Will GM's Shakeup Kill the Volt?
The government-appointed chairman is bringing big changes to the automaker.
Kevin Bullis 12/04/2009
- 4 Comments
It's not clear yet what the management shake-ups at General Motors this week, which sent the CEO, Fritz Henderson, packing and shuffled around senior management, will mean for the Chevrolet Volt, the much hyped electric vehicle (with a gas engine for added range) due out next year.
Fans of the Volt--which is also called a plug-in hybrid--have been nervous about its fate ever since an Obama administration commissioned report in March said the vehicle isn't likely to be an economic success. The car is likely to be too expensive, it said, which is due to its large battery pack. Fans have got more reason to worry now that the man the federal government appointed as chairman of GM, Edward Whitacre, is taking over as CEO. Although he says he's taken the position temporarily, his move puts him in a better position to influence day to day operations and decisions about products. That could hurt the Volt if he agrees with the government report.
Since last March, when the government bought a 61 percent share of the company, GM executives have repeatedly said the Volt program will continue, and that the car will come out on time. This week, after Henderson got the axe, it stuck to that story at the L.A. auto show, with vice chairman Robert Lutz highlighting progress on the Volt in a keynote speech. But since then Whitacre has started to make major changes to GM management. It's unclear what the company will look like when the dust settles.
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Duude
7 Comments
Voltless
The Volt will kill the Volt. The vehicle will be a boondoggle. Far too many excited for plug in hybrids don't really understand how inefficient battery technologies remain. They're expensive, have little range, must be replaced faster than an internal combustion engine, and because of these inefficiencies it must remain a hybrid technology. The Volt didn't work the first time because it exhibited all these problems. Five years later, we're still looking for better range, cheaper battery and better endurance. One day, but its just not ready for prime time for all but those with money to burn.
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gametheoryman
21 Comments
Re: Voltless
What "expensive" means depends upon the cost of gasoline, which depends in turn upon our government's response to global warming and energy "independence."
Someone who recharges their Volt every day and drives the miles available from the battery is largely exchanging the cost of about 400 gallons of gasoline every year for a higher initial cost of the vehicle minus the cost for the electricity used. The success of the Volt ultimately depends upon which set of costs is higher.
If state public utility commissions are doing their jobs well, the price of the electricity in the middle of the night should be set at the incremental cost of the extra electricity produced to serve it. This is near zero.
Coal and nuclear plants take so long to heat up, they stay on, producing much more power than is demanded at a full average cost. A huge number of Volts can be recharged then without producing any more electricity. They only take electricity away from some very low value uses, a near zero cost.
So what will the cost of the gasoline be each year? $1000? $2000?
This cost largely depends upon our government's response to global warming and energy independence. Implicitly or explicitly, a response to global warming raises the cost of emitted carbon, which raises the cost of gas. An efficient response for energy independence also raises the cost of gas.
If we do nothing to address these problems, gas may remain near $2.50 per gallon. At this price the Volt is likely to be a loser, especially if state PUCs don't do their jobs well.
If we respond efficiently to these problems, the Volt might easily be a winner. No one knows exactly what the extra cost would be if we respond efficiently, but it might ultimately be in the $2-$4 range. This would give us gasoline prices that Japan and much of Europe pay now. The Volt is clearly a winner at the high end.
Other factors have an effect, but their unknowns are nowhere near as important as the unknown cost of gasoline. The lifespan of a Volt should be higher than a regular car, and for most of it's life maintenance costs are lower. It's engine is rarely used, and even then it runs at an easy, constant pace; there's no transmission to break down; and electric motors have long lives. It's easier to fix when something does break. But those battery packs are pricey when they need replacement. High and low estimates of these factors don't change our calculations much compared to the wide range of possible gas prices.
Ultimately, if our governments fail us, the Volt is likely a loser. If they do their jobs well, I'd bet it's a winner.
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