Will GM's Volt Change History?

by: Jim Kingsdale August 20, 2008 | about stocks: GM    

Jim Kingsdale

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Details of GM’s (GM) plans for the first-ever production model plug-in hybrid electric vehicle [PHEV] were discussed in a report in Wednesday’s Financial Times.   The car is still scheduled for 2010 delivery.  Now we know that it’s 400 pound lithium-ion battery will have a 40 mile range and will be recharged on the move by a 4 cylinder gas engine which GM says will let the vehicle get about 150 miles per gallon.  

I suppose the engine cuts in automatically when the battery gets down to a certain amount of remaining power.  But if GM were clever enough to let the driver choose when to re-charge via the engine, some drivers might well get nearly infinite miles per gallon simply by driving less than 40 miles before recharging via the electric plug.  No doubt many drivers could easily do that. 

I’d bet the Volt will be a very popular car especially if oil prices spike higher after 2010, as I suspect they will.  I think people will love refueling their cars at home at night and they will love the quiet ride.  GM is seeking government subsidies, confirming estimates that the revolutionary power plant will be too expensive for average buyers. 

My advice to GM (they haven’t called yet): price it high and they’ll get all the exotic car early adopters they can supply.  Government will not be needed.   A friend of mine has already put his name on the waiting list and he’s somewhere over number 25,000.  I doubt they’ll make more than that the first year. 

GM estimates 300,000 - 500,000  PHEV’s will be on the road by 2015.  (SQM fans note: that’s 200 million pounds of lithium batteries.) This is clearly not enough cars to make any noticeable dent in global oil demand.  It might save 300 million gallons of gas a year, which is about 7 million barrels or maybe 20 kb/d.  And that is by 2015. 

The ironic reality may be that just as the future car that can free us of oil dependency makes its appearance, the world will be suffering from the worst oil shortage in history.  

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This article has 40 comments:

  •  
    Aug 20 06:37 PM
    I believe the driver can determine when the gas engine kicks in by recharging often enough so that the battery never has to be recharged by the engine. There might be some algorithms to force the gas engine to kick in otherwise, (like at high loads with A/C), but I'm not sure.

    As for not making a dent in global demand, how can any one model of car do that!? And it's not ironic that the Volt will be appearing when we have our worst oil shortage ever; it will be offered to help slow the shortage a little bit and it will provide customers with a product they want.

    Seeking Alpha contributors on the auto industry seem to be trying to drive GM's stock down further with their negative spin on all things GM. So that means they're either working for a competitor and/or they are shorting GM stock.

    For full disclosure, I'm on the Volt waiting list and I'm a former GM employee by the way.

    UH2L
    www.thingsivenoticed.c...
    Reply | Link to Comment
  •  
    Aug 20 06:52 PM
    Problem is, the best-laid plans of mice and GM will go awry when Toyota throws a monkey wrench into the works...

    Toyota will be introducing a later version of its 3rd Generation Prius at around the same time, also to be powered by a Lion battery pack which can also give the Prius a 40-mile pure-electric range, just like the Volt. And it is expected to cost about $30,000. That's $10,000 less than the Volt.

    When the average head of household is given a choice between the two cars with similar capability but $10,000 difference in price, it makes for a HUGE monkey wrench in GM's plans.

    That's what happens when you give your rival a 10-year head-start in developing HEV/PHEV technology. :-P
    Reply | Link to Comment
  •  
    Aug 20 06:52 PM
    Problem is, the best-laid plans of mice and GM will go awry when Toyota throws a monkey wrench into the works...

    Toyota will be introducing a later version of its 3rd Generation Prius at around the same time, also to be powered by a Lion battery pack which can also give the Prius a 40-mile pure-electric range, just like the Volt. And it is expected to cost about $30,000. That's $10,000 less than the Volt.

    When the average head of household is given a choice between the two cars with similar capability but $10,000 difference in price, it makes for a HUGE monkey wrench in GM's plans.

