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Volt is the top PHEV seller; GM is the global king of vehicle sales

Riding high on its best sales in 7 years, General Motors Comp. (GM) is investing deeply into research and development. The company is striving to deliver on its promise to put 500,000 hybrids, plug-in hybrids electric vehicle (PHEVs), and battery electric vehicles (BEVs) on the road by 2017.

I. GM Guns for 200 Mile EV

Doug Parks, VP of global product development at GM, on Monday reiterated GM's march promise to deliver an electrified vehicle that could travel 200 miles on a charge.  Moreover it wants to sell that car at $30,000 USD.

GM didn't clarify whether this figure included the $7,500 USD subsidy EVs currently obtain.  It also didn't mention what year it was hoping to release this in-development vehicle in, what form factor it would fall in (e.g. sedan or subcompact), and whether it would be all electric (although given the range, this seems a likely possibility).

GM Battery Lab
GM unveiled an expansion to its battery testing lab in Mich. this week. [Image Source: GM]

Still any way you slice it this would be a huge leap forward for GM; such an EV would have the potential to win over even some hardened critics.

Tom Libby, lead North American analyst for the Polk automotive research firm told the Associate Press, "That would be a huge step forward, no question."

II. World's Top Automaker is Seeing Record Sales

It's an ambitious goal for a company who still has the ugly image of its 2009 Chapter 11 bankruptcy in its rear view mirror.  Today, the U.S. government -- which took a 61 percent stake in GM in exchange for wiping out its outstanding debt and helping to reorganize it into a leaner company -- still holds 19 percent of the resulting firm, having sold roughly two thirds of its stock in a 2010 IPO and subsequent stock sales.  GM in 2008, 2009, and 2010 was the world's second best selling automaker, but since 2011 has taken hold of first place in sales.

GM is currently the top-selling automaker in the U.S., and posted terrific sales for the month of August 2013, selling 275,847 vehicles .  GM posted an impressive 14.7 percent sales growth although second place Toyota Motor Corp. (TYO:7203and Nissan Motor Comp., Ltd. (TYO:7201) posted even bigger percentage growths on a year-to-year basis.


The Chevrolet Volt is the world's top selling PHEV. [Image Source: GM]

On a year-to-year basis as of June 2013 GM sold 4.85 million vehicles overseas and 1.64 million vehicles in the U.S.  GM EVs -- the Chevy Volt sedan and Chevy Spark EV subcompact sold 24,467 units -- or roughly half a percent of global sales (~0.5 percent).

The Volt debuted in concept vehicle form back at the January 2007 North American International Auto Show and continued to roll towards the market in following years, surviving GM's bankruptcy, and hitting the streets in pre-production form in 2009.  In Dec. 2010 the 2011 Chevy Volt -- which features a battery pack assembled at a factory in Michigan -- officially went on sale, with a range of 38 miles on battery (after which the gasoline engine takes over).

Despite the Volt's promise it's been a bit of a bumpy ride since 2010.

III. Volt has Turned the Corner Sales-Wise, But Struggles With Losses

In late 2011 the National Highway Traffic Safety Administration (NHTSA), a sub-agency of the U.S. Department of Transportation (DoT) launched an investigation into fires with the Chevy Volt's lithium-ion battery pack.  GM was subsequently forced to testify before Congress about the potential fire risks.  A combination of factors -- the vehicle's slightly high price point, concerns about its electric range, and the fire controversy -- culminated in weak sales throughout 2011 and much of 2012.
 

Volt sales are up on a year-to-year basis, but GM continues to struggle with production costs. [Image Source: GM]

Since then sales have risen.  By June 2013 GM had achieve year-to-year sales of 24,400+ units.  But as much as bad sales were a blow to GM's brand image, stronger sales of the flagship EV were bad news for GM's pocketbook.

Where as Tesla Motor Inc. (TSLAhas achieved profitability on its electric vehicles by selling them at much higher price points to the luxury sports car market, GM has admitted in the past to swallowing an undisclosed loss on every Chevy Volt it sells.  The 2011 and 2012 Chevy Volt model years were priced at $39,999 -- or $32,249 USD after the $7,500 USD government tax credit.  Tesla's current all-electric Model S starts at $71,000 -- nearly twice the price of the Volt -- but delivers an industry-leading 265 miles on a charge.

While August's price from $40K down to $35K USD ($27.5K USD after tax credit) cut drove sales up to a record 3,351 units for the month, they also mean GM is losing $5,000 more on each vehicle.  Tesla meanwhile is shipping roughly 2,000 Model S units a month, while making a profit on every one (Tesla predicts selling 20,000 Model S luxury sedans in 2013).

GM's only all electric -- the 2013 Spark EV -- went on sale in June with a range of 82 miles.  Partially due to a very limited release it sold only 27 units (reportedly) that month, and July sales weren't much better at 103 units [source].  The subcompact features impressive acceleration and is priced at an aggressive $32, 495 USD ($24,995 USD after the tax credit).  


The Spark EV has sold poorly.

Still that's more expensive than Nissan's LEAF S EV, which retails for $28,800 USD ($21,300 USD after tax rebate).  The LEAF has seen rampant demand since its price cut last January (a $6,000 cut from the original price of $35,200 USD).  The 2013 LEAF has a slightly worse range at an EPA estimate 75 miles.
 
