Shell sidesteps electric bandwagon with petrol-powered concept car

By Jake Spring

BEIJING (Reuters) - Royal Dutch Shell PLC (RDSa.L) unveiled a high-efficiency petrol-burning concept car in China on Friday, to show the world's biggest electric vehicle (EV) market that there is a lot of mileage left in conventional internal combustion engines.

Shell, one of the largest producers of automotive fuel, said it could take decades before EVs help arrest a rise in exhaust emissions, and that its concept car - which it has no intention of mass producing - demonstrates what can be done now.

The launch ahead of next week's Beijing auto show is ironic as the government of smog-plagued China is heavily promoting new-energy vehicles through subsidies and other incentives, helping sales of electric and plug-in hybrids quadruple in 2015.

But with green vehicles accounting for just 1.4 percent of China's automobile market, Shell's concept car represents an early move in what may eventually become a technological revolution with new-energy vehicles supplanting petrol-powered cars, forcing oil companies to rethink their business.

Producers of fossil fuels also have to contend with changing public perceptions, with exhaust emissions - like cigarette smoke - increasingly seen as a social nuisance.

"This project aims to see just how good we can be with something manufactured today," said Andrew Hepher, vice president of lubricant technology at Shell.

The firm said its three-seat car can travel 100 kilometres on 2.6 litres of petrol, or around 89.1 miles per U.S. gallon. That would be about 3.6 times further than the U.S. average, according to data from the University of Michigan.

Countries around the world are increasingly tightening fuel economy requirements, with automakers responding by developing petrol-electric hybrid and all-electric vehicles.

The fuel economy of Shell's petrol car falls well below the maximum permitted in China due to modifications, advances in lubrication and weight reduction. At 550 kilograms (1213 lbs), the car is less than half the weight of a Toyota Motor Corp Corolla, a leading compact car.

"We've been absolutely obsessive about weight reduction and streamlining," said lubricants manager Bob Mainwaring.

The price of such a car would be "affordable," Shell said, as combustion engines are cheaper to produce than electric counterparts.

"The car is a thought-leadership paper on wheels," Mainwaring said.

(Reporting by Jake Spring; Editing by Christopher Cushing)