GM fires a Bolt at electric car rivals
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When the curtain lifted on Monday to reveal General Motors’ Chevrolet Bolt concept car, there were few obvious signs why the modest-looking vehicle was being unveiled amid the fanfare on the first morning of the Detroit auto show. With the crucial exception that it lacked an exhaust, the vehicle looked much like an Opel Corsa or other run-of-the-mill compact car.
But Mary Barra, GM’s chief executive, told the watching crowd that the vehicle resulted from a challenge the company had set its experts to devise a revolutionary, purely electric vehicle. The car had to marry long battery range and affordability.
The tasks facing the engineers had echoes of those that the whole auto industry faced a century ago when pioneers such as Henry Ford were struggling to bring down the cost of making a vehicle to turn them into mass-market products.
However, the question facing GM, Tesla, the electric vehicle specialist, and other makers of pure electric vehicles is whether they can ever achieve the mix of affordability and popularity of their conventionally fuelled counterparts.
GM’s investment in the market also raises questions about why US carmakers continue to devote substantial shares of their product development budgets to a vehicle class that accounts for a tiny share of sales. Only 0.4 per cent of new vehicles sold last year in the US were pure electrics.
Ms Barra nevertheless was confident about the concept vehicle, which she suggested GM would turn into a production model within the next few years.
“Chevrolet is looking at once again raising the bar by bringing an affordable, long-range electric vehicle to the market,” she said. “This is a game-changer.”
The scale of the challenge was obvious on the other side of the hall at the stand of Tesla Motors, the specialist electric vehicle maker started by Elon Musk, the entrepreneur. Tesla’s stand featured several pure electric vehicles — including its best-selling Model S car — that already manage the 200 mile-per-charge range that Ms Barra set GM’s engineers for the Bolt. Such a range can give owners assurance that they are unlikely to find themselves stranded with a flat battery.
But the Model S, which has a 208-mile range and is Tesla’s cheapest vehicle, costs $74,570, even after the effects of US federal tax rebates for electric vehicles. Many other vehicles on the stand sell for more than $100,000. Consumers face an unpalatable choice between affordable vehicles that offer only a relatively modest performance — such as Nissan’s Leaf, which is small, achieves only 85 miles per charge but costs less than $30,000 after tax rebates — and the premium performance of Tesla, at a premium price.
The issue is whether either GM or Tesla — which is planning to introduce a mass-market vehicle known as the Model 3 — can provide the sophisticated batteries and control equipment for a 200-mile range for the $30,000 price tag both are targeting.
Bob Carter, a senior vice-president for Japan’s Toyota in the US, says the weight of existing batteries, and the energy involved in moving batteries around, remain a formidable challenge.
“To keep it affordable and lightweight, you’ve got to put in small batteries, which limits the range and has long recharge times,” Mr Carter says.
The economics have grown still worse in recent months because, according to the US’s energy information administration, the average price of a US gallon of gasoline has fallen more than 41 per cent from its peak last June to $2.14 this week, having hovered in recent weeks around $2.50.
Carmakers continue to invest in electric vehicles partly because they doubt oil prices will stay at their low current levels for long.
“The world is constantly changing,” Steve Majoros, marketing director of Chevrolet cars, says. “We live in a world of $2.50 gas but that’s not going to be the permanent situation.”
Electric vehicle makers also insist that a growing number of car owners are concerned enough about their environmental impact to consider it when buying vehicles. They point to the spread of charging infrastructure as positive for the segment.
Yet the reality for GM and other carmakers is that, since they face strict new fuel economy standards that provide incentives for the development of electric vehicles, they have little choice but to produce them.
The Bolt appears to represent a bet that GM — the US’s biggest carmaker by sales, which started developing electric vehicles in the 1990s — will be able to undertake the task more efficiently and competitively than Tesla, a start-up.
Ms Barra said on Monday after unveiling the latest version of GM’s Volt plug-in hybrid car — which has batteries and a gasoline generator — that it would confirm GM’s “leadership” in electric vehicle technology.
Then, starting to introduce the Bolt, she went on: “We continue to take it further.”
Additional reporting by Andy Sharman