GM: Next Generation Volt Will Be $10,000 Cheaper to Build

By · May 01, 2013

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Dan Akerson speaking at the Brainstorm Green conference. (Photo: General Motors)

Dan Akerson, chief executive of General Motors, said yesterday that next-generation Chevy Volt will cost $7,000 to 10,000 less to build than today's Volt. His remarks were made at Fortune's Brainstorm Green conference in Laguna Niguel, Calif.

Akerson also said that General Motors has sold about 26,500 Volts so far, but that by 2017 G.M. will have sold a half-million “electrified" cars, a category that includes conventional mild and full hybrids, as well as the plug-in electric vehicles.

Akerson's comments did not exclusively focus on electric-drive vehicles, but covered a range of topics about sustainability efforts at General Motors. He talked about vehicle light-weighting, a Corvette that gets 26 miles per gallon, a turbo-diesel Cruze that gets 46 m.p.g., and the need to embrace CNG-powered vehicles.

The upcoming Volt model will support recharging the battery pack from the gas engine, a feature that has been used for years by hybrid cars, like the Toyota Prius. This approach will also be used in the Cadillac ELR, essentially an upscale version of the Volt that is due in early 2014.

For the next generation of the Volt, Akerson said that cost reductions will be made without “decontenting” the vehicle. In other words, the Chevy Volt will deliver the same performance and creature comforts as the current model. It's too early to know how these changes will affect price on the next-generation model, which is not due until 2015 or 2016.

Making Money

Akerson believes the next-generation Volt will be profitable for General Motors. The chief executive admitted that the company has not yet turned a profit on its high-profile halo car. “We're losing money on every one of them,” he said.

Akerson did not explain exactly how they would reduce the cost, but one avenue is improved battery technology—providing more kilowatt-hours of storage at a lower price. Akerson predicted that improved battery technology will also allow G.M. to offer a 200-mile range pure electric car within a few years. Engineers can use energy density improvements either to improve driving range, or to reduce price and weight while maintaining the same driving range. “We've got to light-weight this car,” Akerson said.

A price reduction on the Volt would help G.M. compete against other plug-in electric vehicles. Nissan, for example, significantly reduced the entry-level price of the 2013 LEAF. “We know we have to reduce costs,” said Akerson. “We’ve got to look at smart ways at getting it better positioned from a price perspective, and that means we’ve got to take cost out of it.”

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