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GM IPO: 12 Green Things to Know from the S-1

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General Motors’ (s GM) long-awaited S-1 filing today spotlights the automaker’s work on the upcoming Chevy Volt, its OnStar communication system and its partnership with Google as evidence of its commitment to launching competitive next-generation technologies. It also contains tidbits about plans for boosting fuel efficiency and investing in hydrogen fuel cell technology, and nagging uncertainty about a request for $14.4 billion from a federal loan program that has doled out awards to Fisker Automotive, Tesla Motors, Nissan and Ford. Here’s a dozen things to know from GM’s S-1 related to greener vehicles and Car 2.0:

  1. Wielding MPGs in the battle for market share: The automaker writes that improving a negative public perception of its products — in particular when it comes to fuel efficiency — will be critical to the company’s long-term profitability. The company plans to use cylinder deactivation, direct injection, variable valve timing, turbo-charging with engine downsizing and six-speed transmissions, among other technologies, to boost MPGs in its internal combustion engine vehicles.
  2. Technology investment plans (and potential delays): GM says it plans to, “invest heavily in alternative fuel and advanced propulsion technologies between 2010 and 2012, largely to support our planned expansion of hybrid and electric vehicles, consistent with our announced objective of being recognized as the industry leader in fuel efficiency.” But that’s not all: GM aims to make investments that “support energy diversity,” including petroleum, biofuels, hydrogen and electricity, as well as energy efficiency, safety, telematics and “infotainment.”
  3. Hydrogen fuel cells still on the table: GM has high hopes for hydrogen fuel cells and advanced battery technology, but the company acknowledges that the tech remains in early, high-risk stages of development, noting that they’re “not yet commercially practical and depend on significant future technological advances by us and by suppliers.” Those advances are far from guaranteed. In fact, GM writes, there can be no assurance that hoped-for breakthroughs “will occur in a timely or feasible way, that the funds that we have budgeted for these purposes will be adequate, or that we will be able to establish our right to these technologies.”
  4. Uncertainty surrounding the Chevy Volt: GM reminds prospective investors in its S-1 that while it intends to produce the plug-in Chevy Volt by November 2010, the car “requires battery technology that has not yet proven to be commercially viable.”
  5. Environment and energy concerns driving regulation: Five main factors are driving government regulation in the U.S. and Europe, writes GM, most of them related to growing pressure for greener cars, including: “concerns about the environment (including greenhouse gas emissions), vehicle safety, fuel economy, and energy security.” As the automaker explains, regulatory requirements in these areas could play a big role in GM’s “plans for global product development and may result in substantial costs, including civil penalties. They may also result in limits on the types of vehicles we sell and where we sell them, which can affect revenue.”
  6. Wake up and smell the CAFE standards: In order to meet tightening CAFE (Corporate Average Fuel Economy) standards set for automakers through the 2016 model year, GM expects that it will have to “sell a significant volume of hybrid or electrically powered vehicles throughout the U.S., as well as implement new technologies for conventional internal combustion engines, all at increased cost levels.” It’s possible, according to GM, that it will lose money on cars that use these technologies, and there’s no guarantee that customers will actually step up to buy them in large enough numbers for GM to meet the regulatory requirements.
  7. That pesky still-pending DOE loan: GM has been pursuing loans from the Department of Energy’s Advanced Technology Vehicles Manufacturing program since before it filed for bankruptcy protection. And while the agency has awarded $8.4 billion in loans (on a conditional basis) to Ford (s F), Nissan (s NSANY), Fisker Automotive, Tesla Motors (s TSLA) and parts maker Tenneco Inc. through the program, GM is still waiting. The automaker submitted a consolidated application (wrapping three old GM applications, one Delphi request, and a new GM application into one) for $14.4 billion back in October 2009. Now, 10 months later, GM says “Ongoing product portfolio updates and project modifications requested from the DOE have the potential to reduce the maximum loan amount.” Noting the $8.4 billion in awards announced for some of its competitors, GM acknowledges that it may not “qualify for any remaining loans or receive any such loans even if we qualify.”
  8. Eye on oil prices: “Any future increases in the price of oil in the U.S. or in our other markets or any sustained shortage of oil,” GM warns, “could further weaken the demand for [higher margin SUVs and full-size pick-up trucks], which could reduce our market share in affected markets, decrease profitability, and have a material adverse effect on our business.”
  9. High hopes for new tech: Among the eight areas of competitive strength GM lists in its S-1 is a “commitment to new technologies,” as exemplified by the Chevy Volt (touted throughout the S-1) and the OnStar system. But the company’s just getting started in these areas. OnStar, GM writes, “creates a connection to the customer and a platform for future infotainment initiatives.” The automaker believes its OnStar service and “partnerships with companies such as Google,” (GM is tapping Google Maps for OnStar and working on an app for phones running on Google’s Android operating system) places it in a strong “position to deliver safety, security, navigation and connectivity systems and features.”
  10. Research priorities: Our top priority for research is to continue to develop and advance our alternative propulsion strategy, as energy diversity and environmental leadership are critical elements of our overall business strategy. Our objective is to be the recognized industry leader in fuel efficiency through the development of a wide variety of technologies to reduce petroleum consumption……We plan to invest heavily between 2011 and 2012 to support the expansion of our electrified vehicle offerings and in-house development and manufacturing capabilities of the enabling technologies-advanced batteries, electric motors and power control systems.
  11. Biofuel bets: GM aims to make at least half of the vehicles produced for the U.S. market capable of running on E85 ethanol by 2012. The company says it’s currently “focused on promoting sustainable biofuels derived from non-food sources, such as agricultural, forestry and municipal waste,” and continues to work with cellulosic ethanol developers Coskata and Mascoma.
  12. OnStar in court: OnStar, which is a wholly owned subsidiary of GM (and a key part of the automaker’s plan for making the Volt like a cool electronic gadget), is party to no less than 20 putative class action suits filed in various states, “alleging various breaches of contract, misrepresentation and unfair trade practices.” As recently as August 2, plaintiffs filed a motion to add GM as an additional defendant, according to the S-1. As GM explains, “The litigation arises out of the discontinuation by OnStar of services to vehicles equipped with analog hardware.” When the cellular carriers providing communication service for OnStar ended analog service in early 2008, the company says it could no longer provide services to those vehicles.

Image courtesy of General Motors

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