Nissan Leaf sales have soared since a price cut. [Image Source: Nissan]

To GM's credit its Volt sales do look especially impressive when compared to Toyota's 2012 Prius Plug-in sales of 12,750 units.  Toyota plans to launch a next generation Prius hybrid and Prius PHEV in 2015.
Prius plug-in
The Prius PHEV has been unable to keep up with the Volt in sales. [Image Source: response.jp]

Toyota's plug-in retails for $32,000 USD -- $3,000 USD cheaper than the Volt -- but gets a much weaker 11 mile range (less than a third the Volt's range) in EV mode.  Buyers clearly are mixed on this tradeoff.

IV. Tesla v. GM -- the Race is On

In order to reach its goal of an affordable 200 mile EV, GM is aggressively pursuing battery development.  It's added an additional 50,000 square feet to the previously 35,000 square foot Global Battery Systems Lab at its technical center in Warren, Mich.  Doug Parks remarks:

In the past four years, the competitive landscape in the electrification space has grown exponentially. This has required us to raise our game and draw a new line in the sand.  To maintain our battery leadership, this additional real estate is filled with new capability that will help us improve speed to market for our next generation of battery systems and help us improve the value equation to our customers around the world.

GM expansion
The expansion nearly doubles the pack testing sites at the facility. [Image Source: GM]

GM's efforts are already starting to pay off.  It bumped its Chevy Volt's range by 3 miles in 2013 solely by battery improvements.  The new facilities nearly double GM's full pack test channels from 64 to 112, while cell level channels are bumped from 96 to 120 units.

The world's biggest automaker will have to move fast, though.  Tesla is also eyeing its first try at an affordable mass-market EV.  Tesla in May promised a sub-$40,000 USD EV in 3 to 4 years with a range identical to GM's proposed one -- 200 miles.
 
Elon Musk
Tesla CEO Elon Musk has also pledged affordable 200 mi. EVs. [Image Source: Sparked Minds]
 
Tesla's iconic CEO Elon Musk recently commented to the press, "With the Model S, you have a compelling car that’s too expensive for most people.  And you have the Leaf, which is cheap, but it’s not great.  What the world really needs is a great, affordable electric car.  I’m not going to let anything go, no matter what people offer, until I complete that mission."

Sources: GM, AP on Yahoo! News



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This article is over a month old, voting and posting comments is disabled

By Nutzo on 9/17/2013 6:09:54 PM , Rating: 2
The cost & weight of the batteries will be a problem for any all electric car for many years to come. Unless you only use it for short commutes, the range will also be a problem for most people.

The problem with plug-in Hybrids (including the Volt) is that you have the cost/weight of the batteries, plus the weight of the ice and the transmission. The weight reduces the electic range, and also reduces the mileage when running on gas.

There is also a problem with regular hybrids. If you normally drive short trips (like less then 5 miles) your hybrid mileage will be much less than the rating. This is because the car takes a couple miles to warmup the ICE, resulting in poor (for a hybrid) milage the first couple miles.

I think a range or around 15 miles would be best for a plugin hybrid. Anything higher results in too much cost/weight/space for the battery. 15 miles is good enough fore those short trip to get around the ICE warmup on a standard hybrid.

The other option you will start seeing soon, will be all electric cars with gas powered extenders. Basically a small on board gas generator that can recharge the battery, even while driving. This is a simipler/lighter design than the standard plugin hybrid, since there is no need to a transmission for the ICE.


By Mint on 9/17/2013 11:31:06 PM , Rating: 2
quote:
The problem with plug-in Hybrids (including the Volt) is that you have the cost/weight of the batteries, plus the weight of the ice and the transmission.
My point is precisely that the cost/weight of a small ICE will be less than the difference in battery size.

I'm not talking about regular hybrids. I'm talking about Voltec derived cars which don't need the engine at all unless the battery is low.
quote:
I think a range or around 15 miles would be best for a plugin hybrid. Anything higher results in too much cost/weight/space for the battery.

Current PHEVs have awful space optimization. It makes no sense for the C-Max Energy to lose 5 cu ft of luggage space for only 6.2 kWh extra battery over the regular hybrid. Raw battery density is 10x that.

15 miles isn't very optimal, IMO, as you already have all the other electronics in place, and average daily mileage is a lot more.


By Nutzo on 9/18/2013 12:04:02 PM , Rating: 2
Actually a 15 mile range would easily cover my commute and over 90% of my driving. Same with the wife (taking kids to school, etc) A 15 mile plug range (assuming I plugged it in every night) would reduce my gas usage so much I would go months between gas station visits.

As for how much extra space the batteries take, you have to take into account the ventilation, mounting, and the safety cage. Large batteries can be dangerous if they are damaged(think explosive fire). They can also overheat, especially during fast charging, if they don’t have good active ventilation.


By Mint on 9/18/2013 1:20:26 PM , Rating: 2
I support variable battery sizes, and can fully see how 15 miles would be adequate for many people.

But the average new car does 15k miles in its first year, so it's definitely useful for most people to have 25+ mile range in a PHEV.

Also, the Volt's cost premium is more easily made up by those doing a lot more mileage than you are. Of the ~15M new car buyers each year, I'm sure several million have a 50+ mile daily commute plus significant mileage on the weekend. Those are the buyers to whom the Volt makes most economical sense.


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