The U.S. auto makerhas invested millions of dollars in EV battery research, including startup companies such as Envia Systems seen as close to major improvements in range and affordability.
GM sees Chevy Spark EV breaking ice.
SAUSALITO, CA – The first auto maker to break the 100-mile (161-km) range on batteries for electrified vehicles will dominate a market segment where costs are keeping a lid on sales volumes,product-development chief Mary Barra says.
“Customers are very rational. They look at their opportunity from a cost-benefit perspective,” Barra tells WardsAuto at the GM Electrification Experience here, where the auto maker unveils its Chevrolet Spark electric vehicle.
Auto makers worldwide intend to make EVs an important part of their go-to-market strategy because of ever-tightening global fuel-economy and carbon-dioxide emissions standards. Rising fuel prices and growing environmental sensibilities among consumers also are pulling the technology into the market.
But the cost of battery technology powering electrified cars makes them a tough sell to most buyers, because it adds thousands of dollars to the sticker price.
The Chevrolet Volt’s lithium-ion battery powering it to roughly 40 miles (64 km) of range adds between $8,000 and $10,000 to the cost of the $40,000 compact car. The Volt, launched in 2011, was expected to sell 10,000 units its first year in the U.S. market, but did not reach that point until earlier this year.
GM has not announced range or pricing for the Spark EV, which it expects will travel distances at the upper range of its competition. Rivals such as theFit EV and i have ranges of 82 and 62 miles (131 km and 100 km), respectively, according to U.S. Environmental Protection Agency estimates.
As a result, EV sales have been tepid. According to WardsAuto data, auto makers in the U.S. delivered 8,569 units through October for a 0.07% share of the market. Plug-in hybrids sold 29,050 for 0.24% share.
Finding an acceptable compromise between range and affordability continues to elude auto makers. Experts remain divided on when the next big breakthrough on battery range and affordability might come. Some say five years, others say 10 years and some say never.
“Obviously, the first OEM to offer those types of solutions will have a real advantage,” Barra says, speaking via satellite from Detroit.
Barra says GM continues to work on a variety of technologies that address the dilemma. It has hired hundreds of engineers in recent years to perform battery research and spent more than $800 million on facilities. The auto maker also has invested millions of dollars in startup companies to improve its odds of making advances.
GM, for example, invested $7 million last year in Envia Systems, a California-based battery researcher. The auto maker said at the time that Envia was close to “major improvements” in range and affordability, and a breakthrough announcement still is anticipated.
Barra tells journalists here the auto maker expects to sell 500,000 vehicles annually worldwide by 2017 with some degree of electrification, including its eAssist mild-hybrid technology that so far this year has delivered 26,876 units in the U.S.
GM also remains committed to hydrogen fuel-cell technology, a zero-emissions solution auto makers have spent years researching and promised by the end of the last decade. Barra says the technology continues to face the same cost and infrastructure hurdles now facing EV adoption.