Playing Devil's Advocate, Part 2: The Chevy Volt
After taking a look at Tesla Motors and their lithium-ion battery powered Roadster with a rather "critical eye", I decided we should take a look at General Motors and their Volt. On the surface, there doesn't appear to be a great deal in common between the Volt and the Tesla Roadster; do any of the concerns we discussed regarding Tesla Motors carry over to the General? Well, yes and no. There are certainly concerns, but the only one which carries over directly relates to the batteries. This just happens to be a very big issue, perhaps the largest of them all. If you have spent any amount of time perusing the comments that we get whenever we mention the batteries being the biggest issue with the Volt, you know that some agree and many don't agree with that sentiment. With vehicles such as GM's own EV1 already proving to some extent that electric vehicles can be viable for certain consumers, where does GM come from in telling us that they can't make the Volt yet? We'll discuss that issue here, and a few others. So, strap in and read why Chevy might not succeed with their Volt.
Continue reading after the break.
The batteries... yes, that is a big problem, if you believe what General Motors has to say. I am not saying that I don't believe them. But, here's the rub. Whether you believe them or not, it still may be bad news. Think of it this way: If GM is right, then a major, perhaps THE major component, for the Volt is not yet ready. How, then, can they say they plan to produce it, possibly as early as 2010? Or, if you think that the battery issue is all smoke and mirrors, then you must think that GM is playing around with their consumers, and might be using the batteries as nothing more than an excuse. Either way, that leads to serious questions as to whether the vehicle will ever reach dealers lots and, ultimately, consumers hands.
Is there anything else to worry about? Of course! GM has already stated that they plan to use different sources of power as their "range extender". Be it a standard internal combustion engine, using ethanol or gasoline, a diesel engine or a hydrogen fuel cell, that range extender will be adding a significant cost to the vehicle. There is no way around this fact, there are two power-plants in the design of the Chevy Volt. With American automakers already struggling to make a decent profit, how does GM expect to compete in the midsize vehicle class with a car that comes with a built-in disadvantage of costing more to build? Will they pass that cost onto the consumer, or will they end up selling them at a loss? Perhaps the price of the batteries, motor and associated electronics drops to the point that the end-cost is close to what consumers want to pay for the vehicle. That sounds to me like a big "if"; how about you? Additionally, the cost of the vehicle itself might be too high if they need to use exotic materials in its construction.
Will GM be around long enough, and have enough cash on hand to continue producing the Volt, even if it loses money in the process? Some have suggested that whatever amount of money GM needs to spend to get the Volt ready for the road is money well spent, because it will greatly bolster their green credentials. Is that true? Perhaps, but let's take a closer look at that before agreeing. GM took a pretty big leap already with their aforementioned EV1. They built a completely new platform, using materials which cost them more than other vehicles the EV1's size. Much of the vehicle was built using aluminum, and every part was scrutinized to ensure light weight and safety needs were met. Let's just assume that they did not sell them at a profit, alright? I think that is pretty fair to assume. So, GM made an electric vehicle and put them in consumers hands already. They certainly made lots of news headlines when they did it too. Everybody knows about the GM EV1 by now, right? Sounds like good press in the making! Hold on a minute, not so fast! GM got quite the black eye at the end of the EV1 story, by not re-leasing them after a couple of lease cycles took place. This has sullied the reputation of the automaker in the minds of green car enthusiasts. Why did they refuse to sell them off, or re-lease them back out to the public? There are many possible reasons, some of which involve "big oil" playing a part. A different scenario is that they were getting old. GM did not have any desire to keep losing money on them. They were expensive to build and were expensive to maintain. No matter what the real reason, GM chose to crush them instead of gaining traction in the green world of alternative transportation choices. Does that tell you that GM probably is not going to invest a ton of money into another money-losing proposition with the Volt? Perhaps. Will they choose again to only lease the vehicles? Perhaps. Will they do much like they did with the EV1 and take them back after some time on the market? Again, perhaps they will. We do not know what they will do, or if they will even bring them to market at all. We do know, though, that making a "green" car such as the EV1 does not guarantee good publicity, and GM now knows that better than any other automaker.
Lastly, we strive to do the best job that we can to bring you all the latest news in the automotive sector that can be considered green. We usually don't need to dig that deep to find it, either. There are many companies like Tesla and Phoenix Motorcars that are hoping to enter the same market as GM may with the Volt. The more choices out there, the better chance that GM will not want to enter the market without knowing that profits will be a "sure thing". How many will they need to sell to present a strong business case? If Tesla succeeds in bringing their "Whitestar" vehicle to market, and follows that up with an even cheaper electric car; and if Phoenix succeeds in selling their all electric SUT and SUV; and Toyota continues to refine their Prius with lithium ion batteries; and Honda revives their hybrid-only model with the return of the Insight or another model... Get the point? There are others too. How many sales will there be for GM with the Volt? Remember too that they have also publicly said they plan on selling a fuel cell car by 2010 as well.
