Message from Frankfurt: Hydrogen's Out, EVs Are In & Software Is Key

One day down, a dozen more to go: At the end of the biennial Frankfurt Motor Show’s opening day, we have a snapshot of how much the auto industry has changed in recent years (to start, only 753 companies showed up this year, compared with more than 1,050 in 2007), and a glimpse of where it’s heading. The last few international auto shows (notably in Detroit and Geneva) have displayed automakers competing to flaunt the greenest, fastest and most futuristic vehicles in their lineups while also trying to appear frugal in a way befitting the gloomy state of their industry and the economy.

The Frankfurt show, however, suggests some larger trends: The time has come to get practical and urgent about reducing vehicle emissions, and deep pockets and software smarts will be crucial in determining which companies emerge as leaders in the next generation of smarter vehicles with lower emissions.

Perhaps the biggest sign that there’s new urgency and seriousness about reducing vehicle emissions is the relatively low profile of hydrogen cars. As Secretary of Energy Steven Chu said earlier this year, “We asked ourselves, ‘Is it likely in the next 10 or 15, or 20 years that we will convert to a hydrogen car economy?’ The answer, we felt, was ‘no.’” Automakers have been touting the technology pretty heavily this month. But while Mercedes-Benz plans to lease 100 hydrogen fuel cell cars in the U.S. next year, at Frankfurt this week the emphasis for larger-scale deployments is on hybrids and electric vehicles.

In July, Ford (s F) stressed the importance of hybrids and fuel sippers in its lineup for a full financial turnaround. And at Frankfurt on Tuesday, Ford’s approach to practicality (in the face of tighter fuel-efficiency standards coming quickly down the pike from Washington), centered on giving the ole internal combustion engine vehicle an MPG makeover. The company’s big announcements included the launch of the C-Max minivan (which, as the LA Times Up to Speed blog puts it, is a supermini “in the plus-sized, butter-not-margarine North American market…To Europeans, such cars are average-sized”) and a new, smaller version of its EcoBoost engine, which the company claims cuts fuel consumption and carbon dioxide emissions by up to 20 percent.

Other automakers are being more ambitious. France-based Renault plowed ahead with its quest for domination of the global electric vehicle market, unveiling four new or revised models. One of those models, the Fluence, highlights the important role that software and technology partners will play for the companies competing in a growing field of EV makers in the coming decade. The Fluence comes as the first vehicle slated for production (in 2011) that has been designed to work with infrastructure startup Better Place’s battery swap system, and it’s loaded with Better Place’s new AutOS computing platform.

Whether or not other automakers decide to join Better Place’s network, they will have to solve many of the problems the startup is tackling with the new system — enabling the cars to crunch energy calculations, deliver an “energy plan” for each driver, and find the closest charging and battery swap stations, for example — if the electric concepts shown this week at Frankfurt really roll out at mass scale. The system brings together technology from Continental, Microsoft (s MSFT), Intel and Flextronics. We wouldn’t be surprised if next year, we see even more tech companies hitting the auto show circuit.