General Motors Co. plans to launch a $30,000 electric
vehicle called the Chevrolet Bolt that would be capable of
driving 200 miles on a charge by 2017, according to people
familiar with the strategy, a move to gain ground on
Tesla
Motors Inc.
GM will show off a concept version of the Bolt on Monday at
the Detroit auto show, eight years after the auto giant
disclosed it would re-enter the electric car market with the
Chevrolet Volt. The Volt, on sale since late 2010 and
redesigned for 2015, is being upgraded to get better
capability and sharper design, and has a backup gasoline motor
on board in case juice runs out.
The Chevy Bolt, carrying a more capable battery manufactured
by South Korea’s
LG Chem Ltd. , will be aimed
squarely at Tesla’s forthcoming Model 3, a $35,000 electric
car also slated to debut in 2017. The concept version of the
electric car will be a hatchback designed to look more like a
so-called crossover vehicle, according to people familiar with
the design. The Bolt will be capable of driving four times
farther than a Chevrolet Volt plug-in hybrid on a single
charge.
GM has thus far struck out in its attempt to match its
Silicon Valley rival. Recently, GM launched a $75,000 Cadillac
ELR plug-in car that failed to dent Tesla’s dominance among
luxury electric-vehicle buyers who have clamored for the Model
S sedan.
By placing the Bolt in the high-volume Chevrolet line and
giving it a name similar to the Volt, executives hope to
polish Chevy’s image as a full-line vehicle manufacturer
prepared to meet demand, regardless of prices at the pump,
according to people familiar with the strategy. GM expects the
Bolt to compete globally, including in markets such as China.
It is unclear if a car similar to the Bolt would be inserted
in the Opel, Cadillac or Buick brands down the road.
The Bolt represents the biggest risk taken by Chief Executive
Mary
Barra since taking GM’s helm a year ago. Its development
was approved when she was product chief under former CEO
Dan
Akerson . But U.S. gasoline prices have fallen below $2 a
gallon this year, hurting demand for electric cars.
While Tesla has sold relatively few Model S sedans since
putting the car on sale in 2012, the Palo Alto, Calif., auto
maker’s shares have soared on investor hopes for the company’s
future.
Over Ms. Barra’s first year at GM’s helm, company shares fell
14% while Telsa shares soared 48%. Ms. Barra aims to have up
to 500,000 electrified vehicles—including vehicles with
partial-electric capabilities—on the road by 2017. In
contrast, Tesla CEO
Elon
Musk has said he envisions up to 500,000 annual Tesla
sales of pure electrics by 2020.
One factor motivating Ms. Barra is meeting regulations in the
U.S., Europe and Asia that penalize full-line manufacturers
when they sell too high a concentration of trucks and
sport-utility vehicles, which are GM’s sweet spots. Ms. Barra,
however, has insisted the company won’t build electric
vehicles just “to check a regulatory box.”
AutoNation Inc. CEO
Mike
Jackson , who runs the largest U.S. auto retailer, said
a vehicle like the Bolt shows a new attitude atop GM. The auto
maker is now making big profits in the U.S. on its new trucks
and SUVs in an era of low gas prices making the investment
into more capable electric vehicles look more like a moonshot
than a sound business decision.
“The old GM would have milked the cash cow until it was dry,”
Mr. Jackson said in an interview. The new GM, he said, is
showing signs that it is willing to take the long view. He
estimates electric cars will compose 2% of the U.S. market, at
most, in five years. “The industry will lose money on it,” he
said.
GM’s track record with electrics remains spotty. The company
shut down EV1 production in 1999, pulling the plug on a $1
billion electric-vehicle program that had impressed regulators
but failed to reach commercial viability.
The Volt project started several years later. Heavily hyped
by former GM CEOs and legendary product development chief Bob
Lutz, the $35,000 car has been a disappointment despite hefty
government subsidies.
Less than 90,000 Volts have sold globally since it went on
sale in late 2010, and only 1,500 were delivered in December.
The introduction of pure electric vehicles, such as
Nissan Motor Co. ’s Leaf (which achieves 75 miles on a
charge), and the relative success of Tesla’s pricey but more
capable Model S sedan has overshadowed GM’s efforts.
The Volt is set for an overhaul in 2015. But it will be a
smaller part of GM’s strategy than initially expected.
For Ms. Barra and other GM engineers, the Bolt’s proposed
200-mile range is critical because it is seen as addressing
concerns about range long associated with electric cars, one
person involved in the car’s development said. “Two hundred
miles is seen as some sort of barrier where the notion of
range anxiety goes away,” this person said.
Tesla has said its Model 3, due in 2017, will achieve about
200 miles on a charge. While less capable than the 85 kwh
Model S, Mr. Musk plans to offer the Model 3 at a fraction of
the price.
By the time the Bolt and the Model 3 hit the market, an
onslaught of competitors, mostly from Europe, are expected to
have long-range EVs available. Those cars, which could get
more range, will likely be far more expensive than the Chevy.
While the electric car GM plans to build is far bigger than
the economy car that has long been rumored, the Bolt will be
smaller than Tesla’s Model S. The pouch battery cells that LG
uses gives the auto maker flexibility to tuck the battery pack
into a unique design in the vehicle.
The pack for GM’s new vehicle could be built in LG Chem’s
Holland, Mich., plant, where the Volt batteries currently are
made by the same supplier. That plant would have a capacity to
build about 60,000 Volt battery packs, or 20,000 of the larger
packs for a new EV, or a mixture of the two.
LG Chems’s battery improvements to make it possible to for GM
to create the low-cost EV include better durability and
electrical controls. Also, LG will use more of the available
storage capacity in the cell than it does on the Volt. Plug-in
hybrids can use less available storage capacity because of the
constant charging from the gasoline engine. If more charge is
used, it would limit the life of the battery.
“We have progressed far enough that it gives us a high level
of confidence that in the 2017 kind of a time frame, there are
no show stoppers or gotchas that we don’t know how to get
over,” Prabhakar Patil, the chief executive of LG Chem Power
Inc., the U.S.-based battery arm of the Korean electronics
giant, said in an interview.
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