Did you read that whole thing? Kudos to you if you did! If you did take the time to read it, why not take one more minute and comment. What do you think? Will GM release the Volt or not? If they do, will you buy one, or will you wait and see how the rest of the market shakes out?
Reader Comments (Page 1 of 2)
porges2111978 10:12AM (5/17/2007)
I read it and please, edit your work before you hit 'Send' I hate rambling. I think that your concern about GM being around is the most significant argument. It looks like they are dead last in the horse race if the Volt is not introduced by let's say 2009. I would not be surprised if the next Prius comes available w/ a Plug In Option, beating the Volt to market by >1 year. And w/ EVs gaining ground, who cares about a Plug In? Yes, please, let me fill up on gas, can I?
Reply
Mike 10:32AM (5/17/2007)
GM is the leader in the PHEV race right now. Toyota has already announced that the next Prius (09) will have Li-Ion batteries but will not be a plug in. Toyota doesn’t think the batteries are ready for PHEV. Sound familiar?
Reply
Howard Lee Harkness 11:05AM (5/17/2007)
"Will GM be around long enough, and have enough cash on hand to continue producing the Volt, even if it loses money in the process?"
GM has two major problems: 1) They already owe more money than they can possibly pay off without a government bailout, and 2) they are a public corporation whose primary concern is the next quarter or two. Add to that the complication of some interesting labor problems.
Don't hold your breath waiting for the Volt. Especially if they figure it will be a money-loser.
Reply
Stan 11:08AM (5/17/2007)
I don't think you will have to worry about GM being around since it is a fixture of the US, however it will become smaller. I really think they will pull it off and be willing to sell at a loss. GM has been playing with the technology for a long time. The current Sequel is a more realistic decendent of the Hy-Wire concept which was comissioned to 'rethink the automobile'. The Sequel has a fuel cell, wheel hub motors and drive by wire. This represents a modularization and simplification of the auto from all the mechanical and fluid based systems - solid state - if you will.
I believe they want to get a car out there like the Volt that gets them on the path to this future of the automobile. After the Volt has been out for a few years and perfected, batteries improved and cheaper then other models will follow until by 2020 you have mostly EV's. That is my ideal scenerio.
Reply
dirtkahuna 11:14AM (5/17/2007)
Great article. The Volt is a very important product for GM and the American people. It could be the first mainstream electric (hybrid) electric car to really capture the hearts of the car-buying public. GM might need to add a fake "V8" sound module to the car for it to appeal to the enthusiast crowd, but if the car reduces our dependence upon foreign oil, anything that helps to sell the car is fine with me.
If we fight the war at home, we won't need to fight it overseas.
Reply
Chris 11:15AM (5/17/2007)
The key for the Volt on batteries is the role they play in the car. By using two power systems, electric and ICE or other, one would think it puts less stress on the electric batteries. This is actually somewhat opposite because they are affected by recharge cycles. If you drive a Volt around and the batteries recharge every 40 miles, they will use up cycles (read lifespan) much faster. Thus creating the need for batteries which much greater cycle life than today's batteries.
The Tesla Motors batteries would not work the way GM wants batteries to work. Martin Eberhard explains this entire issue in this blog post:
http://www.teslamotors.com/blog2/?p=46
The idea of a car powered by an electric motor, but without the range constraints of only battery range are very appealing. They may prove quite difficult in engineering.
Reply
Tony Belding 11:38AM (5/17/2007)
Chris is on the mark. Both Tesla and GM are constrained by battery technology, but they are constrained in very different ways. For what it's worth, I think there are batteries today which can meet GM's goals for the Volt, but they are being cautious because these batteries haven't yet undergone full, formal testing for durability, safety and performance at temperature extremes, and they are also not yet being mass produced at a price point that hits GM's target. I'm optimistic they will pass these hurdles, and I don't think it's likely that battery technology will prevent the Volt from being made.
Regarding Toyota. . . What a short memory people have! Toyota have already announced their intention to produce a PHEV. They announced it before GM announced the Volt, in fact. It is very possible that Toyota's PHEV may be further along in development than the Volt. The big difference is that Toyota are keeping it under wraps, they aren't talking about it, they aren't showing styling mockups (or "concept cars") related to it and haven't publicly given it a name. That doesn't mean it's not real, and I'm sure GM take the Toyota PHEV very seriously as a competitive threat.
Reply
Dave 11:44AM (5/17/2007)
While I too am having a sinking feeling about the Volt and GM, most of your worries are yet without substance.
