Episode 218 – GM Says “Nyet” to GAZ, Material Shortage Threatens EVs, BMW’s Vision Concept

August 31st, 2009 at 12:09pm

Runtime 8:29

GM says “nyet” to the Russians who want a stake in Opel. Hybrids and EVs face a critical rare-earth metals shortage. BMW unveils a dramatic new concept boasting M-car performance with hybrid fuel economy. All that and more, plus we drive two German diesels head to head.

Transcript and Story Links after the jump . . .

Here are today’s top headlines. GM says “nyet” to the Russians. Hybrids and EVs face a critical metals shortage. BMW unveils a dramatic new concept car. And we test-drive two diesels.

Up next, we’ll be back with the news behind the headlines.

This is Autoline Daily for Monday, August 31, 2009. And now, the latest auto news.

Reports out of Germany say that General Motors does not want the Russians involved in any takeover of Opel. The AFP reports that an article in German magazine Der Speigel claims the U.S. government, which now owns 60 percent of GM does not want the Russians involved. But the German government denies these reports.

Let me give you some background on what’s really going on. Earlier this year, GM’s vice president of purchasing, Bo Anderson, left GM to become chairman and CEO of the Russian automaker GAZ. GM is not happy that Anderson left the company and even more upset that he went with GAZ, which is tied in with Russian investment bank Sberbank, which is Magna’s partner to buy part of Opel. GM knows that Bo Anderson is a pretty smart guy and could do a lot of damage if he got technology from GM and Opel. So it’s not only for strategic reasons GM doesn’t want GAZ to get Opel. It’s personal.

A report from Reuters says there could be a shortage of the rare-earth metals that are needed to make hybrid cars. It quotes one strategic metals expert calling the Toyota Prius “the biggest user of rare earths of any object in the world.” These metals include neodymium, which is needed to make the powerful magnets used for electric motors in hybrids, and lanthanum, which is needed to make hybrid batteries. China, which is the largest producer of rare-earth metals, is beginning to limit exports so its home industries can have access to them. New mines are being opened in California and Canada, but experts say demand will soon exceed supply.

And maybe billionaire investor Warren Buffet saw these reports because word out of China is that he wants to acquire more of BYD, the Chinese company that makes lithium batteries and electric cars. Gasgoo reports that BYD is deciding whether it should sell him more of the company. Buffet bought a 10-percent stake in BYD last year for $230 million and has already made a billion-dollar profit on that investment.

Another automaker has unveiled a new concept car ahead of the Frankfurt Motor Show – this time BMW spilled the beans. The Vision EfficientDynamics is a plug-in hybrid that aims to combine M-car performance with super-low emissions. It has a 98-cell lithium polymer battery pack that delivers an electric-only range of 50 kilometers, or about 31 miles. It features a three-cylinder diesel engine and two electric motors that deliver a combined 356 horsepower and a walloping 590 pound-feet of torque. The company says it will sprint from zero to 100 kilometers an hour in 4.8 seconds with fuel consumption around 3.8 L/100 km, or about 62 miles per gallon. It’s great that BMW was able to combine performance and efficiency like this, but man, the styling, especially at the back end. We can’t blame Chris Bengal for this thing.

Ford finally released details on its brand-new, heavy-duty diesel engine. Codenamed “Scorpion,” the 6.7-liter PowerStroke is an in-house design that will replace the company’s current Navistar-built engine. Like other modern diesels, it features a long list of advanced technologies, like piezoelectric fuel injectors and a compacted-graphite iron, or CGI block that’s twice as strong as regular cast iron. It also has twin turbochargers, which are mounted in the valley of the “V” so they take up less space. They’re also of a new design. Essentially two-in-one, they share the same housing and shaft. Ford says this layout helps cut lag without sacrificing boost pressure. The PowerStroke engine should be fully-compatible with blended, B20 fuel. Look for it to debut on the Ford’s 2011 Super-Duty Pickup.

And speaking of diesels, coming up next, a look at a couple of diesel-powered cars we just had in the Autoline garage, we’ll be back right after this.

Diesels are a tough sell in the U.S. market. Most of the American public doesn’t think about diesels when it comes to fuel economy. They think about hybrids. But we’re starting to see more choices when it comes to diesel-powered cars. And I just had a chance to drive two of them.

