The fuel-sipping cars have been unprofitable, but technological advances are changing that.

KEVIN BULLIS

Monday, October 1, 2012

As automakers work to comply with fuel-economy standards, they’re increasingly turning to hybrids. Last week, for example, Toyota announced that it would make 21 hybrid models by 2015, up from 12 now (see “Toyota Scales Back Electric Vehicle Plans” and “Stringent CAFE Standards Push Automakers“). Automakers have grown more enthusiastic about hybrids because the cost of making them has plummeted. Several years ago, Toyota’s Prius hybrid cost the consumer about $6,000 more than an equivalent conventional car—and even at that price, the company was losing money on every one it sold. The difference is now $2,500, and the car is profitable, says Mike Omotoso, an analyst with LMC Automotive. The drop in cost is due to an accumulation of incremental technology improvements, along with economies of scale. And advances going forward—better batteries, electric motors, and power electronics and transmissions—could cut costs by another 50 percent.

At Toyota, for example, the company shifted from a 500-volt electrical system to a 650-volt one, a decision that produced “a host of benefits,” says Justin Ward, advanced power-train program manager at the Toyota Technical Center. The company was able to reduce the cost and weight of copper wiring, use cheaper power transistors in the electronics that control the hybrid system, and make the electric motor cheaper and smaller.

Although other automakers have shifted to lithium-ion batteries, Toyota has stayed with nickel-metal hydride. But it’s made improvements to these batteries, such as shifting from cylindrical cells to flat ones to save space and modifying the cases to improve battery cooling. Simple changes like moving connectors from one side of a circuit board to the other can have big implications in terms of manufacturing, Ward says, making it possible, for example, to replace a worker with a robot for an assembly step.

Ford has helped develop motors that halve the required amount of dysprosium—the most expensive rare-earth material in its motors, used in part to give the magnets resistance to heat. Ford developed a better motor cooling system, which lessened the need for dysprosium. Simultaneously, its supplier, Hitachi, developed a better process for diffusing the material through a magnet, also allowing the use of less of it. This and other advances have helped Ford lower hybrid costs by about 30 percent.

Even as Toyota is increasing the number of its hybrid models, GM is dropping its conventional hybrids in favor of the much cheaper (and less fuel-efficient) eAssist vehicles—hybrids that use a motor together with a small battery that allows the engine to turn off whenever the car comes to a stop.

Will tablets that can transform into laptops challenge the iPad?

RACHEL METZ

Friday, September 28, 2012

The meteoric rise of Apple’s iPad has caused many people to neglect their laptops, or put off buying a new one. But many tablets released for Microsoft’s new Windows 8 operating system next month will attempt to make peace between the two formats—they’ll ship with snap-on keyboards.

Major computer manufacturers, including Hewlett-Packard, Asus, Acer, and Samsung, are all readying convertible tablets. Of the many sleek slabs in black, white, or silvery gray shown off at an event in San Francisco on Thursday held by chip maker Intel to highlight its newest Atom processor, almost all will be available with a detachable keyboard.

Computer manufacturers are struggling to catch up with Apple, which essentially created the tablet market in 2010 with the release of the iPad. Tablets had been offered before by other companies, but Apple was the first to successfully sell consumers on the idea of a thin slab that operates somewhere between a smartphone and a laptop computer. Some analysts say there is evidence the iPad has eaten into the revenues of other computer manufacturers by causing people to decide against buying a laptop.

Samsung showed off the latest version of its Slate tablet, a grayish device with a bright touch screen measuring 11.6 inches at the diagonal. It comes with a pressure-sensing stylus called the S-Pen, and will sell with an optional detachable keyboard that uses magnets and latching hardware to stay in place. Unlike most of the devices shown at the event, the Slate had a price and release date: it will be available October 26, the same day Windows 8 launches, for $749 with the keyboard and $649 without.

Allison Kohn, public relations manager for Samsung Electronics America, said the company decided to pair the tablet with a keyboard to help users carry around fewer gadgets. “It simplifies your lifestyle, being able to consolidate your devices,” she said.

