It wasn't too long ago that General Motors' (GM) top executives sniffed at the notion of building hybrids. They were too expensive to be made profitably. Consumers wouldn't pay for fuel economy until gasoline prices stood well over $3 a gallon. And hydrogen-powered cars would make hybrids a short-lived option early in the next decade.
At the same time, Toyota (TM), then the world's fourth-largest automaker, was already launching its second-generation Prius hybrid in late 2003.
Today those GM execs are looking shortsighted. After the price of gas soared in early 2006, the company was caught unprepared as hybrids and other vehicles that emphasized fuel economy suddenly became hot commodities.
As a result, in addition to crashing a dozen GM gasoline hybrid models through the design process so that they can reach the market in the next several years, the company is now pushing plug-in hybrids. Plug-ins offer better fuel economy than today's hybrids because larger batteries store more energy and one can drive in pure electric mode longer. The most impressive one—the Chevrolet Volt concept being unveiled on Jan. 7 at the North American International Auto Show in Detroit—can run purely on electric power and can get a minimum 50 mpg over the long haul.
Volting Into the Future
If it's not just a public-relations play (this car does face some serious challenges), the Volt would mark a big shift in strategy for GM, as well as a major development in fuel efficiency. For several years, GM has pushed hydrogen fuel cells as its pet project for reducing U.S. oil consumption. But that's still a proposition for the next decade.
The company just last year got its first real hybrid—the Saturn Vue Green Line—to market in late 2006. And it's a mild one compared to the Toyota Prius. Says GM Vice-Chairman Robert A. "Bob" Lutz: "We don't think there will be a single solution."
Hence the Volt. If GM can get it built, the Volt will not only advance hybrid development but may also get consumers comfortable with the notion of plugging in their cars. It also pushes electric drive one step further and advances research needed for hydrogen fuel cell cars, which would also run on electric motors.
The Volt could be one cool vehicle. Its E-Flex hybrid system can drive 40 miles in pure electric mode before the lithium-ion batteries wear down. When the battery runs out of juice, a small gasoline engine kicks in and recharges the battery. If you drive it until the 12-gallon gas tank is dry and the battery drained, you'll go 640 miles at 50 mpg. And all on one charge from the home outlet.
Big Issue: Battery Safety
You can plug the car into a home outlet and fully charge it in about six hours. So for many Americans, the Volt would enable them to use little or no fuel in daily driving.
Tony Posawatz, vehicle line executive for the Volt, says 78% of drivers commute 40 miles or less a day. So they could get to and from work on a charge. But if they needed to go farther, the gasoline engine would be backup. "When we sold the EV1 [electric car], customers didn't want to plan their daily lives around charging the car," Posawatz says.
Even with fatter electric bills, Volt drivers would save money. Add $300 in annual electric bills but cut gasoline expense by $1,200, and drivers save $900 a year.
There's a catch, however. Several, in fact. The biggest is lithium-ion battery technology. People use them every day in laptops and cell phones, but scaling them up to store electricity on board a car is a different proposition.
Recall last year that Sony (SNE) had some of its laptop batteries catch on fire. That can happen in a collision or if the battery is overcharged with electricity, says Scott Lindholm, chief sales officer for Cobasys, a Michigan company contracted by GM to develop the batteries.
Ahead of the Technology?
They're also expensive, Lindholm says.
But he thinks the issues can be solved in time for GM to sell a plug-in hybrid Volt. Lutz says he wants to bring one to market in the typical amount of time it takes to design and engineer a conventional car—about three or four years.
There are doubters. James Hall, vice-president of automotive research firm AutoPacific, says cost, safety, and reliability issues all could take longer to solve than GM thinks. A lot more testing and development needs to be done.
"GM announced the car and they don't control the key technology," Hall says. "They could end up selling a hydrogen fuel cell before selling one of these."
Lutz admits that the batteries are a real challenge. So GM has hired Cobasys to develop one battery and Milwaukee-based Johnson Controls (JCI) to develop another. "We're taking a calculated gamble," Lutz says. "We're kicking off a full vehicle development program and betting that the batteries will be done in that time."
If plug-in hybrids make it to prime time, there are other issues for consumers. Will they really take to plugging their cars in?
Humbled by Tesla's Sports Car
While plug-in hybrids make great sense for city dwellers, there's a problem. Where will all those garageless urban dwellers plug in?
Imagine Seinfeld's George Costanza driving around the block a dozen times to find the perfect spot in front of his own place, and then needing an outdoor outlet to recharge the battery. If Jerry or George had an outdoor outlet, could they park in front of it? Or would Newman get the spot and charge his car's battery on Jerry's electric bill?
In any case, GM is forging ahead whether the batteries and the public are ready or not. And believe it or not, Lutz is behind the push.
The 74-year-old horsepower junkie was spurred to push plug-in hybrids and electric drive technology by Tesla Motors, a California startup that is selling a $100,000 electric sports car that stores energy by stringing together multiple lithium-ion laptop batteries.
Lutz says he figured that if some non-Detroit guys could cobble together their own battery system and build a $100,000, two-seat car that goes from zero to 60 mph in a tire-screeching four seconds and goes 250 miles without a charge, then GM should be able to make it work. "I have a great fondness for Dodge Vipers and Corvettes. Too much horsepower isn't enough," Lutz says. "What put me over the edge was the Tesla."
Now, Lutz needs to push GM over the edge and get the batteries and the Volt to market as quickly as promised.
Click here to see all the highlights of the 2007 North American International Auto Show.