HOW & WHY GM & THE EV SPLIT AND GOT BACK TOGETHER
Submitted by New Energy News Blog
In the 1890s, Henry Ford believed so intensely in the future of the internal combustion engine he built a prototype in his garage to get funding to start his auto company. He didn’t have market studies, he had commitment. It worked out. There was probably somebody around at the same time who believed in a better horse buggy but that guy didn’t go down in history.
The folks who run GM were building SUVs and following in the footprints of the guy who believed in the better horse buggy until, suddenly last summer, Bob Lutz went into the garage and, with the backing of CEO Rick Wagoner and a few realistic members of the GM board, started building the Chevy Volt, a potentially game-changing plug-in hybrid electric vehicle (PHEV).
GM had seen its falling market share, a rising demand for improved vehicle mileage and the success of Toyota’s Prius and knew it was time to act.
Richard Wagoner Jr., CEO, GM: “We may not get the calls right. But we have to start making some calls.”
Lutz had suggested the EV 2 years before, in 2005. BusinessWeek, on GM’s 2005 decision: “Myopia. Fear. Inertia. All had a seat at the table in Detroit…”
Electric Vehicle (EV) enthusiasts include GM near the top of the list of suspects for Who Killed the Electric Car? while GM says the battery technology in the late 1990s made the EV1 a sure market loser. EV1 advocates say the car would have been a success with good marketing.
The Volt will have a state-of-the-art lithium ion battery. The company has already started marketing the car. Seems they learned lessons the last time around. Will GM win this aggressive bet? 2 questions: (1) How good will the battery turn out to be? (2) How good will the marketing be?
Many industry insiders are adamant that the new, fuel-efficient, plug-in vehicles will not sell.
Here’s Bob Lutz, GM Vice Chairman in charge of the Volt and the company’s green shift, replying to a marketing assertion that buyers want a big powerful gas-guzzling engine in their Cadillacs: “They said: That’s what those buyers want.’ I said: It is now, but it won’t be in 2011.’…You people don’t understand…Everything has changed.”
Holman W. Jenkins Jr., auto industry columnist, Wall Street Journal: “We just can’t decide whether GM is a genius or a dolt for developing the Volt…”
Henry Ford’s wife wondered the same thing about him – but so did the wife of the build-a-better-buggy guy. Ain’t it interesting to have a front row seat on history?
Wagoner: “It’s the biggest challenge we’ve seen since the start of the industry…It affects everything we think about.”
