General Motors (GM) pioneered the electric car in the 1990s, but you might think GM is out of the business completely these days. Tesla Motors (TSLA), not GM, tends to get credit for sparking interest in plug-in cars and for dominating news of innovative new electrics.
GM, however, says it’s making new breakthroughs in battery technology that will recharge its image as a leader in electric vehicles. Yahoo Finance recently caught up with GM’s product development chief, Mark Reuss, at an auto-industry event in upstate New York, where we asked about GM’s electric offerings. Reuss said GM is beginning to scale battery technology at a faster pace, which ought to lower costs, make electrics more affordable, and boost the distance they can go on a single charge. “It’s got a long runway,” Reuss says of EV technology in the video above. “We are lower [on cost] that many of our competitors, and we’ve arrived there quicker.”
The showcase for these breakthroughs will be the Chevy Bolt, due to go on sale late next year. The Bolt, unveiled as a concept car earlier this year, has been a target of some skepticism given that GM’s first mass-market plug-in, the 2011 Chevy Volt, missed sales targets even though GM hyped it with Trumpian zeal. Some critics also wonder why GM chose a name that rhymes with Volt and seems likely to confuse casual buyers.
The Bolt will hardly be the first small EV on the market. There’s already the Nissan Leaf, the Volkswagen e-Golf, the Kia Soul EV and several others in the Bolt’s category. What will be different about the Bolt, GM says, will be its range and price. Most EVs priced around $40,000 or less have a range under 100 miles before they need to be recharged. Tesla’s Model S sedan can go more than 200 miles, but it starts at $71,000 and can easily surpass $100,000 with options.
The Bolt will be the first EV with the range of a Tesla at a Chevrolet price. GM says it will go more than 200 miles on a single charge, with a starting price around $37,000. A $7,500 federal tax credit (also available to buyers of Teslas and most other EVs) would bring the net price under $30,000. Reuss says charging times ought to improve as well, falling significantly below the 45 minutes or so it now takes to refill a battery at a fast-charge station. The trick is improving price, range and charge time enough to convince ordinary families the Bolt is practical and affordable enough to serve as their primary car, instead of a second car only suitable for short trips.
GM recently disclosed that it has lowered the cost of producing lithium-ion batteries for cars to $145 per kilowatt-hour, a level that would be close to Tesla’s costs and lower than some other manufacturers’. By 2020 those costs could fall to $100 per kwh. This pace of development is faster than many experts predicted just a couple years ago, and could sharply boost the appeal of electrics. Reuss adds that the Bolt will have the advantage of being built purely as an EV (as all Teslas are), allowing GM to optimize regenerative braking (which helps charge the batteries with energy captured from the wheels) and the car’s overall efficiency as an electric. Most other EVs on the market are still “donor architectures” that were originally gas-powered models.
Tesla will be targeting many of the same buyers as GM when it launches its Model 3, which is supposed to be priced at $40,000 or less, with the same 200-mile-plus range as other Teslas. That car is due in 2017, though Tesla’s model launches tend to run behind schedule. The Model 3 is crucial to Tesla’s success because it will be the automaker’s first high-volume car aimed at a broader customer base than rich folks who can afford a few $100,000 vehicles. If the Model 3 is a hit, Tesla ought to become profitable around 2020 or so. A stumble, however, could jeopardize the whole company.
By the time the Model 3 debuts, the Chevy Bolt should already be on the road, along with a dozen or more EVs in the same price range. Tesla is clearly an innovator to be reckoned with, and the Model 3 may have some wow features its competitors lack. Still, Tesla has never taken on the big automakers in the mass-market segments where they’re strongest, or competed in such a crowded field. The more mainstream electrics become, the more winners there will be.