Guy in an Easter Bunny Costume

Bob Lutz, GM’s vice chairman for product development, told a group of automotive journalists that the feasibility of the Chevy Volt plug-in hybrid concept will be proven by next Easter. By that time, he said that GM will have put the Volt’s electric drive system and lithium batteries in stripped down Chevy Malibu bodies—referred to as “mule” vehicles—and tested the ability of the Volt system to achieve 40 miles of gas-free range. The vehicle is primarily powered by an electric motor, with a small gasoline engine on board to extend its range.

Mr. Lutz made his comments in San Francisco at a meeting of the Western Automotive Journalists association, where he received the organization’s “Anti-gravity Award,” for a lifetime achievement in the automotive industry. The playful title of the award was meant to recognize Lutz for his ability to repeatedly resist naysayers to his plans for producing ground-breaking vehicles.

Fighting Words

Mr. Lutz then took on naysayers of GM’s advanced technology plans—throwing barbs equally at competitors, environmentalists, the oil industry, and Democrats. The most direct attack was levied at Toyota. Lutz referred to comments made by his counterpart at Toyota, Kazuo Okamoto, executive vice president of R&D and product development. Okamoto questioned GM’s ability to deliver on its plans for the Chevy Volt at the recent Tokyo Auto Show. The two companies have been waging a war of words over competing plans for hybrid and electric vehicles. According to Lutz, Okamoto accused GM of using the Volt concept as a marketing ruse, and characterized the lithium battery-powered Volt as “completely wacky” and “nonsense.”

Referring to GM plans to demonstrate extended electric range of the Volt next spring, Lutz said, “Let’s wait for the Easter Bunny. Somebody’s going to have egg on their face. And I don’t like having egg on my face.” He said that Japanese companies were guarding its advanced battery technology research and refused to bid on GM’s battery proposals. “Lithium battery technology is being husbanded in Japan. It’s like a secret weapon.” At the same time, Lutz criticized the U.S. government for not keeping up with the Japanese government’s funding of advanced battery research.

Higher Gas Taxes

Mr. Lutz, considered GM’s product guru, was critical of environmentalists, especially the Union of Concerned Scientists (UCS) which advocates for using existing technologies—such as better aerodynamics, lower tire resistance and more efficient transmissions—to produce significant fuel economy gains. Mr. Lutz and UCS officials met privately last spring. “I’m not sure if they are concerned,” he said. “But they are certainly not scientists.” According to Lutz, GM and the auto industry has already “tapped out” on obtaining fuel efficiency benefits from conventional technologies. “We are at the very steep part of that curve.”

Mr. Lutz then criticized current Democratic proposals to raise Corporate Average Fuel Efficiency (CAFE) standards. He singled out Barack Obama and Hillary Clinton as a playing a political game of one-upmanship with competing unrealistic plans to raise required fuel efficiency to 40 mpg in the next decade or so. “CAFE is a totally flawed strategy,” said Lutz. “It has never worked and it never will.” He remarked that achieving those levels of fuel efficiency will raise the cost of vehicles by $6,000 or $7,000, which consumers will not be willing to pay. Lutz suggested that raising gas taxes was a more effective solution to getting consumers to drive less and to drive smaller vehicles. “If I were dictator of America, I would gradually raise the price of gasoline by 25 cents every six months or so, until it’s more in line with gas prices in the rest of the world.”

When the floor was opened to questions, Mr. Lutz was asked about the wisdom of producing vehicles that can run on an 85-percent blend of ethanol—based on the questionable environmental, energy, and economic benefits of the alternative fuel. He responded by accusing the American Petroleum Institute of running a multi-million dollar smear campaign against ethanol. “They make it sound like ethanol is taking food out of the mouths of babes. According to them, we’re going to have taco riots in Mexico because of ethanol.” Lutz did admit that the net energy benefits of corn-based ethanol are “not what we would like to see” and pointed to the development of next-generation cellulosic ethanol as a necessary step.

Countdown to Easter

Lutz’s barbs could be dismissed as mere bravado, if it were not for his conviction that GM has a genuine solution to the long-term environmental and energy challenges facing the auto industry. The company is allocating considerable resources to the Chevy Volt. More than 600 employees across the globe are working on the project, and the company is aggressively hiring battery engineers. Lutz said, “Whether you’re talking about weaning us off imported oil, reducing CO2, or cleaning up air pollution in the L.A. basin, the electric vehicle with a gasoline range extender is the ideal solution.” There’s never been so much anticipation for the Easter Bunny in Detroit.