GM-VOLT : Chevy Volt Electric Car Site

Jon Lauckner and Volt Chassis

General Motors announced earlier this week it was forming a new venture capital unit called General Motors Ventures, LLC. This new unit is being funded with an initial investment of $100 million. It will serve to help the company “identify and develop innovative technologies in the automotive/transportation sector.”

“We are constantly looking for ways to deliver the best technology for our customers,” said Stephen J. Girsky, GM vice chairman Corporate Strategy and New Business Development. “Our goal is to nurture these innovative technologies to help bring them to market, and to ensure our customers have access to the best technology available.”

The subsidiary will attempt to discover small companies developing breakthrough advanced transportation technologies and offer them venture captial funding and investment.

This is a model other large successful corporations often engage in. It is also an activity GM has experience in. Prior to bankruptcy GM had invested in cellulosic ethanol production firms including Mascoma Inc, and Coskata Inc . Google, IBM and Intel all have similar VC divisions which allow them access to some of the best new technologies in their fields, affording them significant benefit and competitive advantage

That GM is doing this speaks to their forward-looking strategy and commitment to advanced technology vehicles which the Volt itself represents.  By getting in on the ground floor in fledging companies GM will potentially be able to adapt and patent these new technologies into their vehicles ahead of the competition.

Interestingly, the new VC unit is being headed by Jon Lauckner who has been named its President. Lauckner has been GM’s vice president of global program management, a position he has held since before he first conceived and sketched out the Volt concept with Bob Lutz in 2006. In moving from this position GM has named Steve Carlisle, current VP for U.S. Sales,to Lauckner’s post. He will reports directly to CEO Ed Whitacre.

Several additional executive shuffles were also reported yesterday in an effort to “enable leaders to apply their extensive experience in fresh ways to benefit the customers and GM,” wrote vice chariman Tom Stephens in a memo to employees.

Lauckner now joins Bob Lutz, Frank Weber, Denise Gray, and Bob Kruse as executives who previously held key positions in the Volt program and have since moved on.

Source (GM) and (Detroit Free Press)

The Chevrolet Cruze is a very important car for GM.  It is their long-awaited new compact sedan said to be high in quality, amenities, and driveability.  GM hopes it will sell in high volume too, and is head and shoulders above the current compact Cobalt.  It is intended to compete well against the popular Toyota Corolla and Honda Civic.

It is also a sister car to the Volt, in a way, sitting atop the same global compact car platform and using as its engine in some trims a turbocharged version of the 1.4 L Ecotec engine the Volt will use as its generator.

Today GM announced that the Cruze will go on sale in the US in September, two months before the Volt, and for the first time in years of hearing about this car have announced pricing.  We might consider this an exercise of what will happen when the Volt is finally priced, perhaps two months from today.

The standard Cruze LS will start at $16,995, and includes a 1.8L engine with 6-speed manual transmission, 10 airbags, stability control and OnStar. Air conditioning and power windows and locks are included.

The LT model with the 1.4L turbo engine, 6-speed automatic transmission, and 16 inch wheels will start at $18,995.

The Cruze Eco model, expected to hit 40 mpg on the highway, will also come in at $18,995.

The high-end LTZ model including leather, steering-wheel mounted controls, bluetooth, and automatic climate control starts at $22,695.

With automotive sales finally recovering, and GM posting a 37% increase in sales in May and 1st quarter profit, this car and its reachable price looks well-positioned to help brighten GM’s future.

Also with the Volt in short early supply, some visitors to Chevrolet showrooms, going in to look at a Volt, might just leave with a Cruze, at least I imagine that’s what GM hopes.

Source (GM)

GM first announced in late 2007 that the Volt would reach production in November 2010. Considering all the company and country has been through since that time, the fact that they are right on track is truly remarkable. Of course, a big advantage the Volt has is that it’s being produced by a 100-year old auto manufacturer with unparalleled experience, expertise, and facilities.

