Fiat Focuses on Natural Gas Engines
Fiat and Chrysler Group LLC are taking their new cars in a different direction by looking at natural gas to power their engines. Chief executive officer Sergio Marchionne believes natural gas engines are a better choice for cutting greenhouse gas emissions because they are less expensive to produce and sell than other new technologies. Specifically, electric cars create “too many obstacles” to successfully compete in the market. Battery technology, access to charging stations and the time necessary for recharging are all problematic issues for the electric car.
Marchionne thinks that the U.S. market is ripe for natural-gas engines after becoming the largest natural gas producer in the world last year. Newly tapped reserves in the Marcellus Shale field have boosted gas reserves and driven prices lower. Constantinos Vafidis, of Fiat’s transmission and hybrid research center in Italy, noted, “Natural gas is very suitable for the U.S.” He said the fuel is especially appropriate for “public services and goods transportation, where vehicles are refueled from a central base.”
Government and corporate owned vehicles generally return to a centrally located station to refuel. Currently, there are only 1,300 natural gas fueling stations in the U.S., a number that would have to grow substantially to power a large consumer market. Corporate truck fleets are a good initial target for the natural-gas engine market. As fueling stations increase in number, passenger car production will rise. The U.S. presently ranks 14th in natural gas engine sales. Italy, Fiat’s home country, ranks sixth. The number 1 ranking goes to Pakistan, with over 3,000 fueling stations for 2.3 million natural gas vehicles.
Fiat is already at the top of the natural-gas engine market in Europe, where they hold an 80 percent share of the methane-powered automobile market and a 55 percent share in the light commercial vehicle market. In 2009, Fiat sold 127,000 methane-powered cars to European customers. Government incentives in Europe helped fuel the sales.
The company’s experience should allow them to transfer easily to the American market. Milan Polytechnic University professor Giuliano Noci said moving into the U.S. natural-gas engine market is “almost a mandatory strategy. Fiat should lead the natural-gas car market as it’s far behind in the electric vehicle sector.” General Motors and Toyota are heavily invested in electric and hybrid technology.
Natural gas is comparatively cheaper to produce and distribute than competing fuel sources. Alfredo Altavilla, head of Fiat’s Iveco truck unit, said the extra cost involved in installing a diesel engine is $3,300 and a pricey $8,000 for an electric hybrid engine. A natural-gas engine adds $3,000 in additional costs, making it the most “affordable solution,” according to Altavilla. Natural gas also averages about $1 less per gallon than gasoline, a huge savings over the life of a vehicle.
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