Chapter 5Advanced Automotive R&D Programs: An International ComparisonThis chapter attempts to describe and evaluate the federal role in the research and development
(R&D) of advanced automotive technologies. It begins with a historical perspective on federal
involvement in automotive R&D, from the early 1970s to the present. It then describes ongoing
government/industry programs in the United States, Japan, and Western Europe, and draws some
conclusions about the competitive position of the U.S. automotive industry in these technologies.
The analysis compares the R&D needs resulting from the Office of Technology Assessment ‘s
(OTA’s) technical assessment with federal R&D budget priorities proposed for fiscal year (FY)
- The chapter concludes with a discussion of the federal role and the way it might evolve in
the future.
At this writing, Congress is considering significant cuts in finding for federal agency programs
that have supported advanced automotive R&D. If these cuts are implemented, recent initiatives
such as the Clinton Administration’s Partnership for a New Generation of Vehicles (PNGV, see
below) will be seriously jeopardized, and will be competing with more traditional R&D programs
(e.g., alternative fuels, heavy-duty engines) for a smaller pool of government resources. In any
case, while this chapter provides a snapshot of current federal R&D efforts as of the summer of
1995, the reader should be aware that the landscape of federal R&D programs could change
radically in the coming months and years.
AUTOMOTIVE R&D
It is important to understand that the largest source of finding for automotive R&D around the
world is the industry itself. There is intense pressure on the manufacturers and their suppliers to
innovate and to reduce production costs through the adoption of new technologies. The costs of
innovation are very high. For example, the total cost of developing a new vehicle from concept to
prototype may be hundreds of millions of dollars; moving it from prototype to production
typically costs billions more. In 1992, R&D expenditures in the U.S. auto industry (vehicles and
parts) totaled $12.3 billion, the second highest of all U.S. industrial sectors, and about 4 percent
of total sales. ] In 1992, General Motors (GM) and Ford had the first and third highest R&D
expenditures among all U.S. companies.^2
Some of the research conducted by the manufacturers is quite long term. For example, GM has
investigated fuel cells for decades, and Ford has developed expertise in advanced composites for
body structures. Yet, according to OTA’s analysis, neither fuel cells nor advanced composites will
likely be commercialized in light-duty vehicles for at least 10 years.
(^1) International Trade Commission, Industry, Trade, and Technology Review, August 1994, p.22.
(^2) Ibid.