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The Hyundai iBlue concept at last November’s Los Angeles Auto Show.

Hyundai

John Krafcik is no longer willing or even interested in debating the science or the "truth" about climate change or global warming.

And it's not because the acting CEO of Hyundai North America is either shy of a fight or trying to avoid controversy and simply focus on selling cars in a weak market.

No, better fuel economy and lower vehicle emissions are an "indisputable social good" and delivering clean cars is, therefore, good business with a growing and influential segment of the buying public. Many of them are the smart early adopters or 20- and 30-something professionals Hyundai - like all the other car companies - wants to capture as new buyers.

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In an appeal at least partially crafted for them, Krafcik has been arguing that whether climate change is the result of human activity or sunspots or something else, there remains a "finite supply of oil, and the turmoil that our present consumption habit is fuelling in the Middle East …" makes it "abundantly clear that improved fuel economy makes sense for our industry and for our country," he said in a recent speech marked by its candour and its potentially controversial tone.

So Krafcik is talking the talk. Now we'll see if he and Hyundai can walk the walk. We won't have long to wait.

In five years or less, Krafcik and Hyundai will be revealed either as experts at working the spin cycle of the car sales game, or deadly serious players in the race to deliver clean vehicles that dramatically reduce emissions and fuel consumption.

That's Hyundai's own time frame. The South Korean company has said it will meet the U.S. and Canadian government-mandated fuel economy fleet average of 6.7 litres/100 km (35 miles per gallon) by 2010, five years ahead of the deadline.

"A bold position perhaps, but we were honestly surprised to be alone amongst all auto makers in taking a position like this one," Krafcik said at February's Chicago auto show. "Going forward, we'd love to have some company here."

Notice the swipe at Hyundai's competition? Hyundai, despite tough market conditions, is going on the offensive in an area where almost no one would have expected 12 months ago: the environment. At last November's Los Angeles auto show, Krafcik was there to unveil Hyundai's Blue Drive strategy.

The goal is for Hyundai to unseat Toyota as the most fuel-efficient car company in the United States and the world's recognized leader in gasoline-electric hybrids. Honda, with its own highly fuel-thrifty fleet, is also in Hyundai's crosshairs.

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This is not a minor goal Hyundai has set for itself. No figures are available in Canada, but in the United States, Hyundai's fleet average is 28.6 mpg, slightly lower than Toyota's 29 mpg and Honda's 28.7, according to the U.S. Environmental Protection Agency.

Here's the Hyundai plan: The company will bring its first U.S.-market gasoline-electric full hybrid in the next-generation Sonata for October, 2010; a new crossover concept powered by a turbocharged gasoline direct-injection engine is coming, too; and future high-mileage editions of the Accent and Elantra will hit showrooms this year.

In fact, at the Geneva auto show in March, Hyundai announced that the production version of the HED-5 "i-Mode" crossover concept has been approved for the United States, though no introduction date has been set. The new crossover will likely have a production version of the concept's 2.0-litre Theta turbocharged gasoline direct-injection four-cylinder engine.

That powertrain should be capable of developing as much as 285 horsepower, yet have the fuel economy of a strong four-cylinder engine. The combination of direct-injection and turbocharging will appear in various Hyundai models in the future.

Meanwhile, the super fuel-efficient "Blue" editions of its Accent and Elantra models will be priced lower than other models for efficiency and economy. They will include low-rolling-resistance tires, enhanced aerodynamics, revised engine calibrations and reduced final drive ratios. The "Blue" cars are definitely coming to U.S. buyers and Hyundai Canada officials they are in deep discussions to bring them to Canadian dealerships, too.

"Hyundai aims to be the most fuel-efficient auto maker on the planet," says Krafcik. "We're aligning our global R&D resources in Michigan, California, Namyang and Frankfurt to develop the Blue Drive technologies we need to achieve our goal, a 35-mpg U.S. fleet average by 2015."

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Beyond that, Hyundai recently showed the Blue-Will at the Seoul auto show. It's a plug-in hybrid concept that, according to Krafcik, has a "very good possibility" of coming to North America, though he offers no timetable.

"It will be a dedicated hybrid like the (Toyota) Prius and (Honda) Insight," Krafcik told dealers at a recent meeting reported in trade journal Automotive News. "But those cars are benign. Our car has attitude. It comes under the idea of eco-sleek."

The Blue-Will is a window into Hyundai's thinking. It's an aggressive-looking sports car powered by a direct-injection, 1.6-litre gasoline engine with a continuously variable transmission and a 100-kilowatt electric motor.

But perhaps the most interesting piece is the battery. It's Hyundai's own in-house lithium-ion unit and it will be used first in the Sonata hybrid.

Krafcik is so confident of Hyundai's battery technology, he said at the L.A. auto show, it could potentially be at the heart of a pure-electric vehicle for Hyundai.

"We're certainly studying it," he told Automotive News. "The plug-in hybrid is a step on the way to a pure electric car."

