The GM Volt challenge

Insert photo caption or credit here

Many wonder how GM will pull off the introduction of a highly advanced plug-in vehicle, PHEV or as they like to call it, an extended range electric vehicle, ER-EV at an affordable price.

The gist is that GM has a lot of work on its plate if it wants to introduce such a sophisticated car.  The Volt relies on batteries driving the electric motor for the first 40 miles and then uses an internal combustion engine, ICE as a generator to keep the battery pack charged.  This technology is still fairly new and many question the feasibility of selling it at around $30,000 to 40,000, especially in the state GM is in.

Traditional Introduction Of Technology.  If you look back in history, new technology has mostly been introduced in the upper end of the market.  Whether we think of independent suspension, air conditioning, seat belt and stereos, etc., all these creature comforts and advanced technologies were released in the premium version of what manufacturers had to offer.  Only when enough had been sold to recoup the development costs, would these technologies find their way down to the more affordable versions.

GM's Quest.  GM is raising the bar high, some would say too high.  How can a beleaguered car maker whose image has been tarnished, think it could offer a $40,000 ER-EV/PHEV car?  Most of all, who will buy it?  Yes, there are early adopters, those that just need to have the very first of anything.  However, at $40,000, that clientele wail have a choice of cheaper economic gas cars also or spend more and get a Fisker Karma.  GM hopes owning an ER-EV/PHEV would allow its customers to say they can drive without gas during the weekdays.  In many instances, a series PHEV or ER-EV is the perfect stablemate to the other pure electric vehicle, EV consumers will own, at least in the beginning.  Still, introducing such high technology on the Chevrolet brand is a tour de force.

Another venue GM could use would be to sell its Volt through the higher end Cadillac brand and thus raise the premium enough to recoup developing costs sooner.  In this aspect, GM knows it can count on a faithful clientele who would be early adopters and still re-brand its Chevrolet as a technology automobile brand in the future.

No matter how GM looks at it, it will loose money on the first Volt generation, at least for the first few years.  Another point raised is whether or not solely focusing on an advanced hybrid while many in the industry are already turning their attention to pure electric cars is the best way to go.  While GM has hinted it will work on pure EVs, they have not shown much as of yet. 

The GM Volt is a lot of gambling for a stepping stone solution such as a PHEV, even if that solution will be an intelligent one for families wanting to travel great distances before EVs can do that.  One bright glimmer of hope is that car collectors will always look favorably at a first edition, especially one with an advanced technicality when it came out.  Given the character of the Volt, it will make for a good collectors item for decades to come.

Hot New Drives 2009

Looking for the summer's hottest wheels? Check out Examiner.com's nationwide network of Transportation Examiners for a guide to the year's high-tech cars, adventure-packed trucks and best deals.