GM Chief With Eye on Tesla Announces Natural-Gas-Powered Impala

General Motors Co. (GM) will begin selling a Chevrolet Impala next year that can seamlessly switch between compressed-natural gas and gasoline as the automaker looks to create a bigger market for alternative-fueled vehicles.

It’s a move similar to GM’s strategy with the Chevrolet Volt, a plug-in hybrid sedan that can go about 40 miles (64 kilometers) on electricity before a gasoline engine engages and powers a generator to recharge the battery.

“This approach takes range anxiety completely off the table by offering 150 miles of range using CNG and an additional 350 miles on gasoline,” Chief Executive Officer Dan Akerson said in prepared remarks that he’s scheduled to deliver today in Washington D.C. “There will be nothing like it on the road -- literally.”

GM, based in Detroit, is trying to improve its image as a maker of fuel-efficient vehicles to catch up with competitors such as Toyota Motor Corp. (7203), with its mass-market Prius hybrid, and Tesla Motors Inc. (TSLA) with its luxury electric cars. Tesla, and its CEO, Elon Musk, are a concern for Akerson, who sees the electric-car maker as a potentially disruptive force in the auto industry.

The bi-fuel Impala will go on sale next year as a 2015 model, according to an e-mailed GM statement. Akerson said in the speech that most deliveries will be to commercial and government fleets “and selling 750 to 1,000 units in the first model year would be a home run.”

CNG vehicles are part of a broader approach by GM to boost fuel efficiency and meet tougher U.S. mileage requirements. GM said improvements, such as alternative fuels and lighter materials, made to its 2011 to 2017 model year vehicles will save 12 billion gallons (45.4 billion liters) of gasoline in the U.S.

No ‘Moonshot’

“We know that U.S. energy security won’t come from a one-off moonshot,” Akerson said. “It will flow from our systematic investment in technology and innovation, our drive to get more from existing energy sources and renewables, our commitment to conservation, and it will be assured by fully and safely exploiting our shale gas reserves.”

GM’s electric vehicles face increased competition from Tesla. Akerson, a former telecommunication executive, has assigned a small team to study the upstart electric-car maker and how it might threaten the 105-year-old automaker’s business, Steve Girsky, GM vice chairman, said in July during an interview at Bloomberg headquarters in New York.

Akerson, in telling an anecdote about how he bought a Volt for his family, also took a jab at Tesla.

Charging Stations

“Over 10,000 miles, we have only spent about $75 on gasoline,” he said. “We take mostly short trips. But I like knowing that I can drive a Volt from Detroit to Palo Alto without having to play the EV-version of connect the dots.”

Tesla, based in Palo Alto, California, said in May that it was expanding its fast-charging stations across the country to allow owners of its plug-in electric cars to drive coast-to-coast.

Volt is GM’s flagship car in its efforts to have about 500,000 vehicles on the road by 2017 with some form of electrification. The model’s sales have been below the company’s initial projections and GM announced on Aug. 6 that it’s lowering the starting price of the 2014 model by $5,000 to compete against the less-expensive and better-selling Toyota Prius and Nissan Motor Co. (7201)’s Leaf electric car.

GM last week said a Cadillac version of the Volt called ELR will go on sale in January in major U.S. cities at the starting price of $75,995. That doesn’t include federal tax credits of as much as $7,500.

Natural Gas

GM last year began selling pickups that run on both gasoline and CNG aimed at fleet customers. Around the time of the pickup announcement, Joyce Mattman, director of GM commercial product and specialty vehicles, said such a truck could save $6,000 to $10,000 in fuel costs over a three-year period because CNG is cheaper than gasoline.

While there are more than 168,000 gas stations in the U.S., there are about 1,200 CNG fueling stations with only about half of them open to the public, Akerson said.

“To give the CNG infrastructure time to play catch up, we got creative and engineered two energy reservoirs for the Impala, just as we did for the Volt,” Akerson said. He spoke at an event marking the 40th anniversary of the OPEC oil embargo sponsored by Securing America’s Future Energy, a nonpartisan group of political, business and military leaders.

To contact the reporter on this story: Tim Higgins in Washington at thiggins21@bloomberg.net

To contact the editor responsible for this story: Jamie Butters at jbutters@bloomberg.net

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