The Detroit Hybrid Electric Car Show

some cars at zero pollution
some cars at zero pollution

Automakers now have to contend with increasing fuel economy standards and government regulations and as a response, more and more hybrids and electric cars have been showcased in the latest Detroit Auto Show currently underway.

Despite analysts’ expectations that the hybrid market would grow significantly in 2012, the main drawbacks continue to be the lower pump prices for gasoline and higher purchase cost for these kinds of vehicles. The automakers such as Toyota, Honda, Ford Motor, and others, continue to build and market hybrids and other plug-in vehicles.

Electric and hybrid cars cost several thousand more than internal combustion engines. BMW said that the ActiveHybrid 5 would be priced at $8,700 above the gas-fueled 535i. For GM, the Volt costs double compared to the Cruze, after the federal tax credit application.

While consumers are able to recover their costs for purchasing alternative fuel vehicles within a year, the lower gas prices has extended that recovery to more years. Another drawback is that the shortages in batteries and other important parts held back sales last year.

According to Carlos Ghosn, the CEO of Nissan said, “We have a bottleneck with the batteries.” He added that he is expecting supplies to increase as their flagship Leaf goes online in markets in the United States. The electric car and battery arrays would start to be built in Tennessee, United States.

Ghosn further adds, “A lot of consumers are thrilled that they have the option of buying an electric car. We sold 9,700 the first year. We can double that. I am much more optimistic on the prospects for electric cars than many people. We are very, very far from our potential.”

As for GM, the carmaker is planning to sell 45,000 Volts in 2012 even if they fell short of their 10,000-unit target for the previous year. GM’s CEO, Daniel F. Akerson said that the company would build as many Volts as the demanded by the market. He said, “We’re going to match production with demand. There are new variables in the equation, so we’ll see.”

Toyota for its part would unveil its Prius C, a smaller version of the most popular hybrid in history, the Prius. The original Prius sales dipped 3.2 percent last year mainly due to the disasters in Japan. The company is also making available the Prius V this fall and the plug-in Prius this spring season with unveiling of a hybrid plug-in concept named the NS4 while Lexus, the company’s premium brand would be unveiling a hybrid sports coupe concept.

Other carmakers also had their own versions. For Honda, its upscale Acura brand unveiled two hybrid versions, namely the ILX and the NSX. These vehicles would be built in its new Ohio plant. For Volkswagen, the Jetta model would unveil its hybrid version while Mercedes would also unveil two E-class hybrids. These German hybrids would not be available in the United States. Volvo would also have its very own hybrid plug-in concept.

General Motors on Hyperdrive

chevyVOLT
chevyVOLT

Top executives of General Motors convened on a conference call to discuss the company’s response to the current federal investigation to the flagship vehicle of GM, the Chevrolet Volt plug-in hybrid.

The call was led by GM CEO Daniel F. Akerson from his Virginia home during Thanksgiving. This was the first major crisis he has faced as CEO of America’s largest automaker. The call was done to act quickly and decisively on the issues.

Akerson was quoted as saying, “This could be a defining moment for us.”

After much debate, the executives decided to go public in its defense of the safety of the Volt. It even took a step further in offering free loaner cars to owners who are worried as to the results of the inquiry into the incidence of post crash fires in the lithium-ion battery pack of the Volt.

Market analysts say that GM’s moves are aggressive with a high potential for risk for a company undergoing a safety inquiry to one of its flagship vehicles. This is just one of the moves typical of the new face of management in the Detroit car culture. Outsiders such as Alan Mulally from Boeing took a job at Ford while Sergio Marchionne of Fiat instilled a new thinking in Chrysler.

Compared to the other CEOs, Akerson has made more waves to change the conformity and predictability deeply instilled in GM tradition. Upon assuming office, he said he is bent on defining himself as anything but a traditional auto executive. Many see him as impatient on obtaining results but find that his learning curve on balancing quick response as against the complexity of the industry is improving.

One such instance was the initial response of GM on the federal inquiry. When asked about the federal investigation, Akerson said that GM was willing to buy back Volts of concerned owners. Back at the head office, company spokespersons scrambled to explain the offer as a measure of goodwill and at the same time denying that the policy was done entirely on the fly. Since then, the GM CEO has been unavailable to the media.

For his part, Akerson said that his unconventional methods and outspoken style is different from his predecessors. He said, “I guess being new is both an advantage and a disadvantage because I kind of look at things a little bit differently than everybody else. I don’t have the history.”

