Ask The Best And Brightest: Will Electric Cars Save GM And Detroit?

by Edward Niedermeyer

January 20th, 2011 10:20 AM

ask the best and brightest will electric cars save gm and detroit

Wheh, that’s a big question… and I was dismayed to see myself giving such a short answer to it in my Newshour appearance. There are a host of reasons for my swift “no” answer to that question… here are a few of them:

1: GM Doesn’t need saving. The Government “saved” GM.

2: The market projections for EVs are all works in progress.

3: GM isn’t actually committed to the electrification of the car. It’s committed to gas engines and transmissions and the idea of “range anxiety”… for its “electric car.”

4: If GM were committed to electrification, and that was a prudent business gamble, it would still be chasing Renault-Nissan just as Honda chased Toyota in the race for hybrid leadership not so many years ago. And like Honda, GM seems less committed (in the literal, mechanical sense) to the electric car than the emerging global leader, Nissan. Yes, the Volt is mechanical marvel, unrivaled in its complexity… but only because it clings to its gas technology. Honda’s hybrid half-step, never introducing an electric drive mode to its “mild” hybrids, seems pragmatic by comparison. Toyota’s sole ownership of the “hybrid halo” is instructive (and worrying for Toyota, considering it’s been taking a GM-esque tack towards EVs lately).

5: Even after GM starts selling tons of electric cars (in a scenario where that is indeed possible), it will be working uphill to re-establish consumer trust (in all its products) that was squandered over decades.

I could go on, but I’d rather hear your answers to the question.

#AskTheBestAndBrightest #EV

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6 of 77 comments

SVX pearlie on Jan 20, 2011

Well, crap. I guess GM shoulda learned their lesson with the EV1 and shouldn't have even bothered with the Volt...

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George B on Jan 20, 2011

I don't see how GM or any other car company can achieve both the unit profit and unit volume the need to survive selling electric cars. Expensive niche product that's not cost competitive with gasoline powered internal combustion engine cars. The biggest hurdle for electric cars is battery cost and limited charge/discharge cycles. Right now buying an electric car is like buying an economy car at near luxury car prices with a high probability that battery performance will be degraded well before an economy car would be worn out. It takes government incentives to soften the blow of the initial price, but that subsidy does nothing to deal with reduced range as batteries wear out. The consumer either has to replace the battery pack at a cost of thousands of dollars or live with more frequent recharging. For contrast, if I buy a natural gas powered Honda Civic GX plus a home refueling station, I get a car that costs less than electric cars, uses cheap domestic fuel, could be refueled in minutes at public refueling stations, and has about the same range and performance after a decade that it had when it was new.

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- Joeaverage on Jan 20, 2011
  
  What the automakers need to do is take one of their compact cars and redesign it just a little to incorporate the battery and electric drive. From my stand point all it takes is a series of brackets to mount the electric drive to an existing Versa ICE and tranny compartment, and a different floor stamping to make roof for the batteries. Just teach the robots to weld a different set of points when the EV is getting built. Put the same interior into these cars. I suppose details like the carpet would be different. Porsche builds all their 911s on the same line simultaneously. Don't see any reason to build a unique vehicle to make it electric. Build the Yaris-ICE and the Yaris-EV, build the Versa_ICE and the Versa-EV, Aveo versions, Insight versions, etc. That way the car company doesn't have to design a unique vehicle and then suffer when it only sells 20,000 a year.
  
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Carlson Fan on Jan 20, 2011

Short term no, long term possibly. Any good manufacturing company should be looking to the future to determine changes in the market. A CEO's main focus should be strategic planning, both short & long term. I've seen nothing from GM that suggests they ever thought for one minute that the Volt would be their saving grace short term. Just the opposite. It's the media with their usual sensationalism that's playing that song. Do people really think that GM was stupid enough to think a 41K electric car w/40 mile range which they are making no moneyt on, was going to put the company back in the black in and by itself. I think they are banking that investing in new technology like they have with the Volt will have a payoff 5-10 years down the road. Perfect! Just what I want to see from a company I own.

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- Joeaverage on Jan 21, 2011
  
  GM simultaneously green-washing and trying to leap-frog the competition? I'm thinking of the SSR halo-type vehicles. I don't think it will sell at that price to the average working stiff unless gas gets real expensive and stays that way. On the flips side three are folks who spend like that on a SUV they can't afford. You know, $35K on the SUV and another $15K in gasoline on a modest paycheck.
  
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Zeus01 on Jan 20, 2011
All cars above $15k are bought for status. A $40k car is still a $40k car as long as the rest of the world knows what you paid for it so the price spread is in fact not large between electric and ICE cars. Agreed. In Canada that 15K can be adjusted to 20K since we pay a premium for our vehicles that is completely out of proportion to the Canada/US dollar values. I'm sure we're all familiar with the modern symptoms of someone with "status", ie: you know "you have it if you buy things you don't need with money you don't have to impress people you don't like." This is not to say you shouldn't buy nice expensive cars, but unless you're genuinely well-off financially it's probably not wise to make payments on a car that costs upwards of 50% of your annual income. I know some folks who are now paying a 50,000 mortgage (Yes, I'm actually calling it that!) over six years on an SUV they bought new two years ago---and their combined income before taxes is less than $80,000(!) What's worse, their pride and joy is now worth about 60% of what it was when it went out the showroom door. Hell, I could justify plunking down 200K for an exotic sports car--- if my annual net income was 7 figures. As it stands, I paid cash for an entry-level econo/go-kart/utility car with bullet-proof reliability and better resale value than any in its class. But alas, the Honda Fit Sport doesn't have much in the way of "status." But that's alright, I don't mind. It suits my needs, and I never cared much for status anyway. And by the numbers of similar cars on the road I'm not alone.

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