GM-VOLT : Chevy Volt Electric Car Site

One of the most compelling and important advantages of switching our fleet to plug-in electric cars like the Chevy Volt is being able to break this countries dependence on foreign oil.  As oil supplies become tighter and demand increases the detrimental effects on economy and quality of life become clear, as the current oil price crisis reminds us.

However, as a new article point out, the Chevy Volt depends on batteries that are produced and assembled in Asian countries and are purchased from Asian countries.  Depending on which pack maker GM chooses for the Volt, its batteries will be made either in Korea or China.

When lithium-ion batteries were first developed, the Japanese firm Sony licensed the technology, as well Asian governments have considered building advanced batteries a national priority and have greatly funded the development of a vast production infrastructure.

Although some of the engineering and component assembly for the Volts battery packs will occur in the U.S., both Compact Power and A123 are U.S. firms, there is only one U.S. company that both designs and assembles lithium-ion battery packs here and that’s Indiana-based EnerDel.

EnerDel has a contract to make packs for Norwegian automaker Th!nk and has recently demonstrated a functional 26kWh pack in a vehicle.

It is estimated that the Volts battery pack will "likely will cost more than $10,000 per vehicle," and this concerns US automakers who are forced to shop for the most expense part of their new technology cars from Asian manufacturers.  Toyota has their own joint battery venture Matsushita Electric to produce advanced batteries.

There are also some experts who believe the world’s lithium supply might be insufficient for widespread automotive use, but that assertion remains controversial.

So although we may narrowly be able to escape the impending doom of dependence on Middle East oil, will we be simply substituting for a similar problem of dependence on Asian batteries?

Source (Detroit Press )

In following the Volt enthusiastically, one cannot help being struck by the significance of GM’s current financial challenges.

The company had been in the midst of a turnaround effort when VOLT was first introduced. Since then many significant economic hurdles have been presented.  Not the least of which is the rapidly slumping sale of trucks and SUVs taking place across the USA in response to $4 gasoline. Trucks have long been GM’s dominant product accounting for a significant share of their North American revenue.

On June 3rd GM announced they were closing 4 truck and SUV plants, and considering the sale of Hummer.  Now we find out they have put future product development for trucks and SUVs on hold. The carmaker has shifted significant engineering and development forces from truck building to car building in the hopes of better serving the rapidly shifting consumer marketplace.  They are also developing plans on how to expand the E-flex portfolio for which the VOLT is only the beginning.

GM’s stock has reached its lowest level since 1982 as the company faces the prospects of needing to borrow as much as $10 billion at a time that its credit rating has also just been dropped. Further economic losses are also being induced by the fact that trucks being returned from leases suddenly have significant lower residual values.  This while no profit has been made since 2004, and cash is being burned to the tune of $1 billion per month.  GM started this quarter with about $24 billion in reserve but needs from $10 – $15 billion to operate.

There is talk of shedding brands and selling assets.  GMs’ market value is nearly that Chrysler had reached when it was bought by Cerberus.

The time has come my fellow Americans, support GM now in these tough days, and help them bring the VOLT to market.

Source (WSJ ), (Detroit Press ), and (CNN )

Besides price, another question that we often debate is how many Chevy Volts does GM actually plan to build.

Since the concept was first announced in January 2007, three numbers that come up in the press most often are 10,000, 60,000, and 100,000.

Two of them have come up again.

In discussions I have had with Mr. Lutz and Thomas Stephens, GM VP of powertrain, a lot of discussion has gone into deciding on the number for the initial production run. Clearly there must be a balance between the desire to satiate public demand and the risk management of pouring out too many cars using revolutionary drivetrain technology.

It seems like since Volt production intention was announced, GM has settled on some figures.

GM vice-chair Bob Lutz had a blogger dinner and members of the CarDomain Blog were in attendance.

Not going into too much detail they write:

“They (GM) are expecting to build and sell 10,000 (Chevy Volts) in 2011 and 60,000 in 2012.”

I was able to confirm and clarify this statement with Dee Allen who was also in attendance and is GM director of marketing communications.

