Promoting rapid technological change in the automobile industry is not a novel idea.
Environmental groups pursuing twin goals of energy conservation and reduced vehicular emissions have promoted technological innovation for decades, for example, and the federal government has encouraged innovation in the industry in pursuit of similar goals.2 Currently, there are some additional pressures for innovation. In particular, California’s Low Emission Vehicle (LEV) Program requires automakers to begin producing vehicles with substantially reduced emissions; in particular, the LEV program requires 2 percent of the fleets of major automakers to be zero emission vehicles (ZEVs) by 1998, increasing to 10 percent by 2003.
Some northeastern states also have adopted these regulations. In this time frame, only electric vehicles will be likely to satisfy the ZEV requirement.3 Industry responses to the ZEV requirements include both an active campaign to discourage enforcement in California and several northeastern states that have followed California’s example and a substantial cooperative research effort to help produce a commercially successful electric vehicle, including formation of an Advanced Battery Consortium with battery manufacturers, electric utilities, and the Electric Power Research Institute. Meanwhile, various development and commercialization efforts have begun independent of the established industry. These include market introduction of several
vehicles (most based on conversion of conventional models, which involves removal of engines and transmissions and replacement with EV drivetrain components) and organizing of groups such as CALSTART, which is designed to promote a cooperative effort among California companies and others to design and manufacture electric vehicles and vehicle systems in California.
Another force for innovation is the newly created Partnership for a New Generation of Vehicles (PNGV), an R&D program jointly sponsored by the federal government and the three domestic auto manufacturers. One of the program’s three goals is the development of a manufacturable prototype vehicle within 10 years that achieves as much as a threefold increase in fuel efficiency while maintaining the affordability, safety standards, performance, and comfort available in today’s cars. Although the Partnership has not yet defined any technology choices, it is clear that there will be a strong research emphasis on new materials and alternative powertrains, especially on hybrid electric configurations. Whether or not these forces for innovation will actually provide the impetus for an acceleration in the rate of technological change is uncertain, of course. Box 2-1 provides some perspective on the view that such an acceleration will be difficult.
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