GM Nears Moment of Truth for Chevy Volt as Green Halo

chevy-volt-productionThe burden loaded onto General Motors’ extended-range electric Chevy Volt has been heavy since before the “New GM” — the company that emerged this summer after the federally managed bailout and bankruptcy process — was even born. In the financial viability plans that GM submitted to Congress in pursuit of federal aid, the company used the Volt to bolster its credentials as an innovative, green-minded company.

So will the Volt help boost GM’s image in high-growth market segments where according to a Reuters interview Chevrolet VP Brent Dewar says it’s currently lagging when it comes to young and environmentalist car buyers? That’s the kind of green halo effect GM hopes to see when the car launches in 2011, and the company now has a series of key benchmarks along the way to commercial production now coming in rapid fire: the 74th and final pre-production version of the sedan was just completed on Friday, GM and union officials plan to announce plans for Volt manufacturing in Flint, Mich. on Tuesday, and Volt vehicle line engineer director Tony Posawatz told the GM-Volt blog this week production of some 3,000 “validation” models will begin by March 2010.

GM is off to a somewhat rocky start this month, fielding reactions to a 90-day post-bailout progress report it delivered last week and a statement that it could build up to 2.8 million vehicles in North America in 2010 (around a million more than it plans to make in 2009. Several critics on Monday said, in so many words, that the company was showing “a little bit of shades of the old GM” by announcing overly optimistic production schedules. (One notable exception: Evan Newmark at the WSJ Deal Journal argued GM CEO Fritz Henderson should get a Nobel Peace Prize for his efforts toward “putting an executive team in place, overhauling GM’s culture and making cars that Americans actually want to buy.”)

We noted nearly a year ago that it would be very interesting to see how GM’s commitment to the Volt would look in coming months, given the company’s history with the EV1 and the expectation that the Volt, projected to cost more than $1 billion to develop, would not be profitable for the first few years.

Well the company has maintained high expectations for the Volt through the course of its bailout pitch, restructuring and executive-level shakeups. In fact the company is banking on new models under the Chevrolet nameplate (including the Volt, the 40 MPG Cruze compact and the automaker’s first minicar, the Spark) to help boost sales now that the company is ditching its Hummer, Subaru, Pontiac and Saturn brands. But in the two areas where Dewar tells Auto Observer he sees the highest growth potential — the youth and environmental segments — he says Chevrolet, at this point, is “not making the grade.”

Making big promises about new technology means running the risk of disappointing or disillusioning customers with a product that might have some real potential — but for GM, especially if it’s going to win over young people concerned about the environmental impact of driving, it’s better than risking a starring role in a remake of “Who Killed the Electric Car?” This time around, GM seems like it’s sticking to its guns.


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