Apr 15, 2009 (From the CalCars-News archive)
More auto industry and Washington DC news: followups on our posting about Boston Consulting Group's role in the Automotive Task Force; General Motors continues to push ahead, making clear that it's committed to protecting and enhancing the Volt as its future path, regardless of management or corporate developments: two more automakers, Jaguar and Hyundai, jump in with plans for plug-in hybrids (we'll add them to the 18+ at http://www.calcars.org/carmakers.html ); new battery factories in Michigan will add over 6,000 jobs, and other reactions on GM.
MORE ON ADMINISTRATION AUTO TASK FORCE AND PLUG-IN CARS: We're gratified that Climate Progress, one of the leading voices on global warming, has reproduced yesterday's posting as a guest column where comments are already arriving. Climate Progress, called "The Indispensable blog" by author and columnist Thomas Friedman, is run by the eminent and influential Joseph Romm -- see his bio at http://www.americanprogress.org/experts/RommJoseph.html . We encourage others to reprint it or link to our posting at http://www.calcars.org/calcars-news/1055.html or the Climate Progress version at http://climateprogress.org/2009/04/15/obama-automotive-task-force-consultants-plug-in-hybrid-electric-vehicle/ . We've received several private emails from people who did not want to be quoted publicly saying that our analysis and critique of the Boston Consulting Group's perspective was on target, noting that its rivals Bain and McKinsey (most recently in "Roads toward a low-carbon future" http://www.mckinsey.com/clientservice/ccsi/roads_toward.asp ) see things differently.
CLARIFICATION: The White House: uncharacteristically "on background" rather than with a quotation from a public spokesperson, says its assessment of the Volt does not mean that it's not supporting the vehicle's production. Here's the first half of the April 8 McClatchy Newspapers report, "GM says Volt isn't dead yet, despite panel's bleak report" http://www.miamiherald.com/business/nation/story/991117.html :
The White House may have sounded a bit bleak on the Chevrolet Volt last week, but both the company and the Obama administration say don't read that as early news of the much-advertised electric car's demise. President Barack Obama's auto task force last week said in an assessment of General Motors' viability that it was a full generation behind Toyota in "green powertrain development" and that "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." A White House official who worked on the assessment said Wednesday, however, that the statements had been simply another way of saying what GM has said all along - it will be a challenge to bring the new technology up to scale and make it cost-competitive. GM will have to make its own decisions about the pace of its advanced technology, said the official, who requested anonymity because he wasn't authorized to speak publicly. "You should not expect the task force will say GM should discontinue the Volt," he said.
GM spokesman Dave Darovitz said there was nothing new in the government statement on high costs. New technology is always expensive, he said . The company has added money to building the Volt, and it's still the "No. 1 product development program here at GM," he said.
GM'S NEW CEO ON PROFITABILITY AND THE VOLT: This Monday, in an interview with Automotive News, Fritz Henderson, GM CFO who succeeded Rick Wagoner as CEO said, "On some products, the costs, particularly in advanced technologies, are high. The Volt is the case study. We have been very clear with the task force, particularly in Gen-1 technology, like the Volt, the cost is high. And that means, it doesn't necessarily pay the rent. It actually consumes rent when it's launched. But you don't get to skip Gen-1, you've got to do Gen-1 and 2 to get to Gen-3. And what we want to do is make sure we launch the car well, that we get the maximum learning from it, that it's successful in the market, so that when we get to Gen-2, we've got the most cost out that we can. And when we get to Gen-3, get the most cost-out we can, and that's how I look at it." (Reported at http://www.huffingtonpost.com/2009/04/14/new-gm-ceo-ok-with-losing_n_186540.html .)
Since the Volt was announced, and since Toyota began saying why it wasn't ready to produce PHEVs, we've criticized the auto industry for "making the perfect the enemy of the good," and not understanding "versioning," as have most other industries. For instance, makers of plasma TVs and cellphones got expensive and "good enough to start" products on the market, learned what customers wanted, and then reduced costs. We had in fact encouraged GM to start with a lower-range vehicle to use smaller, cheaper, or different chemistry batteries. Now GM is following this path, and criticizing the company for "losing money on the first Volts" is missing the point.
GM PROMOTES PLUG-IN READINESS: Since early April, GM has taken several steps to further its electrification strategy.