And that’ll do it for today’s top auto news. As always, thanks for watching, we’ll see you tomorrow.

27 Comments to “Episode 218 – GM Says “Nyet” to GAZ, Material Shortage Threatens EVs, BMW’s Vision Concept”

  1. Nick Stevens Says:

    Congtats, John, Excellent show today, the kind that got you the Emmy. It was also chock-filled with important and interesting news.

    On the Diesel vs Hybrid controversy, the choice is not between enviros and enthusiasts, but between city and highway. If most of your miles are city, (or you live in the LA area), buy a Prius (it is by far the best hybrid, among toyotas or other brands), if you do a LOT of highway miles, buy a diesel, and if you do a modest no of miles, as I do, buy a big-ass V8 performance car, your few miles will not affect anything, and in fact, you can claim you help the environment too, because if you had not bought that used V8, somebody else would, and e or she would commute 120 miles a day, so you save the planet from that if you only drive 12!.

  2. Thor Says:

    I fully agree with Nick above, Hybrids’ natural customers are really city Fleets like Taxis, police cars, UPS (they already have them) and other delivery services, not private car buyers so much.

    BTW, that BMW concept was amazing, having 500 HP and torque and getting 60+ MPG! But I doubt they can produce it for under a half million bucks or so..

  3. pedro Fernandez Says:

    First, we have to depend on the arabs for oil, now on the Chinese for these metals? What is happening to this country? These environmentalists are gonna destroy us, Great report on those two diesels, I just hope they catch on. Why can’t Detroit get anything on the market like these two fine diesels.

  4. Nick Stevens Says:

    Plug-in Hybrids, when mass produced and sold at reasonable prices, will almost totally eliminate our addiction to oil from hostile nations (Iranians are not Arabs, but are even more hostile!), we will only need gas for long trips, not for commuting and short drives.

    We have infinite coal reserves, and if the environuts don’t like them, we can build 200 new Big Nuke plants to provide as much electricity and energy as we will ever need.

  5. Tony Gray Says:

    Even as a Bimmerphile, that concept left me, well, squinting to find a line I liked. The IDEA is cool, but the execution…well…

    As for the diesel question, I have to add to all of you folks. If only the US would compromise and accept EU diesel emission standards, and if only we’d get people back into MANUAL transmissions again, all would be right with the world.

  6. Thor Says:

    My current “magnificent 7″ is my first car ever that does not have a manual. In Europe, the 7 is offered with a manual, but here the last 3 generation 7 series were not available. Fortunately the 4.4 v8 and the 5-speed auto has so much power that I never bothered to use the “keep the current gear in place” switch in the middle console.

    I also wish they would import the excellent 730D here, its 3.0 lt has as much if not more torque than my 4.4 gas engine, AND would easily get 30 MPG highway, when mine barely gets 24 (and 12-18 city!)

  7. Pedro Fernandez Says:

    While John tests 2 very desirable and right for the times vehicles, Ford announces a behemoth of an engine which will only serve a very limited group of buyers. No wonder the US auto industry is in the shape it’s in. And even though it’s diesel, it’s still a guzzler.

  8. Nick Stevens Says:

    Ford did not tell us any of the “beef” for its engine, so I will speculate:

    The 6.8lt Diesel will have 350 HP, 700 (!) Lbft Torque, and get 22 mpg highway on the big trucks.

    The only thing Ford said is that the diesel option will cost a RIDICULOUS $9,300 MORE than the gas V8 and as such only serious professionals in the construction etc businesses will buy it, IF they do a million miles with it, otherwise it makes little sense.

  9. Alex Kovnat Says:

    Re Diesel engines: The Diesel is the ideal automotive engine in many respects. It has great low end torque. I remember years ago, there was a Diesel version of the Volkswagen Golf (or was it called the Rabbit?). The Diesel engine on that car was rated at only 48 HP. If any gasoline engine one might use in that car were rated at only 48 HP, it would accelerate like a sick and dying turtle. But since Diesels have such great low end torque, 48 HP was all that engine needed.

    In addition, the brake specific fuel consumption of a Diesel engine doesn’t shoot way up when you go well below the rated power output, as is the case with an Otto cycle (spark ignition) engine, because you don’t have to throttle intake air to control power output.

