GM chief sees tripling elec­tric-drive cars tar­get

The Pak Banker - - Company & Boss News -

MICHI­GAN: Gen­eral Mo­tors Co. Chief Ex­ec­u­tive Of­fi­cer Dan Ak­er­son is look­ing to at least triple the com­pany's tar­get for elec­tric-car sales by ex­pand­ing the mar­ket for the Chevro­let Volt and adding mod­els that would share sim­i­lar technology, said three peo­ple fa­mil­iar with his plan.

Ak­er­son, who took over on Sept. 1, told his ex­ec­u­tive team in early De­cem­ber to find ways to sell three to four times as many elec­tric cars as planned for 2012 by mid-decade, said the peo­ple, who asked not to be iden­ti­fied be­cause the plans are pri­vate. GM has said it ex­pects to sell 10,000 Volts in 2011 and 45,000 the fol­low­ing year, when ca­pac­ity may reach 60,000.

In­creas­ing Volt sales and de­vel­op­ing other mod­els with elec­tric drive will spread out the cost of de­vel­op­ing the technology across more ve­hi­cles. It also car­ries risk be­cause hy­brid and elec­tric cars have tended to sell in low vol­ume and be un­prof­itable, said Jim Hall, prin­ci­pal of 2953 An­a­lyt­ics Inc., a con­sult­ing firm in Birm­ing­ham, Michi­gan.

"That makes sense in the long term, but they have to get costs down," Hall said. "Once the govern­ment sales in­cen­tives are gone, GM has to ma­ture the cost of the technology to get prices down and make sure they're not los­ing money."

Ak­er­son's plan for more cars with elec­tric drive un­der­scores his strat­egy to dif­fer­en­ti­ate GM and make it a technology leader, fol­low­ing an ini­tial pub­lic of­fer­ing that raised more than $20 bil­lion in Novem­ber, 16 months af­ter the car­maker emerged from bank­ruptcy. Ak­er­son, 62, has told top ex­ec­u­tives that he wants Detroit-based GM to seek new mar­kets and pre­pare for higher fuel prices, ac­cord­ing to the peo­ple.

The Volt went on sale this month in the U.S. at a price of $41,000. The car, which can travel as much as 50 miles (80 kilo­me­ters) us­ing bat­ter­ies, will be sold in China dur­ing the sec­ond half of 2011. GM last month be­gan tak­ing reser­va­tions for the elec­tric-drive Opel Am­pera, which will sell in Europe next year. The mod­els in­clude a gaso­line en­gine that ex­tends the driv­ing range to more than 370 miles.

Dave Darovitz, a GM spokesman, said GM will look at other mod­els for the Volt sys­tem. He de­clined to com­ment on Ak­er­son's vol­ume goals for the technology.

The fed­eral govern­ment is of­fer­ing con­sumers a $7,500 tax credit to buy the Volt, plugin hy­brids and elec­tric cars. The credit be­gins to phase out af­ter a man­u­fac­turer pro­duces 200,000 el­i­gi­ble plug-in elec­tric ve­hi­cles, ac­cord­ing to the U.S. En­vi­ron­men­tal Pro­tec­tion Agency's web­site.

Ak­er­son, a for­mer man­ag­ing di­rec­tor of pri­vate-eq­uity firm Car­lyle Group, suc­ceeded Ed Whi­tacre as CEO in Septem­ber and as­sumes the role of chair­man at the end of the year. Ak­er­son told his ex­ec­u­tive team to come back to him with a way to meet the higher sales num­bers for the Volt and other elec­tric-drive mod­els, or with rea­sons why it can't be done, one of the peo­ple fa­mil­iar with the plan said.

GM rose 9 cents to $33.85 at 4 p.m. in New York Stock Ex­change trad­ing. They have gained 2.6 per­cent since the IPO.

GM is con­sid­er­ing adding elec­tric-gaso­line Volt technology to sev­eral mod­els un­der mul­ti­ple brands, most of them larger than the Volt, in­clud­ing SUVs, ac­cord­ing to the three peo­ple fa­mil­iar with the plan. In April at the Bei­jing Mo­tor Show, Chevro­let showed a five-pas­sen­ger SUV that could drive in all-elec­tric mode for 32 miles us­ing the Volt's pow­er­train sys­tem. That kind of ve­hi­cle is one pos­si­bil­ity, the peo­ple said.

Mak­ing larger mod­els us­ing the same sys­tem is dif­fi­cult and may be more ex­pen­sive be­cause adding fea­tures and pas­sen­ger space will make the car heav­ier and less aero­dy­namic, ac­cord­ing to two of the peo­ple. GM stopped work on a plan hatched by now-re­tired Vice Chair­man Bob Lutz to make a two-door Cadil­lac sports car called the Con­verj that used the Volt's drive sys­tem, two ex­ec­u­tives with knowl­edge of the de­ci­sion said in March.

The Volt runs us­ing only elec­tric drive for the first 25 miles to 50 miles. Af­ter that, a four-cylin­der gaso­line en­gine turns on and recharges the lithium-ion bat­tery.

The EPA rated the Volt's fuel econ­omy at the equiv­a­lent of 93 miles per gal­lon in elec­tric-only mode and 37 mpg if the car runs on gas af­ter the bat­tery is drained. -Bloomberg

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