To give credit where it's due, Tesla Motors Inc. (NASDAQ:TSLA) has been the one company to make electric vehicles a viable reality, melding coolness and functionality - even if not affordability - into an automobile that people will like, and buy. Yet, although TSLA shares are understandably priced relative to the company's sales and potential future earnings, investors and consumers alike may be errantly holding Tesla up as the harbinger of the electric vehicle era. The fact of the matter is, EV's are still a miniscule part of the auto market, and due to a lack of capacity and materials needed to put an electric car in every driveway, the real opportunity for carmakers like Honda Motor Co Ltd (NYSE:HMC) or Toyota Motor Corp (NYSE:TM) is to radically improve the efficiency of existing technologies like the combustion engine. Thing is, with the help of companies like Cummins Inc. (NYSE:CMI) and HydroPhi Technologies Group, Inc. (OTCMKTS:HPTG), names like Honda and Toyota really are making big strides in auto motor efficiency, with the biggest of those recent strides being made in the diesel arena. All joking aside, Tesla and other electric vehicle manufactures may want to look over their shoulder and see how quickly the diesel market is gaining on them.
Yes, you read that right. While the media has put the bulk of its attention on Tesla leading us into the electric vehicle era, Toyota Motor, Honda Motor, and even a couple of the U.S. carmakers have quietly fiddled with diesel engines, making them not only serious threats to gasoline-powered cars, but even to hybrids. EVs are next.
Kudos to Toyota Motor Corp. for being able to proverbial switch gears with one of its key sellers in the United States. It was announced last month that beginning with its 2015 models, the Tundra will be available with a 5.0 liter Cummins turbo-diesel V8 that is as powerful as - and a little more efficient than - its gasoline-driven counterpart. The Tundra will join American-made Dodge Rams and Ford F-series pickup trucks on the diesel front, so it's not exactly ground-breaking. It's telling to see a Japanese manufacturer take that leap into uncharted waters though.
That said, it's not as crazy as it sounds considering the fact that Honda Motor is also wading waist deep into diesel waters. It already makes a deisil Civic for overseas markets, but the company has vowed to bring a diesel Civic the - i-DTEC - within the next couple of years. Mazda recently unveiled a "6" model with diesel engines that boasts 30% greater fuel efficiency compared to its gas-powered counterpart. BMW, Mercedes, and even Chevrolet - the Cruze - will be available as diesel-powered vehicles. All of them are expected to have eye-popping mileage.
The prod - where it's all going - is increasingly tough U.S. regulations regarding fuel efficiency. By 2025, CAFE regulations will require carmakers' vehicles to operate at an average of 54.5 miles per gallon. With electric vehicles not going to be prolific and/or affordable enough by that time to meet new demand, that leaves manufacturers no choice but to greatly improve combustion engines. And as it turns out, the needed efficiency advances are easier to come by with diesel engines rather than gasoline engines. That's where little HydroPhi Technologies Group comes into the picture.
What HydroPhi Technologies makes/does is ridiculously simple, but stunning brilliant. Its HydroPlant technology is a device mounted near a diesel engine. By splitting water molecules into their basic atomic components - hydrogen and oxygen - and then injecting that combustible mix of gases into the combustion chamber of a diesel motor, fuel efficiency can be improved by as much as 30%, while greenhouse gas emissions are reduced by 70%.
The injection of hydrogen into a diesel engine's airflow isn't exactly a new idea - engineers knew it would improve performance of an engine years ago. The challenge was building a device that was small enough and safe enough and effective enough to aerate water (which doesn't burn at all, and shouldn't even be close to a combustion chamber) into two pure gases that are not only safe to inject into a diesel engines airflow, but beneficial. The HydroPlant add-on, about the size of a breadbox, finally makes the idea work. In fact, the technology's first real field test - transit busses in Mexico City - has proven the devices work as billed, producing the results exactly as described.
As for seeing a HydroPlant device under the hood of the new diesel-powered Toyota or any of the other passenger cars now available as a diesel vehicle, don't hold your breath. It could be a couple more years before passenger vehicles will have then on board. It won't be that long before tractor trailers and busses need them, not just to comply with emissions and efficiency standards, but just for cost-savings purposes. Eventually though, the HydroPhi Technologies device may well become the norm. As good as the engineers working on better diesel performance are 54.5 miles per gallon is an enormously lofty goal, and car manufactures are going to need to use every trick in the book to get there.
That's a promising situation for HPTG shareholders.
For more on HydroPhi Technologies Group, visit the company's website here.
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