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General Motors subsidiary puts $5M in electric firm

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General Motors subsidiary puts $5M in electric firm

Automaker also defends price of Volt

BY BRENT SNAVELY AND JEWEL GOPWANI

FREE PRESS BUSINESS WRITERS

TRAVERSE CITY -- General Motors expressed confidence in the future of electric vehicles Tuesday when a subsidiary invested $5 million into a start-up company in Indiana and it defended the price of the Chevrolet Volt at an automotive conference.

GM, through its GM Ventures subsidiary, will provide $5 million to Bright Automotive to help jump-start production of the plug-in hybrid van Bright calls the Idea, a vehicle designed for cable, telecom, utility and other companies that use fleets of trucks.

"GM's investment gives them legitimacy and puts them on the map," said Mike Omotoso, an automotive analyst with J.D. Power and Associates.

The investment could help Bright win loan approval from the U.S. Department of Energy as well as funding from private investors, Omotoso said.

Bright, based in Anderson, Ind., put the Idea on hold in 2008 when it encountered funding hurdles during the credit crisis and its loan application with the U.S. Department of Energy has been pending for 19 months.

The investment also gives GM a quick way to develop a commercial electric vehicle to match Ford's Transit Connect. Ford launched a gasoline-powered version of the Transit Connect last year and is planning to launch an electric version this year.

"Funding early-stage start-up companies is a new way of doing business at GM to accelerate the introduction of innovative technology to support our core automotive business and give us a competitive advantage," said Jon Lauckner, president of GM Ventures.

The Idea will use a GM engine and transmission. It is to drive 40 miles on battery power and about 300 miles on an internal-combustion engine and is expected to debut by 2014.

GM on Tuesday also had to defend the price of its Chevrolet Volt plug-in car.

The car's $41,000 price, questioned by conservative talk-show host Rush Limbaugh last week, was challenged by a Ford executive on Tuesday.

"We want to be able to provide a solution that works for all of our customers, and at $40,000 or $41,000, you are taking a lot of customers out of that equation," said Barb Samardzich, Ford's vice president of global powertrain and engineering, during the 2010 Center for Automotive Research Management Briefing Seminars.

The Volt, scheduled to go on sale late this year, can go 40 miles on a single charge before a gasoline generator kicks in, giving it more than 300 additional miles of travel.

"With a federal tax credit, it is $33,500," said Larry Nitz, GM's executive director of hybrid and electric powertrain engineering. "We think there will be a plentiful supply of customers at that price."

link:

http://www.freep.com/article/20100804/BUSINESS01/8040312/1331/General-Motors-subsidiary-puts-5M-in-electric-firm

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