Could the new electric car get killed before it even hits the streets?
There are hundreds of engineers and technicians at both General Motors and its suppliers working feverishly to try and get the Volt into Chevrolet dealerships by late 2010 or early 2011. The company's senior management all seem to be firmly committed to the project. Everyone I've spoken to at GM seems to believe that the carmaker's long-term survival may hinge on the success of the Volt. But even with so many people behind it, this is in many ways just like any other new car program. There are time-lines and budgets to meet and a market must be shown to exist. Plenty of car programs have been killed when they were a lot further along than this one.
Does that mean that the Volt could still get killed before it lives? Of course it does. Is it likely to get killed? Probably not. A column in Automotive News outlines three of the possible culprits in the potential cancellation of the Volt. Physics is the obvious one, and perhaps least likely to be a factor. The technological challenges in guaranteeing the robustness of the battery pack are tough but appear to be surmountable. The other two are potentially more problematic. OPEC is one. At this point no one can say with any certainty what the price of oil will be in 2010. It could be $300/barrel or it could be $30/barrel. If our political "leaders" had the backbone to set a minimum price for petroleum that would help ensure a demand for efficient vehicles, this could easily be removed as a factor. Fat chance of that happening though. Perhaps the most troubling possibility is the owners of the company. As a public corporation GM has a fiduciary responsibility to earn a profit for its shareholders. If the new vehicle market in the U.S. tanks in the next few years, there is certainly a possibility that GM will not be able to afford the subsidies that will almost certainly be needed to make the Volt an affordable mainstream proposition in its early years of production. If that happens the Volt could either be priced out of the market or euthanised entirely. Any of these three scenarios are possible. All the fans of the Volt certainly hope they don't come to pass.
[Source: Automotive News - Sub. req'd]
Reader Comments (Page 1 of 1)
meme 1:32PM (2/12/2008)
With a price "closer to $40k than $30k", it seems they're going to have to subsidize it in order to sell "40,000 per year".
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rmontgomery 3:01PM (2/12/2008)
"l. If our political "leaders" had the backbone "
Cripes, why is always the gov responsibility? If we all car pooled once a week, the "energy, CO2, global crisis" would end. So blame "us" for our collective failures.
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eddy 2:56PM (2/12/2008)
Don't forget that the VOLTs plattform will be used for the Opel/Saturn Flextreme, too. Actually this cars will be launched the same year. If the Opel Flextreme would get a similar price tag that would surely sell good. A golf-sized practical PHEV Opel for 27.000 euro will be something that will sell very good in germany where gasoline costs 8 dollars a gallon.
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rgseidl 3:39PM (2/12/2008)
It's not necessary nor feasible to guarantee a minimum price for petroleum (i.e. crude oil). In the US, it would be technically - but apparently not politically - possible to impose high taxes on on-road motor fuel only. These taxes are fixed so they float like a cork on the underlying variable cost of the product.
The net effect is that those variations amount to a smaller percentage of the final price, i.e. volatility is reduced and vehicle purchase decisions can be made with greater confidence in estimates of future operating costs.
In practice, that means consumers become willing to spend more up front on value added in the factory because real fuel savings are certain to translate into significant cost savings, regardless of what happens to the price of oil. That means more jobs for auto workers and more tax revenue for the government.
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bioburner 4:49PM (2/12/2008)
Electricity costs about 9 cents per KWH in the USA and gasoline is 3 bucks per, no contest electricity is way cheaper. Let not forget their are plenty of people out their willing to pay closer to 40K than 30K for an SUV which means there are plenty of people out there that can afford the EV at closer to 40K. Death of the electric car-I don't see it.
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Domenick 6:06PM (2/12/2008)
I suspect GM realizes that they have a fiduciary responsibility, not only to shareholders now, but also in the future. Within the Volt program lies the development of the tech that GM will incorporate into a good portion of it's future lineup. So, this "subsidy" could easily viewed as necessary r&d investment. I read an interesting article on this topic recently....
http://www.thecarconnection.com/blog/?p=773
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Throwback 6:48PM (2/12/2008)
While I personally am excited about the Volt, I am not convinced there is a great demand for electric cars. 99% of today's car buyers do not need to plug their cars in. i don't think there is a huge groundswell of buyers who can't wait to plug in their cars and live with a limited range.
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Wave54 11:27PM (2/12/2008)
Barring a truly major recession/depression in the Western countries, crude isn't going to drop to $30 a barrel! China and India can and will soak up any excess, especially at lower prices. The Volt will get superior fuel economy even for those who can't or don't plug it in at all.
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Chris 7:53AM (2/13/2008)
The government needs to get out of the way when it comes to fuel pricing and new technologies. Its the government fault why we are going down the corn-ethanol path.. not the industry.
I don't consider the Volt to be an electric car, it still will have an ICE in it. if it is decently sized (read Malibu sized) and pulls around 50+ in the city I would buy it at 40K
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takermaker 11:16AM (2/15/2008)
I am close to windpower and use surplus batterys from many sources especially industrial ni-cads-When plants and other industrys change from one battery technology to a new one-there is no industry in place to receive the old ones-thats great for experimentors like myself for projects but there is no plan to take these at the moment and recycle them-whats going to happen is they will accumalate like all the old tires people throw out.Its a shame i have industrial ni-cads that are big and cost 400 each and they are not worth 10 cents and no battery company will take them
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