industry? Beyond product development and process improvement, three things will propel an eco-friendly future for the industry. First, there must be a commitment to further overall reduction of vehicle emissions, even as current CAFÉ standards are met this decade. In part, this also requires that alternative powertrain options become more attractive to the average consumer than they are today while remaining grounded in free-market principles. Not an easy task, to be sure.
Secondly, rapid development of infrastructure necessary to support these alternative vehicles as they match up with safety and regulatory requirements is vital. In particular the EV, CNG and hydrogen cell infrastructures must grow at the pace of consumer adoption in order for these options to flourish. This will assume that the automotive supply chain continues to transform as it includes more technology, utility, academic, and government partners. Thirdly, the U.S. must act as a world leader and put pressure on foreign markets – China, Russia and India specifically – to comply with new global and regional emission standards. Without these countries’ leading-edge commitment to sustainable research and emissions compliance, the overall enviro-mission will have far less real impact, and we likely will not see clean skies in Shanghai anytime soon.
The automotive industry is hardly alone in its ambition to leave a sustainable footprint. But, as aerospace, health care, and other sectors look to replicate its best practices, the automotive OEMs are literally building a better earth in some respects. And, if they commit to doing even more, they can provide a much-needed eco-path for others to follow in the coming years.
Phil Biggs is Executive Vice President for the Nashville, TN-based technology company, NeXovation.
