How Committed Is GM To Vehicle Electrification?

In order to meet 2017-2025 fuel efficiency and emissions mandates imposed by federal CAFE and California rules, electrification in various forms will be vital, and that right there is one reason not to count General Motors out.

Not that an honest, objective look would suggest anyone should dismiss GM, but questions as to how committed it is have been repeatedly raised by advocates.

Regarding hybrids, all of GM’s hybridized vehicles under various nameplates added to around 26,000 sales last year, which contrasts with the Toyota brand’s 288,000.

Even Ford, despite controversies surrounding the C-Max and Fusion hybrids’ EPA mileage, sold 65,000 examples of these two full hybrids last year, compared to GM’s nine vehicles, none of which is a full hybrid.

Regarding plug-in hybrids, the Chevrolet Volt’s sales in 2013 were just 400 units over 2012’s, only the $76,000-plus Cadillac ELR and no other mainstream-oriented Voltec variants have been announced in three years since the Volt’s launch.

As for electric cars, Nissan, Tesla are running circles around GM’s California and Oregon-only Spark EV.

Chevrolet's Volt and Spark EV are represented at Detroit but the 7-liter Z28 was more prominently displayed.

Chevrolet’s Volt and Spark EV are represented at Detroit but the 7-liter Z28 was more prominently displayed.

Some have wondered how much GM cares to make a run for the electrification end-zone as it books significant profits from less-efficient conventional offerings, and continues to enthusiastically introduce 500 and 600-plus-horsepower cars.

But not so fast, says GM. Company spokespeople are quick to point out GM has also invested billions in electrification, and has been and will continue to be an innovator with advanced super efficient cars.

In September GM announced a near tripling in size of its Warren, Mich. battery lab, and GM says it’s now the largest in North America.

GM is continuing work behind the scenes on “electrification,” a term describing what is actually a multi-pronged technological approach.

Electrification includes, plug-in hybrids, hybrids of various types, pure battery electric vehicles, and fuel cell vehicles.

Regarding all of these, GM has struck early – such as with the 1996-1999 EV1 which it subsequently recalled for termination and was later castigated for in the documentary “Who Killed the Electric Car?”

The company was also out-in-front during the first decade of the 2000s with fuel cell prototypes and yet has test fleets around the world.

And, goaded by Tesla’s limited-market Roadster EV, it helped launch the present mainstream plug-in car era with the Volt in December 2010.

Tesla has done just about no paid advertising, is gaining fans anyway, and remains a goad to GM.

Tesla has done just about no paid advertising, is gaining fans anyway, and remains a goad to GM.

But GM is officially less outspoken in promoting itself and its future potential as perhaps is Tesla Motors’ CEO Elon Musk, or even Nissan’s CEO Carlos Ghosn.

Whenever its former CEO Dan Akerson has apparently gone off script and hinted at future products at speaking engagements, not one iota beyond the letter of his disclosures were confirmed or denied by its media department.

This week, GM’s new CEO, Mary Barra told CNBC from Detroit that GM will keep innovating as technology and the market enable it to do so.

“I think electrification will continue to grow as we go forward,” she said. “It’s a lot about the technology. As we continue to make breakthroughs in technology I think you will see that advance, but again I think a very important segment of the auto market globally.”

If that’s a bit vague for you – and despite some of Akerson’s disclosures – GM has no vested interest in opening up its secret test labs only to cannibalize its present products. And, GM says, it would rather keep competitors guessing.

Judging by how it says it does not want to tip its hand, one might even surmise GM is content to let people think it’s now just loping along, taking things as they come.

To learn what we could, we spoke with Volt media rep Michelle Malcho in Detroit, and followed up with GM’s Kevin Kelly, manager, Electric Vehicle and Hybrid Communications.

Plug-In Hybrids

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GM officially calls its gas-electric Volt an “extended-range electric vehicle,” and GM says the car will remain a niche offering for now, while it also serves as technological seed stock for every other advanced technology GM is planning in its future portfolio.

Malcho said GM was relatively pleased with its 2013 U.S. sales of 23,094 Volts – the most plug-in cars sold by any manufacturer, and it also has the highest cumulative sales of over 55,000 units since launch.

The Nissan Leaf, by comparison, has sold over 42,000 since launching the same month, but it did have a stronger 2013 – in a sense having no where to go but up – following a much weaker 2012 in which the Volt more than doubled its sales. Globally, Nissan will announce this month 100,000 unit sales, and the Volt and Holden and Vauxhall badged versions have just crossed 70,000.