Most importnatly the idea that a range extending power plant will make it cost too much is rediculous. Look at hybrids. They are a gas powertrain with an electric range extender. The Volt just makes the elctric motor big and the gas motor small. Electric motors are less complicated so they will eventaully be cheaper. Toyota has stated that their new hybrids powertrain will be half the cost and weight.
Yes the batteries are an issue. Before I get flamed, I will agree the technology is there and they can make the batteries now (A123 Systems, AltairNano). The problem is price. This is what I think they are really saying whne they say there are problems with the batteries, and why we won't see the volt in '09 or '10. But we will see it by '12.
As far as the EV1 debacle, the more they get stomped by the Toyota and the climbing Prius sales they will have to do something. Toyota has said hybrid options for all of their vehicles by 2010, with only hybrids by 2020.
By 2010 we will be looking at $4.00/gallon gas nationwide. GM knows how people are freaking out at $3.00/gallon. They don't jsut need a green option they need a game changer. Who knows if the Volt will be such a changer with Whitestar,Prius 3.0 and others out there.
The platform will not be a problem. Unlike the EV1 they have many more vehicles lined up for the e-flex after Volt. I think if all goes well all of their cars will end with e-flex by 2020.
Most importantly I am already on a wait list at my dealership for the Volt.
Reply
small-wee-wee 12:04PM (5/17/2007)
Here is the problem GM and the other BIG 1.5 have. They lack the commitment to be true visionaries. If you lack the commitment to carry through with your vision you then are destined to fail.
Toyota and Honda have not just a vision but the commitment to make their plan come to fruition.
Honda set itself out to be the most enviro. friendly auto MFG. They created and are following a long term plan and are succeeding.
If GM set out to do the same thing they would go 3 years down the road, see it is costing money in the short term and bail on the whole project.
Attitudes must change at the BIG 2.5 or all are destined to failure. Perhaps at least then the autoworkers can get a job at a company that cares about the future. Toyota or Honda - Assembled in the USA.
Reply
Matt 12:32PM (5/18/2007)
RE: Tony Belding on Toyota - I agree with you about Toyota. Toyota doesn't need to market the hell out of themselves because they are already perceived to be a green car company. I'm sure they are quietly working very hard to develop and launch a competitive product before or at the same time the US auto's do.
Reply
Tony Belding 3:58PM (5/17/2007)
Honda is an interesting case, because they've been more consistently committed to fuel efficiency over the long run than probably any other car maker, even moreso than Toyota and the other Japanese companies.
However. . . Honda is also a company very focused on the internal combustion engine. They really look on themselves more as an engine company than as a car company. Honda also make motorcycles, generators, and even private jets. The main thing these products all have in common is internal combustion engines. I think this is why Honda have been rather weak in terms of moving to electrically driven cars. Honda's expertise in ICEs encourages them to focus more on wringing maximum efficiency out of the ICE rather than developing alternatives to it.
For a point of comparison, Mitsubishi Motors have less resources to work with than Honda, but nonetheless are pushing ahead much more aggressively with their MiEV program.
Reply
Tim 4:17PM (5/17/2007)
Chrysler as a whole may already be dead long term.
GM needs to produce a Volt like product.
Ford and GM need to produce a Volt like product and come out with other hybrid vehicles. I see fuel becoming more and more expensive and if they don't have fuel efficent products to offer the public even the most patriotic American will not buy American. It's a matter of survival for them long term.
The bright spots for them are that they both have more hybrid products in the pipe. The Chevy Sequel test beds show GM is plowing a bunch of money in to future tech. I'm not ready to call them dead but what happens between now and say 2012 may seal their fate.
Reply
Mike 3:19PM (5/17/2007)
Regarding Toyota and the PHEV please see their VP’s comments on May 11, 2007.
Mr. Takimoto, Toyota’s executive vice president in charge of powertrain development
told reporters that battery technology was still far from capable of supporting the practical application of ‘plug-in’ hybrid systems or pure battery-electric powertrains for cars required to emulate the range of petrol or diesel cars.
All of the OEMs have the same issue, the batteries are not quite ready. GM is publicly betting that they will be by 2010 for the volt. Toyota is not quite ready to go there.
GM is taking a PR risk by announcing that they intend to build the Volt, Toyota is playing it safer and closer to the vest.
Tesla is taking the biggest risk in going with the commodity laptop batteries. But Telsa is not a multi billion dollar worldwide enterprise with a huge reputation at stake. Its backed by a bunch of rich guys who can probably afford to lose their investment.
If the newly announced A123 batteries work out, then we should see the Volt and others on the road in the next few years.
Reply
Tony Belding 4:29PM (5/17/2007)
I had not seen those comments from Mr. Takimoto, thanks for pointing that out, Mike!