MEDIA BRIEFING ON PLUG-IN READINESS; On April 2, Chevy Volt Line Director Tony Posawatz appeared along with San Francisco Department of Environment's Bob Howard and Mark Duvall of EPRI answered media questions. Read reports about that briefing at http://www.technologyreview.com/business/22392/ (business issues) http://www.technologyreview.com/blog/energy/23291/ and http://evworld.com/blogs/index.cfm?authorid=12&blogid=715&archive=1 (technology). AutoBlogGreen's report http://www.autobloggreen.com/2009/04/02/plug-in-ecosystem-update-gm-working-with-dozens-of-utilities-to/ includes a long writeup and most of the presentation slides; both they and Green Car Congress at http://www.greencarcongress.com/2009/04/gm-putting-1m-plugins-on-the-road-will-require-a-plugin-ecosystem.html reproduced in full the comment CalCars provided to media after the briefing:
"Today's briefing confirms GM's giant steps forward. The company is putting together the pieces needed to bring plug-in vehicles to market -- this time, broadly and successfully. We commend GM for its open-minded ness in embracing many of the concepts plug-in advocates have long promoted, which will increase its chances of success. For instance, conceptually, they have a vision of a needed "plug-in ecosystem" enlisting cities, companies, utilities, and grassroots organizations as partners. Analytically, they're making important distinctions between improving vehicle efficiency with hybrids and engine improvements compared to more ambitiously displacing gasoline with electricity from plug-ins. Linguistically, they're talking about "plug-ins" rather than quibbling about plug-in hybrids vs. extended range EVs. In messaging, they're aligned in communicating electricity's benefits, compared to gasoline, as cleaner, cheaper and domestically sourced. And strategically they've confirmed they will bring demonstration fleets to some receptive localities before November 2010. They're doing everything right -- and they're clearly willing to continue adjusting their strategies to increase the probability of a win for all."
GM PROMOTES PLUG-IN ECOSYSTEM IN WEBCHAT: At http://fastlane.gmblogs.com/archives/2009/04/what_is_it_going_to_take_to_put_one_million_plug-in_vehicles_on_the_road.html read Chevy Volt Line Director Tony Posawatz introduced the idea that the successful launch of the Volt requires a series of interdependent factors to make it work. To illustrate the partnership, on April 3, GM held a unique webchat that was simultaneously hosted by its own Fastlane blog, EVWorld.com, GreenCarCongress.com and GM-Volt.com . At the URL above you can read the responses by GM's Britta Gross, director of infrastructure commercialization, to questions, as well as a survey showing 88% of those asked in an instant survey saying they would charge at home/garage.
THE DAY AFTER THE TASK FORCE REPORT: GM also confirmed its plans for its second generation on the "Voltec" platform (renamed from "E-Flex"). It asked for $2.6B in federal loans to get the Cadillac Converj and Opel/Vauxhall Ampera to market, bringing to $10.3B the total it is seeking under the $25B TARP retooling program from last fall. Analysts said an approval decision, scheduled for sMay, would probably be held until after the Auto Task Force's overall review of GM in June http://www.autonews.com/article/20090408/ANA02/904089971/1229 .
GM GIVES JOURNALISTS FIRST VOLT DRIVING EXPERIENCE: GM has been demoing the Volt, giving journalists the electric driving experience of the Volt inside a Chevy Cruze "mule" (test vehicle). Volt Vehicle Line Director Tony Posawatz says the vehicle has performance "comparable to a 250-horsepower V6." See many media reports and film clips: GM's video with Global Vehicle Line Executive Frank Weber and Posawatz at http://www.youtube.com/watch?v=J7SNVjW_HHU or at the GM Fastlane blog http://fastlane.gmblogs.com/archives/2009/04/gm_voltec_electric_propulsion_system_drive.html . Other videos at CBS http://www.cbsnews.com/stories/2009/04/14/eveningnews/main4945194.shtml CNN
http://money.cnn.com/galleries/2009/autos/0903/gallery.chevrolet_volt_mule_drive/3.html and a story transcript at PBS http://www.pbs.org/nbr/site/onair/transcripts/chevy-volt-090414/
GM DENIES CADILLAC CONVERJ OK'D FOR PRODUCTION: After Motor Trend reported production approval for the luxury Converj (shown at the Detroit Auto Show as a two-door concept vehicle) with a target date of 2011 http://www.motortrend.com/features/auto_news/2009/112_0904_cadillac_converj_gets_green_light/index.html , the company denied any change in the vehicle's status. A GM insider said its fate lay in the hands of the federal Automotive Task Force. http://www.edmunds.com/insideline/do/News/articleId=146068 And the company did not respond to the Motor Trend reports that it would build a Buick seven-passenger SUV/people-mover series PHEV on the Voltec platform.
