GM - Chevrolet Volt Rechargeable Electric/ Hybrid Car 2010 Launch a Challange

LAS VEGAS, Jan 8, 2008; Kevin Krolicki writing for Reuters reported that General Motors Corp. planned launch of the closely watched Chevrolet Volt in 2010 will remain "a stretch" even though the automaker has not hit any snags in its development of the rechargeable electric car, the automaker's chief executive said on Tuesday.

GM Chief Executive Rick Wagoner also said the automaker's initial tests of a new-generation of lithium-ion batteries needed to power the Volt had been "favorable."

"From the beginning, going for 2010 was a stretch, and it's still a stretch, but we're putting resources like crazy into it and we haven't seen anything yet that says we've hit a glitch on it," Wagoner told reporters on the sidelines of the Consumer Electronics Show in Las Vegas.

The Volt represents GM's bid to beat rival Toyota Motor Corp to the market with a hybrid vehicle that can be recharged at a standard outlet and to win back consumers who have abandoned the Detroit-based automaker's brands because of concern about fuel economy and the environment.

"I think it's fair to say that no concept in my GM career has created more excitement than the Chevy Volt," said Wagoner, who used his keynote address at the electronic industry's major trade to drive onstage in a prototype version of the car.

Environmental advocates have long urged automakers to develop plug-in hybrids such as the Volt, which GM sees as a way to restore some of the luster to its brands in markets such as California where they are now outsold by rivals.

When Wagoner said last week there was no guarantee that GM could meet the timetable for a launch of the highly-anticipated Volt by 2010, the remarks prompted headlines and coincided with a drop in GM shares.

But the GM chief executive said his view that there was a risk that GM could fail to meet its ambitious launch target had not changed from the beginning of the Volt project.

"It's what we've been saying all along," he told reporters in Las Vegas ahead of his keynote speech.

Wagoner said the Volt development effort was far more complex than the usual process of turning a concept car into a production model, which typically takes three to four years.

In addition to the standard vehicle engineering, GM is working with suppliers to develop a new generation of lithium-ion batteries, which have been long used in consumer electronic devices such as cell phones, to power vehicles.

"Typically we develop new technology...before we kick off a production vehicle," Wagoner said. "But the Volt is being developed with the maximum sense of urgency."

GM engineers are scrambling to figure out how to run a whole range of vehicle features -- from satellite radio to air conditioning -- without cutting into the Volt's ability to run 40 miles on battery power alone as GM has planned.

GM also is working out how to develop a first-of-its-kind liquid cooling and heating system for the Volt's battery-pack that will protect it from extreme cold and heat where battery performance suffers, executives said on Tuesday.

GM, Wagoner said, has 200 engineers devoted full-time to the Volt and finished the final major design overhaul of the car last month.

BATTERY SUPPLIERS RACE TO MARKET

For suppliers, GM's push to develop lithium-ion batteries is expected to open the door to a new market valued in billions of dollars over the next few years.

A subsidiary of Korea's LG Chem Ltd., one of two company's vying for the Volt battery contract, delivered the first battery packs to GM researchers late last year.

On a separate competitive track, a division of German auto parts supplier Continental AG is working to integrate batteries for GM's Volt that would be supplied by privately held Massachusetts-based A123 Systems.

The Continental-A123 group will supply the first battery packs to GM for testing later this month, Denise Gray, GM's director of hybrid engineering told Reuters.

GM's initial tests of the battery packs supplied by LG Chem subsidiary Compact Power had been positive in tests designed to simulate real driving conditions, Gray said.

"They're performing within the forecast parameter, and that's pretty good," she said.

Toyota is working to develop a rechargeable or plug-in version of its market-leading Prius hybrid but has said that the battery technology will not be ready for market by 2010.

Additional Reporting by Kevin Krolicki; Editing by Gary Hill and Carol Bishopric