    That's what happens when you give your rival a 10-year head-start in developing HEV/PHEV technology. :-P
    Reply | Link to Comment
  •  
    Aug 20 07:17 PM
    169775: According to your numbers, Toyota started its PHEV research in 1987 and found a way to put $10,000 worth of lithium-ion batteries in a car for only $4,000.
    Reply | Link to Comment
  •  
    Aug 20 07:22 PM
    That's why GM is seeking a govt subsidy. Regardless of what Toyota says, it is likely the Japanese govt is underwriting the Prius.
    Reply | Link to Comment
  •  
    Aug 20 07:35 PM
    @142738:

    The base price for the Prius is $22,000, of which $3000 is the cost of the current Nickel-Metal-Hydride battery.

    Take out the NiMH battery and put in the $10,000 Lion battery, you end up with a $30,000 PHEV Prius.

    You need to check your math, amigo.
    Reply | Link to Comment
  •  
    Aug 20 07:39 PM
    BTW, Bob Lutz has already said the Volt is going to cost $40,000: gm-volt.com/2008/06/18.../

    Not sure how a $40,000 volt is going to compete against a $30,000 PHEV Prius with similar capabilities.
    Reply | Link to Comment
  •  
    Aug 20 07:59 PM
    I predict an over $5000 tax cut for anybody buying a hybrid. Also will this help ALTI or any other battery stocks? What about the GM stock is this enough to move the needle there? Romney is a big car guy if he is McCain's VP stock look for him to very open to helping the auto makers in my humble opinion.
    Reply | Link to Comment
  •  
    Aug 20 07:59 PM
    The VOLT Lithium battery is too heavy and too expensive.

    The same weight, 400 lbs., of NiMH would yield 12 kWh, enough to go 60 miles. GM's insistence on using unproven Lithium while ignoring proven NiMH, which still powers the Toyota RAV4-EV over 100 miles, augers ill for the VOLT's future.

    It's not "new and revolutionary", there have been 40-mile-range EVs around for a hundred years. All GM did was add a small genset, nothing difficult except anything GM does is wastefull, roundabout and doomed.
    Reply | Link to Comment
  •  
    Aug 20 08:02 PM
    CORRECTION about the Prius battery: the RETAIL cost of the 78 lb. box is $3000, but the actual battery only costs $700 (not including fan, computer, handshake firmware, case).

    Toyota could add 8 kWh of NiMH to the Prius for $3,500, enough to go 40 miles in all-electric mode.
    Reply | Link to Comment
  •  
    Aug 20 08:22 PM
    I understand Toyota is introducing the 2010 Prius at the Detroit Auto show in January 2009 and will start selling the car is the US in the Apr/May timeframe, 2009. No pricing information is available. My 2001
    Prius, with the original batteries, still averages 41-46 MPG. Tough decision to buy American.
    Reply | Link to Comment
  •  
    Aug 20 08:34 PM
    Interview with Chevy Volt's Frank Weber (Volt developer) at:

    www.hybrid-car-show.co...
    Reply | Link to Comment
  •  
    Aug 20 09:12 PM
    169775: The VOLT battery must be 16 kWh of A123, in order to yield 8 kWh of energy.

    This is wasteful, as well as expensive.

    The estimate of the Lithium pack for the VOLT is $30,000, that's why it's so expensive.

    NiMH would only cost $3000, and you only would need 8 kWh.

    Lead-acid would only cost $1600, but it wouldn't last quite as long.
    Reply | Link to Comment
  •  
    Aug 20 10:07 PM
    #169775-
    Where are your facts to back up your claim the public can buy a 2010 Prius that can go 40 miles on electic only? Everything I have seen is that Toyota (who was late to the Li-Ion revolution) will maybe have a few produced for fleet sales only, Not for sale to the general public! and no where have I seen that this future Prius will even approach 40 miles electric only.

