Automakers to double production of 'flex fuel' vehicles

The three automakers with the biggest U.S.-based operations are pledging to double production of cars and trucks that can use ethanol and other biofuels and urging Congress to encourage oil companies to build pumps where the “flex fuel” vehicles can fill up.

The top executives of Ford Motor Co., General Motors and DaimlerChrysler said in a letter to Congress that their companies would produce an additional 2 million vehicles that can run on both gasoline and renewable fuels, and well as cleaner-burning diesel fuel, each year.

At the end of 2010, there would be 12 million flex-fuel vehicles produced if the car makers keep their pledge. There are expected to be around 6 million flex-fuel cars and trucks on the road by 2007. The vehicles are called flex-fuel because they can operate both on normal gasoline or blends with a high percentage of alternative fuel.

The letter, which was sent to each congressional office, was signed by Thomas LaSorda, president and CEO of DaimlerChrysler; William Clay Ford, chairman and CEO of Ford; and G. Richard Wagoner, chairman and CEO of GM.

It follows meetings in May between the auto executives and House and Senate leaders, who encouraged them, according to the letter, to find ways to reduce America’s dependence on oil produced in foreign countries.

One obstacle to wider use of flex-fuel vehicles is a deficit in the number of stations that service them. There are only around 700 pumps in the country that pump E-85, which is a blend of 85 percent ethanol and 15 percent gasoline. To compare, there are roughly 170,000 gas stations in the United States.

“We need business and government to work together to enhance the production, distribution and use of renewable biofuels,” the letter states.

The auto companies’ call to promote the development of infrastructure to handle biofuels could raise tensions with oil companies that say E-85 has not been sufficiently tested as a product to warrant widespread use.

Auto executives said, however, that E-85 offers a way to reduce dependence on foreign oil. If all the flex-fuel vehicles on the road filled their tanks only with E-85 it would displace 3.5 billion gallons of gasoline each year, or the equivalent annual use in Missouri, according to the letter.

Some lawmakers also continue to push for higher mileage standards for cars and trucks to get manufacturers away from producing large, gas-guzzling sport utility vehicles, which had been the main moneymakers for American carmakers in recent years.

Nathanael Greene, a fuels expert at the Natural Resources Defense Council, credited the auto companies for pledging to double the number of flex-fuel vehicles they produce, calling wider production levels critical to cutting oil use. But he said Congress should also raise fuel-efficiency standards — known as corporate average fuel economy, or CAFE.

“There’s no doubt that one reason they are pushing this is to take pressure off of them to improve the fuel economy of cars and truck,” Greene said.

“Given the infrastructure problems [with biofuels], increasing CAFE is the fastest, cheapest way to save oil.”

Using a refrain often heard from auto executives, however, Ziad Ojakli, a vice president at Ford, said that U.S. automakers already produce 30 vehicles that exceed federal fuel-economy standards.

“Our general principle is we believe incentives are better than mandates,” Ojakli said.

One incentive Congress could offer auto companies is to extend the now expired research and development tax credit, Ojakli said.

Ford will produce 250,000 flex-fuel vehicles this year and 3 million vehicles in total.

GM will produce 400,000 flex-fuel vehicles in 2006.