Can GM's Volt Save the Company?

The planned plug-in hybrid car is at the core of the automaker's attempt to reinvent itself. But will the car be a commercial success?

In the wake of harsh criticism from President Obama and his administration last week, GM is building a case that it's taking the steps needed to make its planned plug-in hybrid, the Chevrolet Volt, a commercial success.

European Volt: The Opel Ampera uses the battery and electric-drive system developed for the Chevrolet Volt plug-in hybrid. Credit: GM

Last week, President Obama said that GM had failed to present a convincing plan to turn around its decline, and he warned that the automaker may face bankruptcy. Part of the problem, according to a report by his administration, is that the company is not producing the right mix of vehicles to compete with other automakers. For example, the Volt, the company's attempt to overcome Toyota's lead in green vehicle technology, "is currently projected to be much more expensive than its gasoline-fueled peers and will likely need substantial reductions in manufacturing cost in order to become commercially viable," the report said.

But the Volt is central to GM's plans for the "reinvention of our company," said Tony Posawatz, the vehicle line manager for the Volt, in a conference call with reporters last week. The car can be recharged by plugging it in, and will allow people to drive 40 miles without using any gasoline. For longer trips, an onboard generator that runs on gasoline or ethanol will recharge the battery to extend the car's range. GM plans to use the basic platform for the Volt in a range of vehicles. Indeed, it has already announced two derivatives of the car, one a Cadillac and the other a plug-in hybrid for Europe.

Posawatz acknowledged that the first-generation version of the Volt, due out at the end of 2010, will be more expensive "than one would want." But he said that the company is already developing the second generation of the car, which could be thousands of dollars less expensive. The company has also been working with local governments and utilities to help it sell more cars by creating various incentives.

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One way to save money is by improving the battery system. For the first version of the Volt, GM has taken extra pains to make sure that the battery will last, Posawatz said. A dedicated heating and cooling system will prevent the temperature extremes that can quickly degrade a battery. In addition, because discharging the battery completely can also shorten its life, control systems keep the battery from being discharged more than about 50 percent. But these measures could be overkill, Posawatz noted. "We have put in place a lot of extra fail-safe engineering solutions," he said. "So there are some opportunities [to reduce costs] as we refine the design."

Indeed, tests on similar batteries by the Electric Power Research Institute have shown that they can last for more than 10 years even if discharged over 75 percent. Using more of the energy in the batteries would reduce the number of cells needed. Posawatz said that the dedicated heating and cooling system might also be unnecessary.