http://seekingalpha.com/article/957...p-for-grabs-with-gm-s-volt-debut?source=yahooFuture of Auto Industry Up for Grabs with GM's Volt Debut
By Michael Kanellos
General Motors (GM)–the lumbering, money-losing giant of American industry–will formally unveil the Chevy Volt today to celebrate its 100th anniversary. The event, though, will mark more than a new car for GM and a triple-digit anniversary. It will set the stage for a turn in the balance of power in the automotive business.
The Volt won’t start reaching consumers until late 2010. The initial reaction and test drives among customers will be more crucial than what gets said today. But the public will get the formal look at the car today and get some technical details. These will be hashed out and some consensus or momentum may begin to emerge.
If the Volt lives up to its promises, it will serve as a wake up call to the large Japanese automakers. GM has been the principal proponent among large manufacturers of plug-in hybrids. Plug-ins can be charged from wall sockets. They get better mileage than regular hybrids and nearly the same mileage under average daily driving conditions as fully electric cars. Because the Volt will drive the first 40 miles on electricity and most Americans only drive about 26 miles a day, these cars will function effectively as electric cars.
Mass manufactured plug-ins, though, are expected to cost only about $6,000 or so more than standard hybrids when coming out in volume and tens of thousands less than equivalent all-electric cars. The Volt is initially expected to cost close to $40,000. That’s a good $16,000 over the cost of a low-end Prius right now, but the Prius has been in volume production for several years. Toyota (TM) has sold more than 1.6 million hybrids to date.
Toyota, Nissan (NSANY) and Honda (HMC) are building plug-ins as well, but clearly GM has done its homework. If it got the Volt right, the company won’t be a laggard in a key market anymore. Motor Trend also reports that Opel and Vauxhall, two GM brands, will come out with series hybrids like the Volt in 2010 too. Thus, it will be a global assault.
Success also means bad news for all of those electric car start-ups like Tesla Motors. While some of these companies plan to concentrate only on high-end electric sports cars, some (like Tesla) plan to get into the sedan market, in which case it’s going to have to beat GM on price, market penetration and advertising.
But if the Volt doesn’t live up to billing, stockholders are going to really be asking questions and/or voting with their feet. GM has lost $57.5 billion in the last 18 months. The price will also need to be below $40,000 and GM will have to demonstrate how the price will decline in the coming years. If the Volt doesn’t cut it, the future will be more bleak than the present for GM.
We also might get a glimpse into the future of battery maker A123 Systems. GM said it has already decided on a battery maker for the Volt. The contest is down to two groups, one of which includes A123. If A123 is part of the winning bid, its coming IPO looks a lot better. GM owns around five percent of the company so they tend to be favored. If GM went with the other group, it could be a tough IPO to sell.
We’re not sure if they will release the name of the battery maker or not. But it will be something to listen for.
It does look a lot better than the Prius. Everytime I look at that car it looks like it has 14in wheels and it drives me nuts (I'm not sure what size they are, but they look silly on there). This - not bad at all.I don't understand the negative reaction to they styling.
It doesn't look as futuristic as the concept, but it still looks good. One heck of a lot better looking than a geek-mobile Prius, or what seems to be an apparent Prius clone in Honda's upcoming hybrid. (Hmmm. "Hybird." How quaint.)
This car isn't about styling, it's about technology and MPG.