GM: Volt Program Still Going Full Speed
Giant automaker views Volt as a long-term investment
Charles J. Murray, Senior Technical Editor -- Design News, December 5, 2008
Despite its financial woes and bailout pleas, General Motors Corp. says it's sticking with its plan to build the hybrid-electric Chevy Volt.
"The Volt is the lead program for General Motors," says GM spokesman Rob Peterson. "We're moving forward with it and that's not going to change."
Speculation about the Volt has reached a peak in the past few weeks as GM has revealed more about its financial status during its Capitol Hill pleas for bailout funding. Newspaper editorials have questioned whether the Volt could even turn a profit for the giant automaker and have asked aloud whether such a program is in the giant automaker's best interest while it teeters on the brink of bankruptcy.
GM says, however, it sees the Volt as a new technical foundation for the company rather than as a single model. The high-profile vehicle, which uses electric motors to drive its wheels and an internal combustion engine to charge its batteries, has captured the imagination of auto enthusiasts. It has also sucked tens of millions of dollars from GM's product development coffers.
"This is just like any other new technology; there's an exorbitant cost up front," Peterson says. "We consider this to be a movement toward electric vehicles, and this is the first step in that direction."
In an appearance before the Senate Banking Committee this week, GM CEO Rick Wagoner reiterated his support for the program, saying, "...we're running all out to get the Chevy Volt extended-range electric vehicle to market as soon as possible."
GM representatives have acknowledged the vehicle will not turn a profit initially, but have argued they see the Volt as a long-term investment for the company. "It's important to take the long view on this car," Peterson says. "Yes, in the early stages it may not be as profitable as we'd like it to be, but we're in it for the long term. And, as is the case with all new technologies, it will eventually come down in price."
Industry analysts believe GM plans to build a variety of different car models on top of Volt powertrain technology. The key, they say, is for GM to first scale up production of the battery and later to proliferate the Volt drivetrain across several GM platforms.
"When you bring a new technology to the market, you have a learning curve," says David Cole, chairman of the Center for Automotive Research (CAR). "It's never going to happen instantly. No battery manufacturer is going to put up a facility to build a million lithium car batteries in the first year. Production volume will start out at 20,000, 30,000 or 40,000. They'll learn and they'll incorporate what they learn into the next generation of batteries. By the third or fourth generation, they'll begin to boost the scale and get cost-competitive."
Cole believes lithium-ion battery packs will initially cost about $10,000. By the third or fourth generation, he says, the packs will cost about half that much.
Recently, rumors have placed the Volt's initial cost in 2010 at about $40,000. GM, however, strongly denied any price has been set. "We haven't commented on a price," Peterson says. "There are too many variables that have to play out in the market to determine that."
GM acknowledged tax incentives could be important in helping launch the Volt program. The federal government's Troubled Assets Relief Program (TARP), signed into law on October 3, has put a $7,500 per vehicle tax incentive in place to assist buyers and encourage them to adopt battery-electric technology. The incentive would apply directly to the Volt and possibly to other plug-in hybrids, depending on the level of energy stored on board.
Despite all the talk of bankruptcy, Cole believes GM will forge ahead with the Volt. "Before the Volt is introduced, (the bankruptcy) issue will be settled," he says. "If GM is still here in a couple of years, it will be well on its way to healing, and the Volt will still be there."
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