GM Wants Robust, Timely Consumer Credits for Plug-ins

Special Coverage

Management Briefing Seminars

TRAVERSE CITY, MI – General Motors Corp. urges lawmakers in Washington to think about consumers’ pocketbooks as they move closer to drafting climate-change policy.

“Energize consumers about advanced technologies by providing tax credits and other incentives for people who purchase plug-in, extended-range electric and fuel-cell vehicles,” says Beth Lowery, vice president-Environment, Energy and Safety Policy at General Motors Corp.

Lowery’s remarks come during a speech at the Management Briefing Seminars here and mark some of GM’s boldest requests of Washington since the passage of last year’s corporate average fuel economy increases.

Both houses of Congress are pondering versions of consumer credits for plug-in electric vehicles, Lowery says, but Americans need the most robust consumer-credit incentives possible and the certainty they will be available by the time the vehicles enter the market.

GM expects to bring its Chevrolet Volt plug-in hybrid-electric vehicle to market by the end of 2010 and suggests a similar timetable for the debut of a Saturn Vue PHEV.

“Getting a meaningful consumer credit for plug-in electric vehicles is a must,” she adds. “It needs substance to make a real difference.”

Meaningful consumer credits for plug-in electric vehicles a must, says GM executive Beth Lowery.

Consumer credits aside, Lowery says, cars such as the Chevy Volt would trim the average American’s per-mile fuel cost to $0.02, or as little as $0.01 when recharging off-peak, from $0.14 today with a vehicle that delivers roughly 30 mpg (8 L/100 km). Over an entire year, it would translate into a savings of $1,700.

“So it’s not going to be difficult for consumers to see the advantage,” she says.

Meanwhile, plug-ins demand “a candid conversation” between consumers, government, utilities and the auto industry about what will be required to bring them to market in volume.

“We need further development of advanced batteries, the power grid and power-generation technologies to develop a large market for electrically driven vehicles,” Lowery says. “That’s how we’ll ultimately make a sizable dent (in) our petroleum dependency.”

As such, GM last month formed a coalition with utilities and the Electric Power Research Institute to prepare PHEVs for commercialization in North America.

But Lowery’s remarks also seemed to reflect a broader industry effort in recent months to demonstrate the product investments and advanced-technology breakthroughs auto makers have delivered on the fuel-efficiency front, as politicians push them to higher CAFE numbers sooner.

For instance, presumptive presidential candidates John McCain and Barack Obama have expressed support for California’s strict fuel-economy proposals and want greater fleet fuel economy from auto makers than outlined in last year’s CAFE changes.

Lowery summarizes steps auto makers have taken in recent months, such as developing more new technologies like the Volt’s electric-drive system and shifting product plans to meet a dramatic consumer flight from fuel-thirsty trucks to more efficient passenger cars and cross/utility vehicles in the face of tough economic times and greater global competition.

In addition to enacting a national greenhouse-gas policy that features consumer credit for electric-vehicle purchases and “emphasizes the use of advanced technologies and low-carbon fuels that span the entire economy on a market-driven basis,” Lowery says the government should “undertake consistent steps to promote and develop diversity in U.S. energy supplies.”

Lowery says GM would like Washington to establish clear, attainable regulations and one set of federal requirements. It also wants the government to help revitalize manufacturing by providing auto makers investment tax credits for reinvestment in the U.S. or provide funding support to convert facilities to produce advanced technology vehicles and components; accelerate the use of low-carbon fuels by providing funding to expand ethanol infrastructure, and develop hydrogen infrastructure.

GM, she notes, plans to build a new compact car called the Chevy Cruze in the U.S. in 2010 to replace the existing Chevy Cobalt that will offer a 9-mpg (26 L/100 km) improvement in fuel economy over the Cobalt. The auto maker also has helped place 300 E85 pumps in 15 states over the last three years and will make 50% of its fleet flex-fuel capable by 2012.

GM intends to further increase E85 availability through a recently announced partnership with an association of state governors.

In addition, the auto maker’s hydrogen fuel-cell test fleet, part of a program called “Project Driveway” that allows everyday people to drive the cars for several months, will expand to Germany within a year. Similar programs in China, Korea and Japan will follow, Lowery says.

Exchanging the internal combustion engine for electric propulsion; petroleum for electricity; and mechanical systems for electrical; makes good business sense for GM, she adds.

“It’s the right thing to do, and it’s what our consumers are asking for. But getting there will require a collaborative effort on a scale that has never been seen before in this industry and all of us have a role to play.”