General Motors (GM) unveiled the Chevrolet Volt series hybrid concept car
to a huge fanfare at the Detroit Motor Show in January 2007. This car is
unlike conventional parallel hybrids on the market at the moment, such as
the Toyota Prius or the Honda Civic IMA with their electric motor and
their internal combustion engine (ICE), both of which power the wheels
depending on the speed of the car. Although GM's version also has both a
battery and an internal combustion engine, in the case of the Volt the ICE
is used to recharge the battery when it runs out of power as opposed to
directly powering the car. GM has named this "E-Flex" technology.
After the Volt, which was equipped with a 1.0 flex-fuel bioethanol
gasoline (petrol) engine, came two more incarnations of the car. One had a
hydrogen fuel cell in place of the ICE, which was shown at the Shanghai
Motor Show, and one with a turbo diesel engine--the Opel Flextreme--seen
at the Frankfurt Motor Show in September.
Global Insight Perspective
- Significance
-
General Motors is standing by earlier
assertions that it is aiming to build and
sell the first production versions of its
Volt and Flextreme plug-in electric cars
by 2010.
- Implications
- If GM does achieve its 2010 goal, this
will be an outstanding achievement from
an engineering point of view if nothing
else. However, the company has already
admitted that the car would carry a
significant price premium due to the cost
of the lithium ion technology, therefore
the potential commercial success of such
an early launch still looks questionable.
- Outlook
- Global Insight believes this goal will be
extremely hard to reach. Even if
achieved, there is likely to be scant
demand in Europe for a car such as the
Volt or Flextreme. This is for various
reasons, not least that the extra cost
will make little sense in a region where
clean diesel engines are so prevalent. On
the other hand, a switch to CO2-based
road taxes or a more widespread
introduction of congestion-charging type
schemes could be the vital demand driver
that cars such as the Volt and Flextreme
need.
Suffice to say that GM is serious about this line of cars. At Detroit,
GM's product czar Bob Lutz described it as "the most exciting vehicle he's
ever worked on". Earlier this year, Lutz said that to date, around $100US
million had been spent on the project, which even has its own design
studio. Investment is being ramped up fast, he insists and several hundred
engineers have been moved from other projects to this one. Most
importantly, Lutz and other GM executives have, on a number of occasions,
spoken of an "internal target" of 2010 for the start of production and
sales launch of the vehicle.
...Whilst Others Are Not So Sure
Despite GM's air of bullishness around this car, rival vehicle
manufacturers have been unusually vocal in their criticism. For example,
theWall Street Journal (WSJ)has carried several articles recently, quoting
top executives from Toyota and Honda explaining why they think that GM's
strategy makes little sense.
"My feeling is that the kind of plug-in hybrid currently proposed by
different auto makers can be best described as a battery electric vehicle
equipped with an unnecessary fuel engine and fuel tank," chief executive
of Honda, Takeo Fukui was reported as telling a group of journalists. He
said that he was referring to plug-in hybrids such as the Chevrolet Volt,
according to theWSJ. "Assuming that we can come up with a really
high-performing battery that we are working on currently, I think a
battery electric vehicle would actually be a plus from an environmental
point of view." He was also reported as saying that although Honda could
easily develop a plug-in hybrid within two years, it will not be doing
this because it would not make enough of a contribution to reducing
emissions.
Earlier on that week, the same newspaper also quoted Yoshitaka Asakura, a
general manager from Toyota's hybrid-vehicle system-engineering division
as voicing several concerns about the viability of the Volt, including
that "customers might not accept a plug-in hybrid electric car that has to
be recharged every day," and questioning how GM would manage to improve
lithium-ion battery technology so much as to be able to use it in a mass
production car by 2010.
At What Cost will Battery Technology Come to GM?
GM itself admits that there are a lot of issues to resolve still before
this car is brought to market, most of which relate to the battery. The
small fact that the automaker has not even tested any cars with batteries
in, because the batteries are still under development is an indication of
just how much work there is to be done on the Volt still. That
experimentation is due to start around now.
Size, cost, safety and reliability are four of the aspects of current
lithium-ion technology that GM and its suppliers must make serious headway
on before the Volt and Flextreme get anywhere close to being launched.
