Fukui: Nickel battery is best bet for hybrid
Honda won't follow rivals down lithium ion road — for now
Hans Greimel
March 24, 2008

Hybrid hopes

The lithium ion race is also important because Honda is trying to catch Toyota in hybrid vehicles. Honda is introducing its new dedicated hybrid early next year, with an eye to selling 200,000 units a year. The company wants hybrids to make up 10 percent of sales by 2012.

Toyota is planning to use lithium ion batteries in a plug-in hybrid to arrive by 2010.

Nickel-metal hydride is the current hybrid standard. But automakers see lithium ion batteries as the next step because they are smaller, lighter and pack more electricity. The problem is lithium ion batteries tend to overheat.

"Timingwise, I would say there is no possibility we would resort to lithium ion batteries" in the new hybrid due next year, Fukui said. Still, the car will be engineered so lithium ion batteries can be swapped for nickel-metal hydride batteries later.

Details of Honda's new hybrid, billed as the Prius killer, are largely under wraps. Honda is aiming to price it below the current Civic Hybrid, whose sales have been lackluster.

The engine will be based on the Civic's, Fukui said. But the upcoming hybrid will have a newly designed motor and engine control unit, making it lighter and more compact.

That also will help bring down its cost, he said. The Civic's base engine in the United States is a 1.8-liter inline four-cylinder.

Fukui said the car will have a global nameplate, like the Accord and Civic.

As for styling, he said the new hybrid will take cues from the sleek, wedge-shaped FCX Clarity sedan, a hydrogen fuel cell vehicle Honda will start leasing this summer.

"That's more or less the image we're striving for," Fukui said.

Many partners

Many of Honda's rivals have committed to a single partner in lithium ion research. Toyota has teamed with Matsushita Electric Industrial Co., Nissan with NEC Corp. and Mitsubishi with GS Yuasa Corp.

But Honda is playing the field. It is working with Matsushita, Sanyo Electric Co. and several others that Fukui declined to name. But that doesn't mean Honda is behind, he said.

"There's a word in Japanese, soukon, for people who decide to get married too soon," he said. "It's like marrying a girl who's only 13. You don't know how that girl will turn out as a lady."

Fukui also downplayed the immediate potential for electric vehicles.

"It's not really practical as of yet, based on our experience," he said. Recharging times are still too long and the driving range is still too limited, said the Honda chief.

"But that depends on the evolution of the battery," Fukui said. "It might be that we come up with a battery that has 10 times the performance of the existing lithium ion battery. And if that happens, maybe there will be a leapfrog to electric vehicles."

Separately, Fukui also said:

-- Honda is still on track for higher sales in the United States this year.

-- Honda may reconsider production plans if the dollar lingers in the 90-yen range too long.

-- Sales in China will see a double-digit increase in 2008.

-- U.S. sales could have benefited from launching the hot-selling Fit a year earlier.

Advertising, rising yen

Fukui tried to ease concerns at some U.S. dealers that the automaker isn't spending enough on advertising to buoy sales amid the North American market slump.

After a 12-year absence, Honda revived its partnership with dealer ad associations in September 2006. But the brand's primary focus was Los Angeles — an expensive market with falling sales.

"I do agree advertisement is necessary, and I'm sure America Honda will respond," Fukui said. "It's far better to spend money on advertising than incentives."

Regarding the dollar's recent plunge against the yen, Fukui said Honda's basic strategy is to protect against such fluctuations by manufacturing locally.

But if the yen stays in the 90s against the dollar for too long, Honda may have to tweak its production plans. That could entail boosting demand at home to soak up more locally produced cars or trying to ramp up exports from the United States.

"If we are going to see this level, which is in the high 90s, continue for some time, then we may have to reconsider something," Fukui said. "The exchange rate will settle down, and that's the time we might need to review things."

Honda President Takeo Fukui’s take on lithium ion batteries: “In terms of reliability and durability, I must say there still remain some concerns. I don’t think they are necessarily best suited for mass-produced vehicles.”
Photo credit: NEWSCOM