The first pre-production versions of the Chevrolet Volt plug-in.
Though it’s still a year before it finally rolls into showroom, the Chevrolet Volt may be one of the auto industry’s best-known nameplates. But gaining publicity for the breakthrough technology is likely to be the easy part. In the coming months, General Motors will have to transform its plug-in hybrid into a viable business case.
And that, admits Tom Stephens, GM’s director of powertrain operations, won’t be easy. In its initial incarnation, the dual drive system under Volt’s hood will be expensive and complex. And, at least for now, there isn’t a well-developed infrastructure that would let Volt buyers readily charge up the vehicle when they’re away from home. In fact, it may not be easy for some potential customers to charge up even there.
Transforming plug-in technology from a promising, environmentally-friendly concept into a viable business case is the central topic of a well-attended conference, in Detroit, this week. Originally, organizers hoped to attract about 300 participants to “The Business of Plugging In.” The final tally is expected to top 700.
GM isn’t the only maker exploring the options offered by plug-in hybrid-electric vehicles, or PHEVs, automobiles meant to let motorists drive for extended periods on electric power, then automatically switch to gasoline when their batteries run down. Ford plans to bring out a version of its own, as does Toyota, which next year will launch a fleet test of a PHEV version of the popular Prius.
For the typical American commuter, Volt’s 40-mile battery range is expected to be enough to cover a typical day’s driving. But the real appeal, explains Dr. David Cole, director of the Center for Automotive Research, or CAR, is that plug-ins, “eliminate ‘range anxiety,’ the driver’s concern that he might get stuck somewhere with a dead battery.”
Great on paper, but the challenges are significant. For one thing, plug-in technology is more complex and costly than a conventional gasoline-powered drivetrain. While GM hasn’t confirmed final numbers, insiders hint it will cost at least $40,000 when it reaches market in late 2010.
“We expect that price to come down,” Stephens told TheDetroitBureau.com following his opening remarks at the “Business of Plugging In” conference. By the third generation, GM is betting the battery side of Volt’s drivetrain will be smaller, lighter and significantly less costly. But there are plenty of “ifs” that the conference needs to address.
For one thing, automakers are hoping to see the list of suppliers producing plug-in parts expand significantly. That would likely yield new technology even as it drives down costs.
Dr. Cole suggested that it is possible “with development,” a lithium-ion battery pack the size of the one in Volt could come down to “$4,000 to $5,000,” compared to $12,000 or more today.
But there are other challenges that need to be addressed if plug-ins are to become more mainstream. Right now, the technology, “is a headache for the (electrical) grid,” cautioned Dennis Assanis, another keynote speaker and director of the University of Michigan’s new energy lab.
While most suburbanites likely have access to 110-volt power in their garages, it’s less common in urban settings, where a vehicle like Volt might prove especially appealing. And there’s need to add chargers at offices and parking structures, as well. Automakers like GM, Ford and Toyota have been forming alliances with utility companies across the country, and hope this week’s conference will encourage even more.
One of those energy providers signed up and ready to go is Michigan’s DTE Energy. “The challenger (to popularizing plug-ins and pure electric vehicles) is the customer experience,” says CEO Tom Early. “It has to be seamless. Consumers can’t be worrying about things like where they can charge up.”
Early believes plug-ins have a definite advantage over pure battery-electric vehicles because they can instantly switch to gasoline power. That would “give us time to build up an infrastructure.”
How much that will cost is uncertain, and some experts have forecast numbers that run well into the billions. For his part the DTE chairman believes it will be far less expensive. For one thing, he anticipates most users, at least initially, would charge up their vehicles at night, “And we’ve got huge excess capacity, off-peak. So, if we fill these valleys, off-peak, it actually lowers our fixed costs to customers.”
The general consensus, says Tony Posawatz, Volt’s program manager, is that it should cost “about one to two cents a mile for electric power, compared to 10 to 12 cents with gasoline.”
Of course, that depends on the price of gas, and that, cautions Cole, “is the biggest uncertainty.” If petroleum starts nudging back towards $150 a barrel, he and others agree – and stays there – it would significantly improve the appeal of plug-ins and other battery technologies.
For now, though, the business case is far from certain. But sponsors hope that this week’s conference, in Detroit, will help set the stage for what they believe could be, in the words of GM’s Stephens, “the opportunity to make the vehicle more sustainable.”
There’s another piece that could complete the puzzle, and that’s the government. Last year, Washington approved a $25 billion program to help spur the development of clean, high-mileage automobiles. And this year, the Obama Administration added $2 billion for to encourage the development of production of advanced batteries. Meanwhile, federal tax credits of $7,500 could ease the pain for early buyers of vehicles like Volt.
But, “the government can’t do it alone,” cautions GM Vice President Jonathan Lauckner. It will take automakers, suppliers, energy providers and government to make the plug-in a viable alternative that customers will be willing to invest in.