    Unfortunately mother nature loves to throw showstoppers in our faces. For Diesel engines, you not only have oxides of nitrogen but also, hyperfine particulates. The EPA is almost certain to object to the latter.

    Because you tend to have brief “puffs” of emissions when accelerating any engine, I think with Diesels you will need hybrid components (i.e. battery pack and motor) so the engine doesn’t have to power up as rapidly when you step on the accelerator when the light turns green. If that is, you want to reduce particulate and nitrogen oxide emissions as much as technology allows.

    So the question is not one of Diesel versus hybrid, but where we can get enough rare earth metals for the latter in case China cuts off our supply.

  10. G.A.Branigan Says:

    Kudos to Ford for finally getting their own diesel out.Navistar and Ford was not a match made in heaven.

    Kudos to John for bringing us a good report on my favorite topic,DIESELS…LOL.

    FAIL:Ford’s lack of bringing out a small diesel for the F150,and the ageing Ranger.BUT,that fail also applies to every other manufacturer that sells 1/2 ton and small pickups in the american market.

  11. Nick Stevens Says:

    Alex wrote “But since Diesels have such great low end torque, 48 HP was all that engine needed.”

    Right. Of course, that 1st gen GOlf Diesel barely weighed 2,000 lbs, so that helped a lot too. And it had an EPA 60 MPG (but EPA ratings were lowered for realism twice after that, so today it would probably be rated 45-50 MPG highway at most) If you drove 55-65, you could get your 60 MPG.

    Today even the Golf exceeds 3,000 lbs, maybe 3,200! And all other cars are far more obese and powerful than their 1980-85 predecessors. SO it would probably need a diesel with about 100 HP and 200 Lbft for lively acceleration.

    PS the diesel Hybrid is too expensive to make for most mid-priced vehicles, and if plug-in hybrid is successful and their volumes increase, their price will decrease and the need for a diesel in the hybrid will be less.

  12. G.A.Branigan Says:

    Having had a new 06 Jeep Liberty CRD I can say truthfully that when even making a wide open start it did not puff any black smoke.Electronic injection pumps and other improvements eliminate that.

    Particulates:There are a number of proven technology diesel particulate filters already on the market.

  13. Kit Gerhart Says:

    While hybrids are the best technology for city driving, diesels are much better than similar size conventional gas cars. I had a VW Jetta diesel (manual transmission), and it got 40mpg in mixed driving conditions where you’d be doing well to get 27 with the gas version of the same car. I really like BMW’s decision to do a diesel hybrid. That should be the ultimate setup to maximize fuel economy of a car using conventional liquid fuels.

  14. Kit Gerhart Says:

    I’m one of those people Mr. Stevens calls an “environut,” but I completely agree with him that a bunch of nuclear plants would be a good way to make our electricity, IF there is a safe way to handle the radioactive waste.

  15. Nick Stevens Says:

    I also consider myself an enviro, even if not an extreme one, and in fact all my research funding the last 10 years was on econ-enviro studies.

    But most importantly I am pro-env because I use it intensively, swim for hours each day in the summer etc.

    We already have two safe ways to dispose of Nuke waste, one is storage in Yucca Mt, we spent over $4 billion developing the site, but Harry Reid, the shameless idiot in Congress, stopped it because it is in his gambling and prostitution backyard (NV).

    The second way is the Euro way, which is recycling the nuke fuel in Breeder reactors.

    (I am also fully for renewable energy, but currently solar is prohibitively expensive, Wind has made huge progress, but in any case, the two can only provide a small fraction of our needs)

  16. Alex Kovnat Says:

    Nick Stevens writes:

    >Right. Of course, that 1st gen GOlf
    >Diesel barely weighed 2,000 lbs,
    >so that helped a lot too.


    >Today even the Golf exceeds 3,000
    >lbs, maybe 3,200!

    Chalk that up to ever more draconian demands for safety. A lot of the improvements in vehicle design and drivetrain efficiency have been eaten up by increased safety requirements which add weight, i.e. side impact and now rollover protection. That leaves less room for fuel economy improvement, if you know what I mean.

    I think the public must be made aware of what regulatory aggression against the auto industry may lead to, if the powers-that-be keep it up.

  17. Alex Kovnat Says:

    And thank you Nick, for mentioning nuclear power. One of the things you could use a nuke plant for is not only generating electricity, but also the waste heat could be used to help process biomass into ethanol or other biofuels.

