The Alliance of Automobile Manufacturers, Inc.
U.S. Senate Environment and Public Works Committee
Regarding Innovative Environmental Technology
May 30, 2001
Good Morning, my name is Cass Andary. I am Director of Regulatory Programs at the Alliance of Automobile Manufacturers. The Alliance is a trade association of 13 automobile manufacturers representing over 90% of U.S. vehicle sales.
The auto industry in the U. S. is proud of not only its contributions to advanced technology, but also to its contributions to the U. S. economy. In a recent report,  researchers associated with the University of Michigan concluded that the automotive industry produces a higher level of output in the U.S. than any other single industry. Notably, U.S. motor vehicle output represented 3.7 percent of the U.S. gross domestic product in 1999. Many of the jobs provided by the industry are high skill jobs paying well above industry average – the average job in the automotive manufacturing sector was compensated at a level 73 percent higher than the average U.S. job.
The motor vehicle industry is one of the most technologically advanced industries in the world. Our designers use state-of-the-art computer design, our manufacturing facilities are some of the most complex and technologically advanced in existence, and our vehicles are probably the most complex and advanced consumer product sold on the market today.
The industry has reached levels of emission control and vehicle safety today never anticipated in the past using computer controlled fuel injection and advanced catalyst systems to control exhaust emissions. For safety, manufacturers have installed sophisticated air bag supplemental systems, collapsing steering wheels, seat belt pretensioners and many other advanced technologies to help save lives.
However, our quest for even better vehicles never ends. Alliance members continue to push new technology to further improve the environmental footprint of our vehicles.
First, let me point out how far we have come in controlling exhaust emissions from the traditional gasoline-fueled vehicle. For the new Federal emission standards that take effect in the 2004 model year, the industry will be meeting standards that represent a 99 percent control level for hydrocarbons and nitrogen oxides, the two main precursors to ozone or smog. Moreover, cars and light trucks will have to meet the same emission standards as part of these new regulations.
Member companies of the Alliance have invested billions of dollars in research and development. These companies are working to bring cutting-edge technologies – alternative fuels, hybrid electric, electric and fuel cell vehicles – to the marketplace.
Let me talk a bit about the new types of vehicles that the industry is busy working on today. The industry has long been active in exploring alternative fuels. Manufacturers make vehicles available that run on CNG and LPG, and others that can run on either gasoline or a mixture of fuel containing 85 percent ethanol.
A new technology that has recently appeared on the market is a hybrid-electric vehicle. Both Toyota and Honda have a vehicle selling today, and Ford, GM and DaimlerChrysler have vehicles ready to introduce in the next few years. This technology combines both a traditional engine with electric motors and a small battery pack giving the vehicle two sources of power for the vehicle. Sophisticated computer control logic shuts off the engine when possible, letting the vehicle run in electric mode, and then restarts the engine when needed.
We have also invested a lot of time and money in battery-powered electric vehicles (BEVs), mostly due to a regulatory requirement in California for these vehicles. The Alliance does not believe that battery-electric vehicles can ever become mainstream vehicles that would replace today’s gasoline-fueled vehicle, but there may be market niches where some of the smaller BEVs can be sold.
The entire industry is working feverishly to develop commercially viable vehicles powered by fuel cells. You will recall that fuel cells were used in the early U.S. space program. The industry is working hard to reduce the cost of the fuel cell while improving its performance so that it can replace the traditional gasoline-fueled engine we have today. Fuel cells offer the promise of zero emissions, with a vehicle that can also meet all other customer needs and expectations. Many manufacturers are part of the California Fuel Cell Partnership, along with the California Air Resources Board and a number of Federal agencies. This partnership is working hard to develop both fuel cell vehicles and the necessary fueling infrastructure.
This industry is committed to continuing to push technology even further year by year, constantly improving the product, while continuing to meet the transportation needs of the public. We believe further that pursuing these goals should lead to consideration of more broadly defined programs (i.e., beyond the new vehicle transportation sector). All energy users and producers should be integrated in a comprehensive national energy strategy to achieve fuel savings with economic efficiency.
In addition, we believe that the costs of more expensive technologies are a deterrent to the market. In order to expand the use of these advanced technologies, tax credits and incentives for advanced technology vehicles [and vehicles which demonstrate significantly higher efficiencies] are necessary. Such incentives will speed acceptance and promote market forces that will make advanced technologies less cost prohibitive.
Finally, we observe that, as in all industries, both capital and human resources are finite, and are most efficiently deployed in response to market forces. Commitment schedules for capital spending, vehicle model renewals, and powertrain longevity can range from 5-10+ years. Over the past ten years the industry has clearly demonstrated that when resources can be shifted from continual incremental regulatory compliance pressures, the industry can and will undertake major research and development programs aimed at significant long-term energy efficiency. Clear examples are the development of hybrid electric powertrains, and the continuing investment in fuel cell systems. The commitment to market-driven advanced technology development is clearly demonstrated by these programs, which have little potential to produce sufficient sales volumes to impact CAFE within the next 5-10 years.
Thank you for the opportunity to speak today and I would be happy to answer any questions you may have.
 Contribution of the Automotive Industry to the U.S. Economy in 1998: The Nation and Its Fifty States. Prepared for the Alliance of Automobile Manufacturers, Inc. and the Association of International Automobile Manufacturers, Inc. by the Institute of Labor and Industrial Relations, University of Michigan, the Office for the Study of Automotive Transportation, University of Michigan Transportation Research Institute, and the Center for Automotive Research, Environmental Research Institute of Michigan.