Boosting Chevy Volt Production No Easy Task

DETROIT – General Motors wants to crank-up output of the Chevrolet Volt extended-range electric vehicle at its Detroit-Hamtramck assembly plant to take advantage of an expected rise in gasoline prices, but the unique car’s supply chain may not be ready for primetime.

Micky Bly, GM’s executive director-electrical system, hybrids, electric vehicles and batteries, says doubling production of the Volt will not be as easy as turning a dial.

“You’re talking about five or six layers deep in the supply chain that has to be prepared for this,” he tells Ward’s in an interview here. Any production increase would reverberate from the assembly plant floor down to suppliers of tiny resisters used in circuit boards.

GM’s long-held target for Volt production is 15,000 units this year, with 5,000 cars earmarked for export. The auto maker has said it wants to build 45,000 Volts in 2012.

But GM Chairman and CEO Dan Akerson in recent weeks has spoken of wanting to more than double the 2-year total, as many experts anticipate sharply rising gas prices in the coming months.

“We don’t want to miss the opportunity,” he told journalists during the North American International Auto Show in Detroit last month.

Bly confirms GM would like to meet such an uptick in demand, but also delineates on the many factors that could stand in the way of higher volumes for the one-of-a-kind car.

“As you build more, you go from manual operations to automated operations,” he says, referring to supplier parts meticulously built by hand for early production models to those done by machine with the risk of slight variations.

GM “years away” from shrinking Volt’s Li-ion battery pack, electrification chief says.

“You go from one set of tools to two sets of tools,” Bly adds. “You can easily introduce quality issues if you are not diligent during the process. We could crank the knob today, but we would put risk into the quality of the product.”

GM also faces financial constraints to raising Volt production. Put simply, it is an expensive car to build with all of its advanced technology, especially the 16 kWh lithium-ion battery pack serving as the backbone of its propulsion system.

So the more Volts GM makes, the greater its investment in a program the auto maker admits will not be profitable in its first generation.

“We’re working hard right now on cost reduction,” Bly says. “More volume on the same set of tools (and) the cost goes down. You get scale. You get bulk (parts) purchases. The good news is you build one, you can build two, three, four…”

GM also continues to look for technical alternatives to the Volt’s current battery, evidenced by its recent worldwide licensing agreement to use patented composite cathode material from the U.S. Department of Energy’s Argonne National Laboratory to make Li-ion batteries.

Argonne’s material promises to extend the operating window of a Li-ion battery between charges, extend overall battery life, improve safety and allow charging at higher voltages, leading to higher energy-storage capacities.

A smaller battery would mean a less-costly battery, and that would help create the margins necessary for successful high-volume production of the Volt.

But to maintain the car’s current battery-power range of between 35-50 miles (56-80 km), Bly says GM remains “years away” from shrinking the battery.

“It’s not ready for primetime production yet,” he says of the Argonne chemistry. “I’ll say it’s at the end of R&D and moving into the production range. That’s why we want it.”

GM’s investment in Argonne reflects a new, post-bankruptcy strategy by the auto maker to target emerging technologies sooner, Bly says. “If we were the old GM, we would stay away from it, sit back and wait until it was fully developed and somebody else has it in production.

“Instead, we’ve gone proactive to get this license up front and start developing it up front, to be a leader with the introduction of the technology and take advantage of that faster than anyone else.”

Bly estimates the industry is about five years away from a major breakthrough in battery technology capable of delivering twice the energy density of today. But that’s better than two years ago, when the duration looked more like 10 years.

He notes the sudden influx of federal money meant to push the U.S. to President Obama’s goal of 1 million EVs on the road by 2015, as well as other global research and development initiatives in the space.

“Maybe four years away,” says Bly, who manages some 2,000 engineers around the world. “We’re placing our bets on some different technologies”

He cites as an example Ann Arbor, MI-based startup Sakti3, a developer of high-powered automotive batteries that received $4.2 million from GM and Itochu Technology last year. Sakti3 works with solid-state materials for Li-ion batteries that are showing promise.

Meanwhile, LG Chem, the Korean supplier for the Volt’s battery, is working on a new cathode material for Li-ion.

“It’s there,” Bly says of a pending breakthrough. “We’re starting to see the samples. We’re starting to see parts from these companies. So I think we’ve seen almost a 4-year pull-ahead.”

Spreading the Voltec propulsion system across more vehicles than the Volt and European-market twin, the Ampera, also would bring down production costs. All GM C-segment vehicles and smaller are candidates, Bly says without objecting to the idea of a Chevy Sonic EREV.

GM introduced the ’12 Sonic hatchback and sedan, a replacement to the Aveo B-segment car, at the Detroit show. Production begins early in the third quarter at the company’s Orion Twp. MI, assembly plant.

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