Green "gold rush" seen in new U.S. auto standards

DETROIT (Reuters) – The tough U.S. fuel economy standards announced by President Barack Obama on Tuesday represents a bonanza for companies that supply hybrid technology and other gas-conserving components needed to meet the new benchmarks.

Potential winners range from established suppliers such as BorgWarner Inc, Honeywell International Inc and Johnson Controls Inc to battery makers such as start-up A123 Systems, Continental AG and LG Chem Ltd, analysts say.

To improve fuel efficiency by as much as 40 percent, major automakers will need to order a lot more turbochargers, more advanced lithium-ion batteries and more electric motors for cars and trucks already under development.

“There are a lot of suppliers out there with credentials that are lining up to get into this gold rush,” said Larry Rinek, an expert in fuel efficiency at consulting firm Frost & Sullivan. “This is going to be a drama to watch.”

Other analysts expect steel to be swapped for lighter aluminum and plastics. Copper demand could grow as electric motors are rolled out to meet the rising production of hybrids.

The hitch: analysts expect American consumers will pay more than projected and face sharply limited choices.

Reuters