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Study Finds GM Volt Cost May Limit Value to Drivers

Posted on March 3, 2009
Filed Under Chevrolet Volt, Industry News, Polls & Studies, Toyota Prius | Leave a Comment

2011 Chevrolet Volt Production Show CarGeneral Motors Corp.’s Volt electric car may be too expensive to buy and operate to displace Toyota Motor Corp.’s Prius hybrid as the industry benchmark for cutting fuel use and cutting carbon exhaust.

A rechargeable auto with the Volt’s target range of 40 miles on electricity is “not cost effective in any scenario,” a study by Carnegie Mellon University in Pittsburgh found. Plug- in cars with smaller batteries may be a better value, according to the study, which doesn’t cite the Volt by name.

“Forty miles might be a sweet spot for making sure a lot of people get to work without using gasoline, but you’re doing it at a cost that will never be repaid in fuel savings,” Jeremy Michalek, an engineering professor who led the study, said in an interview.

The study is an attempt to test how prices and driving habits may shape consumer choices among current hybrids and new models such as the Volt and a Prius able to be recharged at a household outlet.

With lighter, cheaper batteries, a plug-in with 7 to 10 miles (11 to 16 kilometers) of electric range or a conventional hybrid may provide the best mix of price, faster charge times and efficiency, Michalek said. His study was accepted this week for publication in a future issue of the journal Energy Policy.

While plug-in hybrids aren’t in mass production, President Barack Obama is pushing carmakers to sell vehicles that cut U.S. use of imported oil and emit fewer gases tied to global warming. Automakers and suppliers are vying for $25 billion in low-cost U.S. Energy Department loans to help build such models.

‘Best Option’

GM believes “40 miles, based on all the data we’ve seen, covers roughly 78 percent of consumers in the U.S. and is the best option” for reducing gasoline use, said spokesman Robert Peterson, who hadn’t read the Carnegie Mellon study.

A battery big enough to propel a car for 40 miles, such as the 400-pound pack for Volt, may cost $16,000, based on current industry and academic estimates. The price of the car isn’t set, though GM backed off last year from an initial goal of less than $30,000 when the Volt reaches the U.S. market in late 2010.

Costs aren’t the only questions about plug-in vehicles, said K.G. Duleep, managing director of consulting firm Energy & Environmental Analysis Inc. in Arlington, Virginia, and a researcher on a U.S. study on plug-ins and other advanced autos.

‘Very Skeptical’

“I’m very skeptical about the prospects for near-term durability of the batteries,” said Duleep. “Even in the lab they aren’t lasting more than 7 years.”

The Carnegie Mellon study, funded by a National Science Foundation grant, looked at battery costs as well as the expenses a plug-in vehicle owner would encounter in recharging the units. The researchers also reviewed the greenhouse-gas emissions needed to make the packs and generate electricity for home and commercial recharging.

The Volt will have a small onboard gasoline engine to replenish the lithium-ion battery while driving. Detroit-based GM also plans to sell a plug-in version of its hybrid Saturn Vue sport-utility vehicle that will travel 7 miles on battery power alone, Peterson said.

“We’re developing two different plug-ins and definitely see a need for a range of vehicle types,” Peterson said. “You don’t want to buy too much battery, but we believe 40-mile range is the right size.” GM is seeking $8.3 billion in Energy Department loans.

Toyota, the world’s largest automaker and biggest hybrid seller, this year adds a revamped Prius that is to get at least 50 miles per gallon of gasoline in combined city-highway driving. Toyota also plans tests this year on a plug-in Prius able to go more than 10 miles on a charge.

The final range is likely to be less than half that of the Volt, said Bill Reinert, U.S. national manager for advanced technology for Toyota City, Japan-based Toyota. The Prius now sells for $22,000 to $24,270.

“We believe that if you have a smaller battery charged more frequently, you can run on electricity more of the time, then your carbon emissions are going to be lower overall,” Reinert said in a Feb. 18 interview in Pasadena, California.

SOURCE: Bloomberg

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