What are the Specifics of GM’s Volt Battery Contracts?

26 Responses to “What are the Specifics of GM’s Volt Battery Contracts?”

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   John Says:
   December 28th, 2007 at 7:23 am

   Great!
   Awesome!  
   
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   Jim I Says:
   December 28th, 2007 at 7:45 am

   I would expect GM to ask for some type of exclusive contract, but there would also have to be some sales volumes attached to protect the battery manufacturer, don’t you think?

   In actuality, these types of negotiations become fun for the lawyers, but all I really care about is that the pack works to spec, will be available in quantity, and that GM produces the vehicle!  
   
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   Dave G Says:
   December 28th, 2007 at 9:11 am

   I thought I remembered Lutz saying they need two suppliers for every part they buy, including the battery pack.  
   
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   Steve F Says:
   December 28th, 2007 at 9:32 am

   Considering the quantity of batteries required, outside contracts may not even be possible for the first year as they ramp up production, regardless of whether they could do so legally.

   Assuming all works out, this could be the beginning of a very lucrative phase of the battery manufacturer’s corporate life.  
   
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   Computer-codger Says:
   December 28th, 2007 at 10:56 am

   Honda says they are going to focus on fuel cell vehicles, rather than electric vehicles. (By the way, a fuel cell vehicle is an electric vehicle.)

   http://www.greencarcongress.com/2007/12/honda-eyeing-ma.html#more

   Every year or two, it seems, car manufacturers say they may begin full scale production of fuel cell vehicles in 10 years.

   GM, you made the correct decision on going the battery route. Just get done this decade.  
   
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   noel park Says:
   December 28th, 2007 at 11:21 am

   There was an interesting article in the L.A. Times yesterday warning us to get ready for $4.00/gallon gas in 2008.

   They pointed out that the price has not fallen back between summer and now as it traditionally has in the past.

   They pointed out that gas nation wide is something on the order of 60 to 70 cents a gallon more than it was a year ago today.

   Last night I waited about 20 minutes at a local ARCO station that was selling regular for $2.99/gallon. $2.99/gallon an awesome bargain? Who would have ever believed it.

   BTW, there was a bit on NPR this morning interviewing a corn farmer in Illinois bemoaning the fact that the diesel fuel for his equipment is now over $3.00/gallon.

   Diesel fuel for farm equipment. Diesel fuel for trucks to haul the corn to the distillery. Diesel fuel to haul the ethanol wherever it has to go since no pipeline infrastructure exists for it. Oil based fertilizers on the corn fields. Natural gas to heat the distilling process? Where are the oil savings?

   By 2011, GM, Toyota, and everybody else with the ability to make a viable plug in hybrid (or whatever the PC name is) will be able to sell every one thay can produce.  
   
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   Estero Says:
   December 28th, 2007 at 12:00 pm

   Not so fast!

   he cost of the li-on batteries should decease over time as production volume increases. This is not likely to occur to the extent it could otherwise when production is tied to the volume of a single manufacturer, whether that is GM or otherwise.  
   
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   LyleL Says:
   December 28th, 2007 at 12:05 pm

   Kempton, a wiry, 59-year-old renewable energy professor at the University of Delaware with round, wire-rimmed glasses, is the U.S.’ foremost proponent of what’s known as vehicle-to-grid technology.

   This gentleman has some interesting numbers on how V2G could get electric cars owners a check for $2,000.00 each year.

   Here’s a nice chart:

   Electric V. Gas in U.S.

   How power sources differ in two areas.

   1.1 tons of greenhouse gases, from coal generation, attributed to an electric car per year.

   6.3tons of greenhouse gases from gasoline-powered cars.

   $270 annual utility bill for an electric car.

   $1,538 annual fuel cost for a gas-powered compact car.

   http://www.forbes.com/global/2008/0107/036.html  
   
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   noel park Says:
   December 28th, 2007 at 12:45 pm

   LyleL, #8:

   Many thanks for this. A very similar story ran in, I believe, the LA Times this week. Maybe this idea is getting some legs. This is the best explanation of the concept I have seen.

   I have said get the Volt on the street ASAP and don’t get sidetracked into such exotica as V2G, but this makes it seem like a real possibility.

   Does it take some sort of a heavier duty hookup than a standard 110v outlet to make this work? That might be a real complication. Can I use my 220v dryer outlet? I know that people have gone over these questions already, but I didn’t pay much attention until I saw this.  
   
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    OhmExcited Says:
    December 28th, 2007 at 1:32 pm

    I still don’t understand how this works. Is John Voelcker suggesting that A123 and LG/Chem are both prohibited from making batteries for EV’s or E-REV’s indefinitely?