    Liveoilfree- I glad you are an expert regarding your claim of how simple it is to add a genset to supplement a battery in a car. It's so simple that every auto manufacturer must have been producing them for years (yeah right!) Where are all the 40 mile EVs you claim? Who is currently producing a 40 mile EV that can travel at highway speeds of 60+ mph and carry four people?

    The Li-Ion automotive battery will continue to evolve like any new technology, and it will soon have even better range and lower price!
    Reply | Link to Comment
  •  
    Aug 21 06:28 AM
    I am not sure which is more ludicrous, the orginal writing or some of the comments that are all opinion and lack any real substance. I agree with 1991, quote facts, point to stated data. Stop wasting my time by spouting opinions.
    Reply | Link to Comment
  •  
    Aug 21 08:55 AM
    I am personally very excitied about the Volt. (And not just because I work at GM.) I drive about 25 miles on a typically work day, so I could do most of my driving on electricity only. Since I am driving an entry lux vehicle now, the projected Volt price is hardly a deal breaker. I am also glad that Toyota is pushing full speed ahead with a new Prius. A head-to-head battle between GM and Toyota will motivate both companies and result in better products for consumers. Big question: What will this mean for smaller companies that don't have the volume and global footprint to needed to compete in this 'arms race?'
    Reply | Link to Comment
  •  
    Aug 21 09:14 AM
    Lively discussion, guys. Let's try to separate the two subjects (GM and PEV's) for a moment while we consider them.

    On the one hand we have Toyota, which consumers believe is a manufacturer of reliable high mileage vehicles, and appears to be leading the world in hybrid technology. And on the other we have GM, which is beset by financial difficulties, and has not yet demonstrated its ability to compete in this new arena.

    My own rooting interest is with GM, based on tradition and their American heritage. But only an idiot could believe they are a better investment right now (in equities or products) than the other guys.
    In the end, there is simply too much WORLDWIDE competition in this sector for any company to be very successful.

    As for PEV's, I maintain they will only be "boutique" vehicles for MANY years for a variety of reasons. They have serious issues with costs, reliability, emerging technologies and consumer acceptance.

    Right now, our goal has to be to cut our reliance on foreign oil TODAY! And, no offense, but PEV's aren't going to be a major contributor to this effort. So we need to look ELSWHERE for answers.
    Reply | Link to Comment
  •  
    Aug 21 09:37 AM
    GM Guy,

    And your company could help lead the way by manufacturing "dual-fueled"... (CNG + gasoline) trucks (and SUV's) again, even on an "order only" basis. Cost isn't a consideration here, and this is a fully vetted, decades old technology.

    Climb on the Pickens bandwagon, if you will. After all, he's paying for the advertising, and he's moving ahead with his wind farms and LNG trucks (both vehicles and refueling depots) with or without you. What have you got to LOSE?

    Or, better yet, why not JOIN him? Just think of all the cross marketing possibilities, not to mention potential JV's for both light and heavy vehicles available to you.

    I am told you have highly structured management at GM, which isn't particularly open to hearing new ideas. Maybe there's a suggestion box, then. Like I said, you've got nothing to lose (but perhaps your job, which looks like it's going away in any event, no offense).