Malcho said GM is also gratified the plug-in market expanded in makes and models, and grew to almost double the volume in 2013, but GM has learned Volt acceptance will only grow so fast.

“I’d say it was a very interesting year for electrification overall. I think the market showed that there’s interest in electrification but yet it’s still not a huge segment, its not a mainstream segment as maybe what we would have thought a couple years ago … there’s still a lot of people who don’t quite frankly understand it,” she said.

GM has done tech conferences, and advertising where it thinks it will be heard and will continue with more of the same this year on a selective basis.

“I would say we focus our advertising really in California to be honest, it’s our number-one market,” she said. “So if you live in California you probably see a lot more from Volt and Chevrolet than you do in other places.”

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Other focal points include tech events like the Consumer Electronics Show in Las Vegas a couple weeks ago where “Volt was center stage.”

“We choose to proactively showcase the Volt in tech spaces where people are more likely to understand what it is more than mainstream advertising because of all the products Chevrolet offers; we find more success there,” she said, adding, “We did a lot of LGBT outreach last year, so it’s a huge market for Volt, and you’ll continue to see that from us … So it’s a tech halo and that’s kind of where they place it from a brand perspective.”

So, we asked to clarify, you say the Volt is not a mass market car?

“It’s not, just like Corvette is not being mass marketed,” she said. “It is more of a niche style of product.”

But, we asked, wasn’t there early talk of the Volt leapfrogging the Prius?

“I think everybody thought the potential – and the potential still exists – but I think the time frame of what that potential is, I don’t think it’s automatic. I don’t think it’s automatically what people thought.”

We then asked: You readjusted your expectations?

“I think so, I think the market did that for us,” she said.

Thus, we continued: You got a reality check from the market?

“Yeah. And that doesn’t mean there is not room for growth in the market and whether it’s the Volt or Volt-like technology or hybrid technology that it can grow – and we’ll have to grow, it has to change; we have to go in that direction,” she said alluding to federal and California regulations.

The 2014 Cadillac ELR, such as this $83,130 MSRP example, is the only production spin-off from the Volt's technology.

The 2014 Cadillac ELR, such as this $83,130 MSRP example, is the only production spin-off from the Volt’s technology.

But Kevin Kelly emphasized also GM is pleased with the Volt, and he accentuated ways it is paying dividends by trickling down its technology and lessons learned from its drivers to GM’s growing portfolio of present and future products.

“The technology is vital to us, but the technology that’s in the Volt has already paved the way for us to do things with Spark EV [and numerous other cars, including next-gen eAssist hybrids and others pending],” said Kelly who mentioned hardware, software, algorithms, and more that were pioneered with Volt.

Kelly confirmed also, as Dan Akerson has already, that an improved Volt is coming.

“Gen 2 of our E-REV technology is far under development and so we’ll have more to say about that,” he said. “I can’t tell you when, but we’ll have more to say about that. Rest assured we are committed to the technology.”

But while there’s been a tech transfer from the Volt, Kelly said Voltec is not being looked at as a single answer to all the world’s future transportation needs.

“We don’t look at it as just a one-technology solution,” he said. “We realize that there’s got to be multiple technologies out there.”

Kelly said also GM has learned core competencies, such as with its in-house electric motor manufacturing, that it knows competitors do not have.

In sum, GM is surveying all possibilities. It knows its Voltec fans have said they’d like a CUV, SUV, minivan or high-performance Voltec but Kelly said the answer has to be no comment.

“I’m not going to sit here today and tell you we’re going to do A, B and C,” he said, “I’m sure people in Korea and Dearborn and other places would love to know that.”

Hybrids

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In a recent article we did on the top five hybrid automakers, GM ranked fourth, but only by virtue of its myriad eAssist and outgoing 2-mode hybrid trucks.

GM has nothing in the full parallel hybrid space quite like a Ford Fusion Hybrid or C-Max Hybrid, let alone hybrid variants of the Toyota Camry, Honda Accord, Kia Optiima, or Hyundai Sonata.

Compared to the regular gas versions of these cars, the full hybrids cost a couple thousand or more extra, but return significantly more mpg gains than say, a Maibu eAssist could next to a regular Malibu.

And the market speaks louder than any published commentary: GM’s best-selling entry was the eAssist mild hybrid version of its Malibu.

The mild hybrid Malibu is priced within range of full-hybrid competitors, but its sales were 266 units in December 2013, and for the year were down 17.3 percent at 13,779.

It wass down because it was discontinued and is limited to existing inventories. For now it’s being replaced with a variant that includes stop-start technology offering marginal efficiency gains for a marginal price differential.

