GM Volt Generates Interest - Will Congressional Funding Follow?

With all the talk about high gas prices, the car companies are rushing to launch high mileage or alternative power vehicles. General Motors (GM) has just announced the new Chevy Volt, a rechargeable electric car. The car is entirely powered by electricity from its lithium ion battery. It is initially charged from any 120 volt household electric outlet and can travel forty miles on a single charge.

Forty miles isn't a lot, but fortunately there's an extended range capability. A small gasoline engine kicks in when the battery runs low. However, the gasoline engine doesn't power the drive train like most hybrid cards. Instead it generates electricity for the electric motors which propel the car at all times.

When the car arrives at its destination, you just plug it in to recharge the battery for another forty miles. We can imagine that workplace parking lots all over the country will be sprouting electrical outlets if this type of car catches on.

General Motors is hoping to out-green the popular Toyota (TM) Prius which features a hybrid gasoline/electric engine, assuming that Toyota doesn't improve on their hybrid before GM's expected launch of the Volt in 2010. GM's press release says that the launch is dependent upon receiving suitable incentives from the government.

Meanwhile, GM joined with Ford (F) and privately held Chrysler in August to ask the US government for low interest loans in the amount of $50 billion to develop alternate energy cars like the Chevy Volt. That's almost enough to bail out another bank, and would double the amount authorized under last year's budget.

CNN reports that senior lawmakers are balking at the revised amount, and GM CEO Rick Wagoner seemed to back down from the requested increase in his testimony Friday when he told lawmakers that $25 billion was "sufficient." Because the issue of reducing dependence on foreign oil is high on everyone's list of campaign issues, appropriation of the original funding amount is likely to sail through Congress.

Sales results from the big three automakers have slumped dramatically with the rest of the economy in recent quarters as we discussed in our entry of August 6th, so government loans for these expensive development programs might actually be a good idea, especially in light of the tightening commercial credit markets. Wagoner also asked the Senate on Friday to loosen up the fuel efficiency goals needed for a car to qualify for this funding. The current rules call for a 25% increase in fuel efficiency.

Disclosure: None

Comments

[Joey:]

GM's stock was $55 when Clinton left office. If GM did not fight for more fuel efficient vehicles with the Government, they would not be in the mess they are in with their shares less than $11.

2008 Sep 18 10:24 AM

[Paul Killinger:]

The only problem is the Volt, IF and when it ever gets into production, will be that it will sell for the price of TWO Priuses. And they're Toyotas, not Chevys in the first place.

What the Detroit 3 could do is piggyback on the interest Boone Pickens has created for CNG powered vehicles, and begin selling the "dual-fueled" (CNG + gasoline) versions in the U.S. (which they've built for 40 years) again starting TOMORROW.

Indeed, they sell CNG vehicles across the globe (5 MILLION are in service around the world), everywhere but in America. So, let me ask you, would YOU "loan" $25 or $50 billion to such dummies? No, only the Congress would do something so stupid!

2008 Sep 18 11:37 AM

[Paul Killinger:]

The problem is one of VISION. Without harping about what may or may not happened in the past, the future is NOW (not some far off day when EV's may or may not be running around).

And what's taking place TODAY is Kenworth is building LNG trucks, buyers in UT and OK are snapping up NGV's, California is about to pass an initiative a $5 billion public NGV initiative, and Wal-Mart is looking to replace it's 850,000 diesel powered rigs with LNG trucks.

Meanwhile, Congress and Detroit are oblivious to all this. Well, Congress can afford to be, because those idiots get paid (by us!) one way or the other. But if GM and Ford are to survive, they need to WAKE UP and get on the stick!

2008 Sep 18 12:01 PM

[Brandon:]

LNG is part of what needs to happen, but EV should make up the bulk of future automobiles.

This needs to be accompanied with major electricity infrastructure improvements and hugely increased tax credits for individuals who buy solar panels.

Let's use everything we've got. Wind, Solar, Geothermal, Nuclear, Water, Cellulosic, and anything else I'm sure I missed.

2008 Sep 18 01:11 PM

[diamonddallas:]

2 years to get into production, that's a joke when they had 40 years to make startegic changes for more fuel efficient vehicles. Well, in 2 years whatever GM brings out it will face tigh competition. I don't understand why it will take two years to bring this to market.

2008 Sep 18 02:08 PM

[Deweyp:]

So far Brandon seems to be the only one with constructive comments and no axe to grind here. 18 months ago the only question asked by prospective auto customers was "how much horsepower does it have?" Now with gas prices at $4 the big 3 are pulling out all the stops to produce more fuel efficient cars, and it looks like GM has done it with the Volt. Waiting is a little like planting a garden when the grocery stores close and then try not to starve to death waiting for harvest. It is easy to blame auto companies for not seeing this coming, but 3 years ago no one I know did. Now that we are in this situation, let's water the garden instead of cursing the ground for being dry.

2008 Sep 18 02:26 PM

[Willywah:]

the lithium battery is the bug-a boo that has GM worried. Being sure that the problem of long useful life is ensured so that it won't be the Achillies heel of the whole machine. GM is to be comended taking the slow and hopefully successful introduction of the Volt

2008 Sep 18 09:01 PM

[Deweyp:]

Change an only be made by taking risks. I give GM a lot of credit for this,

2008 Sep 19 11:49 AM

[33Nick:]

Just a few misconceptions I wanted to point out. The Volt is not an electric vehicle per se, but a plug-in hybrid. The Tesla Roadster is a electric vehicle, completely. Why is it important to define terminology? Because it is disingenuous stretching the meaning of terms when other apply better. It is marketing and part of what has gotten us into the mess we are in.

The Prius is a parallel hybrid, meaning both electric and gas engine power the transmission. The Volt will be a serial hybrid, meaning the gas engine is coupled to a generator that recharges a battery pack when levels falls low.

The Volt is a good idea and innovates in so much as it is a logical progression of the current crop of hybrids, parallel with no outlet recharge capacity. The next Prius will be a parallel plug-in hybrid.

Most people are already confused with terms like electric vehicle, EV, hybrid, HEV, plug-in hybrid, PHEV, fuel cell, FCV. Each terms fits a particular vehicle and might over lap but the Volt is not an EV, it's a PHEV. Big difference and a good one.

2008 Sep 19 12:11 PM

[rttttrrrr:]

GM is banking on the fact that the Volt will not only be a dependable well performing car but also that if WELL RECIEVED it can start a new trend in this type of power system being used widespread, thats why its taking a long time to bring to the market, because they know how much rides on its success no pun intended, they wanna execute it right, i support the decission 110%

2008 Sep 22 10:20 PM

[Mister Jimmy:]

There is one big difference between Toyota and GM that is rarely (if ever) identified. In Japan, the government and its citizens support, fund, and cheer-on their domestic companies. They understand how critical these are to the nation's prosperity, power, and success. In the U.S., automakers are scorned, over-regulated, and scoffed at. Many even saying "let 'em go bankrupt". The result? If you've been paying attention to the news lately, you know.

2008 Sep 24 12:31 PM