By Erik Kirschbaum
But away from the spotlight, carmakers have been quietly delivering significant cuts in CO2 emissions with some re-engineering of internal combustion engines, technology advances, weight reduction and aerodynamic improvements.
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Increasingly stringent fuel economy standards in Europe and the United States that were mandated due to climate change concerns have been the main catalyst. Yet with rising fuel prices and a waxing awareness of global warming, consumers have also been clamoring for more fuel-efficient vehicles.
"Before 2008 they had only voluntary targets that were largely ignored. They're moving forward now because they know if they don't cut emissions they'll pay heavy fines. They're doing better but there is still a lot of untapped potential."
In the European Union, CO2 emissions fell 3.7 percent last year to 140 grams per kilometer after dropping 5.1 percent in 2009. Average emissions are down from 186 grams in 1995. The EU is on track to meet a 130 grams target by 2015 set in 2008 in the face of heavy resistance. The limit will be 98 grams in 2020.
In the United States, notorious around the world for its gas guzzlers, the Obama administration announced plans in August to raise fuel economy requirements by 53 percent by 2025. The proposal requires companies to reach an average fuel efficiency across their U.S. fleets of 54.5 miles per gallon by 2025.
"The industry has done what they have agreed to with the CO2 reduction goals but the problem is that they are aiming at moving targets," said Philippe Houchois, car industry analyst at UBS in London. "The CO2 targets get tougher all the time.
"Everyone has made good progress because they have to with the regulations," he added. "There are no obvious laggards. But as the requirements continue to move, they are going to have to have sell more electric cars to be able to meet the targets."
That is an important reason why many carmakers are turning to electric cars even if they now only represent a tiny slice of the global business -- where about 50 million cars are sold each year. Until now only a few thousand have been electric.
Even hybrids represent only a small slice of the pie so far. Out of an estimated one billion vehicles on the roads worldwide, only 47 million alternative vehicles are running as hybrids, on hydrogen or electric power, according to a recent report by the Low Carbon Vehicle Partnership.
Electric cars, a key part of a low-carbon economy, have been on the minds of consumers with a green consciousness for years. Green will be a major theme at the Frankfurt Car Show with an entire building -- Hall 4 -- devoted to electric mobility.
"Never before have the stars of the Frankfurt Car Show been so revolutionary, so green, so efficient, so quiet and so super clean as in 2011," wrote Bild am Sonntag newspaper on Sunday.
But there are still many hurdles preventing electric cars from becoming a more common sight on the roads -- in particular high battery costs, limited range and infrastructure.
Tesla Motors made a splash in 2004 with its battery-powered Roadster while Mitsubishi's i MiEV and Nissan's Leaf followed. Nissan with its French partner Renault has sold 8,500 Leaf cars since it was launched in December 2010.
Plug-in hybrids, such as the Chevrolet Volt -- also known as the Opel Ampera -- entered markets in late 2010. Ford will introduce its C-MAX Energi plug-in hybrid in 2013. Toyota has said it will begin selling a Prius-based plug-in hybrid in 2012. Daimler and BMW have been field testing electric cars.
But battery-powered vehicles will likely remain only a small niche as long as batteries make the car prices prohibitively expensive. Why would anyone in their right mind pay more for a car that might run out of power in the middle of nowhere?
"The limitations of the electric cars right now are all well known," said Houchois. "They will not be replacing combustion engines anytime soon. A lot of people aren't going to replace their cars with electric cars. The industry is reluctant too. Every electric car you sell is a combustion car you don't sell."
Analysts and industry officials expect it to take another three to five years at least for battery technology and infrastructure to improve to a point that "range anxiety" disappears and electric cars can hope for market shares in the low single digits. The Boston Consulting Group forecast there will be just 1.5 million fully electric cars worldwide in 2020.
Cars are responsible for about 10 percent of the world's greenhouse gas emissions, which most scientist believe are responsible for climate change that could lead to rising sea levels, more powerful storms, droughts and floods.
Governments are thus under pressure to reduce greenhouse gas emissions. Many have ramped up spending, devoting billions to develop electric cars, batteries and recharging infrastructures. Many offer tax credits and other incentives for electric cars, which if recharged with renewable energy have zero emissions.
The German government, for example, in May set a goal of having have one million electric vehicles on the road by 2020 and doubled federal research spending on electric vehicles to 2 billion euros over the next two years.
So with the heat on, it is no wonder that the automobile manufacturers have focused on cutting emissions.
BMW, for instance, got an early start even before EU fuel efficiency standards were mandated. The Munich carmaker launched its "efficient dynamics" program to cut emissions in 2007. Its overall fleet average in 2006 was 186 grams of CO2 per km but was cut to 148 grams by 2010.
It was not any single major breakthrough that helped reduce emissions by some 20 percent in four years but rather a series of small, unremarkable changes to the engine, the aerodynamics and components along with the introduction of a stop-start button, air vent control and brake energy regeneration.
BMW officials are proud to point out that, despite the reduced emissions, engine performance was maintained with a fleet average in Germany of 139 kilowatts (or 188 PS).
The German dream of building a "3-liter car" -- a vehicle that can travel 100 km on 3 liters of fuel -- has gone from a far-fetched fantasy to near reality. BMW's 2012 116d model with 116 PS needs 3.8 liters per 100 km and emits 99 grams of CO2 -- down from its 2011 model with 4.5 liters and 118 grams.
Technology advances have helped carmakers reduce emissions without sacrificing performance. Helping make engines more efficient are suppliers like Honeywell, whose turbo-chargers increase the air entering engines. Alex Ismail, CEO of Honeywell Transportation Systems, said turbo-chargers can boost fuel economy by 20 percent for petrol cars and 40 percent for diesel.
"Tightening fuel economy and emission standards worldwide, coupled with consumer demand for affordable and more fuel efficient vehicles have automakers looking to increase turbo charging," Ismail told Reuters via email in response to a query.
"Despite the buzz around electric vehicles, it's clear that automakers are looking primarily at turbo charged engines to help quickly green their fleets and meet the regulatory targets."
(Reporting By Erik Kirschbaum; Editing by Chris Wickham)