It has taken years, but executives at General Motors finally acknowledge some of the company's failures: losing customers because of shoddy cars, dismissing hybrids as a fad, ceding technology leadership to Japanese rival Toyota and others. Now, GM is trying to regain some of its lost luster with innovations of its own: Real-world customers are testing a fleet of 100 hydrogen-powered fuel-cell vehicles. The first full-size hybrid SUVs, the Chevrolet Tahoe and GMC Yukon, are about to hit the market. And by the end of 2010, GM hopes to launch an electric car, the Chevy Volt, that some experts think could transform the industry. U.S. News spoke recently with GM's "car czar," Vice Chairman Bob Lutz, about the giant automaker's plans.
GM is working on several different alternatives to the internal-combustion engine—fuel cells, cellulosic ethanol, hybrids, electric cars. Can you outline the overall strategy?
Fuel cells are extremely difficult, because there's no infrastructure for fueling them. A battery-recharging infrastructure is available—it's the electrical grid. We've got a lot of problems to solve because nobody's done this before. What's new is the whole interaction between the internal combustion engine and the battery. The car's circuitry must handle enormous power loads. There's a lot of intricate software.
The software is really important, right, because that's where the intellectual property is? Is GM keeping that in-house, or getting it from suppliers?
We can probably write 60 to 70 percent of the software ourselves. We have to cover every possible sequence of events. That's what takes so long.
When will you have prototype battery-powered cars that you'll actually be able to drive?
By the spring of '08, we'll have all these old Malibus with battery packs that we'll drive around.
How confident are you that it's going to work?
Our computations show this is going to work. Our suppliers know lithium ion chemistry. We're not inventing anything. There's no reason to believe this won't work. There would have to be some horrible surprise for it not to work.
How important is the Volt for GM? What's at stake? You've got Toyota going in a slightly different direction, with its hybrids powered by nickel metal hydride batteries. They're playing down lithium.
We now have showdown at the OK Corral. You have one giant auto company saying it won't work, and one saying it will. Ever since Toyota assumed the mantle of technology leader, there's been a certain class of buyer who wants to be associated with the best technology. In that sense, every Toyota has a little bit of Prius in it. The iconic Toyota vehicle is the Prius. The iconic GM vehicle is the Hummer H2. So that creates the impression that Toyota is frugal, GM guzzles. Toyota loves the environment, GM pillages the environment. Perception becomes reality. Well, this is about recapturing General Motors' technological leadership. We want to be the company that has the solutions for tomorrow.
And you think lithium ion batteries are the way to do that?
The problem with lithium ion is scalability. But now Black & Decker has been using it in tools. Segway switched to lithium ion from nickel metal hydride two years ago for their transporter. Then I read about Tesla, these battery-powered cars with a 200-mile range. To do that, they're using thousands of laptop batteries wired together. When Tesla announced they were building a car, that kind of tore it for me. I thought, "If some little West Coast outfit can do this, we can no longer stand by."
So how has the program developed since then?
The first plan was to simply cram a lot of lithium ion batteries into a vehicle and give it a range of about 100 miles. Then [GM Vice President] Jon Lauckner said, "How about a smaller battery with a lower range?" That led to the Volt. For the launch last January, we made sure it wasn't a science fair project we were doing just to get attention. Then we put it in the Detroit show.
Even at GM, there seems to be some skepticism that you can get this car out by 2010.
Our team says the end of 2010 is an impossible target. But instead of the normal GM routine, the usual gates, we removed all that. There are no milestone meetings. No gate reviews. Nobody has to prepare papers prior to meetings. We make decisions on the spot, then the team marches off.
How much of a risk is this for GM?
It's not our way to kick off a major program without knowing what the overall investment will be. But there's a huge tradition of technological leadership at this company. We invented the catalytic converter. The electric starter. The automatic transmission. We were the technology company. Losing that in today's environment is very bad news, and we have to get it back.
The sales goal is pretty low, though, just 60,000. That's a pretty small portion of all the cars GM sells every year. Can the Volt make a difference at those numbers?
Within a few years we hope to be producing hundreds of thousands. This is potentially the reinvention of the automobile.
Another gasoline alternative is cellulosic ethanol, which isn't a GM technology, per se. It's something that would be available to all the automakers and won't require much change for ordinary cars to run on it. If that turns out to be a solution, would it give GM some kind of competitive advantage? Or would it simply lift all boats?
We'd be happy if cellulosic arrived and it lifted all boats. The advantage for us would be cost avoidance. To get the same mileage without it, we'd need a $6,000 diesel engine or a very complex series hybrid and all these lightweight materials. Biofuels would be the quickest way to get to a nonpetroleum fleet.
So of all the different technologies GM is working on, how would you prioritize them?
Electric. Advanced hybrid. Plug-in hybrid. Advanced clean diesels. And far out, there's hydrogen.