Using the lithium-ion technology that is available today, batteries large
enough to power a car the size of the Volt or the Flextreme in every day
driving conditions would have to be at least large enough to fill the
entire trunk (boot) of the car. The cost of them would be astronomical and
would either make the car prohibitively expensive for consumers to
purchase or cripplingly unprofitable for GM to sell. Reports from Japanese
testing tracks talk of cars fitted with lithium-ion batteries bursting
into flames after they either short-circuited or overheated. In short,
lithium-ion technology, whilst now widely used in certain portable
electronic products such as laptops and mobile phones, is nowhere near
ready for the type of application for which GM has it in mind.
GM Europe has told Global Insight that one way it could get round the cost
issue would be to sell the car but lease the batteries. This could enable
it to keep costs down and bring the car to marker quicker as it would be
able to constantly refine and improve the battery technology. However, the
company has said, even if it does this, there would still be a price
premium on the car. "Although the Opel Flextreme will be of Astra/Zafira
size, it will retail for a car of Vectra size," a GM Europe spokesperson
told us. Currently, the Opel Astra's starting price is around 17,000 euro
(US$) in Germany, whilst the Vectra starts at 22,500 euro.
To Plug In or Not to Plug In
Whilst most carmakers, policy-makers, and even environmentalists seem to
agree that for now that electric cars do make sense in the short-to-medium
term (at least until hydrogen is in widespread use), another source of
disagreement around GM's strategy relates to how much sense it makes to
recharge electric cars in Europe via mains electricity, as voiced by
Honda's Fukui. Apart from in France, most of Europe's electricity is
generated at coal-fired power stations. Critics say that this is simply
displacing the emissions from the use of the energy to its source.
This line of thinking was also expressed in the first part of the King
Review, which is the U.K. government-funded study designed as a road
transport follow-up to the widely-quoted Stern Review (see ). Noting the
importance of clean power generation as the world moves towards the
electrification of vehicles, and referring to electric and
hydrogen-powered cars, the report said: "While such vehicles will have
zero CO2 emissions on our streets, they will rely on clean electricity to
provide truly low-carbon transport." The study went on to point out that
in the United Kingdom for example, only 4% of electricity is produced from
renewable energy, and 18% from nuclear power, leaving 78% to come from
fossil fuels.
GM and others argue the other side of the coin, pointing to the economies
of scale that come with mass electricity production. For example, studies
show that it is still far more efficient to produce electricity on a large
scale all in one place, even if it is from fossil fuels, than to have lots
of mini, individual generators, whether they be cars running on fossil
fuels or on batteries that do not need to be plugged in.
Outlook and Implications
On the one hand, GM should be applauded for sticking its neck out and
putting its reputation on the line as far as this range of cars goes. This
is a bold move which many of its competitors have not dared take. On the
other hand, this really is a huge risk that the company is taking, and
many would argue that GM is in no position to be taking such risks.
The range of issues facing GM before it brings the Chevrolet Volt and Opel
Flextreme to mass production in 2010 are wide-ranging and vast. They span
from the serious: does the company really have enough time to guarantee
that the lithium ion batteries used in an application like this will be
safe and dependable, to the softer end of the scale: how will European
drivers feel about having to plug their car in every single night and
between other journeys?
Even if these issues are overcome, one has to ask how popular these
vehicles will be in Europe, which is after all the home of the clean and
efficient diesel engine. Although the Chevrolet Volt might make a lot of
sense in North America and Japan where diesel-fuelled cars barely exist
and relative CO2 emissions from road transport are correspondingly higher,
many would say that the Flextreme does not make an equal amount of sense
in Europe. Would European consumers not be better off purchasing an
existing car on the market with a small diesel engine--at least this
technology is proven and would be the far cheaper option? On the other
hand, increases in CO2-based road taxation and the widespread introduction
of congestion-charging schemes for all vehicles apart from the very-lowest
emitting such as the Volt and Flextreme, could be the demand drivers which
these cars need.
Of course the beauty of GM's E-Flex technology is that it does allow GM to
hedge its bets and develop different solutions for different parts of the
world within one car to a certain extent. But whether or not this
particular one has any relevance to Europe, at least in the timeframe that
GM is talking, remains very much to be seen.