Despite such pronouncements, the GM CEO is well aware of the company’s stigma of being slow and unresponsive. As a response, his first moves were to eliminate about thirty internal boards and committees that he saw as hampering the company’s ability to be attuned to the needs of its customers and client base. Since 2010 when he took the helm of the company, he has guided GM through its public stock offering and was instrumental in the success of the labor talks with the United Automobile Workers. Despite such successes, he still has a long way to go, from solving the Volt’s battery problems to keeping the modest successes of the company after its bankruptcy and bail out just a couple of years ago.

GM Offers Buy-Back Option for Volts

dollarbills
dollarbills

In an unprecedented move, General Motors announced it would buy back Chevrolet Volts of owners who are concerned about fire risks to their vehicles. In the announcement made last Thursday, the company also promised to comply with changes to the battery pack design based on the recommendations of federal regulators.

The announcement was made in an interview with GM’s CEO Daniel Akerson by the Associated Press. Akerson reiterated the safety of the plug-in hybrid but offered the Volt owners that the company would buy back the units from unsatisfied customers.

This buyback offer was confirmed by GM spokesman, Rob Peterson. He said, “If there’s a customer that wants to sell back their Volt, we’ll buy it back from them.”

This is an unusual move for car companies as the common process is to have recalls when regulators or customers report issues with its cars or parts. The last one done was Ford Motors, when it offered to repurchase older Windstar vans in 2010 when rear axle issues were brought forth for investigation.

In this case, the Volt has been put under the microscope after the National Highway Transportation Safety Administration when last November 25 that an investigation was being undertaken as to the 400 pound battery array of the vehicle.

In a previous move, the car maker offered free loaner cars to all Volt owners while the investigation is ongoing on the possible safety issues to the lithium-ion batteries. The NHTSA reported two post crash fires to the battery pack of the Volt. The first one occurred three weeks after the battery was damaged while the second one occurred after a week. A third one started to spew smoke and sparks started to fly after a simulated crash test.

In another interview, Akerson said that the company would make design changes to the battery pack of the Volt if they are recommended after the investigation made by federal officials. He said the alterations would be done “if there’s an engineering solution required” to increase the safety of the vehicle.

Some owners though are not too concerned with the federal investigation. One owner, Eric Rotbard, a lawyer in White Plains said “It just has to be treated carefully in the event of a crash. I really am not worried. We just have to get more comfortable with the technology. It doesn’t seem to be any less safe for me.”

In a fit of irony, GM reported that November 2011 was the best month in terms of Volt sales since its introduction last year. The company said there were 1,139 Volts in November, making 2011 numbers reach 6,142. The company though recognized that it would not be able to achieve its target of selling 10,000 Volts for the year.

China and General Motors Enter into EV Partnership

chinaFLAG200
chinaFLAG200

Last Tuesday, General Motors announced that it has entered into a joint venture partnership with a Chinese automaker. Included in the agreement are transfers of technology, such as battery design and other core electric vehicle technologies.

GM is the leading conventional carmaker in China and has expanded such reach in spearheading the next generation of electric cars to be offered to the Chinese market. This comes after the Chinese government is exerting pressure on foreign carmakers to share their technologies with Chinese counterparts. For its part, GM steered clear of the issue by stating that the agreement did not include the importation of the Chevrolet Volt, its flagship electric hybrid.

According to Stephen J. Girsky, Vice Chairman of General Motors, indicated that the Chinese government did not request that Volt technologies be included in the joint venture partnership. With this, GM understands that the Volt would not be eligible to be covered by the government subsidies provided for purchasers of clean energy vehicles. Instead, the joint venture is part of GM’s effort to improve the technical capabilities of the Chinese partner automaker. This is key as GM is able to sell more cars in China through this partnership than what it sells in the United States.

“This is not a political decision today. It’s a business decision,” according to Mr. Girsky.

The new electric car development partnership is a fifty-fifty partnership between GM and the Shanghai Automotive Industry Corporation, China’s largest automaker. The partnership is called the Pan Asia Technical Automotive Center based out of Shanghai. The previous project of the partnership is the LaCrosse eAssist currently on sale in both the U.S. and China. This vehicle is termed a mild hybrid because the electric motors help increase the fuel economy of the main powerhouse of the car, a gasoline engine.

Included in the agreement is expanding the current partnership into an electric car development center. This would be achieved would include transfer of battery technology as well as inverter technology. Inverters assist in controlling the transfer of electricity between the batteries and the electric motor.

Is the Chevrolet Volt a True Hybrid Car?

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.

Conclusion

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.