General Motors (GM) is counting on its new electric car, the Volt, to save not only the company’s battered reputation but its soul. (No matter how well it sells, it won’t save GM’s leading market share, which will soon be gone for good.)
The Atlantic‘s Jonathan Rauch paints the Volt as a metaphor for GM’s efforts to capture its old glory–specifically, to lead instead of follow–and in this endeavour at least, the company comes off OK. Alas, the same probably can’t be said for the Volt.
The Volt will almost certainly not be released in 2010, as GM has promised:
It is 6 a.m., and [Andrew] Farah, [the Volt’s chief engineer,] who is 47 and has angular features and prominent black glasses, is rushing to make a 7 a.m. meeting. The car, he says, is 10 weeks behind the original schedule. Any more slippage, and the 2010 deadline will be history. Even if no more time is lost, he will have only eight weeks to test the underbody, the car’s structural base.
Is that enough time? He answers indirectly. In some cars, he says, testing the underbody can take a year.
The battery remains a major problem:
For a century [of electric car research], the deal-breaker has been the battery. Any battery with nearly enough power to drive a full-size car was prohibitively large and heavy, prohibitively expensive, unable to go more than a few miles on a charge, or (usually) all of the above. Only recently has the advent of lithium-ion batteries brought a full-range electric car into the realm of the practical. Even so, the battery for the Volt doesn’t yet exist, at least not at a mass-market price, and building it poses formidable challenges. Loading enough energy into a sufficiently small, lightweight package is hard (the battery isn’t much good unless it fits in the car); keeping it cool lest it burst into flames is harder; making it durable enough to last 10 years on bumpy roads is harder yet; manufacturing it in high volumes and at mass-market prices may be hardest of all.
Given the challenges, standard procedure dictates first building and testing the battery, and only then designing a car around it. That process, however, would take until 2012 or 2013—time GM does not have if it wants to beat Toyota. The only hope of meeting the 2010 deadline is to invent the battery while simultaneously designing the car…
When I called Menahem Anderman, a prominent battery consultant in California, he said the lithium-ion battery will be expensive—far too expensive to make sense as a business proposition as long as gas is $3 or $4 a gallon. (“At $10 a gallon we can have a different discussion.”) Its life is unproven, and unprovable in the short time GM has allotted. To deliver tens of thousands of vehicles in 2010, Anderman said, “they should have had hundreds of them already driving around for two or three years. Hundreds.
GM can’t explain how it will deliver the car on time. Instead, it invokes the Apollo program (which, if memory serves was given a decade to succeeed, not a couple of years):
In conversations with everyone from staff engineers to Rick Wagoner, the chairman and CEO, I heard references to the Apollo program. “John Kennedy didn’t say, ‘Let’s go to the moon and, you know, we’ll get there as soon as we can,'” Wagoner said in a recent interview in his office, atop a high-rise in Detroit. “I asked our experts, ‘Guys, do we have a reasonable chance of making it or not?’ Yes. ‘Well, then, let’s go for what we want rather than go for what we know we can do.'” With the Volt, GM—battered, beleaguered, struggling for profitability—hopes to re-engineer not just the car but the way the public thinks about cars, the way the public thinks about GM, and the way GM thinks about itself.
GM’s vice chairman Bob Lutz is, shall we say, sceptical of global warming:
A few months ago, while GM was busy trying to improve its environmental image, he couldn’t stop himself from telling reporters that global warming is a “total crock of shit.”
Lutz likes the idea of kicking the gas habit, though:
Lutz [is] a hawk on energy security. “The one thing I care about is getting off imported oil,” he told me in December, over dinner in Detroit.
The inspiration for the Volt is Silicon Valley, specifically Tesla and Apple:
[Chris] Preuss [GM’s PR honcho] had been arguing that GM needed a breakthrough product in the mould of the iPod. “Apple Computer was almost on its last breath,” Preuss says. “Once the iPod hit, all the other things they had suddenly looked relevant again.” [Not surprisingly, GM referred to the Volt prototype as the “iCar.”]
Whatever happens with the Volt, it won’t improve GM’s financial situation:
Positioning the Volt as affordable family transportation—Chevy’s bread and butter—is an order of magnitude harder [than selling a few cool cars]. It implies selling not thousands but hundreds of thousands of cars, and at Chevrolet rather than Cadillac prices. The battery alone is likely to cost something in the high four figures. At Chevy prices, GM can expect to lose money on every Volt it sells, at least in the early going, and possibly for years.
Outflanking Toyota makes good sense strategically, but GM’s market capitalisation is less than a tenth of Toyota’s. Unless battery costs fall as quickly as GM hopes, the car could break the bank by succeeding.
Vice Chairman Bob Lutz doesn’t care about that:
“It may be years before we make a dime on this product. Years! And the board said, ‘Don’t even talk about profitability. General Motors needs this car.'”
After spending six months researching the Volt (and being granted an impressive amount of access), The Atlantic‘s Rauch also thinks the Volt will be late and expensive:
My own feeling, just a reporter’s guess, is that battery glitches have reduced the odds of GM’s having the Volt in showrooms by late 2010, but advances in the underlying technology have increased the odds of its producing the Volt early in the decade. In other words, delay on the order of months is looking more likely, but delay on the order of years is looking less likely. I’d also guess that the car’s sticker price will be higher than GM initially hoped, maybe north of $35,000.
But like GM, he’s still excited about it.
Business Insider Emails & Alerts
Site highlights each day to your inbox.