Exxon Mobil Diversifies Into the Hybrid Car Market

Exxon Mobil (XOM) is not known for its environmental record. Indeed, many environmentally-friendly investors feel that Exxon could be doing much more in terms of alternative energy investment. And, interestingly, that is what XOM has been doing the past three decades. XOM just hasn't been doing it in an area where we usually think to look. The Wall Street Journal reports on Exxon's efforts to remain diversified as alternative energy comes to the fore:

But even as it hunts the earth for new supplies of oil and natural gas, Exxon has worked on developing alternative energy technology. The company, which has big plastic and chemical operations, isn't keen on the long-term prospects for biofuels, but it is bullish on the hybrid market.

Exxon isn't stupid. It's not the largest company in the world, in terms of value, for nothing. Exxon knows that, even as it spends money on oil and natural gas exploration, certain tides are changing. Exxon, instead of betting on biofuels, thinks that future is the hybrid car market. That's why Exxon has been working on better lithium batteries since the 1970s.

Exxon doesn't actually make the batteries. Rather, Exxon scientists are developing ways that the batteries could withstand higher temperatures (the main problem with lithium batteries is that at some point they explode). Exxon's design is used in a large number of lithium cellphones and other electronic device batteries. Now, Exxon is paying scientists to improve lithium battery technology in order to make it a practical replacement for the bulky, less efficient nickel-metal hydrid batteries that are currently used in hybrid cars. Exxon wants a share of the hybrid car market by selling its technology to Toyota (TM), Ford (F) and other makers of hybrid cars.

Whether you agree with Exxon's environmental record or not, there's no denying that the company has made some very savvy business decisions in the past. This decision is no different. Exxon isn't moving in a green direction because it cares about going green. Exxon is doing it because the company cares about making money. And, if Exxon continues to push the hybrid car market, the company is likely to continue to do well. After all, a hybrid car with a lithium battery designed by Exxon would be a double win for the company -- it still needs gas, but even though it won't need as much, the battery will make up some of the difference.

Disclosure: Author not own XOM, F or TM, but is considering TM.

Comments

[gebby]

it will be hard to deny the will of the people once bush is gone.

[Ames Tiedeman]

Gebby:

What people are you talking about? Here in Texas, in the second largest state in the union, we are quite pleased with oil at 111 today.

[Moneymaker]

There was a time when the company was working on a car that converted low Octane gasoline to hydrogen within the car itself.
You did not have to drive around with a tank of potentially explosive hydrogen in your trunk.
The car actually had a reformer on board that converted gasoline to hyrodgen and had zero emissions. The problem with hybrids is it pollutes very much to make the batterys. I remember reading somewhere that a Toyota Hybrid had a larger carbon foot print from birth to death than a big Hummer due to the manufacture of the batterys.

[Pipeweld]

It is called a fuel cell. Still very much under development.
Ethanol also has a much larger foot print cradle to grave than Gasoline.
ea. plow, plant, spray, harvest. haul to refiner, truck to terminal(you can't send it by pipeline to crossive for that.). But that is not politically correct for the environmentalist.

[RON$WAD]

Once TATA MOTORS introduces it AIR CAR to the USA, it will be time to buy put options on all Big Oil and car manufacturers who climbed into bed with them! GOOGLE IT - 2010 - ALL HELL BREAKS LOOSE! Even if they are blocked out of USA they still have all of India and China and Africa to sell to - besides Europe!

[Whisper On The Wind]

The Tata Motors article is here: reviews.cnet.com/8301-13746_7-9876428-48.html

I just might get one! If they can't make the fuel cell technology work where the car produces its own hydrogen from water - and they CAN do that but maybe it would be too expensive - then this would be next best. Although many would love to drive faster than it's proposed 96 mph, this is the USA and our top speed is 70? 75? For most of us, this would make a terrific vehicle. Something to look forward to. Why don't GM, Ford, and Chrysler come up with this stuff?

