fuel cell effort), a continuation of the more comprehensive U.S. approach is likely to put U.S.
companies in a strong position technologically. Whether this technological lead will be translated
into early commercialization in the United States will depend on government policies as well as
the way in which the vehicles perform and how much they cost relative to steadily improving
conventional vehicles of the same generation.“Advanced Conventional” Technology=
The U.S. car industry’s competitive position in “advanced conventional” automotive
technologies--those that promise significant but evolutionary improvements in fuel efficiency and
reduced emissions--does not appear to be as strong. For example, German automakers have
developed advanced, direct injection diesel engines that offer a 40 percent increase in fuel
efficiency, while reducing the noise, vibration and particulate emissions that formerly have been
associated with diesels. A significant fraction of new passenger car sales in Germany are diesel-
powered, whereas diesel passenger cars have disappeared from the U.S. market. In OTA’s view, if
NOX emissions from these engines can be reduced through the use of improved catalysts, diesel-
powered cars could make a comeback in the U.S. market. Based on their experience with building
small, efficient diesels for passenger cars, European automakers may also be in an excellent
position to exploit the use of compact diesel powerplamts in hybrid electric vehicles. This is a
promising option currently being evaluated by the PNGV partners.Japanese manufacturers apparently believe they can achieve many of the benefits of leapfrog
technologies through evolutionary improvement in conventional technologies, at much lower cost.
One example is the lean-bum gasoline engine (see previous chapters), which offers fuel efficiency
improvements of 10 percent at relatively low cost. This has been a technology targeted by
Japanese manufacturers, especially Honda. If NOX emissions from lean-bum engines can be
reduced through catalysts or other means, these vehicles will be able to meet California’s ULEV
standards. To date, no U.S. automaker has announced its intention to market a lean-bum engine
vehicle.Another “advanced conventional” technology that can improve fuel economy is the use of
lightweight aluminum instead of steel in the vehicle structure. This is another case where some
foreign manufacturers have been more aggressive than U.S. automakers, at least in introducing
actual production vehicles. In 1991, Honda introduced its aluminum-intensive sports car, the
NSX. In 1994, Audi (working with Alcoa) unveiled the A8 luxury coupe, which has an innovative
aluminum space frame structure. Although neither of these vehicles is particularly lightweight (or
cheap), they demonstrate a near-term technology that could be used for fuel efficiency gains.
These examples are not offered to suggest that U.S. automakers are ignoring these
technological opportunities. Rather, they reflect differences in automakers’ assessments of the
cost-effectiveness of these technologies, given current fuel prices and consumer preferences in the
United States. In fact, the Big Three have extensive in-house research programs on lean NOx
catalysts, and will build direct injection diesels for the European market through their subsidiaries
in Europe. Furthermore, Federal finding for compact diesels, lean NOX catalysts, and aluminum
manufacturing technologies is requested to increase substantially in the FY 1996 budget (see
below). The principal lesson from this experience for leapfrog technologies is that even when the