Will the Chevy Volt save the world?

Please! It isn’t even enough to save General Motors.

NEW YORK (Fortune) — Given the prolonged drum roll of publicity that accompanied the unveiling of the Chevrolet Volt electric vehicle last week, it isn’t surprising that any number of onlookers got caught up in the enthusiasm. When people begin referring to it as a “game changer” and a “paradigm shift,” it’s time to inject a bracing dose of reality.

To put the Volt in perspective, it is an expensive, low-volume automobile that will have no visible impact on GM’s market share, CAFE average or profitability. One cynic calls it “a Viper for tree huggers.”


Start with the sales numbers. The best available estimates are that the Volt will sell for around $40,000 and that production volume will be in the “tens of thousands.” That gives it more in common with a Cadillac sedan than a Chevy Cobalt. Nor will the Volt make any money. GM (GM, Fortune 500) executives concede that, given the cost of development, the first generation of Volt vehicles will not be profitable. This project isn’t going to turn GM into a money spinner.

Second, although GM revealed what the Volt will look like last week, the car is far from ready for production. Developing the advanced lithium-ion batteries required to power the Volt and getting them ready for production is an enormous undertaking. No one has ever built auto-sized batteries of this description in significant quantities. Worse, GM has yet to sign a contract with whomever it is will supply the batteries. GM has promised to get the Volt into showrooms by November 2010, but it could be many months after that before significant numbers are available.

Fortune