GM plans to double the 2012 production capacity for the Chevrolet Volt to 120,000

Then hopes to triple sales of plug-in hybrids by mid-decade

General Motors Co. Chief Executive Officer Dan Akerson plans to double the 2012 production capacity for the Chevrolet Volt to 120,000 as he works to boost the plug-in hybrid’s sales, said two people familiar with the matter.

Volt output this year may increase to 25,000 from an original plan of 10,000, Akerson said earlier this month. GM now is working with suppliers to raise 2012 capacity from an earlier target of 60,000….

Akerson, who became CEO in September, wants to sell more of the $41,000 Volt and is pushing to use its Voltec gasoline- electric drive system for models sold by other GM brands. Akerson has said he wants GM to have more fuel-efficient models ready for a possible increase in oil prices to $120 a barrel.

“We want to stay sharply focused on technology,” Akerson told analysts at Deutsche Bank’s Auto Industry Conference in Detroit on Jan. 11. “We don’t want to be caught flat-footed as we were in 2008.”

Crude oil that year climbed to more than $140 a barrel and average gasoline prices topped $4 a gallon.

If it’s really true that GM is planning for $4 gasoline, as the Detroit News reported last week, then they have truly made a remarkable turnaround in strategic thinking.  That alone would justify the Obama administration’s decision to save the company.

After all, serious consequences from peak oil are now unavoidable (see “Peak oil production coming sooner than expected“).  Most every major company is pursuing EVs (see “Our cup runneth over with plug-in hybrids“).  Indeed, electricity is the only alternative fuel that can lead to energy independence.  It also happens that plug-in hybrids are a core climate solution.

Some conservatives, however, hate Obama so much they would be happy to see GM fail, but fortunately the Volt appears to be a solid vehicle (see Motor Trend slams Limbaugh for attacking the Chevy Volt: “Driving and Oxycontin don’t mix”:  Car reviewers rave about GM’s PHEV while Rush fumes).

Here’s more news on the Volt:

Akerson told his executive team in early December that he wanted to boost Volt production and explore adding its drive system to several models with a goal of at least tripling sales of vehicles with that technology by mid-decade from the 2012 target, people familiar with the matter said at the time.

After exploring its options, the team settled on doubling capacity for the Volt next year, they said. GM is still evaluating the Volt’s technology for other models.

Higher output will allow GM to reduce the cost of the Volt’s drive and battery systems, helping it lower the car’s cost in future years, said Jim Hall, principal of 2953 Analytics Inc., an automotive consulting firm in Birmingham.

GM should be able to sell all of its Volt production as long as the government’s $7,500 tax incentive is in place, Hall said. The incentive expires after GM sells 200,000 of the car.

“The only way they will get cost down is with more production,” Hall said. “They are in a race to get costs down concurrent with selling 200,000 Volts.”

GM may announce the production increase at the Washington auto show next week, one of the people said.

The Volt can travel about 35 miles on a fully charged battery before the gasoline engine kicks in, giving the vehicle an additional 340 miles of range on a full tank of gas, GM said on its website.

The U.S. Environmental Protection Agency estimated the Volt’s energy use as the equivalent of 93 mpg in electric-only mode. In combined gasoline-electric driving, the EPA estimated the Volt would average 60 mpg, GM said. In gasoline-only mode, when the battery was drained, the car would get 37 mpg, GM said.

And here’s some fascinating reporting from the Houston Chronicle, “Demand looks good for Chevrolet Volt,” on the Volt’s early success in the oil capital of the country:

The first Chevrolet Volts have yet to arrive at dealerships in the Houston area, but already there seems to be demand for the electric vehicles.

Late last year, the Volt was launched in seven U.S. markets, including Austin, which received 20 of the electric autos. All were reserved by buyers, GM spokesman Craig Eppling said, so they spent almost no time on the lot before being driven away.

By late February or early March, a few Volts will arrive at Houston dealerships. The number of Volts each dealer will receive will depend on its size and sales, Eppling said….

Don Heihn of San Antonio bought his Chevy Volt in Austin late last year and is pleased with the vehicle.

“It just turned over 1,000 miles, and I’ve only used 5.6 gallons of gas. It performs really well,” he said….

Cheaper than gasoline

There is, of course, a cost to charge the battery of the Volt. But at present, the price of electricity is cheaper than gasoline.

And experts expect the price of gasoline to rise through the summer.

The inflection point for Americans appears to be between $3.50 and $4 a gallon, which we may hit this year.  That’s the price at which SUV resale prices collapse, and people seriously begin factoring in gasoline prices to their car purchases.  If we hit $4 in 2012, then it will certainly be a major campaign issue, but there seems little escape from even five dollar gasoline in the next few years, unless of course the global economy goes back into a deep recession.

When you are peaking in oil production, the only way to avoid higher prices is to destroy demand.  That can be done through an aggressive clean energy policy, which conservatives have opposed for decades, or it can be done, temporarily, by a global economic meltdown, which was the Cheney-Bush strategy.

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17 Responses to GM plans to double the 2012 production capacity for the Chevrolet Volt to 120,000

  1. nyc-tornado-ten says:

    Looks like al gore was right rush limbaugh was wrong.

    The internal combustion engine is in its last days and we are going electric.

    If america retrogrades, the rest of the world will move ahead without us!