In contrast, Ford’s Fusion Hybrid sold 2,768 units in December 2013, and for the year it sold 37,240 as it encroaches on the class-leading Camry which sold 44,448 units.

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Kelly said the next generation of eAssist is coming, but would neither confirm nor deny whether a full hybrid is in the works.

His rationale for not divulging more is the same; GM does not wish to give advanced notice to competitors.

Battery Electric Vehicles

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GM’s Spark EV, its only U.S. market battery electric car, is a subcompact hatch sold in California and Oregon.

Kelly said while this is a limited effort, GM is learning things from data collected, and reiterated the Spark in turn borrowed lessons learned with the Volt.

“And again, all of these different technologies that we’re working on and we’re looking at – fruit has been born from Volt, and Voltec E-REV,” he said. “So we’re learning from how our customers use their vehicles in the Volt, we’re now learning from customers who have Spark EVs.”

But, we noted, Nissan is selling Leafs in 50 states, is GM just trying to make the grade?

Kelly laughed, asking if they were trying to only make the grade, why would they have put a 400 pound-feet motor in the Spark?

We said no offense, and he said none taken.

“I get these questions a lot,” he said.

The short answer is GM is looking at other markets. It knows Atlanta is a hot zone for Nissan, and it knows Norway is booming as well, for that matter.

It’s not prepared to announce anything at the moment, but it was mentioned being near sufficient public infrastructure is one criterion GM is weighing at as it surveys potential new states to launch the Spark.

Other EVs to be launched have also not been announced, although Akerson has alluded to competing with Tesla which the company says will show its “Gen III” EV priced at $35,000 and its EPA window sticker will show 200 miles range.

Akerson has said GM will not be left behind.

But even with occasional disclosures by GM insiders, the company is less fiery in its rhetoric and, we asked, doesn’t GM want to show more public leadership along the lines of Tesla and Nissan?

“The way that we’re going to do it is with deeds, not words,” Kelly said.

Fuel Cell Vehicles

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Toyota, Honda, Hyundai and Daimler have announced fuel cell vehicles to be introduced in the next couple years, but GM, an early pioneer, has not said definitively it will have a car.

Kelly noted GM continues to work behind the scenes, and the company in October noted it has the most fleet miles of anyone with a cumulative fleet total of nearly 3 million miles.

The company in July 2013 also signed an agreement with Honda.

“We are working in partnership with Honda on fuel cell technology,” Kelly said.

GM has also reduced the size of its fuel cell stack, but some hurdles to fuel cell viability are out of its control, he said.

“We have a lot of experience in this,” he said. “One of the biggest challenges is infrastructure. There’s a number of things that have to come together.”

In July when GM and Honda agreed to share expertise, economies of scale and common sourcing strategies, they both said they were looking at a 2020 time frame.

Honda's pending FCV is still in concept stage.

Honda’s pending FCV is still in concept stage.

Honda actually is aiming for 2015 for its follow-up to its existing FCX Clarity, as is Toyota, and Hyundai is to launch its Tucson FCV later this year.

We asked Kelly whether GM is indeed preparing for if and when key markets including California and other states have sufficient infrastructure.

“We continue to work on that and we continue to be strong believers in it … We have not announced production timing,” he said, but “the technological hurdles are not insurmountable. Things have to come together.”

So Now What?

Malcho said GM understands the angst some electrification proponents may feel, wanting to see more. This is true also for Volt fans who know the pluses and minuses, and are ready for the next new thing.

She says GM closely follows its customers, and Mary Barra has spoken of a customer-centric mindset, and has said “No more crappy cars” will come from the company.

The post-bankruptcy “New GM” has a new mission to be better at making profits in an environment that’s as competitive as ever.

Its bread and butter still comes from conventional technologies, and not a few trucks and SUVs.

It is not close to generating alternative-tech revenues like, say, Toyota does for its Hybrid Synergy Drive variants. Toyota globally sold its six millionth hybrid last month, noting the latest one million units were accomplished in nine months.

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But GM faces fleet mandates, and customers who want cleaner choices, if not also many who’d like electric cars that can let them kiss the gas pump goodbye – or almost so, as with the case of extended-range EVs.

We asked Kelly whether GM was now resting on its laurels with the Volt?

“No way, no way. We are hard at work on a number of technologies for our future product portfolio,” he said. “We’re committed to electrification, it’s just that we again are trying to not telegraph things until we get closer to market introduction.”

So, we asked, don’t count GM out?

“I wouldn’t,” he said. “And I’m not just saying that because I work for the company.”