Summary
Is a perceived lead in lithium ion battery technology enough, by itself, to give GM an edge in the US market over Toyota? The answer to the question is a no-brainer (sorry!), NO, Li-Ion ALONE WILL NOT GIVE ANYONE THE LEAD OVER THE OTHERS ON HYBRID TECHNOLOGY…… However, it will give them the freedom to have solved one of the crucial parts of the puzzle: where to get a reliable source of energy and secure supply over the others OEMs!!!
Analysis
To be honest, at this moment no one in their right mind can be sure whether GM will or not capitalize on the apparent technologic edge they are creating ahead of Toyota.
Creating; the “advantage” is only on paper.
Toyota still is the OEM selling the largest number of hybrid vehicles in the US. It has announced to delay introduction of the Li-Ion battery packs, but has not retired from the hybrid market, on the contrary.
Let’s not forget, they have started with this technology long before any other OEM and they dominate it blindfolded. Their vehicle development times are still the best in the industry (even though their engineering reliability and project management capabilities have suffered quite a bit in the past 2 years). Their hybrid power trains are superb, and their vehicles overall reliability is among the best. What else is to be said?
A humble opinion: Bob Lutz and Chief Engineer Jim Queen are creating some sort of expectation in the market for the Volt; well ahead of the delivery of the vehicle and certainly without knowing whether the partnering ventures they have started on the one side with Cobasys LLC and its partner, A123 Systems and on the other side with a the JV between JCI and Saft Group SA will deliver the necessary technology and even more, the required capacity to start pushing Volts out of wherever in the US the vehicle will be built.
One thing is clear, if GM can solve the technical and availability issues around the Volt, this could be a fine vehicle and possibly the start of a new era for GM's model line-up.
Just for your information: GM’s plan right now is to pump-up resources into the 2010 Volt late 2007.
The GM Volt will be, at the beginning, a short to mid-range vehicle; sort of like the Prius. It should run 65 km (some 40 miles) on electricity powered by the lithium-ion batteries, and then use a small gasoline engine to recharge the battery pack and extend the driving range.
Pay load of the vehicle, in the range to the 2.5 tons. The Volt is supposed to be built in the US.
The powertrain concept is called e-flex. Two companies are managing the whole drive train concept: Continental AG and Compact Power.
Continental’s battery packs will be those developed by A123.
Compact Power is looking for battery packs alternatives in Korea, and is working with LG Chem.
Battery bench and field test are planned for October. A123 claims their packs are ready (actually, they supply something similar already to Ford).
A123 Systems seems to have the technology lead. Unlike normal Lithium-Ion packs, their battery-pack is based on enclosed membranes that permit permeability between the reacting chemicals, but at high temperatures do not allow for oxygen intrusion and wall breakage, what has induced fires in a number of lap-top computers and mobile phones.
All mentioned companies should be able to capitalize on the momentum and if field test are positive, GM should be able to push through with their developments.
Now the negative part:
Let’s not forget the current UAW negotiations.
Vehicle assembly cost for both, GM and Toyota show a gap of some $1,900. About 12% of it is UAW stuff (work rules, basic salaries, health care and pension cost, etc…). It is to be expected that with the visibility the negotiations have, some level of “good agreement” will happen by September 2007. But this is not going to solve the problem: GM has some deeper and more complex issues to tackle prior to being competitive again: over-capacity, excessive overhead cost, large engineering CAPEX (basically based on their own internal complexity and slow decision making process), bad brand image, purchasing inefficiencies, etc…
Certainly, this does not have much to do with the Volt, or any other hybrid they might build, but these unresolved issues will continue to eat-up whatever profitability GM could achieve with these vehicles in North America.
Like always, it is up-to-them to change, but there is a sense of urgency in the matter that one does not feel when talking to GM guys.
