Ford Executive Inadvertently(?) Sinks The Chevrolet Volt; The Lady's Logic Is Tough To Refute."

Implications: As James Carville might say to GM's Bob Lutz, "It's the battery, stupid, we don't have enough reliability and longevity data to put it on the market. That'll take at least five years after we finally choose a specific technology based in great part on initial reliability and longevity testing which is not yet completed!" Toyota and Honda have chosen the nickel-metal-hydride  battery equipped hybrid for mass production while continuing to evaluate lithium technologies for future plug-in hybrids.

Analysis:

The most interesting and important comment in this Reuter's article is:

"If you build your plug-in hybrid and the battery only lasts five years, how much is your vehicle worth? Nothing," Gioia said. "The battery replacement costs will exceed the residual value of the vehicle. We don't think that's an acceptable pathway forward."

General Motors is on a path, all by itself, to stave off its demise by creating a 'halo' car, which it prays will cause lenders to continue to feed GM's cash burning machine until it, GM, can come up with a way to make and sell cars at a profit. This something it has been unable to do for more than five years!

GM's focus on the Volt is not to create a revolutionary new car, but rather to create a reason for its lenders to keep it alive.

Toyota which makes mostly internal combustion powered cars, 97% of its current production, is gearing up its infrastructure so as to be able to build 10% of its total production as nickel metal hybrid battery utilizing hybrids by 2011, and it hopes to increase this percentage of hybrids to more than 25% by 2014.

Honda is also gearing itself up so as to be able to produce more than 10% of its total build as nickel metal hydride battery utilizing hybrids by 2011-12, and is actually aiming to surpass Toyota's total hybrid percentage of build by 2014.

Both Toyota and Honda make a substantial profit on their car making operations. In fact together they have made more profits in the last 5 years than the total of losses by just General motors. This means astonishingly that Honda and Toyota combined have made more than 50 billion dollars in total profits since 2003 and each have nearly that much unencumbered capital on hand.

I have no doubt that GM's executives will not pay attention to Ford's executive in charge of hybrid and electric car development, but before anyone listens to anything further that GM says or promises about the future everyone must keep in mind that the now largest and most profitable car maker in the world, Toyota, along with another consistently profitable and very large car maker, Honda, are betting on nickel metal hydride battery powered hybrids growing in demand and becoming the dominant electric car intermediate technology into the foreseeable future.

Toyota has announced that it is already looking beyond lithium technologies to a next generation of battery that will solve the problems that, in Toyota's and Honda's opinion, prevent the lithium battery from being safe, reliable, long-lived, and economical.

Nissan, it is true, is looking at lithium ion battery technology, but it doesn't intend to develop just short range plug-in hybrids, like GM. Nissan plans a total system consisting of short range all electric cars and a comprehensive charging grid so that cars can always be moved so they are within range of a charging station. This will be an ideal system for a small country like Israel, or for a taxi system or for a rental or lease type fleet system where the customer may use whatever vehicle is ready at the charging station. This is another intermediate solution that can last for a long time like Toyota's and Honda's.

The European car makers are going to go with small efficient diesels to increase fuel efficiency and decrease emissions and move slowly on electric and hybrid cars until they see how the technologies sort out.

Ford and Chrysler are in the same boat as GM, but neither is willing to commit to a Volt type of project especially one that is supposed to come on stream in just two years.

In the end I think that the Volt will be a short circuit, and GM will be pinning its hopes on a government bailout. The problem is that GM has no visionary Lee Iacocca in sight. It has only the myopic stale 'leaders' who have brought it to not just ruin but irrelevancy to the future of the OEM automotive industry.