July 27, 2009 / 1:08 PM / 8 years ago

ANALYSIS-Europe's CO2 war has room for electrics, hybrid cars

* Nissan, Renault push electric vehicles

* Analysts see electric, hybrid car mix as ideal solution

By Helen Massy-Beresford, European Autos Correspondent

PARIS, July 27 (Reuters) - European carmakers are likely to rely on a mix of clean car technologies to achieve big emission cuts even as they gear up for fully electric cars, battling to put infrastructure in place and convince wary drivers.

The auto groups must cut global-warming gases from new vehicles by 18 percent within six years [nL2260997] and analysts said that while electric cars would gain prominence, hybrid models would play a big role in the next few years.

Japanese carmaker Nissan Motor Co (7201.T) plans mass commercialisation of electric cars from 2012 globally and is set to unveil its first electric model -- a five seater vehicle with a range of 160 km on a full charge -- in Yokohama on Aug. 2.

Many major manufacturers are also studying plug-in hybrid electric vehicle technology, which cuts greenhouse gas emissions and combines an internal combustion engine with a battery that can be recharged by plugging in to a power source. Conventional gasoline-electric hybrid cars have batteries that are only charged when the driver brakes.

“We believe the electrification of the car appears increasingly inevitable, with plug-in hybrids providing the bridge technology to fully electric vehicles,” Credit Suisse analysts said in a research note.

Consultancy PricewaterhouseCoopers estimated that pure electric vehicles could represent between 2 and 5 percent of total light vehicle output by 2020.

“Inadequate infrastructure will also delay a widespread shift to electric vehicles,” said Steve D‘Arcy, global auto leader at PwC.

But Nissan sees electric cars forming the “centrepiece” of its portfolio, which will also include clean diesel and fuel-cell, as well as hybrid versions of some high-end models.

“Honestly, we weren’t front-runners with hybrids, Toyota were. On the electric vehicle we’ve decided we’re going to try to be the people that take this technology out of the laboratory and front-run it,” Colin Dodge, Executive Vice President, and chairman of the management committee for Africa, Middle East, India and Europe said earlier this month.

“Even though we’ve got hybrid technology, we still believe the vast majority of the segment of the future is best served with the ultimate solution on CO2 -- zero emissions,” he said.

Credit Suisse analysts said that while technology developments for conventional internal combustion engines could cut CO2 emissions by up to 30 percent, and hybrid technology could make for a further reduction of 50 percent, “further improvement from here will likely require more radical powertrain alternatives.”

But some analysts believe early electric vehicles may face acceptability problems, and that hybrids will continue to be more popular for drivers wanting to travel longer distances.

HALFWAY HOUSE

Nissan said on Monday it was developing a hybrid system to power smaller cars as an interim solution to improve mileage before pure electric cars take over. [nT103510]

General Motors may be among the first to market a plug-in hybrid, with the launch of the Chevrolet Volt due next year.

Meanwhile, hybrid market leader Toyota Motor Corp (7203.T) is introducing plug-in hybrid technology on its popular Prius model. The group has sold 139,174 Prius cars in Europe since they were launched there in 2000.

France’s PSA Peugeot Citroen (PEUP.PA) is working with Mitsubishi Motors Corp (7211.T) on introducing an electric car to Europe at the end of 2010 or in early 2011, based on Mitsubishi’s iMiEV, which was launched last week in Japan. Each company is also working separately on plug-in hybrid technology.

In Europe, a market that has traditionally had a high proportion of diesel-powered cars, full-hybrids, with their limited extra fuel savings, will remain present, but as a niche market, Credit Suisse analysts said.

But their role will be important, even as electric vehicles become more mainstream, said Tom De Vleesschauwer, associate director, automotive consulting at forecasting and analysis group IHS Global Insight.

“Electric vehicles are primarily going to be city cars. There’s also a future for hybrid vehicles -- they’re just going to be operating in different segments,” he said.

Analysts said a hybrid vehicle would make sense for larger, heavier vehicles where the additional cost was a smaller percentage of the price. Mercedes-Benz launched the S400 hybrid sedan earlier this year in Europe. De Vleesschauwer noted, “I don’t there’s going to be any dominant technology that’s going to win out of all of this. ‘Normal’ engines as we know them and diesel engines will still be around in 2020 without a doubt.”

For a factbox on electric/hybrid cars, double click on [nLR191256]

(Additional Reporting by Chang-Ran Kim in Tokyo, Editing by Sitaraman Shankar)

((helen.beresford@thomsonreuters.com; +33 1 49 49 56 83; Reuters Messaging: helen.beresford.thomsonreuters.com@reuters.net)) Keywords: AUTOS/ELECTRIC HYBRID

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