General Motors Death Watch 164: Two-Mode Hybrid RIP?

In the world of hybrid-drive technology, far-sighted development can pay huge dividends. Just ask Toyota, whose sales of Hybrid Synergy Drive-powered vehicles passed the global million-unit mark last year. While Nissan is licensing Toyota's Synergy Drive for its Altima Hybrid, GM has passed on proven success in its pursuit of two-mode hybrid technology with BMW, Mercedes and Chrysler at their joint Hybrid Development Center in Troy, Michigan. Smooth move or just another example of GM throwing good money after bad? Yup, you guessed it.

The main reason for the cooperative approach on hybrid technology: the inherent complexity of the two-mode hybrid system and its correspondingly high development costs. At low speeds, the two-mode hybrid system operates in virtually the same manner as Toyota’s Synergy Drive and other “single mode” hybrids. The package uses one electric motor for drivetrain assist and another for power generation. It’s in the second “mode” of the system is where things get crazy… and expensive.

At higher speeds and heavier loads, an intensely complex twin-clutch system interfaces two sets of planetary gears with the two electric engines to create both stepped and continuously-variable transmission modes. The system moderately improves efficiency by routing power mechanically rather than electronically.

Coupled with “displacement-on-demand” technology (which shuts down cylinders under light power use), GM claims their system improves combined EPA fuel efficiency on full-size SUV's like the Tahoe/Yukon by as much as 25 percent. But the high development costs and technological complexity add about $10k worth of sticker shock over a stock Tahoe. It would take a whole lot of driving for an owner of a two-mode hybrid SUV to recoup the “hybrid premium.”

Even if GM sells tens of thousands of hybrid SUVs, it’s doubtful they will recoup their share of the investment in its development. But the only thing worse than overpaying for overcomplicated, under-performing technology is watching as your former development partners ditch you and innovate your technology into obsolescence.

While GM has jumped right in to the market with two-mode Yukon/Tahoe models for '08 and is gearing-up for more models, BMW is planning on releasing only two two-mode hybrids. What’s more (or less), they’re only selling their X5/X6 two-mode hybrids stateside. Beyond that tepid effort, the chances increase daily that BMW will join Mercedes in washing its hands of two-mode technology entirely. Bimmer and Merc are jointly developing a lithium-ion battery based mild hybrid, touted as a cheaper and more efficient alternative to GM's two-mode unit.

Why wouldn't the Germans dump the two-mode system? With clean diesels on the way, and the BMW mild hybrid diesel coming down the pike, BMW and Mercedes are likely nursing a severe case of two-mode buyer’s remorse.

By any reasonable standard, GM should be too. Although part of the two-mode’s appeal lies in its advantages in truck, SUV and other high-torque applications which hold the promise of reinvigorating GM's flagging bread-and-butter truck sales, once again a simpler solution lies well within reach.

The General's recently released Duramax diesel V8 delivers a nearly identical 25 percent reduction in fuel consumption as the two-mode hybrid. Thanks to its particulate filter and NOX after-treatment system, the Duramax oil burner meets 50-state, 2010 emission standards. While the Duramax doesn't grab the green-friendly headlines which seem to motivate every GM efficiency development, it does provide 310 hp in a package the size of a small-block gas V8, with comparable noise vibration harshness levels, without the two-mode’s colossal price tag.

It is precisely on the point of profitability that GM’s green dreams have been faltering. Rather than cut bait and fish, GM is once again displaying copious quantities of its patented arrogance and preference for PR over hard graft and long-term thinking.

Not to put too fine a point on it, GM is ignoring the old maxim: when you’re in a hole, first, stop digging. The automaker is continuing to spread its hybrid efforts thin with its (rushed and compromised) mild hybrid Malibu. It continues to pursue the hugely expensive, untried and untested Volt electric – gas plug-in hybrid. And it refuses to abandon its two-mode snafu. Meanwhile, Toyota is plugging away at its Synergy Dive, steadily lowering costs, bringing the fuel efficient drivetrain within the price range of similarly capable gas engines.

GM remains held captive by its unrealistic goal of creating a truly revolutionary drivetrain. Like a degenerate gambler with a shrinking bankroll, GM seems convinced that ever bigger risks are the key to emerging from its decades-long neglect of fuel efficient vehicles. Rather than chasing the big score, GM would be far better off ceding the hybrid market. If it can’t satisfy new federal corporate average fuel economy regulations using traditional technology, it should join Nissan and license Synergy Drive from Toyota. That way it could concentrate its time and resources on restoring its branding and quality, and, thus, its fortunes.