What Does GM's Bankruptcy Mean for Its Much-Hyped Electric Car?

By Eliza Strickland | June 4, 2009 3:07 pm

Chevy Volt 2The electric car under development at General Motors has been heralded as a potential savior of both the American car industry and the environment, but in aftermath of the automaker’s bankruptcy filing many questions are being raised about the Chevy Volt’s future. GM executives swear that the cutting edge vehicle is still on track to reach auto dealerships late next year: GM executive Jon Lauckner says that the bankruptcy filing “has no bearing on the Volt, quite frankly…. We’re not anticipating any changes. November 2010 remains our date with destiny” [Wired.com]. Lauckner added that engineers have already begun assembly of the pre-production Volts that will be used to test handling and durability, and for crash tests. But some outside experts wonder whether bankruptcy courts will permit the expensive Volt program to continue.

The Volt could revolutionize driving for many commuters, allowing them to cruise to and from work without ever stopping by a gas station to fill up. Different than traditional hybrid or plug-in hybrid vehicles, the Volt can go 40 miles on a single charge on the electric engine and then a smaller, gasoline-powered combustion engine generates electricity for the motor, acting as a range extender [GreenBiz.com]. GM has said that the Volt should be able to drive 400 miles on a full charge and a full tank. The car is expected to sell for around $40,000.

But before the Volt can revolutionize anything, it must get over a big bump in the road: profitability. The high cost of the new technology means that the car will most likely lose money for at least the first several years of production. And as GM sheds workers, factories and dealerships, the bankruptcy court could question the wisdom of manufacturing the expensive new vehicle [Politico].

While the Volt certainly fits with the Obama administration’s mandate for greener, more fuel-efficient cars, some experts note that the U.S. government is not entirely bullish on GM’s electric car. Earlier this year, the White House released an assessment of the automaker that concluded that the Volt will cost too much to make to be a commercial success. From the report: “GM is at least one generation behind Toyota on advanced, “green” powertrain development. In an attempt to leapfrog Toyota, GM has devoted significant resources to the Chevy Volt. While the Volt holds promise, it is currently projected to be much more expensive than its gasoline-fueled peers and will likely need substantial reductions in manufacturing cost in order to become commercially viable” [Technology Review].

Related Content:
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80beats: U.S. Battery Makers Team up to Tackle Their Big Challenge: Electric Cars
80beats: Chrysler Jumps Into Electric Car Race With Three New Vehicles
80beats: The Electric Car Isn’t Dead! Here Comes the Chevy Volt

Image: flickr / JMRosenfeld

CATEGORIZED UNDER: Environment, Technology
  • http://www.youtube.com/user/SkeptikSnarf SkeptikSnarf

    bye bye GM, you wont be missed. i feel sorry for the people affected but GM needs to go, and i think its inevitable. GM, a dinosaur awaiting extinction

  • http://clubneko.net Nick

    Saturn has never turned a profit for GM. The entire time they’ve been produced, they’ve lost money on them. People who’ve been paying attention have been calling for GM to go bankrupt since at least 2005 ( http://globaleconomicanalysis.blogspot.com/2005/11/can-gm-be-saved.html and this guy is an actual, employed investment analyst, not just some random internet yay-hoo).

    GM, which has gotten more bailout than any other US car firm, only employs a 3rd of it’s work-force in America.

    The Aptera is a sustainably made electric vehicle ready to hit the roads later this year. What could they do with 15 billion dollars that GM asked the US to “write-off?” That 15 billion is gone and will never come back, and GM is not going to be able to compete with electric car start-ups due to it’s monolithic nature. The more money we waste on them, the more likely good and ready-to-go technology like the Aptera will have to struggle to catch up because the government is socializing failed companies instead of supporting up-and-coming innovators.

  • Thomas Ammons

    I am 4636th in line to get a Volt. If I get a $7300 dollar rebate and the car stays within its $40,000 price range I might just be able to swing it. If the price goes higher or the rebate is less I’m out of the game. If GM has to cover its costs and this causes a price rise the only way to get a Volt in my hands is to increase the rebate. I don’t think its a waste to subsidize early adopters– its a way to create a market and allow the manufacturer a quicker way to get to economies of scale. How long will I have to wait if I allow free market forces to knock the price down? I might be dead by then.

  • http://www.zoomilife.com Aaron

    Thomas, I understand your feelings, but you’re missing the point. Why should I give you money to buy a car? If I asked you to give me money to buy a car, what would your reaction be?

    In the end, “subsidies” are just that: the government takes money from people like me to give to people like you so you can purchase a car. How is that fair?

    As for free market forces, we haven’t had those in this country in over a century. So your question is kind of pointless.

    GM, Chrysler, and all the rest (banks included) should have been left to die. There’s no such thing as “too big to fail.” I’d like to see California fail too. Maybe then people will wake up and realize that the socialistic trough for government payouts isn’t bottomless. It comes from somewhere. My state is doing just fine and had a yearly budget surplus. Why is that possible here and not elsewhere?

  • Thomas Ammons

    Well, it is a “prime the pump”-lower the energy barrier kind of argument. Let’s say that when GM ramps up production it causes actual costs to drop into the acceptable range. Without absorbing that inital cost bump GM may never get to economies of scale. If GM can’t afford it the only other catalyst left is the government. They also have an interest in seeing that this gets done because it spurs US industry and gets us on the path to sustainable low carbon footprint. I would not object to having the government spend money to further these goals– even if you, Aaron were the beneficiary of such largess. Afterall you deserve some credit for helping things move along and taking the risk of driving the first plugin hybrid.

  • Aaron Allen

    I’m another [different] Aaron…GM shud launch an ‘econo-Volt’ by using the Chevy ‘Cruze’ and perhaps the Malibu or Impala to contain the basic electric motor, classic deep-cycle bat teries, and a 5-speed tranny with ‘Park’ [to hold vehicle as electric motor has no compression to prevent 'windmilling' on grades]. These ‘basic’ Volts cud be upgraded later if the L-I batter ies become less costly, or keep their classic ‘boat’ cells. After a 3 year lease, the leasees wud be able to get a ‘second-tier’ lease or buy the vehicle. If it is traded or lease-returned, it will be a good buy for someone who can appreciate a mid-range, economical BEV. Think seniors, students, single-parents, GIs near bases, short-haul commuters, etc. If properly maintained, these units will last a long time and not deteriorate into noisy, smokey, hulks that one sees…
    These cud become one of the best long-term values in GM’s bag of tricks…Aaron Allen..

  • http://www.newsontable.com/ Freya

    No Surprise that GM had to sink like the Titanic.. Just the pain and hard work of 300 Million Taxpayers going down the drain.. Whose responsible for that?

  • Christina Viering

    Good points!

  • Felix Chesterfield

    Has anyone seen this site for GM car and truck parts ? Will they still be open?

  • http://themotoring.com/CarDealerships.aspx cardealerships

    Lot of useful points are there. Its really keeps me updated.

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