Dee told me “Bob said the first 12 months of production (beginning in 2010) would be around 10k, but in second year 60k would be more like it.”

So there you have it. Now, who will be those lucky first 10,000 ?

A new interview with Bob Lutz taking place yesterday has been published in the Seattle Times. The article outlines GMs plans for the Chevy Volt as well as electric cars in general and contains some interesting comments from GMs vice-chairman and product czar.

Lutz indicated his enthusiasm for electric cars saying “we believe profoundly in the electrification of the automobile,” and he voted for his favorite source of energy to charge those cars saying, “the only real option is nuclear energy.”

He took his customary jab at the Japanese automakers vowing “for the first time, our well-thought-of Asian competitors will be left in the dust.”

Finally he let the cat out of the bag. We have been wondering and speculating about what the Volt might cost. Although GM hasn’t made the expected MRSP public Lutz seemed to acknowledge what GM’s breakeven price for it will be.

Although he is not directly quoted, the source article contains the following quote:

“Lutz said the first-generation Volt will retail for about $40,000 and generate no profit for GM. The company hopes to make money as it rolls out later versions of the vehicle and other plug-in models.”

Source (Seattle Times)

Now that GM has approved production of the Chevy Volt, they can begin to focus on what to us may seem obvious. Who will buy the Chevy Volt?

Clearly, I, and the nearly 30,000 people on our waitlist already hope to do so, assuming it is within our means. But since around 15 million new cars are sold per year in the U.S., aside from the quantity actually produced, how many could they sell?

Price point is important, but should we really expect GM to lose money on them especially when times are as hard as they are?

In a recent statement, GM North America president Troy Clarke admitted GM is placing a substantial corporate bet on the Chevrolet Volt.

He said “We think the Volt is a very well-targeted vehicle — right segment, right technology, right time frame. Full speed ahead.”

In other comments at the PHEV conference Clarke also said:

“We want the Chevy Volt to be a commercial success … a volume product. Yes, we want to make an environmental technology statement. But, we also want a car that sells and that people aspire to own.”

He also went on to say this:

“We’re doing research now on who our Volt customers are likely to be, and what their expectations are for an extended range electric vehicle. And, we’re taking those needs into account as we develop the vehicle. For example, most consumers wouldn’t sacrifice a radio for more electric range… so neither will we. We’re actually working with our supplier to find ways to lower the amount of electricity the Volt’s radio will use. We’re creating a vehicle and a business model that will work … and we want to make as few sacrifices as possible, because in the long run, we believe it will lead to even more enthusiasm for the Volt.

Then, we need to build on our positive electric vehicle momentum so that the excitement and pride around the Volt transcends the vehicle, to impact the Chevrolet brand … and eventually impacts the entire company. We want consumers to see the Volt as the game changer it is not only for our business, but for the way the world drives. Once they do, we can build on that success with other creative E-Flex models – but one step at a time.”

Reuters just published a report outlining an interview with Bob Lutz today on the Chevy Volt.

GM vice-chairman Bob Lutz continued to exude confidence that the Chevy Volt engineering should work out as planned, with a battery supplier to be named shortly.

Lutz said “I would say there’s almost no reasonable doubt in our minds anymore that this is going to work.”

He also confirmed the early Volt prototypes were achieving the electric range GM had hoped for, stating “they’ve routinely had it to the high 30s, low 40s and they go up hills with it and everything”

Lutz also talked more about his test drives of the prototype, continuing to expand of the silent theme of electric drive noting “it never shifts and you just scream along in total silence.”

Further he admitted that GM has yet to fully work out the transition from pure-EV to combustion- powered range extension, “it all works real well, it’s just that the transition from battery power to the internal combustion. They said it’s still noisy and it’s a little rough. But heck, we’ve got a little more than a year and a half to work on that.”

Finally he took a shot at Toyota’s apparent recent turnaround in attitude toward lithium-ion batteries declaring “they (Toyota) told the world that GM was taking a huge risk, that lithium ion batteries were prone to explode and that we were putting our customers at risk and that they would stay with the tried and true. When it comes to Toyota, let me tell you, the press has a short memory.”

Source (Reuters)