    Also, how does the dual supplier thing work? Will both be used? Will consumers have the choice of buying a car with either A123 or LG/Chem batteries? Or will one be chosen, and the other is only a backup if something goes awry?  
    
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    lkruijsw Says:
    December 28th, 2007 at 1:46 pm

    Personally, I think the deal would something like, that GM has for long period the first right to buy production. So, as long A123 can not ramp up fast enough, other companies can not buy.

    This “locks” production to GM.  
    
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    Drake Says:
    December 28th, 2007 at 2:03 pm

    I ultimately see GM signing production contracts with two suppliers for the Volt’s batteries. This will help to keep costs down. Both companies will have to use the same battery and manufacturing technology (they’re not just making windshield wipers afterall) so maybe one company will lease the “winning” technology from the other? We shall see.

    Concerning locking in the battery technology to GM, I think that this could be a very good thing. This will force GM and Toyota to work off of a different technology/patent base resulting in them going in different directions, technologically, for their batteries. This will result in different ideas surfacing concerning battery chemistry, etc. and also force one automobile giant to invest heavily in _new_ battery tech if the other has the better battery, resulting in even more dollars going into battery research. This is a win-win situation and is the Free Market at its best: two large companies forced to develop the best battery they can to defeat their rival.

    I love the Free Market system…  
    
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    ug Says:
    December 28th, 2007 at 2:29 pm

    Exclusive battery supplier contracts are almost as bad as the COBASYS NIMH situation. It’s good for GM or Phoenix but it throws up roadblocks that impede competitors from building electric vehicles.  
    
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    butters Says:
    December 28th, 2007 at 3:29 pm

    My understanding of this is that a winner will be chosen and that only one of the two designs will end up in production Volts.

    I don’t see how it could work any other way. The competing packs will have different energy densities, C-rates, internal resistances, thermal properties, and other differences due to the fact that these are two distinct cell chemistries. I expect that the Volt batteries will be either LiFePO4 or LiMn2O4, not some of each.

    Dell reserves the right to swap out all sorts of computer parts for comparable replacements without informing the customer, but it guarantees that if you choose an Intel or AMD processor, you get your preference, because there’s a large enough difference that it really matters to many customers.

    If GM did this sort of thing with the Volt, which will have a relatively large and well-informed enthusiast community by launch time, prospective buyers would harass dealers to ensure that their car would have their preferred battery pack. Various publications would attempt performance comparisons and make influential recommendations as to which pack is superior.

    I’m assuming that GM doesn’t want to go down that road. The last thing they want is for half of their battery packs to be considered inferior relative to the rest. They want to instill confidence in their new drivetrain, especially the battery pack, and having two different kinds cultivates uncertainty. They need the Volt to be a consistent product.

    Furthermore, I don’t see the loser somehow becoming a second supplier for the winner’s technology. GM has emphasized all along that the competing teams are not sharing technology and have zero interest in doing so. Losing the Volt contract will be a big loss, but none of these four companies are in a bet-the-business situation here. They’d go on to win contracts in power tools, medical equipment, and other transportation applications.

    I don’t think this is like the F-22/23 competition where a large factor in picking Lockheed’s fighter over Boeing’s was that if Lockheed lost, they would go bankrupt and become unable to service their various other defense contracts, whereas Boeing would just partially divest of their defense business and concentrate more on commercial airliners. Neither of these battery teams are going to go belly-up, and GM wouldn’t really care that much if they did.  
    
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    Drake Says:
    December 28th, 2007 at 4:02 pm

    [quote comment="22504"]Neither of these battery teams are going to go belly-up…[/quote]

    I couldn’t agree more. Next-gen batteries are in high demand from so many areas of the economy (e.g personal electronics, cell phones, military, medical, computers, etc.) that no maker of such technology will go out of business anytime soon.  
    
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    lkruijsw Says:
    December 28th, 2007 at 7:04 pm

    Being nominated for GM, is already a big plus for both companies.  
    
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    Jeff M Says:
    December 28th, 2007 at 10:41 pm

    LyleL, regarding V2G… I could be wrong, but I’d have to go with the assumption that using your Volt in a V2G setup would void your warrenty on the battery pack, as it’s definitely going to affect the pack’s life.  
    
