DETROIT--General Motors needs to wring thousands of dollars in cost from its high-profile Chevy Volt electric car before it can compete long term on price, a company executive said on Tuesday.
The biggest challenge relating to the cost of electric vehicles and the Volt specifically is the battery and related components, such as the power electronics and the motors. Compared to other plug-ins, the Volt has a very large battery--sized at 16 kilowatt hours--to ensure that drivers can meet most daily driving needs in electric mode.
For the car to get "traction" in the market, the cost of the battery components needs to drop more than $5,000, said Jonathan Lauckner, GM's vice president of global program management at the Business of Plugging In conference here.
"Clearly if we really want to have these vehicles get traction and want to bring the price of vehicles to a level that's competitive with say, a hybrid today, we got to get battery costs way down from where they are today," Lauckner said.
GM plans to manufacture the battery pack for the Volt, which is scheduled for release at the end of next year, using cells from a division of LG Chem. Lauckner said that the cost per stored energy for that entire pack is several hundred dollars less than $1,000 per kilowatt-hour, a number that's been projected by people outside GM.
The cost for the battery pack needs to shrink substantially to compete with existing auto technology to the range of $250 per kilowatt-hour, Lauckner said.
GM has not yet priced the Volt, which runs on batteries for 40 miles and uses an internal combustion engine to sustain the battery after that. People outside the company have estimated the cost at about $40,000.
There's a potential additional cost if electric car buyers choose to install a 220-volt charger at home, which will essentially cut charge time in half compared to charging from a regular 110-volt outlet. Having a 220-volt charger installed can cost between $300 and $3,000 depending on the complexity of the job, say industry executives.
To offset that upfront cost, Volt buyers qualify for the maximum $7,500 federal tax credit. The tax credit is one way that the federal government has sought to revitalize the U.S. auto industry around electric vehicle technologies. But Lauckner said that long term Volt costs have to go down further because government incentives will go away at some point.
The ongoing operating costs of owning a Volt will be about one-sixth of that of compact sedan, Lauckner said, adding that the savings go higher as the price of gasoline goes up. GM expects that most Volt drivers will be able to do almost all their driving in electric mode.