"GM Urges Tax Incentives to Boost Plug-Interest, Restates Intent for High-Volume Volt Production" Green Car Advisor

GM Urges Tax Incentives to Boost Plug-Interest, Restates Intent for High-Volume Volt Production

Success for plug-In hybrids like this Ford test vehicle may require incentives.

GM's global programs veep says the federal government needs to get plugged-in, so to speak, and realize that tax incentives are going to be necessary to get people to buy the first generation of advanced technology electric vehicles â€“ cars such as the Chevrolet Volt.

Without tax rebates or write-offs, the vehicles are simply going to be too expensive for most people and demand will never get to the point that economies of scale kick in and technology costs drop, GM's John Lauckner said during an energy forum this week at the Competitive Enterprise Institute.

Despite the costs, GM still intends to launch its eagerly anticipated Chevrolet Volt plug-in hybrid car with a bang â€“ "tens of thousands" of vehicles â€“ rather than a whimper. "It's not a niche market," he said.

That's not news â€“ GM executives have said all along that they planned a hefty roll-out for the Volt.

What's important is that the company is still saying it and, in speeches such as Lauckner's, publicly sticking to its guns about starting production in2010 â€“ albeit the end of the year rather than the beginning, which could mean introduction of the car as a 2012 model early in 2011.

Lauckner said battery costs for vehicles such as the Volt, which will rely on lightweight lithium ion batteries that are still under development, will be very high initially but will fall as technology improves and volume grows.

Auto and battery industry experts estimate that it now costs about $1,500 for each 10-mile increase in a hybrid or all-electric vehicle's range on battery power alone.

The Volt, as repeatedly described by GM officials since its introduction as a concept car at the January 2006 Detroit Auto Show, uses an electric drive system and gets its power from a lithium ion battery pack that can be recharged by plugging in to a standard household outlet. An on-board, gasoline-fueled engine generates power for the motor and for recharging the batteries when the initial "plug-in" charge is depleted.

GM has said it expects to configure the car with enough battery power to run for 40 miles on that initial charge before the gasoline engine-generator would start operating. It would then run, providing electricity for the drive motor and the batteries, for about 40 miles, shutting down when the battery pack was fully recharged and able to power the electric motor by itself. The cycle would repeat until the car was parked and plugged in for an overnight recharge.

Although both Ford and Chrysler are testing pluig-ins as well, not all carmakers have jumped on the wagon. A Honda hybrid specialist told the forum that there still are too many issues of cost, reliability, efficiency and demand to warrant jumping whole-heartedly into plug-ins at the expense of other technologies including conventional hybrids, and improved-efficiency gas and diesel engines.

But for GM it is a matter of pride as well as of profit and growth. The carmaker has lost a huge share of its domestic market to Japanese automakers and has just lost its long-held title as the world's largest automaker to Toyota Motor Corp.

It sees a successful plug-in as a means of boosting interest in its products and is racing to beat to market with the world's first mass produced plug-in hybrid.

The Japanese car company has said it will launch its own plug-in hybrids in 2010, but only for sale or lease to businesses and government agency fleets.

Because they can run for a sustained period on battery power alone, plug-ins can post impressive fuel economy numbers â€“ 60 miles per gallon or more depending on how often the gas generator kicks in â€“ and are being positioned as one way to help reduce the nation's gasoline use and dependence on imported crude oil.