Asus displayed the Vivo Tab, along with an optional keyboard containing a battery that can add about nine hours to the tablet’s overall battery life. Intel says that tablets built with the latest Atom processor can get over 10 hours of battery life. The tablet, which has an 11.6-inch screen, will also go on sale on October 26. Asus was one of the first to experiment with convertible tablets, with a model called the Eee Pad Transformer, initially released in 2011. Spokeswoman Xi Min Sam said that 80 to 90 percent of people who bought the Transformer tablets bought the detachable keyboard, too, seeing it as extending the functionality of a tablet.

One presenter at the event whose new tablet won’t include a keyboard is Dell. Buyers of the Latitude 10—which has a 10.1-inch display and a removable battery—will also have the option to purchase a docking station, though, with a smattering of USB ports that will let you plug in, among other accessories, a keyboard.

(Reuters) – Wall Street advanced on Monday after a surprise expansion in U.S. manufacturing last month eased concerns about the economy and offset a gloomier outlook in Asia and Europe.

U.S. manufacturing expanded in September for the first time since May as new orders and employment picked up, an Institute for Supply Management report showed.

Financial stocks led the market’s advance with Goldman Sachs Group (GS.N) up 4 percent at $118.27 after the weekly Barron’s said Goldman shares could rise at least 25 percent in the next year as capital markets improve.

The ISM’s index rose to 51.5 from 49.6 in August, topping expectations for a reading of 49.7, according to a Reuters poll, and breaking above the 50 mark that separates expansion from contraction.

“Numerically that is a pretty small amount,” said Peter Jankovskis, co-chief investment officer at Oakbrook Investments in Lisle, Illinois. “But in terms of looking at the number, it’s the difference between seeing contraction and seeing growth. So psychologically that’s pretty important.”

The Dow Jones industrial average .DJI gained 143.88 points, or 1.07 percent, to 13,581.01. The Standard & Poor’s 500 Index .SPX rose 11.61 points, or 0.81 percent, to 1,452.28. The Nasdaq Composite Index .IXICadded 13.16 points, or 0.42 percent, to 3,129.39.

The ISM figure came after a survey from Markit showed U.S. manufacturing ended its worst quarter in three years in September as foreign demand for U.S. goods fell sharply.

The U.S. data followed surveys in the euro zone that showed manufacturing slackened in the three months to September while Asia’s factories are continuing to struggle in the face of tepid demand from the United States and Europe. The data suggested the euro zone may be moving toward recession and showed a seventh straight quarter of slowing growth in China.

“The U.S. economy is growing at a slow pace but it is still growing. The ISM number suggests that things are not that bad,” said Adam Sarhan, chief executive at Sarhan Capital in New York.

The national ISM survey is especially heartening after some weak regional surveys last month. The Chicago PMI, a survey which measures business activity in the Midwest, showed its first contraction since 2009 in September.

Among stocks weighing on the Nasdaq, discount retailer Gordmans Stores Inc (GMAN.O) said it could miss analysts’ profit estimates for the first time since it went public in 2010 as slowing sales forced the company to cut its current-quarter outlook. The stock slumped 24.2 percent to $14.00.

Baidu Inc (BIDU.O) shares fell 3.7 percent $112.55 after Jefferies cut the stock to hold from buy and lowered the price target to $125 from $135.

The market’s gain on the first day of the final quarter of 2012 comes as stocks closed a strong third quarter, helped by stimulative measures from the Federal Reserve and the European Central Bank. The S&P 500 finished the quarter up 5.8 percent, its best third quarter since 2010.

“Despite a recent spate of weaker-than-expected data from across the world, markets are looking forward,” said Sarhan. “There is a lot of hope that the worst-case scenario is off the table not only for now, but for good.”

Ceradyne Inc (CRDN.O) shares gained 43 percent to $34.92 on news the company will be acquired by 3M Co (MMM.N) for $860 million.

The U.S. Defense Department on Friday awarded United Launch Alliance, which is a 50-50 joint venture of Lockheed Martin Corp (LMT.N) and Boeing Co (BA.N), a $1.17 billion contract to provide satellite launches using its Delta IV and Atlas V rockets. Boeing shares gained 1.5 percent to $70.62.

(Reporting by Edward Krudy; Additional reporting by Rodrigo Campos and Ryan Vlastelica; Editing by James Dalgleish)