Even though General Motors has been in the news of late after applying for bankruptcy protection in U.S., the company is set to emerge as a more powerful and sustainable force in the US car market after agreeing a deal with the U.S. government. While the company’s overseas divisions are in the process of being sold off, the main U.S. business will emerge from bankruptcy for business as usual.
The Chevrolet Volt is expected to be General Motors next venture into the electric car market although it is causing significant controversy across the sector. While officially it is classed as a hybrid, offering electric and fuel power, the company has chosen to describe it as an electric vehicle equipped with a "range extending" gasoline powered internal combustion engine.
Why does GM make it so difficult for itself in the electric vehicle market!
The Chevrolet Volt
The main element of the Chevrolet Volt which is causing so much controversy is the "plug-in hybrid system" which in simple terms means that the vehicle is propelled by electric power. This power comes from on-board lithium ion batteries which can be "refuelled" at an electric charging point or buying a gasoline engine. So while the power which is running the car is purely electric, the systems which produce the electric to power the car are split between gasoline and battery power.
How far can the Chevrolet Volt travel on one charge?
This is where General Motors becomes unstuck because it has been revealed that the Chevrolet Volt is only able to travel 40 miles (64 km) on a full charge of the lithium ion batteries although this can be extended to in excess of 600 miles (over 1000 km) when the gasoline powered internal combustion engine kicks in. The gasoline powered system either charges the lithium ion batteries or the internal combustion engine drives the electric generator which then powers the car itself.
So when you consider that this "hybrid" vehicle is only capable of 40 miles on a full battery charge, although it can reach a further 600 miles using a gasoline powered internal combustion engine to recharge the batteries, is this a true reflection of what consumers require?
Many people believe this is something of a half-hearted attempt to hit the hybrid market and something which could backfire significantly in the future by tempting some consumers to a vehicle which many believe is not a true hybrid.
Why is the Chevrolet Volt still described as a hybrid?
While the Chevrolet Volt is attracting much controversy in the electric vehicle market, with many people scratching heads as to why the vehicle itself can be referred to as a hybrid, the answer is simple. Due to the fact that they gasoline fuelled internal combustion engine has no direct link to the wheels of the vehicle it is technically known as a hybrid - or a plug-in hybrid. As the internal combustion engine either recharges the batteries in the vehicle or powers a generator which then transfers power to the wheels the vehicle is strictly speaking "powered by electric".
Expected sales of the Chevrolet Volt
The Chevrolet Volt will be available in U.S. showrooms toward the end of 2010, even though it will be officially known as a 2011 model, and there are plans to roll it out across the world. The company used the British International Motor Show in July 2008 to confirm that the Chevrolet Volt, Opel Volt and Vauxhall Volt would be hitting the market in 2011. The Volt will also be known as the Opel Ampera in many parts of Europe, with an agreement for it to be produced and sold by GM Europe (although this agreement may be in doubt as the European subsidiary of General Motors is currently being sold off).
As the UK car market is being used as the entry point into Europe, the company has also announced plans to introduce the Volt brand into Australia by 2012. We fully expect more announcements along the way as GM looks to increase the exposure of the Chevrolet Volt and hopefully try to regain some of the power lost over the last few months.
Did General Motors do a deal with the US authorities?
There is a growing suspicion that the U.S. authorities have colluded with General Motors in the creation of the Chevrolet Volt primarily because of the position the company holds in the U.S. economy and the number of employees dependent upon the operation. It was no surprise to see that in October 2008 the United States authorities approved the Emergency Economic Stabilisation Act of 2008 which set aside over $700 billion for the development of hybrid vehicles.
Under the terms of the stabilisation act each hybrid vehicle attracts a $7500 tax credit if it has a battery pack capacity of 16 kWh or more. Interestingly, this particular band fits perfectly with the credentials of the Chevrolet Volt and therefore opens up the possibility of massive government subsidies for a company which is currently on its knees.
The price of the Chevrolet Volt
While initially, when taking into account the $7500 subsidy from the U.S. authorities, General Motors had hoped to sell the vehicle for around $30,000 it looks as though it would be nearer $32,500. The price in the UK has been set at around the £20,000 mark which is as near as you could get to the mass market for a hybrid vehicle of the type and size of the Chevrolet Volt. The Australian market, which is set to open in 2012, will see the vehicle sold for around $30,000 which is a price that should attract significant interest from consumers.
Despite the fact that General Motors already has significant experience in the electric car market, controversial or not, it is surprising to see the company launched its own hybrid vehicle which many believe is simply a revamped traditional gasoline powered vehicle. Whether the company is looking to "hedge its bets" or simply not willing to go down the road of a purely electric car is unclear but the deal with the U.S. authorities, which will see a $7500 tax credit for each vehicle sold, is something which will help the company make a success of the Chevrolet Volt.
It is uncertain as to whether General Motors, in its current form or its future form, will ever make a significant mark in the electric vehicle market. Indeed many people believe that the company’s heart is not in the sector which is disappointing if true.