Although there are several other potentially important electric cars in the pipeline, the fact that they are planned by only fledgling automakers dims their prospects somewhat.

Two cases in point are the Tesla Model S and the Fisker Karma. Both vehicles are rather high profile and have attracted funding from the US government. Tesla has been awarded $465 million in low cost loans, and Fisker $528 million, all for the purpose of bringing these vehicles and other future low cost models to production.

CEO and founder Henrik Fisker, when first introducing the extended range electric Karma luxury sports car, said it would be in production by December 2009. That day of course came and went, and the goal post was moved to May 2010. Since May is about to end without any deliveries or even any press test drives for that matter, a new date was set yet again. Key Fisker investor Kleiner Perkins’ managing partner Ray Lane announced just last week that the car would go into production in February 2011. He did say some 70 to 100 pre-production models would be built by the end of this year and would be used for testing. “Some of them will be given to customers for testing purposes as well, out in the real road,” added Lane.  Fisker also intended to build a lower cost higher volume Nina afterwards.

Tesla’s story isn’t looking a whole lot better either. CEO Elon Musk has poured all of his life savings, once worth over a billion dollars, into Tesla Motors as well as his money-losing private rocket company SpaceX. Tesla alone has burned though $236 million since its founding, just to produce and sell the mere 1000 Roadsters it has so far. This bleeding led Musk to recently report “about four months ago, I ran out of money,” which he said in a court filing for his divorce case.

Tesla recently announced it will purchase the old GM-Toyota NUMMI plant in California from Toyota for $42 million, and that Toyota will act as a partner to help Tesla build the model S, and two future low cost cars. This plant is capable of producing 500,000 cars per year, a volume Tesla hopes to achieve with its post-Model S low cost car, but there are certainly no guarantees. If Tesla cannot issue its IPO before the end of 2010, Toyota is not obligated to invest the $50 million in the company it said it would.

Musk initially claimed that the upcoming Model S sedan would be available for delivery in the 3rd quarter of 2011. The company has already moved that date to 2012, but as it writes in its recently revised S1 filing, accounting for the Toyota deal, “because we have only recently selected this facility and have not begun to implement our manufacturing plans and because we have not yet closed the purchase of the Fremont facility, we may experience unexpected delays in completing the build out of this facility for the production of our planned Model S.”

Furthermore, for the Model S to arrive on schedule, Tesla has only 18 months to design and engineer the car, retool the plant, train the workers, and get the car certified and tested by the federal government. A tall order indeed.

Though it is a great thing to see entrepreneurial drive and a new wave of electric car companies, let us be grateful it is GM is using its vast resources and know-how to get a super high quality Volt out right on schedule. Though there won’t be a whole lot of Volts to be had at first, at least its timely arrival and quality is something we can count on.

Source (Reuters) and (Wired)

As we move closer to the Volt’s launch date, besides pricing, people are beginning to wonder whether the Volt will be sold only, leased only, or both. Nissan has announced pricing for the electric LEAF and has also announced the lease price.

Recently a GM-Volt commentator wrote about he following observation he had made, calling it “breaking news” that GM would only be leasing the Volt:

I just received my GM Card bill, and it included a notice that we WILL NOT BE ABLE TO APPLY GM CARD EARNINGS TO LEASE A VOLT for the first year, i.e., until November 2011. Then they go on to say that “as of November 2011, you will be able to apply your GM Card earnings to the Chevy Volt.” What caught my attention was the use of the word LEASE in the first year (no mention of BUY), then ambiguous reference to the second year and beyond (no distinction whether LEASE or BUY).

I pointed this out to GM Volt strategic marking manger John Hughes.

“I wouldn’t read to much into the note from the card,” replied Hughes.  ”There will be both purchase and lease options to acquire a Volt when it goes on sale.”

GM has said it wasn’t expecting the car to compete with the LEAF, considering the two entities as occupying completely different segments.  Pricing thus should’nt be compared either.