The ambition and commitment behind Hyundai's "green" plan are really quite astonishing. Barely a decade ago, the Hyundai Group was in financial turmoil and its car brand was decidedly second-tier - plagued by a reputation for poor quality, bland performance and undistinguished design.

Now, using Toyota's renowned product development and production methods as a guide, Hyundai's quality is first-rate and the design and performance of its best models are on par with any in the industry. The 2009 Hyundai Genesis premium sedan was named the 2009 Canadian Car of the Year and also the North American Car of the Year.

With quality, design and performance apparently under control, the Korean company has set its sights on being a leader in green-car technologies.

That means taking on Toyota, in particular, where the Japanese auto maker is a global powerhouse. But Toyota is really just one of a handful of global car companies vying for the cachet that comes with selling vehicles equipped with the smartest green technologies.

Honda is obviously a major player and so is Ford, which is now launching its 2010 Fusion Hybrid. The Fusion Hybrid is a symbol of Ford's revitalization plan, one heavily based on what Ford calls "Drive Green" technologies.

General Motors, too, has a fleet of hybrids already for sale and European auto makers from Volkswagen to BMW are moving ahead rapidly with hybrids, electric cars and cleaner diesels that get excellent fuel economy.

Yet virtually all the major auto makers have some sort of lead on Hyundai in this area. Remember, Hyundai's No. 1 focus for the past decade has been on getting the reliability, design and performance of its models competitive with the best in the industry.

At the same time, Hyundai has worked to get its financial house in order. That effort has been aided by the current weakness of the South Korean currency, the won. A weak won makes Korean exports more competitive, despite the 6.1 per cent import tax assessed on vehicles brought in from Korea to Canada.

So it is fair to say that Toyota and others have entered this green race with a technological lead over Hyundai. Consider: Toyota, the world's largest car maker, has been selling its Prius gas-electric hybrid cars for a decade. The third-generation version goes on sale next month, in fact.

Toyota has had years to perfect its hybrid technology, along with the key marketing efforts that make them appealing to the buying public. The company has already sold more than one million Prius hybrids worldwide; Hyundai hasn't sold a single hybrid of any sort.

That's why Hyundai says it is devoting tremendous resources to developing Blue Drive technologies.

"You would not believe what they have going on there; I was astonished," says Hyundai Canada president and CEO Steve Kelleher of a recent trip to South Korea during which he was given a thorough behind-the-scenes briefing on the parent company's green push.

At the company's research labs in Namyang, south of Seoul, Hyundai says nearly 2,000 engineers are working on gas-electric hybrid and fuel-cell engines. They are also devoting resources to developing flex-fuel and clean diesel powertrains.

Kelleher and other Hyundai officials won't talk R&D budgets, but the company has said its overall plan is to spend more than five per cent of its revenue on research and development this year.

Krafcik says Hyundai has a strong advantage in the green race thanks to progress made with its lithium-ion polymer batteries. Hyundai plans to be the first car maker anywhere to introduce such a battery commercially.

Hyundai's batteries, says Krafcik, weigh 35 per cent less than current nickel-metal hydride cells and are 40 per cent smaller. They also last 1.5 times longer than nickel-metal hydride batteries, generate less heat and are more resilient to shock than other lithium-ion batteries.

Standing on the floor of the L.A. show last fall, Krafcik held a small battery cell the size of a travel wallet. "This is it," he said, rolling it in his hands.

In fact the battery cell he was holding isn't exactly it; the story is more complex than that. The polymer in the battery's chemistry actually resembles a gel, so batteries do not need to be shaped in any particular way.

This, says Krafcik, allows engineers to pack the batteries almost anywhere they want on the vehicle. This is Hyundai's answer to problems around bulky hybrid batteries.

Hyundai executives also say the company's engineers are working with suppliers to develop a hybrid system with lighter materials and fewer parts than existing systems.

The goal, naturally, is to build a Hyundai hybrid that is lighter, cheaper and more entertaining to drive than a Toyota hybrid.

Hyundai's plan is bold, but the Korean company is chasing a moving target - or moving targets. Toyota has tremendous experience and expertise in hybrids, but the Japanese car company is no longer relatively alone fighting the hybrid battle. Many others have entered the arena and they, like Hyundai and Toyota, are devoting huge resources in an effort to "own" the green space with the buying public.

As one investment fund manager told BusinessWeek, "Achieving a successful test and delivering a commercial success are two different things," said Kim Jae Woo, an auto specialist at Bermuda-based fund manager Orbis Investment. "With Hyundai trying to address technical challenges on all fronts, its resources will be thinly distributed."

Krafcik, Kelleher and others say their company is up to the challenges and they've gone public with hard dates for the launch of "green" products. That will be the real measure of success.

In short, 2015 is not far away, but it seems an eternity compared to next year's launch date of Hyundai's first hybrid.

The world is watching.

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About the Author
Senior writer, Globe Drive

In 25 years of covering the auto industry, Jeremy Cato has won more than two-dozen awards, including three times being named automotive journalist of the year. Jeremy was born in Montreal and grew up in the San Francisco Bay Area. More

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