There have been several prominent speculations over whether GM will abandon its plug-in program.   Keith Johnson, writing for the Wall Street Journal, has come out saying he believes the Volt will be an unpopular choice for consumers and the new government ownership.   He argues that with taxpayers now about to own 70% of the company, management will be trimming costs and focusing on models that are affordable and have a high certainty to sell well.   They can either cut the Volt line, or continue it in the hope that “either costs come down or consumers suddenly change their habits and run out to buy a $40,000 compact sedan.”

On the other side, Michael G. Richard writing for Treehugger.com,  believes in a more long-term approach.   Comparing the Volt to the Prius (back when oil was $20-$30/barrel), he argues that GM management will look towards a future where electric cars are in high-demand and oil prices are closer to the peak they hit in 2008.   Without introducing the Volt, they will not be able to learn about electric vehicle-technology and will thus “miss the boat” when its competitors are releasing 2nd and 3rd generation plug-in vehicles.

Is There an Internal Debate?

GM spokesman Tom Stephens proclaimed  earlier in the week that the Chevrolet Volt program has not been altered due to GM’s current financial woes.  According to Stephens, plans are still on track to bring  it to market by late 2010 — Additionally, they are even deciding on which other brand should get a vehicle based on the Volt’s Voltec technology.

Besides the optimistic statements from management,  Compact Power, GM’s battery supplier, recently offered their perspective that the Volt is GM’s highest priority program.  For now, at least, there does not seem to be any loss of commitment to the EV program.

Uncertain Future

There are dynamic forces at work affecting the supply and demand side of the electric vehicle equation.  The global recession has made consumers less apt to spend on a car with a $40,000 price tag that offers some green prestige.  Lower oil prices make the switch even less appealling.  On the other hand however, government subsidies and infrastructure spending by companies such as Better Place are providing  incentives that are hard to ignore.  If companies can plan for a future where charging stations are adequately dispersed, battery technology is improving, and competitors are cranking out newer and better models, it will be unwise to completely buck the trend.   Statements from the Saudi Arabian Oil Minister predicting  nearly $200/barrel oil within 2 years further that view.

With the flux in consumer spending habits and public/private expenditures, there is probably no real consensus within GM whether the Volt will be a success.  This is precisly why I believe they will continue the program.    Their survival will depend on diversification and an ability to respond to the market.   Keeping all their eggs in the combustion-engine basket could deliver a knockout blow should oil spike back up or a revolution in electric battery technology tags them as “behind the curve”.   As Mr. Richard argues, they need to have their first generation plug-in vehicle hit the market, not because it will be an instant success, but so they have the expertise and infrastructure in place to produce a best-seller years down the line.

Update (6/1/2009): Michael Moore, who has often spoken about GM and its problems, has blogged about his thoughts on the GM Bankruptcy affair.   Moore  offers his advice on how to save the entire  industrial complex built around automakers,  largely by advocating the development of an electric vehicle and light rail infrastructure.

Usually outspoken on issues of corporate incompetence, Moore takes on a more conciliatory and  foreward-looking tone.  It is an interesting read for anyone familiar with his historically “controversial” calls for action.

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The American Clean Energy and Security Act, also known as H.R. 2354, was opened up for amendments and debate today in Congress.  The legislation is meant to introduce  measures that increase energy efficiency, deploy green technology, and transition the country away from fossil-fuel dependence.

The Bill mandates utilities to begin development of plans that support electric vehicle infrastructure and standards for incorporating their integration with a smart power grid.   It also authorizes the Secretary of Energy to provide financial assistance for the deployment of plug-in vehicles throughout the country.   This assistance includes, but is not limited to, providing funds to offset the costs of purchasing electric cars, funding the construction of charging stations and battery-exchange stations, and promoting the integration of plug-in vehicles with the grid.  It also states that the Secretary of Energy may financially assist automakers with the retooling of factories and the purchase of batteries for first-production models.

H.R. 2454 further directs the President, the Department of Transportation, the EPA, and various state regulatory agencies to establish regulations for greenhouse gas emissions and fuel economy standards.

With the private and public sectors collaborating to ensure wholesale upgrades to the energy infrastructure, it is increasingly becoming a question of when as opposed to if plug-in vehicles will have a major impact internationally.

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As the price of oil spiked to $150/barrel, car shoppers and the media began focusing on fuel efficiency ratings. For gasoline-powered vehicles, the number that is important is the ‘Miles per Gallon’ (or ‘Kilometers per Liter’ outside of the US and UK), the distance one unit of gasoline takes you. The United States EPA has a protocol that it follows to test the MPG ratings of various automobiles, providing a convenient way for making comparisons.

However, when considering electric vehicles, the calculation is not nearly so straightforward. Many car manufacturers are providing a “blended” fuel efficiency number, resulting in ratings of 100 MPG or even higher. They do this by assuming that drivers will only travel slightly more than the electric range of the car. So, if you own a hybrid whose battery provides 30 miles after each charge, and you only drive it 32 miles each day before plugging it back in, the amount of gasoline that is used is minimal. This type of (arbitrary) scenario provides the justification for the MPG numbers being circulated in advertisements and the media.

It is misleading for those who plan to drive their automobile further than its electric range.  Additionally, many plug-in models boast of having driving modes that combine the internal combustion engine with the electric motor, providing greater performance, yet using gas even when the battery has a remaining charge.

A more sensible approach would be to offer an electric range (in miles or kilometers) based on the battery alone, and then an MPG rating once the battery is dead. Further tweaks might need to be made for those vehicles that have solar roofs or those that have batteries that can be recharged by using the internal combustion engine. What is clear though is that more transparency is needed for these products. Unfortunately, the EPA has not yet formed a process to regulate the claims of electric cars, and the media has not examined the justification behind some of the numbers being released.

Until some sort of regulation is adopted, or the industry agrees on a standard, consumers need to be armed with knowledge before buying electric cars with inflated fuel efficiency ratings.

You can also read further about why MPG is an imperfect measure when comparing the fuel-efficiency gains between two cars.  Gallons per Mile, or GPM, is actually a more direct way to calculate fuel savings.

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