GM Faces Another Import Challenge: Electric Vehicles

Implications: General Motors, battered for decades by hot-selling, stylish, dependable, vehicles from European, and Asian automakers, seemed to have the field to itself in the race to produce an electric vehicle. Now, it seems everyone want's to join the party. With its announcement last week that it expects to sell an electric car in the U.S. by 2010, Nissan joins the ranks of what may turn out to be a crowded field.

Analysis: General Motors. led by its indefatigable product-development chief, Bob Lutz, has insisted its extended-range electric vehicle, the Volt, would be ready for public consumption by 2010, an implausibly short and possibly undoable three years after the Volt's concept car unveiling in 2007.

Now, faced with the announcement by Nissan that they plan on having an electric vehicle ready to go by 2010 and other carmakers such as Toyota and Mitsubishi testing their versions of electric cars, there is more pressure than ever on GM to deliver.

GM announced last week that the Volt was being test-driven for the first time on public roads and is hitting its target of 40 miles on pure electric power.

The Volt's powertrain, comprised of a lithum-ion battery and a small gasoline engine, was installed on a mule test vehicle and driven on roads around the carmaker's proving grounds in Milford, Michigan.

Toyota has said its next generation Prius hybrid, scheduled to go on sale in 2009, will stick with nickel-metal hydride batteries instead of lithium-ion though the Japanese carmaker is known to be working on the more advanced battery.

GM is playing coy in not confirming which supplier's battery is in the mule being tested. GM has development contracts with multiple battery makers.

This is not to say GM does not face huge challenges in making the Volt work. The challenge right now is to develop a smooth integration of the battery with the gasoline engine that, unlike traditional hybrids that use a gas engine to power the vehicle, kicks in to generate electricity to feed the battery.

Is GM under the microscope here? Of course, but I'm betting this time they will rise to the challenge.