[Pipeweld]

I don't think I will be able to pull my cattle trailer to market behind that. Come to think of I probably won't be able to pull my lawn mower behind that ! ! ! Just kidding, Lighten up. Rember it is a great day to be alive. Sure beats the hell out of the alternative ! ! !

[User 134716]

Merry clicker, praising the fuel-efficient Tata motors minicar asked: "Why don't GM, Ford, and Chrysler come up with this stuff?"

The question should be, why did they once import wonderfully efficient cars, and then stop? What cars you ask? The Suzuki-built Geo Metro. I just bought an ancient specimen, whose odometer has rolled over too many times to count, and routinely get 50 mpg, and on one occasion, 60 mpg over a 100 mile route consisting of only 40 miles of toll-road.

No high technology needed for 50 mpg. Just a 1.0 liter engine with 55 hp, a manual 5 speed transmission, and an aerodynamic form. With a further improvement of an even smaller diesel or turbo-diesel engine, the car would probably get 75 mpg on the highway.

The question I'd like to have answered, is why can't you buy a car as efficient as the Metro today? Don't tell me there is no market for them. Even though I am sure that many people would not stoop (literally or figuratively) into such a modest conveyance, I am equally sure that there are alot of people with long commutes who WOULD prefer to fill their tank with 10 gallons of gas and then get 500 miles out of those gallons.

[Miranda]

Some excellent points here. I, personally, would love to see more from the American spirit of innovation. The whole point of our country's enterprising spirit used to be to make something that does more for less. It's time to move beyond the status quo...

[jajagabor]

Moneymaker said: "I remember reading somewhere that a Toyota Hybrid had a larger carbon foot print from birth to death than a big Hummer due to the manufacture of the batterys."

Not very likely. Have you ever seen the size of the battery in a Hummer? Very big. For that matter, if you've seen a Hummer itself (haha), it too is very, very big. And when you make big vehicles (and I'm not talking about driving them yet) with big batteries, believe me, it doesn't take a rocket or any other scientist to understand (even without looking too hard, yet) that the carbon footprint is bigger for the Hummer.

And where did you read this? I bet it wasn't in a scientific journal. I've heard the same silly argument made the same silly way about CF
bulbs being more carbon intensive in manufacturer than incandescent ones. And that argument too was gleaned from "some article somewhere." Nothing specific, of course. Not, say -- even a prestigious scientific magazine (not journal) like Scientific American, or maybe one of the more popular (but still credible) ones like Discovery, or Science Digest etc. etc. Nor National Geographic.

Of course, anyone could print up something and claim it is the "Journal of such and such" and make the typeface and everything look so-very technical and prestigious, and thus better able to fool those who don't generally spend their time in Universities and getting familiar with the ones that really are part of academia's "bona-fides."

I'm not being a snob -- but obviously anyone who is even half-serious about an issue should be able to remember where they read something as revolutionary as the idea that a Toyota Prius is more carbon intensive from birth to death than a Hummer! Otherwise, why would they remember any of it at all? The issue of carbon emissions is not exactly a side or esoteric issue these days.

So think hard. Maybe you read it on one of those so-called conservative, online blogs. Or yes, maybe it was on Faux News.

[User 169775]

The "report" that stated the Toyota hybrids have a larger carbon footprint than a Hummer was put out in 2005 by CNW Marketing, which does marketing work for GM (the maker of the Hummer).

Obvious motive there, that is why nobody with a brain cell takes that "report" seriously.

CNW Marketing wanted to accuse Toyota of pollution by using nickel in its batteries, which is complete BS considering that:

- Stainless steel manufacture uses thousands of tonnes of nickel per year.

- Ditto manufacture of jet engines with high-temperature nickel alloys.

- And the U.S. Mint uses more nickel per year to mint its coins than Toyota can ever use to manufacture Prius batteries.

Funny thing is, even GM is hopping onto the hybrid bandwagon these days, using the same nickel metal-hydride batteries as the Toyota hybrids in cars such as the Yukon Hybrid, the Malibu Hybrid, and the Saturn Vue Green Line.

Pot, Kettle, Black!