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NINETY EIGHT REGENCY

GM's Lutz sees limited share for electric cars

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GM's Lutz sees limited share for electric cars

DECEMBER 7, 2009 06:01 CET

LOS ANGELES -- General Motors Co. sees limited sales of electric cars over the next five years and will ramp up output of its much-anticipated Volt plug-in cautiously, Bob Lutz, the automaker's vice-chairman, said.

"This is uncharted territory for all of us," Lutz told reporters at the Los Angeles auto show.

GM unveiled the production version of the Chevy Volt at the show last week. The battery-powered car is set to launch at the end of 2010 that has become a symbol for the automaker's effort to reinvent itself over the past four years.

GM designed the Volt to comply with regulations for all overseas markets, Lutz said. He said GM would build 8,000 to 10,000 Volt models during the first full year of production with an eventual ramp up to production of 50,000 to 60,000 units.

"I'm absolutely sure that demand will not be a limiting factor," Lutz said.

Technology costs too much

But Lutz said electric-powered vehicles such as the Volt still faced hurdles in making it to mass-market sales volumes, including their higher prices.

"The cost of the technology has to come down," Lutz said.

Most consumers will be unwilling to spend the premium of thousands of dollars for a battery-powered vehicles unless gas prices are pushed higher with taxes, Lutz said.

"We're not advocating that but if it doesn't happen it's going to be very difficult for these technologies," he said.

GM has said it expects to price the Volt near $40,000 before a $7,500 tax credit for U.S. consumers but does not expect to make money on early sales.

The automaker said it would offer the first Chevy Volt models for sale in California, a step that would signal its return to a market it was criticized for abandoning earlier this decade.

EVs could reach 3% market share

GM famously scrapped an earlier experiment with an electric car marketed in California as the EV1, an unpopular decision that made it the target of criticism and the 2006 documentary "Who Killed the Electric Car?"

Lutz said he believed that the auto industry was near a historic shift away from traditional combustion engines and toward battery-powered vehicles that would be "as momentous as the shift from horses to horsepower."

But when asked, Lutz also said that the total U.S. market for rechargeable vehicles by 2015 might only be 250,000 to 300,000 units of annual sales.

That would be about 3 percent of industry-wide U.S. auto sales in 2010 and about on par with the current market share for traditional gasoline-electric hybrids led by the Toyota Prius.

The Volt is being designed draw its power exclusively from a lithium-ion battery pack that will be supplied by a unit of Korea's LG Chem.

GM has said it is aiming for the Volt to be able to run for 40 miles (64km) on battery power in average conditions, meaning many drivers would be able to commute without using gasoline.

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I see electric car growth tied to the continued increase in cheaper and better technology. I also see it tied to oil prices.

Both will control how fast this goes. The Japan imports were with us in the 60's but it took the oil shortage in the 70's for them to be accepted by more people.

Even the Automobile did not replace the horse overnight. It will be the outside factors that will control growth of this market and it will not replace gas soon if ever. That is something all of knew going in.

I look for areas in the country where these cars will play well but in the fly overstates I don't see them taking off for a long time if ever.

Edited by hyperv6
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Batteries cost so much more than frugal gas competitors that there will need to be some serious market distortions for them to become viable.

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Mr. Lutz speaks from a position of authority and knowledge.

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Mr. Lutz speaks from a position of authority and knowledge.

He's been yanking the industry around for almost three years now with his special combination of off-the-cuff false statements and ignorant guesses in order to PR-the-heck out of a flawed car that he paid for with our money.

GM PR has told us from the beginning that the Volt was going to be mass market... that is why it had to be a Chevy, and that is why it would electrically satisfy the commuting needs of 80% of the population. Never mind that the flawed one-up design of the Volt had a battery 27 times that of the Insight, and that half of the battery is always dead weight. Now even his (optimistic) prediction for 8 YEARS after they started advertising the Volt is only a 3% uptake for all plug-ins for the entire US.

Why? Bombshell: Cost. To hit 80% of the consumer's commuting needs they jacked up the price so that it is so expensive (even with GM likely taking a loss and taxpayers subsidizing it) that GM doesn't want to build it in volume and consumer uptake is barely worth mentioning. This was obvious to me a year or two ago (I posted it here), yet apparently it was beyond Lutz.

No, that isn't fair to Lutz. We know he wasn't really building the "right" car. He has admitted that he was just setting out to one-up Toyota, that the Volt is the compromise of what he really wanted to build, that he believes that demand for hybrids and electrics is inflated, etc. I suspect he always knew the Volt wasn't really a very good idea beyond PR.

You can give Lutz credit for authority for fooling most of the public, and for making some of the industry jump of the bridge with him, but don't pretend that he has any kind of valuable knowledge of electric cars. This is just another of his specialty niche halo cars.

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Love ya Lutz, but this is one time your true colors shouldn't have shown through.

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Batteries cost so much more than frugal gas competitors that there will need to be some serious market distortions for them to become viable.

Exactly, I can get a Cobalt XFE with 37 mpg and a Malibu with 33 mpg, now why would I want a hybrid? Both get great mpg's have decent performance cost a hell of a lot less than a Prius.

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