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The $375,000 Engine - If You Have To Ask You...

Detroit January 7, 2003; Jonathan Fahey writing for Forbes reports that General Motors says it spends at least $375,000 to build a fuel-cell engine, not including the car or truck to carry it. How to bring those costs down? Start selling fuel-efficient engines to the U.S. military--and hope that the volume and lessons learned will yield new efficiencies.In January GM contracted to sell the Army a fleet of trucks powered by next-generation power plants like fuel cells and diesel-electric hybrids. The Army plans to purchase as many as 30,000 hybrid trucks by 2005 and 80,000 fuel cells by 2013.

The Army won't release the prices but declares that it can rationalize paying top dollar for what is also a research and development effort. It now spends up to $400 a gallon to haul diesel fuel to far-flung battle sites like Afghanistan, a price umbrella that just might make fuel cells economically viable. To be sure, delivering the hydrogen that would power a fuel cell is no small task; hydrogen can be extracted from water in the field, but only by drawing on some energy source that may be as costly as diesel to have on hand.

Paul Kern, general of the U.S. Army matériel command, estimates that tanks, trucks and airplanes make up just 20% of the weight of the equipment brought to battle. Supplies like food, water, diesel fuel and ammunition make up the other 80%. As the Army tries to become more agile, it is looking for ways to cut weight.

Fuel cells, stationary or mobile, also provide tactical advantages. To run communications and surveillance equipment, soldiers now must tow diesel generators or giant battery packs behind trucks. Along with electricity, the diesel generators create heat and noise that can be detected by the enemy. The big battery packs last just an hour or so. Generators powered by fuel cells quietly whir and produce half the heat of diesel as they combine hydrogen with air to create electricity. Soldiers could drink the fuel cell's only emissions, water.

Hybrids, already being sold by Honda and Toyota by the thousands, use battery-powered electric motors to assist traditional internal combustion engines. The combustion engine slowly recharges the battery pack when it is not using energy to move the vehicle. GM has long contested that hybrids are too expensive to mass-produce because they require two motors in place of one. Nevertheless, early this year GM is expected to announce a big hybrid program.

One prototype truck, which GM will soon deliver to the Army, is a diesel-electric hybrid that is 20% more fuel-efficient than the best diesel engines. It carries an auxiliary fuel-cell generator in the pickup bed that the Army will use to power communications equipment.

The military kick-started auto innovations like four-wheel drive and global positioning systems. Car companies can hope something similar happens here.