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Criticism of the Obama Administration’s Volt Report

Did the review of GM’s prospects depend on unrealistic assumptions about its plug-in technology?
April 16, 2009

A couple of weeks ago a report from President Obama’s Auto Task Force roundly criticized GM’s Volt plug-in hybrid–an electric car designed to travel 40 miles on battery power alone and hundreds of miles using a gasoline or ethanol-powered generator. Now some are claiming that the task force’s assessment of the Volt may have been based on some erroneous figures supplied by a consulting firm.

A company reportedly hired to help the Auto Task Force, Boston Consulting Group, has recently published a report that includes estimates of battery costs that are far higher than GM’s own cost estimates, as well as those from other analysts, according to Felix Kramer, the founder of CalCars, an organization that promotes plug-in hybrids. He writes:

The report reaches questionable conclusions about costs for plug-in vehicles based on elevated battery costs, which it sees currently at $2,000 per kilowatt-hour now, declining to $500-$700 by 2020. This assumption is the heart of its analysis – and it’s one that automakers, especially GM, have strongly criticized. While not getting specific, GM has made clear that its battery costs (for packs, not cells) will be “hundreds less” than $1,000 for the first generation Volt and still lower in the second and third generations of the Volt, on which it is already at work. GM isn’t waiting for the “breakthroughs in technology” BCG sees as necessary.

Read the rest of Kramer’s analysis here.

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