GM looks to an electric avenue

GM has high hopes for its Chevy Volt, but unless drivers have easy access to recharging points, the development of electric cars is doomed. A new deal with 30 US utilities will help. Stephen Foley reports

"The eyes of the world are now on the Volt. It's the future of America and the world." That was the US presidential candidate John McCain talking to car industry workers a few days ago, referring to General Motors' promised new electric vehicle, the Chevrolet Volt. The future of the world, no less. No pressure, then.

GM launched the Chevy Volt with a good deal of fanfare at the motor show in its native Detroit last year, and it has tooted its trumpets on several occasions since, as the car has made progress beyond that concept stage. Last month, the GM board formally approved commercial production of the Volt, promising it would hit showrooms in 2010.

Another little toot yesterday. GM said it had begun collaborating with the Electric Power Research Institute (EPRI), an industry group representing more than 30 of the top electric utilities in North America. GM needs help from the power companies to make sure the infrastructure is in place to make the Volt a mass-market success; the utilities want to make sure millions of Americans plugging in their cars at the same time do not overwhelm the electricity grid. The two sides are hoping to standardise the technology that will allow the grid to recognise electric cars and to top their batteries up in the most efficient way.

"Together we can transform automotive transportation as we know it, and get our nation and the world past oil dependence and heading toward a future that is electric," said Jon Lauckner, GM's vice-president of global programme management. "We are focused on creating affordable, highly desired, vehicles that will take advantage of the grid, and on providing accessible, reliable, convenient, low-cost electricity to plug-in customers."

Photo-ops with John McCain certainly help GM make up for the nasty publicity surrounding the shutdown of its last electric car project, the EV-1, in 2003 after it had produced just 1,100 vehicles. A documentary last year, Who Killed the Electric Car?, argued GM conspired with oil companies to axe the project to protect its profitability, and had threatened to turn the company into a bogeyman for the green movement and the left. GM has always insisted the EV-1 wasn't commercially viable, but the Volt has put it back at the head of the pack of major carmakers developing plug-in cars.

Behind the highfalutin rhetoric, though, plenty of scepticism remains, and plenty of hurdles loom. Is the Volt really viable?

GM's car is, technically speaking, a hybrid, but, while existing hybrids employ a battery-powered electric motor to supplement a traditional petrol engine, the Volt runs only on electric power until the battery runs down. That would only be after 40 miles, more than most people's daily drive. Then and only then does the internal combustion engine kick in to feed the onboard generator that produces electricity while the car is operating, extending the range to several hundred miles. The average driver would hardly ever need to fill the tank, GM says – simply plug the car in overnight.

Although many of the calculations are debatable, there is little doubt electric cars would offer a significant breakthrough in the battle against carbon emissions. Even taking account of the emissions likely from additional electricity generation at power stations, plug-in vehicles might put about 80g of carbon dioxide into the atmosphere for every kilometre driven, compared to 160g from the average of existing petrol and diesel vehicles, according to an analysis last year by the consultancy E4tech. That is a big enough gap to make it worthwhile pursuing electric vehicle technology, and with petrol prices having soared due to the oil price spike, GM now calculates the cost per mile of electric power will be about one-fifth the cost of using petrol.

What is in doubt is whether GM and its rivals can make an electric car at a cost anyone in the world would be willing to pay, and whether the battery technology is safe and reliable enough.

Taking the battery issues first, there has been a good deal of caution on display this week at the Plug-In 2008 conference in San Jose for car manufacturers, investors and government regulators. The successful development of electric vehicles hinges on making lithium-ion batteries, of the kind used in laptops, effective as a replacement for the bigger and less powerful nickel-metal hybrid batteries currently on the road.

Although the technology shows great promise, discussion panellist said, battery makers worldwide still are grappling with the impact recharging can have on battery life, and keeping the batteries cool. One sceptic, former General Motors chief executive Bob Stempel, likes to say lithium-ion batteries are prone to being "naughty" – by which he means exploding.

panellist at Plug-In 2008 worried most of all about the costs, as lithium-ion battery packs needed to power even a small car still cost in excess of $10,000 (£5,000). However, there was optimism for the medium term. The larger battery packs now being tested in plug-ins should drop in price as more are produced, just like consumer electronics batteries.

And Fritz Kalhammer, an independent consultant in energy technology, said it might be possible to pay drivers to pay up for a high-cost car that saved them money on fuel down the line. "The batteries cost less than the fuel cost savings they enable," he said.

GM has given very few hints about what it expects the Volt to cost – and until it does it will be impossible to gauge its commercial viability. Even then, if petrol prices fall from their current levels, the economics could change quickly and dramatically against the Volt.

One indicator suggests GM is nervous, though, and that is the ferocity with which it is lobbying on Capitol Hill for big subsidies from the US government. GM's chief executive, Rick Wagoner, spent two hours with John McCain's rival, Barack Obama, recently to press his case, and Mr McCain has already promised customers will get a tax credit of up to $5,000 if they buy a zero-emission car. A bill proposing just such a thing has already started wending its way through Congress. The Republicans are also proposing a $300m prize for breakthrough battery technology.

Mr Obama, meanwhile, is promising $150bn to create jobs in industries developing green technologies.

Yesterday's tie-up between GM and the electricity utilities also has a very strong lobbying component, ensuring both car manufacturers and the power companies are able to take advantage of this extraordinary political consensus in favour of electric car development.

With the politicians in favour, and consumers crying out for more fuel-efficient, low-cost, vehicles, the carmakers are putting in the hours on such development. Yesterday, BMW predicted it would be trialling an all-electric Mini in the US next year. Carlos Ghosn, boss of Nissan and Renault, has also promised his company will invest heavily in plug-in vehicles. Ford is developing plug-in vehicles, too. As for the Volt, it has become the poster-child for this new era. Much rides on its success.