“I (am) excited about other EV entries joining us in the vehicle electrification movement,” said Hughes.  ”It will take different types of EV’s at different price points to serve the varied needs of consumers just as there are SUV’s at various sizes and price points.”

GM will apparently not be releasing pricing in May as was first expected.  Rather Hughes says, “we’ll have quite a bit more to talk about later this summer.”

I aksed Hughes if he thought becasue Nissan has already released its pricing scheme and pre-order process that it puts them in some way ahead.

“I don’t agree that Nissan is out in front,” he said.  ”Think about it, there is little for a consumer to do but continue to wait.”

“Its very important that we deliver a quality experience and that we, our dealers, field teams digital systems,…. are prepared,” he added.

Today General Motors announced its first quarter results. The company said it had earned $865 million in the quarter on revenue of $31.5 billion. In the same quarter last year, prior to bankruptcy, they instead lost $6 billion on revenue of $22.4 billion.

Today’s announcement indicates the first quarterly profit GM has made since 2007.

Based on a free cash flow of $991 million, GM now has $35.7 billion in cash.

Worldwide sales increased 24% to 1.9 million vehicles, including a 15% rise in US market sales, and 45% increase in international sales including China.

“We’re pleased with our first quarter performance, in particular achieving profitability,” said Chris Liddell, vice chairman and chief financial officer. “In North America we are adding production to keep up with strong demand for new products in our four brands. We’re also steadily growing in emerging markets, keeping our costs under control, generating positive cash flow and maintaining a strong balance sheet. These are all important steps as we lay the foundation for a successful GM.”

Continued profit at GM is expected to lead to an IPO possibly later this year. The US government is reported to have hired a firm to help with this process. Through the IPO the government will be able to divest its $50 billion ownership by selling its shares to the public.

So now with fewer brands, better products, lower wages, and profitability GM is poised for success in the future.

Furthermore profitability now makes GM eligible for advanced technology retooling loans. GM had applied for $14.4 billion in these loans which would be used to restructure facilities to build high efficiency cars like the Volt and other future models.

Source (CNN)

Nissan has been working hard to achieve positive publicity since they first began discussing the LEAF program.  By then the Volt had been in the spotlight for two years and they had a lot of catching up to do.

Nissan has repeatedly contended they would make a profit from selling the LEAF, which contrasted from GM’s admission that they wouldn’t profit from the first year or two of Volt sales. GM always said the Volt was an investment in the future where Gen 2 and beyond economies of scale and price reductions would make the car profitable. After all lithium-ion batteries are very expensive at today’s prices.

Nissan has now admitted they are in a similar position to GM.

According to a report in the Wall Street Journal, Nissan US sales and marketing cheif Brian Carolin said the LEAF also would lose money in its first two years.

“Over the course of the vehicle life, it is profitable—in year three,” he said.

The intial supply of LEAFs  for the first two years will be built in Japan.  That plant has an annual capacity of 50,000 cars, 20,000 of which will be shipped to the US.

In late 2012, Nissan will open its US-government funded Smyrna Tennessee LEAF plant that can build 150,000 cars per year.

It is at that volume when the cars will first turn a profit said Carolin.

According to Nissan USA director Mark Perry, the 24 kwh, 600 pound battery pack will cost less than $18,000 ($750 per kwh).  The packs will eventually be made in the US at a plant in Tennessee that will have an annual capacity of 200,000.

Nissan has an internal target of $9000 ($370 per kwh) for the pack which it hopes to achieve when US high volume production starts.

The caveat here is Nissan can thus only turn a profit if the cars can sell at the projected volumes.  Despite its low cost of $25,780 after the tax credit, and assuming no major gouging, concerns about range anxiety may hamper sales, especially if prospective buyers directly compare the car to the Volt and the flexibility it provides.

Though some will adjust their lifestyles to avoid using any gas at all cost, and they are to be commended, a larger segment of the population are more likely to consider EREVs for now.

Source (WSJ)