Driving Conversations: The official GM Europe blog

In getting prepared for the usual onslaught of interviews we schedule during the press week at the London motor show a few weeks ago, I was certain I would be spending the majority of my time explaining how the company’s financial situation in North America would impact Europe. But to my (somewhat) surprise, the vast majority of questions centered on when the Chevrolet Volt range-extended electric vehicle would come to Europe. In fact, some of my comments as to possible European production and whether Opel/Vauxhall models would be created caused a bit of a stir in the press. With that, I thought that it might be good to clarify some of the thinking for EREV in Europe at this time.

I’ll address four key areas of interest that media posed; 1) just what is the technology; 2) when will it arrive in Europe and under what brands; 3) will we build it in Europe and 4) what are the regulatory implications for the technology.

On point one, there is a term that should be clarified, which is “range-extended electric vehicle” or “EREV,” which is the backbone of the global technological approach. The first demonstration of the EREV, as presented in the concept Chevrolet Volt, utilizes a plug-in lithium-ion battery pack to propel the car on pure electric drive up to 65 km, but it would have the ability to recharge the battery while driving, “extending” the range to more than 700 km. We are somewhat insistent in categorizing this technology as an electric vehicle because we believe the vast majority of customers will buy it to be able to drive completely petrol free…they would only use the range extender for emergencies or a few special occasions. This is a far different thesis than a parallel hybrid configuration, which uses both the electric drive and petrol engine to propel the vehicle. This is a strategy for maximum fuel economy, but it is reliant on petrol all of the time. EREVs would free customers of petrol for the vast majority of commuting needs.

As for point two, the current plans are to have the Chevrolet Volt ready for initial production in late 2010 for the U.S. market. This assumes that we will continue to attain all of our goals and milestones for the battery and integration of the power electronics. Assuming we make the target in the U.S., the plan is to have the first EREV vehicles for sale in Europe about one year later, which is late in 2011. Which leads to the next question I usually get: under what brand? The critical element here is the technology itself and its potential huge impact on the CO2 compliance picture for GM. We know this is a game changing technology that is already transforming people’s view of General Motors and its brands. I think it’s a safe statement that this is the kind of cutting-edge thinking and market leadership that people have long desired to see from General Motors.

But beyond this, clearly EREVs have huge implications for vehicle brands, as has already been seen on the impact of Chevrolet Volt in the U.S. We decided to put the technology on Chevrolet because it is the volume brand in the U.S. The thinking goes that to have a significant impact on the environment, EREVs must be sold in high volumes, hence the reasoning for Chevrolet. The same logic is true for Europe, so the first EREV vehicle will be an Opel/Vauxhall, followed several months later by a Chevrolet. The Opel/Vauxhall will be derived directly from the Chevrolet Volt to get into the market quickly, but I can assure you that more variations for Opel-specific designs of EREVs are already in the works…but more on that at a much later time!

As I stated to the media in London, points three and four are possibly linked together. The first EREV variants will certainly come from the U.S., but the thinking goes that to get significant long-term volumes to impact our CO2 compliance strategy, we will need production capability in Europe. Additionally, to deal with the huge cost implications of the new technology (the batteries initially are costing several of thousand Euros more than a typical engine/transmission setup), we need incentives for consumers to off-set the high costs and drive more volume. One thought that I floated in media discussions was that we get early adopter “super credits” under EU CO2 schedules for the initial volumes. By giving an Opel/Vauxhall EREV-powered vehicle (which will have an exceptionally low CO2 number) a high multiplier in CO2 fleet averaging, it would allow GM more flexibility in meeting the overall fleet average while pushing the vehicles into the fleet faster than otherwise would have happened. In other words, if one Volt was incentivized in the compliance plan to count as multiple vehicles at that low CO2 number, it would give GM incentive to offer a higher volume of Volts to the market than the affordability of the vehicle would normally warrant. This is a logical use of the regulations to get a desirable shift in consumer behavior

Put it all together and it’s clear that this new technology is causing the kind of excitement and anticipation that we had hoped. It’s certainly a daring play that is fraught with significant risk, but arguably, that’s exactly the kind of project GM needs to not only energize us internally, but to recapture the imagination and enthusiasm of customers who have long since abandoned any consideration of our brands and products. As far as monumental automotive projects go, it’s one of the most impressive and massive efforts I have had the opportunity to have been part of in my career.

Carl-Peter