I would turn that argument around and suggest that Tesla are taking the least risk by using commodity laptop batteries. Their cost and availability, service life and their other characteristics are well known and proven. Tesla made the decision to engineer a car around what exists rather than what is hoped for. That's allowing them to get a lot of practical hands-on experience working with the technology, and soon a lot more experience as their cars get into the hands of real customers.
Of course I mean the least risk technologically, whereas the business risks of starting any kind of new car company should be apparent to all. (And although the Roadster is not a truly mass-production vehicle, it's probably a necessary exercise both for marketing purposes and as a learning experience before making their own car from the ground up, in their own factory.)
Reply
kert 4:53PM (5/17/2007)
for chrissakes. there WAS a working series hybrid by GM already. EV1 Series Hybrid prototype, anno 1998.
all the battery talk is BS. NiMH has proven itself, there are enough RAV4EVs running around with hundreds of thousands of total miles on it.
better is the eternal enemy of good enough, and GM has lost nine years chasing the "better" in series hybrid race.
Reply
kert 4:58PM (5/17/2007)
Regarding Mitsubishi MiEV, they have a direct competitor there : Subaru R1E. Mitsu and Subaru are obviously in worse position in marketplace than either Honda or Toyota, so apparently the need to innovate and deliver is more urgent for them, and they both try to leapfrog the entire hybrid craze directly to pure EV platform
Reply
Joseph 6:36PM (5/17/2007)
I think GM will build the Volt, and I think they will by 2011 or so.
Anyone here read "The Car that Could"? It's about the developement of the EV1 at GM. The EV1 was developed in a remakably short time. (I for got how long, but it was quick!) The car was almost completed, but as Gm was heading down toward financial trouble, they trimmed the program to just making a bunch of portotypes. Then, when the year of the mandate drew closer, they revisited the program and quickly put the car to market. And as we all know, killed it after a few years.
GM has learned from their mistakes, and so I think they'll be smart and be the first, or one of the first, to put a PHEV to market.
Reply
Tony Belding 6:14PM (5/17/2007)
Pointing a finger at the RAV4 doesn't automatically settle the argument, for a number of reasons.
First, the patents on NiMH are still owned by Chevron who still have no incentive to let anyone produce large-format NiMH cells for automotive use. If it's not available legally, then GM have to seek alternatives, like it or not. The only way around this would be to get some legislative relief from the Congress (not likely, as they are in the pockets of big corporations who consider patent law sacred), or maybe some kind of executive order from the president (on what grounds, national security?).
Secondly, the RAV4 places different demands on a battery than a PHEV does. A PHEV cycles the batteries much more aggressively and will wear out batteries much sooner than a BEV. Just because they worked in the RAV4 doesn't prove they would work as well in the Volt.
Thirdly, the long service life of NiMH batteries in the RAV4 is basically anecdotal. Some are still running, but I'm not sure if anybody has accurate statistics on how many are and how many are not, or a detailed, documented driving and service history of those cars. (Any such information that does exist would be in the hands of Toyota, who have no incentive to share it with GM or anybody else.)
And finally. . . There's Li-ion and Li-poly coming on strong, so if anyone did push to bring a NiMH-based PHEV to the market, they'd take the risk of it being obsolete within two or three years. Please recall that it often takes three years to bring a new car to market! Thus any money spent on NiMH-oriented R&D would effectively be flushed down the drain.
As for the series hybrid EV1, it's pretty much the same story. Yes, GM made a prototype, and yes it apparently worked at least for a while. That's not the same as saying it was proven economical to manufacture and durable enough to put a warranty on.
Reply
Peter Pampusch 6:43PM (5/17/2007)
I haven't seen "Who Killed the Electric Car?", but I'm not a conspiracy theorist and believe the reason the EV1 and other electric cars have't succeeded is that there isn't a big enough market for vehicles with serious distance and refueling issues. I would consider buying a Volt, and have told GM so via the Volt website. If GM has no intention of bringing the Volt to market why would they publicize it so heavily after the PR debacle of the EV1?
Reply
ronilateral-registrations 2:18AM (5/18/2007)
GM killed EV-1 first and foremost because they were no longer legally compelled to produce it, the California ZEV mandate was crushed first, then the cars followed. No automaker is willing to introduce a less profitable car in the same market segment as a more profitable car. That's called product factoring. GM would not want to consider selling a customer an EV-1 because it would be less profitable than another car which they might possibly sell to the same customer. Also bear in mind EV-1 was introduced when gasoline was cheap and SUVs were at a peak of popularity. GM is only selling hybrids now (dual-mode) and talking about plug-ins to compete with Totyota. If Toyota dropped this tomorrow morning, GM would cancel its programs on the same afternoon as a sensible cost-cutting measure. Their actions are just as mechanical as their products...
Reply