Harvey Lamm, co-founder and former CEO of Subaru of America, is co-founder of VNG.co, a provider of a compressed natural gas fueling service for light vehicles within retail gasoline stations.
Awd offered significant benefits to drivers and the industry, but it was largely ignored by the industry in the early 1970s. Today, as co-founder of VNG.co, a provider of natural gas fueling for light vehicles within retail gasoline stations, I see the industry making a similar mistake. Harvey Lamm
|The auto industry’s big mistake
As co-founder and former chairman and CEO of Subaru of America, I was deeply honored in 1999 when Automotive News referred to me as the father of all-wheel drive in the U.S.
Awd offered significant benefits to drivers and the industry, but it was largely ignored by the industry in the early 1970s. Today, as co-founder of VNG.co, a provider of natural gas fueling for light vehicles within retail gasoline stations, I see the industry making a similar mistake. This time it is overlooking light-duty natural gas vehicles, the benefits of which profoundly outweigh those of awd.
After we introduced awd in 1974 it became the foundation of the Subaru brand. But we never envisioned its impact on the broader industry.
Today, it is offered by practically every major manufacturer and is included on about a third of new light vehicles sold.
The industry today faces a more complex set of regulatory challenges that have implications for products and profitability as the government seeks to improve fuel economy and emissions and reduce our nation’s petroleum use.
Undermining these efforts is the industry’s overwhelming reliance on light trucks, which are the most popular but also most fuel-consuming and polluting of all light vehicles.
Since 1970, which coincides with the enactment of the Clean Air Act, light trucks have increased from a 16 percent market share to 63.4 percent today.
Industry risk from this reliance is only heightened by the EPA’s midterm evaluation of corporate average fuel economy standards. Therefore, it is a crucial time for dealers and manufacturers to ensure the regulations not only achieve the goals, but support the health of the industry and provide customers with their vehicles of choice.
To achieve these goals, there is no better, more immediate or more cost-effective solution than natural gas vehicles.
The internal combustion engine shared by gasoline and natural gas vehicles supports the heavier weight and functionality of light trucks. It also takes advantage of ever improving gasoline engine technologies.
As a lower cost and more stable-priced fuel relative to gasoline, natural gas also protects against the risk of declines in light-truck sales in the face of rising gasoline prices.
Moreover, bi-fuel vehicles eliminate the range anxiety that comes with battery electric vehicles.
Natural gas vehicles are also a win for the government in the effort to achieve clean air and petroleum reduction goals, while fitting within a pro-growth, pro-environment regulatory agenda.
Natural gas is 20 percent cleaner than gasoline, and with renewable natural gas (e.g., captured methane from a landfill) can significantly reduce greenhouse gases.
This is the equivalent of a material improvement in fuel economy as it relates to emissions.
Natural gas also supports job creation, trade deficit reduction and economic expansion, as well as the long-term financial health of the auto and energy industries. It would free up oil, gasoline and diesel for export, leveraging our world-leading refinery capacity and extending our global energy influence.
There are more than 22 million natural gas vehicles around the world and the number is rapidly growing. But there are only about 150,000 in the U.S. Clearly, we are lagging.
Natural gas as a transportation fuel is also a unique opportunity for the U.S. to leverage its vast downstream pipeline and utility infrastructure for distribution on a cost-effective and environmentally friendly basis (i.e., no truck deliveries).
All that is missing is fueling at retail locations, which would cost a fraction of developing unproven technologies.
While the benefits of awd are proved, they pale in comparison to the value offered by natural gas vehicles. Just as the industry overlooked awd, we are again making a mistake, but this time with potentially more severe consequences.
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