GM says Volt isn't dead yet, despite panel's bleak report

McClatchy NewspapersApril 8, 2009 

WASHINGTON — 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 on 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.

"We will make it happen," Darovitz said. "There is no deviation in our focus and intent to bring the car to market in late 2010."

Darovitz said the government report made an unfair comparison with Toyota because it was dealing with two different technologies — the Prius gas-electric hybrid and the battery-powered plug-in electric Volt.

Obama last week rejected GM's restructuring plan and gave the automaker until June 1 to explain how it would reshape itself as a healthy company. GM seeks more than $16 billion in additional taxpayer funds.

GM reported in its five-year restructuring plan that it's investing in hybrid and plug-in cars and trucks, including the Volt and two other models that will use its technology.

"With a majority of Americans driving their vehicles less than 40 miles per day, the Chevrolet Volt — providing up to 40 miles on a single electrical charge — should be attractive to those seeking to use little if any gasoline," the GM plan said. "The development costs of high-technology vehicles like the Volt are significant, but so are the long-term benefits that come from increased energy efficiency and independence."

Darovitz said the company expects state and federal incentives will help boost demand for the Volt, particularly a $7,500 federal tax credit. The Volt is expected to sell for around $40,000 because of the high cost of its batteries. The Energy Department has been helping with battery research to bring costs down.

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