SIGNAL THE VOLT HAS ARRIVED: Consumer Reports chose to report on a first drive of the Chevy Volt as its April Fool's story, praising it for its radio, reliable forward momentum, included tires, but criticizing it for requiring the driver's head to swivel to use the mirrors. It concludes, "Overall, a clever plug-in powertrain, creative marketing buzz, and undetermined reliability make this car another choice." http://blogs.consumerreports.org/cars/2009/04/chevrolet-volt-first-drive.html
JAGUAR'S NEW PHEV: Jaguar has announced it will launch "Limo Green," a series PHEV version of its luxury XJ in 2011, a year after the next version of this luxury four-door vehicle comes out. Jaguar is working with British engineering firms Lotus Engineering, MIRA and Caparo. It hopes for an all-electric range of 30 miles. Jaguar announced this commitment after getting a loan of $489M from the European Investment Bank, the lending arm of the European Union, as part of the European Economic Recovery Package. Indian-owned Tata Motors, makers of the new low-priced Nano, recently purchased Jaguar and Land Rover from Ford. http://www.autocar.co.uk/News/NewsArticle.ASpx?AR=239500
HYUNDAI'S NEW PHEV: The Korean automaker has announced plans to bring to market, in the U.S. in late 2012, a series PHEV version of its four-door "Blue-Will concept car shown at the Korean Auto Show. Reports quote Yang Woong-chul, president of Hyundai-Kia Motors' research and development division, saying, "We want to be the world leader in fuel economy and alternative fuels." http://rumors.automobilemag.com/6506006/green/hyundai-to-build-hybrid-plug-in-for-2012/index.html and Lee Hyuno-soon, R&D head, saying that the company wants to "see how the government would support it and if customers would pay big money," including evaluating public reaction to the Chevy Volt, before moving forward http://www.guardian.co.uk/business/feedarticle/8456125
BATTERY MANUFACTURING TO EXPAND IN MICHIGAN, CREATE 6,000+ JOBS: The State of Michigan has expanded its tax breaks and incentives to battery-makers, and in response, four have stepped up. Following, as reported by Autoblog Green and from Governor Jennifer Granholm's press release http://www.autobloggreen.com/2009/04/14/four-battery-makers-announce-plans-to-build-battery-plants-in-mi/ , are the companies, investment amounts, and approximate projected jobs to be created:
- Johnson Controls-Saft Advanced Power Solutions, partnering with Ford, $220 million, 498 jobs
- LG Chem-Compact Power, building packs for the Chevy Volt, $200M, 300 jobs
- KD Advanced Battery Group, a joint venture between Dow Chemical, Kokam America and Townsend Ventures, $665M, 885 jobs
- A123 Systems, building packs for Chrysler, $600M, 5,000 jobs.
OTHER RESPONSES TO THE TASK FORCE: See a sampling of public responses among environmentalists at http://www.treehugger.com/files/2009/03/presidential-auto-task-force-gm-chevy-volt-electric-car-plug-in-hybrid-commercial.php . And in a change of heart, Bloomberg News quotes Dan Becker, director of the Safe Climate Campaign, grudgingly acknowledging, "The Volt is certainly a very tiny step in the right direction." http://www.bloomberg.com/apps/news?pid=20601087&sid=aCJOCuv6_jg8 . This has some special significance to us as we explain below -- it's "inside baseball" within the environmental movement and an illuminating "where are they now?" story.
BACKGROUND: We first encountered Becker, then Director of the Sierra Club's Global Warming and Energy Program, in 2005. Then he thought all we ask for from carmakers was hybrids, whose lack of a plug was a plus http://www.sierraclub.org/iwillevolve/what.shtml . When The New York Times sought his opinion for its exclusive story breaking the news of CalCars' first Prius conversion, Becker went negative, saying "the concern on plug-in hybrids is that we not substitute addiction to one pollution fuel for addiction to a more polluting fuel." He thereby showed his incomplete understanding of the value of electric miles when generated from power sources that include coal http://www.calcars.org/calcars-news/14.html . A few months later, Becker led the Sierra Club to initiate vast cooperative promotions to its 300,000 members and in consumer magazine ads for Ford's new Mariner Hybrid http://www.sierraclub.org/pressroom/releases/pr2005-07-11.asp and http://www.nytimes.com/2005/07/12/automobiles/12ford.html . The SUV's launch event came at the September 2005 Sierra Summit, where Becker energetically excluded plug-in advocates from visibility. Bluewater Network, Rainforest Action Network and Global Exchange concluded Sierra had succumbed to greenwashing -- though in its defense, Sierra continued to criticize Ford for its overall gas-guzzling fleet. Ford soon left Sierra high and dry when it abandoned its commitment to expand hybrid production ten-fold, and Becker eventually moved on. After leaving Sierra, this always well-intentioned but we think often misguided fuel efficiency crusader was lauded for his role in CAFE legislation http://www.huffingtonpost.com/carl-pope/dan-beckers-moment_b_75080.html by Executive Director Carl Pope. (We think Pope recently repeated the Ford error with his alliance with T. Boone Pickens, controversially promoting compressed natural gas vehicles and working to gain water and wind transmission rights in Texas.) Now at his new organization, Becker is backed by foundations to continue appealing to the auto industry for "clean" or "efficient" vehicles of undetermined design http://www.safeclimatecampaign.org/automaker-accountability .