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    LyleL Says:
    December 29th, 2007 at 12:48 am

    Found some videos of Bob Lutz at the Western Automotive Journalists’ meeting. The main presentation is interesting but found the question/answer videos very informative. If you have little time to view these videos, be sure to catch the q & a’s

    Main presentation:
    http://www.theautochannel.com/news/2007/11/26/071838.html
    http://www.theautochannel.com/news/2007/11/26/071839.html

    Q & A
    Q1: What is Buick’s China Strategy?
    http://www.theautochannel.com/news/2007/11/26/071840.html

    Q2: What is the efficiency and future of ethanol? http://www.theautochannel.com/news/2007/11/26/071841.html

    Q3: What is GM’s position on higher CAFE standards?
    http://www.theautochannel.com/news/2007/11/26/071842.html

    Q4: What can the U.S. government do to help (with the fuel/energy problem)?
    http://www.theautochannel.com/news/2007/11/26/071843.html

    Q5: What’s the latest in lithium-ion batteries?
    http://www.theautochannel.com/news/2007/11/26/071844.html

    Q6: Why did the Solstice and Sky get greenlighted for production?
    http://www.theautochannel.com/news/2007/11/26/071845.html

    Q7: Where will sufficient quantities of hydrogen come from?
    http://www.theautochannel.com/news/2007/11/26/071846.html  
    
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    Van Says:
    December 29th, 2007 at 8:20 am

    This report, too, seems to indicate only one supplier’s design will be used. Thus either only one supplier will be awarded the production contract, or both supplier’s will be “licensed” to produce the final superior design.

    And while GM had hoped to issue the production contract mid 2008, the delay in the shipment of the A123/Conti pack would seem to put that in doubt. Since the plan had included about 6 months for testing and evaluation, the longer the delay, the more likey either GM will go with LG, or the production start of the battery packs will be delayed.  
    
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    noel park Says:
    December 29th, 2007 at 12:37 pm

    Jeff M, #17:

    If all of these issues are not reflected in the price the utilities are willing to pay to the V2G participants, clearly the whole thing is DOA.

    I do not have the slightest doubt that every potential Volt owner/V2G participant will absolutely share your concerns.

    We have a saying here that, when the price is right, “You gotta buy it”. Until they offer that kind of a deal, I sure won’t let them mess with my Volt battery. But, if they do, so much the better.  
    
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    Updates on Chverolet Volt - Ultimatecarpage.com forums Says:
    December 29th, 2007 at 2:58 pm
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    Firefly Says:
    December 29th, 2007 at 6:41 pm

    I agree with the post that was left by ohmExited. I feel that it will not really matter whether GM picks one or the other. In my honest opinion, considering production rates I would not be surprised if GM bought battery packs from both for a while. After all, it’s no secret that on occasion some of their V6 gas engines were built in Tonowanda and others in Romulus. But in the end, despite 2 seperate engine plants they all went in the same vehicles. I think what will happen is that the battery pack manufacturers will have benchmarks for operation parameters that they will have to meet (capacity, range, efficiency, lifespan, natural discharge, arcing, etc.) In the end, as long as both manufacturers meet production requirements, the possibility for such exists. There may not ever be a “better battery pack” scenario from the factory but perhaps in an aftermarket setting when the increase in technology comes to pass. For now, if both meet requirements for testing in order to get this project off the ground and functioning as GM says they will, I really don’t care which one it is (or both, if necessary…)  
    
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    Dave G Says:
    December 29th, 2007 at 8:47 pm

    LyleL #8,
    noel park #9 & #20,
    Jeff M, #17,

    The Volt will not support V2G. (period)

    This has been stated very clearly in one of Lyle’s 6 Q&A sessions with GM. Some future E-Flex car may support V2G, but the Volt that we are discussing in this forum will not.

    Specifically, the battery charger that is built into the Volt works in only one direction, from the grid to the battery. To support electricity flowing from the battery to the grid, you would need an additional circuit called “Grid-Tie Inverter”. The Volt will not have this circuit

    So all this talk about voiding Volt warranties with V2G does not apply, since the Volt will not be capable of supporting V2G.  
    
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    Mark H Says:
    December 30th, 2007 at 3:25 pm

    If they are able to use both companies batteries in order to keep up with production and demand I doubt that “you” will be able to tell which one you have by looking at them or their serial #.The software and hardware will keep them functioning identically for some years to come.Only longevity will separate the two for the most of us and if both are coverd by a good long warranty then we should all be happy for years until we find out which one was better in the end.  
    
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    noel park Says:
    December 31st, 2007 at 1:54 pm

    Dave G, #23:

    Actually, that suits me fine. As I said about the solar power discussion in the post above, let’s KISS, get a viable car on the road, and worry about all of this other neat stuff later.

    Actually, I think that GM folks have said much the same in one or more of Lyle’s interviews. Absolutely right, and let’s get going. If I want a solar roof, or V2G capability, I can wait for the next generation and then trade up.  
    
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    noel park Says:
    December 31st, 2007 at 1:55 pm

    Dave G, #23:

    It’s a fascinating concept though. Maybe 5 or 10 years down the road.  
    
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