E85 Hybrids: The Next Big Step

Now that the novelty has worn off, in order for hybrids to succeed they have to be cheaper. It's all about total cost of ownership

by Chris Ellis

Many of the 'early adopters' of hybrids were more concerned with environmental issues, and in demonstrating that concern, than reducing their fuel bills. However, for hybrids to take a major slice of the mass market, it will require the 'hybrid price premium' to be slashed from it's current $3,000+ level to less than $1,000. Toyota, for one, is focusing on achieving this as soon as practicable.

Now that the hybrid novelty has worn off, the decision to buy a hybrid will be dominated by the same considerations that made Europeans flock to diesel cars. In a phrase, it's all about 'total cost of ownership'. The key questions are:

• Can I afford the price premium?

• How much of the premium will I recover when I sell it?

• What's the value of the fuel I will save?

In 2003, Congressman Zach Wamp (R-Tenn.) pumps the first gallon of Ethanol-85 fuel from the new DOE Oak Ridge Federal Building alternative fueling station. Now, imagine E85 going into a Prius or Civic Hybrid.

Let's consider future hybrids from the same perspective.

Diesel and Hybrid in One Package?

One common suggestion is to combine the benefits of diesels and hybrids by bringing out diesel-fueled hybrids. This makes sense in those countries where the tax on diesel fuel is significantly lower than on gasoline, but not elsewhere. A small car with a diesel engine typically costs at least $1,000 more than its gasoline equivalent, but the latest evidence indicates no worthwhile fuel savings. The London Sunday Times recently discovered that the diesel version of the new small Citroen sedan appears to be no more economical than the gasoline version.

Parity of fuel consumption between diesel and gasoline engines may have come as a surprise to the journalists involved and also to many car owners, but not to most automotive engineers. So forget diesel hybrid cars in the U.S.; they will make no economic sense. (Big hybrid diesel trucks are another matter.)

Then How About Flex-Fuel and Hybrid?

What makes real sense is the upgrading of current hybrid offerings to become 'flexible fuel hybrids', and full support from manufacturers that all new hybrid models will run on any mix of gasoline and E85. Less than $200 is added to the production cost of a conventional gasoline vehicle in upgrading it to handle E85. Congress, realizing that we are confronted by Global Warming, Peak Oil, and Energy Insecurity, has put the necessary ethanol pump-priming into the new Energy Policy Act.

The argument basically runs as follows. Take the current annual U.S. consumption of gasoline. Assume that 'aggressive hybridization' cuts it by a quarter (mainly in city driving), and that a further quarter is cut by better aerodynamics and engine downsizing (enabled by hybridization), mainly in freeway driving. Now take a further slice out for plug-in electric drives, and assume that the U.S can continue to source at least 25 percent of its gasoline internally. That leaves an ethanol target of less than a quarter of current gasoline consumption to make the U.S. 'gasoline independent' again. The United States Departments of Agriculture and Energy have recently produced a joint report which confirms that producing this quantity of ethanol is readily achievable without impinging on the current food producing capacity of the United States.

It is important to distinguish between corn ethanol and so-called cellulosic ethanol. Corn ethanol can be criticized because of the amount of fuel needed to produce it. On the other hand, cellulosic ethanol promises a 'one gets you seven' ratio. This translates to a near perfect CO2 score. For example, in Sweden E85 is all the rage, and Ford Sweden advertises that its flexifuel Ford Focus running on E85 generates only 32 grams per kilometer, against the Toyota Prius on bensin (gasoline) which gets 104 g/km.

Assuming a 2007 Toyota Prius could run on E85, CO2 might get as low as 20 g/km. Still want diesel? A diesel Prius might get 80 g/km. Of course, with E85 you get fewer miles per gallon than with gasoline, but the price per gallon is much lower.