    Reply | Link to Comment
  •  
    Aug 21 10:00 AM
    Who Killed the Electric Car?
    en.wikipedia.org/wiki/...
    www.sonyclassics.com/w...
    Reply | Link to Comment
  •  
    Aug 21 10:09 AM
    IF the reports from Tesla are true, and they are releasing 14 cars/month, then look for an adjustment in battery tech for both Toyota and GM. Tesla's range is 200-250 miles. Still not a lot overall, but much better than 40. Take a bit of that technology, and apply it to a hybrid, and the 2012 models could approach 75-100 miles before needing to use gas.
    Reply | Link to Comment
  •  
    Aug 21 10:49 AM
    Much of the comment in this thread is erroneous.
    Lithium batteries have a much higher energy density than NiMH - that is why Toyota is not offering plug in technology in the new Prius yet, as they are still working on the lithium batteries and are currently using NiMH.
    Although full specs have not been released, it looks as though Toyota are planning a much milder PHEV than the Volt, with a 10 mile electric only range instead of 40.
    The cost reductions possible by this means in my view make this the better call, as enough people will be satisfied with this range to guarantee the market for all Toyota can make, and they will be a lot cheaper than the Volt.
    Perhaps the biggest number of new vehicles will come from Nissan/Renault though, with their model of all EV vehicles where you buy the car and hire the battery - cheaper than paying for petrol - you hire a normal car when you need to make a very long journey.
    Reply | Link to Comment
  •  
    Aug 21 10:53 AM
    by 2015, GM will be on its six model year of the Plug in as will Toyota. Both Mitsibushi and Nissan have said that they will be selling a full electric car by 2010. So, they will be on their sixth year as well. In order to have only 500,000 of these cars on the road you would have to postulate that these four vendors will be selling a combined total of less then 125,000 per year. If these sell, I think they will be selling more like 500,000 per year, not 125,000 per year.
    Reply | Link to Comment
  •  
    Aug 21 11:27 AM
    I love my Chevy Tahoe & Silverado. Millions have over the years. General Motors gave its customers what they wanted. I wouldn't own a foreign car, much less a Pickup or SUV. To be honest, I always seem to own GM. President Obama will give whatever rebate required to sell the Volt and more than Likely it will sell better than GM's 1st electric car from so long ago. McCain says constantly " My Friends " well he's not my friend, just a Keating 5 crook who's been in Washington so long he's wearing diapers ( depends ).
    Reply | Link to Comment
  •  
    Aug 21 11:35 AM
    The problem with the Volt is that so far we don't have a lot of tangible besides a PR reports. If it goes according to plan, it will put a new face on GM, who needs to revamp its image. Granted.

    The first PHEV in production? We can't say that for sure, car makers are working on those, including Toyota.

    I'm also afraid that by talking too much about the Volt, it might kill the final result by disappointing. I'm thinking of Microsoft's release of their OS which always seem great, take years to come and land with a certain thud.

    It will be a good car, regardless. They might want to make a "performance"... version and squeeze a few pennies out of it, while offering a base version. Tesla is moving into that direction right now with its next model, the Model S sedan which will be completely electric.

    I think talking too much about something that is still being developed might bring about an anticlimax when it finally gets delivered.
    Reply | Link to Comment
  •  
    Aug 21 11:40 AM
    I'd pay the premium for the Volt for it's excellent styling alone. The Volt is hot and the Prius look like a pregnant roller skate.
    Reply | Link to Comment
  •  
    Aug 21 01:25 PM
    "ZENN (Zero Emission, No Noise) is a 2-seat battery electric vehicle currently in production and built by ZENN Motor Company designed to qualify as a Neighborhood Electric Vehicle. It has a range of up to 40 miles (56 km) and does not exceed 25 mph (40 km/h)..."

    en.wikipedia.org/wiki/...

    www.zenncars.com/

    Reply | Link to Comment
  •  
    Aug 21 01:47 PM
    there is good chance a non USA auto producer[s] will arrive on scene to impact GM's total market expectations, especially in low to mid price range. i'll hedge on that and flex fuel[gasoline/diesel--... gas] IC. we'll use them all for years, price/income the obvious decision factor.
    Reply | Link to Comment
  •  
    Aug 21 02:24 PM
    CNG, that's a new idea. Oh, yes, the management at GM won't hear of a "new" idea, like one they already tried? And who aproved it then? Duh.

    Any why did they stop? Ever think to ask that question?

    I seem to remember some nasty fires. See, in the real world, where many of you do not seem to live, there are practical considerations like safety and durability.

    But you keep comparing real cars that can perform anywhere from -20 to 100 degrees and meet safety requirements to some golf cart company.

