Domestics Pledge to Double E85 Vehicle Output

In an open letter to Congress, CEOs of Detroit’s Big Three auto makers vow to double production of vehicles that run on renewable fuels by 2010.

General Motors Corp., Ford Motor Co. and Chrysler Group pledge to collectively build 2 million flexible-fuel vehicles annually by 2010, which they call “the single largest commitment to renewable fuels in our nation’s history,” in the letter dated June 28.

However, Ford now says it is scaling back its volume targets for hybrid vehicles, earlier set at 250,000 units annually by the end of the decade. The auto maker doesn’t say what volumes are likely, only that a greater diversity in available fuel-efficiency-related technology means hybrids may not play as big a role as once thought.

The June 28 missive marks the latest in a series of announcements and events from auto makers to spark interest in ethanol and renewable fuels and coax lawmakers into drafting legislation that would improve the distribution infrastructure. Of the 170,000 gas stations in the U.S., only about 700 have pumps for E85, a blend of 85% corn-based ethanol and 15% gasoline.

“Our hope is that with this commitment fuel providers will have even more incentive to produce ethanol and other biofuels and install pumps to distribute them,” says the letter signed by Chrysler Group President and CEO Tom LaSorda, Ford Motor Chairman and CEO Bill Ford and GM Chairman and CEO Rick Wagoner.

GM, Ford and Chrysler, combined, have produced about 5 million flexible-fuel vehicles that run on any mix of gasoline and/or E85. The companies collectively will build another 1 million FFVs this year, they say.

Under the new commitment, GM would up production from a current 400,000 to 800,000 FFVs annually by 2010, a spokesman says. Earlier this year, Chrysler pledged to double FFV output to 500,000 by the ’08 model year. Ford is on track to build 250,000 FFVs this year and would ramp up to double that in 2010.

Critics see the E85 campaign as hype from the auto makers and a tactic aimed at avoiding tougher fuel economy standards for cars and trucks. Ethanol critics point out the corn-derived energy lowers vehicle mileage 20%-25% compared with gasoline and still requires significant energy consumption to produce.

A bill introduced in Congress would provide grants to help independent gas stations or small chains add E85 pumps.

A Washington-based spokesman for GM says the letter is not pegged to a particular piece of legislation, but serves to back up auto makers’ dedication to the renewable energy.

“You can talk about a commitment, but increasing production really drives that point home,” the spokesman says.

Auto executives last month met with several members of Congress to encourage favorable energy legislation.

A proposed meeting with President Bush to discuss energy and legacy cost issues has been cancelled three times thus far. No new dates have been publicly set for the confab, but the CEOs still hope to meet with Bush in July, company officials say.

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