GM's Plug-In Push

General Motors is developing a plug-in hybrid technology for its Chevy Volt that is miles ahead of Toyota and Honda

by David Kiley

Don't tell General Motors (GM) Vice-President of Research and Development Larry Burns that the Chevy Volt plug-in gas electric hybrid vehicle it plans to launch is a marketing ploy to improve GM's brown image with consumers.

On the other hand, Burns admits that GM is spending SUV loads of money to make sure the Volt comes to market on time, and ahead of Toyota (TM), in 2010 in the hopes of changing the marketing nightmare the company faces. "No question, it is our intent to leapfrog Toyota in this technology," he says.

Coming from Behind

What marketing nightmare? GM has been unleashing the best vehicles it has ever produced. Quality is better than ever. Designs are being lauded. And critics are falling over themselves praising new versions of such previously dullard drives as the Chevy Malibu. Even a Buick, the Enclave SUV (BusinessWeek.com, 8/24/07), is drawing kudos, and GM can't make them fast enough to meet demand. But overall, GM sales are down almost 6% this year, compared with a drop of 2.5% for the industry through the first 10 months of the year.

Not only does GM's portfolio of brands have an awful time resonating on the East and West coasts, but research commissioned by the automaker spelled out in how little esteem cutting-edge customers hold GM. A survey cited by Burns showed that 70% of respondents think of GM as "part of the problem" when it comes to climate change and pollution, while 70% view Toyota as part of the solution. Moreover, consumers believe GM's brands have much lower quality scores than they really do, because of how poorly GM has marketed its brands over the years. "It's a huge hole to dig out of," says Burns.

But GM is showing signs of life in the arena of "green" image making that, if the company gets it right, could shed stardust on its whole brand portfolio. As GM and Toyota battle for superiority and market momentum with the next gas-saving technology—plug-in-hybrids—many analysts and engineers say GM may, for a change, have the advantage over Toyota. "GM has quietly closed the technology gap with Toyota and looks like it is pulling ahead in plug-ins," says Brett Smith, director of forecasting at the Center for Automotive Research (CAR) in Ann Arbor, Mich. (Read more about GM's successes in developing hybrid transmission technology.)

Changing Horses

Talk is cheap. But there is buzz in the industry's engineering and supplier community that GM's advantage is that it chose better battery technology than Toyota in the first place to develop its Chevy Volt plug-in car for sale by the end of 2010. Toyota has been focusing its battery development on cobalt oxide-based lithium-ion batteries, the same technology that's used in cell-phone and laptop batteries. But fires in laptop batteries earlier this year derailed optimism about their application in cars.

Meantime, GM has been pursuing a nano-phosphate-based battery with privately held battery technology company A123 Systems, in Watertown, Mass., whose technology is the kind used in lithium-ion batteries that drive cordless power tools. And it's this technology, which is not subject to fires and packs more power and battery life, that is emerging as the favored pathway for plug-ins. "There are a lot of problems with cobalt-oxide, including scaling it up for cars because of the cost and availability of cobalt," says Ann Marie Sastry, an engineering professor at the University of Michigan, Ann Arbor.