    I don't think I have ever seen more people crapping out their mouths as this thread.
    Reply | Link to Comment
  •  
    Aug 21 03:25 PM
    Enough! The only onboard stored energy device on the hybrid of the future will be a GRASS TANK supplying a biofuel injected burner encapsulated with solid state heat recovery devices powering a Chorusmotor, directly.
    Reply | Link to Comment
  •  
    Aug 21 03:30 PM
    And furthermore, with the additional claim that I'm unaffiliated short of being a stockholder here and there, as many of you are, with your mantras, below is more tough stuff for Detroit, et.al. and Houston:

    Aug 18 11:57 AM

    Cheer Picken's on folks.

    Burning NG in transportation is the first practical step to REPLACING oil/gasoline.

    Once there, it's an easy step to REPLACE NG (and leave it stored in the ground) by using above-ground grown and renewable biofuels.

    Hopefully, long before that we will have fully developed and implemented the burning of fuels in injected containers (not engines; no moving parts!) and are capturing all the heat (90+% of original energy) with burner-encapsulated direct-coversion-to-el... state-devices powering hybrids with the only on-board stored energy being the biofuel tank capable of being filled at all the existing fueling stations that currently exist.

    Understand, please, that by capturing all the waste heat mentioned above, we will actually need only 1/3 of the existing service station pumps - that's because we currently throw away 70% of the energy, or 70% of all the gallons we pump, AS WASTE HEAT.

    WE WILL NEED TO PROCESS, TRANSPORT, DELIVER, PUMP, CONSUME and grow ONLY 1/3 OF THE 20 MILLION GALLONS A DAY.

    Now chew on that.

    FACTOR THAT INTO THE EQUATIONS FOLKS. THAT ALSO MEANS WE NEED TO GROW ONLY 1/3 OF THE BIOFUELS THAT MOST FEARMONGERS SAY WE DON'T HAVE ENOUGH LAND OR FARMERS, ETC.

    nakedjaybird
    Aug 18 12:03 PM

    The second practical step in transportaton is electrifying the railroads and getting rid of the diesel consumed there.

    The third practical step in transportation is electrifying the inter/intrastates with electric ferries for cargo and people, and if need be, hybrids.


    nakedjaybird
    Aug 18 12:17 PM

    As for Power Generation: Go Boone! Get all that wind installed. And all the solar PV and thermal you can do.

    We only need some 8 Quads of electric to replace all the coal, gas and oil generated electricity, to leave the hydrocarbons in the ground; and we will still use most of the 12 Quad electrical distribution system we alreay have.

    No more wasting of 70% of the energy from oil, gas, coal, etc.

    Just be using the free, readily available, forever solar and wind........at whatever efficiency we can capture it, with no waste.


    nakedjaybird
    Aug 18 01:01 PM

    And for the corn and commoditiy fearmongers, the above ground crops will be cellosic - corn stocks maybe, but not the kernals; try switchgrass.

    And that on dryland currently in CRP programs where we pay farmers to DO NOTHING. That is a great opportunity to readjust subsidies (tax dollar spending!), isn't it.

    In fact, if we give the farmers all the subsidies, tax breaks, research dollars, etc., we give from Detroit to Houston, and the resgt of DC handouts, all those folks would become dirt farmers. Yes, we would retrain them into doing real work - it's the fair thing!!
    Reply | Link to Comment
  •  
    Aug 21 04:15 PM
    As for battery-electric rubber tired vehicles of any sort (except for a $50 12v diehard to ignite a biofuel injector), who needs them, once we have the above.

    And it would be absolutedly foolish to continue mfg'g ICE's, Transmissions, etc. and of course any drilling or mining of any hydrocarbons.

    Prepare for the change(s).
    Reply | Link to Comment
  •  
    Aug 21 04:48 PM
    No conflict between Volt and NG; bring em both on. Toyota does not have a union that will lend them a billion. Disclosure: GM retiree. Keep the pension plan solvent.

    As for anti-GM sentiment that's just part of the culture. Even close relatives resent good wages and benefits, but that has rubbed off on everybody.
    Reply | Link to Comment
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