GM maps its electric strategy
Company to concentrate on EVs, plug-in hybrids
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SAN FRANCISCO -- Mary Barra spent the past several months with her team mulling a future electrification strategy for General Motors before reaching this conclusion: GM can't chase every fuel-saving technology out there.
So GM's product chief decided that the company will focus on mild hybrids, plug-in hybrids and electric vehicles while placing less emphasis on traditional hybrids, a slice of the market long dominated by Toyota Motor Corp. and its Prius line.
"Our recent strategy for developing clean and more fuel-efficient vehicles was essentially to cover the waterfront, to pursue as many promising technologies as possible," Barra said last week during a video conference with reporters gathered here for a GM event.
"Well, that's not how GM is doing business today."
Instead, she said, GM is making "educated bets" on what it deems are the most promising technologies, such as the Chevrolet Volt plug-in hybrid. Barra and CEO Dan Akerson believe the Volt has helped GM stake out a leadership position in plug-in hybrids that will transfer to EVs, such as the electric Spark minicar that GM will unveil at next week's Los Angeles Auto Show.
"A major focus for GM's electrification strategy will center on the plug," Barra said. She added that plug-ins offer "a unique opportunity to change the way people commute" and that Volt owners "love the ability to refuel at home."
Traditional hybrid technology "is important, of course," Barra said. "But we think plug-in technology will play an increasingly important role over the years to come."
The narrowed focus gives GM a strong presence on both ends of the electrification spectrum: At one end are so-called pure EVs and plug-in hybrids; at the other is GM's eAssist mild-hybrid technology, which uses a much smaller battery and electric motor to assist the gasoline engine under certain conditions but doesn't propel the car by electric power alone.
Barra said GM's eAssist technology provides about 25 percent better fuel economy than a standard powertrain in some vehicles, such as the Buick LaCrosse. GM launched eAssist on the LaCrosse last year and since has added the technology to the Buick Regal and Chevrolet Malibu. It will be offered as an option on the Chevrolet Impala when the redesigned version hits showrooms early next year.
By 2017, GM expects to sell 500,000 vehicles a year globally with some form of electrification, Barra said. That would equal about 6 percent of the roughly 9 million vehicles GM sold globally in 2011.
Vehicles with eAssist would account for the majority of that total. Through October, GM sold more than 26,000 eAssist vehicles in the United States.
For comparison, Ford Motor Co. has said it expects hybrids, plug-in hybrids and EVs to account for as much as a quarter of its global sales by 2020.
Nissan Motor Co. CEO Carlos Ghosn has predicted that EVs alone, not including hybrids, will make up "10 percent of the market in 2020 in all the regions where they are available."
It makes sense for GM to capitalize on the momentum created by the Volt while de-emphasizing conventional hybrids, says Alan Baum, a Detroit area automotive analyst who tracks electrified vehicle sales. He notes the tepid demand for GM's past hybrid offerings, including hybrid versions of the Chevrolet Malibu and two Saturn nameplates several years ago.
The problem, Baum says, is that the market for conventional hybrids "is not a transitional technology -- it will continue to be a major player" that GM can't afford to ignore.
"If you're Mitsubishi, you've got to pick and choose" what electrification technologies to go after, he said. "If you're GM, you need to be in all the major segments."
GM continues to work on other fuel-saving technologies, too, Barra said, including fuel cells. It plans to introduce a diesel version of the Cruze compact next year.
You can reach Mike Colias at mcolias@crain.com.
