Taking the charge out of Chevy’s Volt

A new study casts doubt on the benefits of the automaker’s much-hyped plug-in hybrid.

NEW YORK (Fortune) — Any hope that General Motors can survive without massive aid from the federal government was dashed last week when the automaker reported a huge fourth-quarter loss.

Now the Obama administration’s auto panel is determining whether the viability plan that GM submitted has any merit. But one of the main justifications GM offers for its long-term survival, “leadership in advanced propulsion technology,” has been shaken by a report from Carnegie Mellon University.


The study concludes that plug-in hybrids like the Chevy Volt – GM’s most publicized technology project – “are not cost effective in any scenario.” GM says the Volt can go 40 miles on a single charge. But a better choice, according to the report, is a car that goes less than 20 miles on a charge.

GM wound up 2008 on life support. After losing $43.3 billion in 2007, it reported another $16.8 billion in losses for 2008. That left cash on hand at the end of the year at just $14 billion. Since the automaker is burning cash at a rate of greater than $1 billion a month, it needs quick help from the government to stay in business until springtime.

But to get that money, GM has to convince Uncle Sam that it has a reasonable shot at survival. And that’s where the Volt comes in. It has been the subject of relentless promotion long before its scheduled debut at the end of 2010, and it gets prominent display in GM’s viability plan. The Volt has been referred to in the media as “the car that could save GM.”

But GM made some unusual decisions in designing the Volt. It decided that it wanted the car to go 40 miles on a single electrical charge because that was the maximum distance that it said most Americans travel on their daily commutes. Trouble is, configuring the car for all that electric driving means installing lots of big, heavy batteries.

The Carnegie Mellon study, conducted by engineers from three different departments, constructed computer simulation models to determine the impact of additional batteries on fuel consumption and cost and greenhouse gas emissions over a range of charging frequencies.

Fortune