  2. Lore says:

    The possible number of Volts sold in the US by 2012 would amount to less then 1% of total yearly vehicle sales. Not much of an impact from that one model. Of course that is based on a solid US and world economy which I have my doubts about at that point in time.

    From the indication of last nights State of the Union speech, it looks like we’re going to lump along until we reach another critical event without solution. Like a skipping stone.

  3. Daniel Ives says:

    I want one, but they won’t be selling it here in Colorado for a while!

  4. sereres says:

    so I live in an apartment complex… I don’t really see any possible way I could charge one of these cars. With the foreclosure crisis, I wonder if this won’t increasingly be a problem when people want to get electric cars.

    Of course, currently, I have no car at all, so buying one probably would be a net negative for the planet in my case.

    [JR: No parking garage in the complex? No parking lot?]

  5. Lore says:

    “I want one, but they won’t be selling it here in Colorado for a while!”

    Why not buy a Zap vehicle, such as the ZapVan, car or truck. All electric and they’re here now, starting at $12,500.

  6. K Nockels says:

    The companies that exploit natural resouces are about to do battle for the resouces in the artic. They have every incentive to keep it warming.
    What they end up finding there will really be the deciding factor on if we move on sustainability. We here at CP know that what ever they find it won’t change the Peak equation by much but in the short term they will try to use inflated reserve figures to convice the general public that we can continue on as we have been. Just like the pipeline problems that they are blaming on low volume, not on the real issue of loss of perma frost that is putting ever greater stress on the ageing pipe welds, they again are calling for drilling in ANWR and off the north slop shore to increase flow and that that will solve the current problems with the pipe line. Smoke and Mirrors. How about we all join a car pool 4 people in each pool and that way everyone only drives thier car 1 1/2 days a week for work.

  7. Daniel Ives says:

    RE Lore #4

    I need a car that can do speeds above 40 mph with a range of more than 20 miles. Sorry, but $12,500 is way too much to pay for a vehicle that can barely get me to work and back (since I can’t get on the highway doing 40mph top speed, I need to add a lot of miles on back roads) and do little else. I’m all for all-electric vehicles, but I need a car that is practical and low-emissions.

  8. sereres says:

    @JR, no garage, there are lots, but no outdoor outlets remotely near them.

  9. sereres says:

    wait… could one remove the battery and charge indoors? That would be *really* convenient.

  10. Lore says:

    “I need a car that can do speeds above 40 mph with a range of more than 20 miles. Sorry, but $12,500 is way too much to pay for a vehicle that can barely get me to work and back (since I can’t get on the highway doing 40mph top speed, I need to add a lot of miles on back roads) and do little else. I’m all for all-electric vehicles, but I need a car that is practical and low-emissions.”

    That really kind of reflects the crux of the problem, doesn’t it?

    We built a society based on miles of highways that cannot be sustainably driven over other then in vehicles that cost over $40K, which few will be able to afford, and requires large amounts of polluting energy and resources in themselves to create. While it would have been just as easy and less expensive to drive your 25/mph vehicle to the local village mass transit depot to get where we all needed to ultimately go.

  11. Ric Merritt says:

    Um, Daniel Ives @ #7, the Volt isn’t an all-electric vehicle. Even the actual all-electric vehicles on the market far exceed the figures you pulled from some nearby sunless place.

  12. Daniel Ives says:

    Rick #11

    I’m aware that the Volt is a hybrid electric. In that post I was talking about the Zap-car, as mentioned by Lore. You should read the whole conversation before commenting.

  13. Nick says:

    I’ll be in line for one of the early pre-owned.

  14. Sasparilla says:

    Don’t know if it’ll get anywhere (probably not, but you never know), but the Levin brothers (one in the House and one in the Senate) are going to introduce a bill that boosts the Plug In vehicle tax credit (per company) to 500,000 vehicles from 200,000.

    Details are here:

    The existing tax credit expires (and presumably the boost in numbers would not extend its duration much) so that manufacturers that get with the program and get the vehicles into the market (and scale to reduce costs) are rewarded, those that don’t won’t get much of the benefit (fixes the issue with the hybrid credit).

    Personally I think its a great idea, but its probably a long shot to get it past the Oil Lobby, er, I mean the House Republicans who have declared war on electric vehicle technology.

  15. Joan Savage says:

    I may have missed something in the Volt advertising, but the car seems to use up its battery power first, whether you want that or not. It doesn’t seem to have the option to conserve electricity for some city driving at the end of a longer trip. An attractive feature of the real hybrids is the facility to slip back into electric mode as needed.

    Which leads to the concern others have raised about ease of recharging.
    If some commercial parking garages would add an electric recharge section (separate price I suppose) that would be handy. Recharging during a work day rather than at home sounds good.

    The sticker price still makes this theoretical to me personally.

  16. nyc-tornado-ten says:

    Somewhere around half of american workers commute less than 5 miles each way to work, and most of them probably live in homes where they can easily charge a car. Today’s electric car can’t solve every transportation problem, but it can go a long way for a first step.

  17. Glenn Magus Harvey says:

    And first steps are the key to progress these days–especially with the amount of political naysaying that goes on. I’m a take-whatever-I-can-get person, when it comes to some of these things.

    And Rush Limbaugh…well this proves he doesn’t get stuff outside of politics. With behavior little different from that of a schoolyard bully with bluffs of varying effectiveness…heh.