GM backs hybrid vehicles despite losses
By James Mackintosh in London
Published: September 20 2005 03:00 | Last updated: September 20 2005 03:00
General Motors expects its new hybrid fuel-saving vehicles to incur losses but is developing them in the belief they will improve its image, the US carmaker's top executive has said.
Rick Wagoner, chairman and chief executive, said in an interview that no manufacturer was able to make money on hybrid petrol-electric vehicles, sales of which are booming in the US.
But he said GM was pushing ahead with hybrids to improve its environmental credentials in the same way that rival Toyota, the second-biggest carmaker after GM, benefited from the success of its Prius hybrid hatchback.
"Our hybrids will lose money," he said. "It is early stage technology and the volume is low."
GM is planning to launch hybrid versions of its Chevrolet Tahoe and GMC Yukon large sport utility vehicles in late 2007, followed by hybrid pick-up trucks, using technology developed jointly with Daimler- Chrysler and BMW of Germany.
But Mr Wagoner said unless petrol prices hit $8 a US gallon - triple the current level - it would be hard to persuade customers to pay enough to cover the extra costs of building hybrid vehicles, which require an electric motor and battery as well as an engine.
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