    We should all wonder about the motivations of those who demand draconian fuel economy regulations on the auto industry on grounds that the world will come to an end because of CO2-induced global warming, but who don’t want us to have nuclear power.

  18. John Says:

    Hey Pedro,

    “First, we have to depend on the arabs for oil, now on the Chinese for these metals? What is happening to this country? ”

    We have a lot of Coal and Natural Gas.

    Natural Gas conversions and new natural gas vehicles make sense to me.




    This “country” is choosing to be dependent on other “unfriendly” countries to provide key critical elements for our economy, and our ability to have the mobility we have had for the last fifty plus years.

    When you have lemons, make lemon-aid.

  19. motorman Says:

    there is only so many gallons of diesel in a barrel of oil and with the HD trucks and trains using diesel there will be a shortage down the road and the price will skyrocket if a lot of cars switch to diesel. gasoline will then be cheaper because there will be a surplus of it.

  20. Salvador G. Says:

    JohnMc, nice show today but, I was shock, SHOCK; that I didn’t find more about those diesels you test drive on your John’sJournal section, hope you more soon. Also, since we all seem to be on the same page about diesels, I like to ask…

    ..On what current production cars you think a diesel engine would be great???
    – and just for the record I think a diesel engine will be great on…
    A Corvette
    A Ford Taurus SHO
    A Nissan GTR
    A Dodge Caliber or VIPER

    Now that I think about it, there’s a lot of cars that need a good diesel engine.

  21. Kate McLeod Says:

    Diesel? Yeah. I just got out of the Honda Insight. Great if you like driving a Dirt Devil.

  22. Alex Kovnat Says:

    Motorman, you have said just about the best reason there is to allow the price of gasoline, Diesel fuel, jet fuel, etc., to rise and fall in accordance with the forces of supply and demand.

  23. G.A.Branigan Says:

    @Motorman and Alex K.:Diesel fuel is a direct by-product during the normal cracking process to make gasoline.Note:Ford’s new diesel will be able to run B20.That means 20% bio-diesel.Nuther note:Bio diesel is easier to make then ethanol,and requires very little energy to make as opposed to say E85.The diesel shortage was in plain english…..bullshit.

  24. Kit Gerhart Says:

    Salvador G.,
    The Caliber would be a good early candidate for diesel power. FIAT, the new owner of Chrysler has some good 4 cylinder diesels which could be used in the car.

    As far as diesels for high powered sports cars, it would get more complicated. There are very successful diesel race cars from Audi, and more recently Peugeot, but those engines would probably be far removed from what could be used in a road car.

  25. AHMED Says:

    Why every body blame us the arabs for natural reserve it is found to be in our area gas,why you do not blame your auto makers and american oil companies because they are the ones who get benefit we the arabs get pennies from this oil ,you take it from us in crude form (it is dug up by again american companies)and then you process it to many forms and you sell it again to us with higher prices x3 ,they to blame for the high prices they make profit from both of us (american ppl and arabs)
    we are victims for our corrupt politicians and giant companies
    thank u

  26. Nick Stevens Says:

    The first and best candidates for Diesel power are not cars, and definitely not small cars like the caliber or sports cars like the corvette (although Audi has made progress on the latter at the 24 hours of LeMans with its unbeatablel Diesels),

    But, of course, Pickup Trucks and Large SUVS, esp. those that tow a lot.

    And by coincidence, it is there where you have the most savings:

    For example, a Caliber doing 15,000 miles a Year needs 500 gallons at 30 MPG, if you put a diesel it will get close to 40 MPG, needs 400 gallons. Big deal, 100 gallons.

    But the Ford Excursion SUV with the gas V8 got nbarely 10 MPG, ie, 1500 gallons for same miles, while Motorweek got 19 MPG with the diesel, say 800 gallons at most, so savings are SEVEN TIMES those of the Caliber!

  27. Thor Says:

    In europe, Autoblog today reports that the Caliber comes with an excellent 2.2 lt diesel making 163 hp and, more importantly, an oustanding 236 lbft Torque. However, we will NOT be getting this one in the US, but instead the unloved 2 and 2.4 lt I4 gas engines.

    Nick was right on the $ re the MPG, the above diesel gets 40.6 MPG (US), but the EPA numbers might be less.