The End of the Chevy Volt?

[WriteDown]

Almost makes you cry

http://www.bloomberg.com/apps/news?pid=20601087&sid=aCJOCuv6_jg8&refer=home#

GM’s Volt Electric Said Still in Plans After Obama Orders Cuts

By Jeff Green and John Hughes

April 3 (Bloomberg) -- The Obama administration, pressing for more fuel-efficient vehicles, won’t block General Motors Corp.’s Chevrolet Volt electric car even after the president’s task force called it too expensive, a person familiar with the matter said.

Questions about the plug-in Volt’s future arose after the administration ousted Chief Executive Officer Rick Wagoner on March 27 and criticized the car in a report that said government-supported GM’s recovery plan was insufficient.

“While the Chevy Volt holds promise, it will likely be too expensive to be commercially successful in the short-term,” according to the March 30 report by President Barack Obama’s auto task force.

The administration’s concerns about the Volt were offset by its belief that GM needs cleaner, fuel-efficient vehicles to succeed in the long term, said the person, who asked not to be identified because the task force’s deliberations are private. GM’s problems may mean the company won’t meet its timetables for producing and selling the Volt though, the person said.

The automaker said yesterday it still plans to deliver the vehicle to showrooms in November 2010, as planned.

GM has committed about $1 billion to develop the Volt, which the Detroit automaker is banking on to leapfrog Toyota Motor Corp.’s Prius, the industry’s best-selling hybrid electric vehicle. GM said in March it was adding staff to the Volt program even as it cuts 10,000 salaried workers this year to keep $13.4 billion in U.S. loans.

12 Years Late

“The reality is, the Volt doesn’t make sense economically in the short term, and it’s been made very clear that everything is on the table right now,” said Brett Smith, an alternative energy analyst at the Center for Automotive Research in Ann Arbor, Michigan.

“But the Obama administration has put such a high priority on the electrification of the vehicle that it would be a very difficult policy decision to drop the Volt,” Smith said.

The Volt, designed to go 40 miles solely on electric power after being charged at an ordinary household outlet, is due to go on sale more than 12 years after Toyota sold the first Prius in 1997. After the Volt’s battery is exhausted, a small gasoline engine on board recharges the battery to power the wheels.

GM is at least a generation behind Toyota in advanced “green” power-train development, the Obama task force said in the report.

The expense of the car was singled out twice in the five- page report, in which the government gave GM 60 days to cut more costs and debt to avoid bankruptcy.

‘Much More Expensive’

The Volt “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.

The language sparked commentary on blogs. “Since the government now decides what stays and what goes, could the Volt get thrown out with the bathwater?” said a March 31 posting on GM-Volt.com.

The blog Treehugger.com posted an article about the task force comments under the headline, “Will We Ever See Chevy Volts For Sale?”

GM hasn’t said how much it will charge for the Volt. Industry analysts have estimated the price at $30,000 to $40,000. The Prius ranges from $22,000 to $24,270 and Honda Motor Co.’s Insight hybrid, which went on sale last week, sells for $19,800 to $23,100, according to Edmunds.com, a vehicle pricing Web site based in Santa Monica, California.

“This thing is full steam ahead, nothing has changed,” said GM spokesman Rob Peterson. GM has asked the U.S. Department of Energy for $10.3 billion in funds to develop advanced- technology vehicles with better fuel economy.

‘Vastly Idiotic’ Vehicles

“There are a lot of vehicles that GM makes that are vastly idiotic,” said Dan Becker, director of the Safe Climate Campaign, a group in Washington that works for environmentally “clean” cars. “The Volt makes a lot more sense than the Tahoe, Suburban and Tahoe hybrid.”

GM said in January it will open a lithium-ion battery factory in Michigan, the first for a large U.S. automaker, to assemble the power packs for the Volt. The plant will create the packs from battery cells supplied by Compact Power Inc., a unit of Seoul-based LG Chem Ltd.

The Volt may be produced in volumes of about 60,000 annually once it goes on sale, GM has said. It is scheduled to be built in Hamtramck, Michigan. Depending on how the fuel economy is measured, it may be the first car to exceed the equivalent of 100 miles per gallon of gasoline in the U.S.

“The Volt is certainly a very tiny step in the right direction,” Becker said.

[BeatleBoot]

1. Highly doubtful that it's the "end of the Chevy Volt"

In fact, the "drama" of the article is laughable.

60,000 vehicles per year is low volume stuff. Similar to Corvette volumes, if I'm not mistaken.

In manufacturing, lower volume means higher cost and, in turn, higher price.

There is a huge tooling investment up front that won't be paid back until vehicles are sold (sometimes a 4 to 6 year time frame for payback to begin - not breakeven - just to begin payback.

The GM's of the world aren't going to make the up front investment until they are confident that the sales are there.

I am so glad that Obama is supporting GM in their electric car endeavors, its needed.

I just hope everyone understands the business model in Detroit. It's capital intensive up front with pay back post-launch. There needs to be compelling reasons to make the up front investment. And that's where Obama Administration comes in.

[doc03]

2. At the present time the Volt is the 'vastly idiotic' vehicle

With the gas prices down Hybrids aren't selling. The people that are buying cars today are buying SUVs and pickups again. Toyota currently has a 80 day supply of the Prius, there is no waiting list today. Everyone got on the auto executives for making cars people don't want, that was just untrue. A year ago people wanted gas hogs then when the gas went to $4.00 they all of a sudden wanted a Hybrid. Just how in the hell does anyone know what the American people want? In my opinion the only way to put people in hybrids is either tax gas to keep it over $4.00 or else pay a huge incentive to people that buy a hybrid.

[msongs]

3. China will be world's seller of electric cars. GM should be ashamed nt

[DainBramaged]

4. No, WE should be ashamed for not supporting GM

Nissan-Renault JUST announced a joint venture with THE CHINESE GOVERNMENT to build an electric recharging network and make China the world's largest market for electric cars, provided by Nissan of course.


Of course, you'll probably clap about that instead of saying our government should be ashamed for not supporting the same kind of initiative.