How Sincere Are the Large Auto OEMs in Their Integration of Electric Vehicles?
My friend Paul Scott of Plug-in America has me convinced that the large auto OEMs – the Nissans and GMs of the world – are sincere in their integration of electric vehicles. But watching this process unfold surely does test one’s faith. For instance, take today’s announcement from Chevrolet Volt Marketing Director Tony DiSalle to the effect that GM plans to produce 10,000 Volts by the end of 2011, and an additional 30,000 Volts during 2012 (compared to approximately 7 million vehicles that run on fossil fuels).
Cynic Sam Jaffe, a research manager working on distributed energy strategies at IDC Energy Insights, believes that the extremely high miles per gallon of each Volt will help GM to continue to sell large numbers of gas-guzzlers and still remain within the US Corporate Average Fuel Economy regulations.
Who knows? I suppose this disturbing announcement does require a theory, but I’m not ready to adopt that one – which I would describe as somewhere between bad faith and pure evil.
Having said that, I have to comment again that big business and big government in the US seem to be doing their level best to trail the pack in terms of clean energy and transportation.
But why?
I sure wish I knew.
Hello. I am in a unique position to comment on this subject. In one word, NO. The major OEM’s are not sincere. It is interesting to suspect that they want the EPA fuel economy numbers, but having not run what 10k or 30k means to their overall average, I can’t really say.
I worked at GM for 25 years and the last 5 before I quit were on the EV1 and conversion vehicles. Middle and upper management drove me crazy due do their lack of vision or desire to change. But change will be hard for the OEM’s today. The automotive paradigm changes in a direction they can’t accept. EV’s do not wear out and need to be replaced every 3-5 years. They can last easily 10 years, perhaps longer if batteries are replaced. The OEM’s don’t want that kind of buying cycle. Secondly, the dealers don’t get any service off EV’s. They do not need to come in every 3 months or 3,000 miles for oil changes and common other maintenance. Dealers don’t want that either. This is why, in part, hybrids are getting so much attention; they are the old paradigm tweaked slightly.
Are there any real facts that support this notion? One is that they are pricing EV’s and hybrids, not for the long term but for the short term and are really pressuring the Government for larger subsidies. When GM came out and said the Volt was going to be $40,000, every other OEM copied since this appeared a way to get Government help to cover their costs to develop something that they really did not want.
Item #2 is battery size standardization. At GM EV1, at the very beginning, the team realized that only if batteries were standardize, would the price of batteries drop. Standardization would mean more competition, larger production volumes, and ability to have competition on technology. Today, as the SAE lead on standardization, I can not even get any OEM’s or battery manufacturer’s participation in a standardization task force. This will insure batteries remain high in cost and slow in development. Furthermore, not all the OEM’s or battery companies will make it long term. So consumers will likely be without batteries to replace in their cars, when the batteries need replacement.
The OEM’s are spending money beyond what is reasonable. They really don’t want this market to be viable. They have billions of dollars in the manufacturing of gas engines and transmissions. This is their core expertise. They can’t throw it away. This is not unlike the Swiss who invented the electric watch, but could not adapt to bring it in house. So the Asian companies, saw it, took it up and now the Swiss have a very small market share. The Swiss build novelty watches, while China can build a $3 electric watch that keeps better time than a Rolex.
So what is the future? Like my company, I believe EV’s will happen from outside the industry BUT with the people, talent, knowledge and skills that came from inside the industry. Not from software writers or auto stylists, but from the hard core talent that has designed, built, validated vehicles from start to finish.
I also think the Volt may get delayed at the very end or at least GM may decide to reduce the price and lease the batteries. (although, Whitacre will probably push regardless of the test validation.) The batteries are not ready for 10 year life expectancy. Neither GM or Nissan has done the needed testing for battery life. The next five years will be interesting.
Richard. Thanks. This is really insightful level-headed stuff. Great post.
My 2 cents’ worth: While everything you say here is true, I believe the OEMs see the handwriting on the wall with respect to consumer demand. Any that drag their heels in EV product releases and production quantities do so at the risk of falling hopelessly behind — in what, they now realize, is bound to soon become the only auto game in town.