General Motors Corp. will introduce new hybrid gasoline-electric autos next year to take sales from Toyota Motor Corp., the leader in the fuel-saving technology.
GM plans three hybrid-electric versions of its Saturn Vue sport-utility vehicle, including one that plugs into an outlet, as part of a new focus on “electrically driven” autos, GM Chief Executive Officer Rick Wagoner said in a speech today. Plug-in hybrids recharge when the vehicle isn’t in use and switch to gasoline when the batteries are drained.
Wagoner is working to counter Toyota’s 9-year head start in hybrid-electric vehicles. Hybrids use less fuel and produce less pollution by using a battery and electric motor to supplement a gasoline engine. They are gaining sales as governments crack down on pollution and buyers shift to fuel-sipping vehicles.
“For every automaker it’s now critical to have hybrid models,” said Eric Noble, president of consulting firm Car Lab in Orange, California. “People are demanding it now. Having hybrids is the cost of doing business.” Wagoner, speaking at the Los Angeles auto show, said vehicles that run on a mixture of 85 percent ethanol and 15 percent gasoline also are part of the Detroit automaker’s plan to reduce U.S. reliance on imported oil. Within three years, all versions of Hummer SUVs will offer an engine powered by so- called biofuels, Wagoner said today.
‘Business Necessity’ “We must – as a business necessity – develop alternative sources of propulsion, based on alternative sources of energy,” Wagoner said.
GM North American President Troy Clarke said the highway mileage for the new plug-in hybrid would be double the range of any current gasoline sport-utility vehicle. He didn’t dispute that would be 70 miles a gallon or more. He said the vehicle would have a range of more than 600 miles.
Wagoner’s environmental push comes as GM’s share of the U.S. market declines. U.S. sales are down 9.4 percent this year through October. Wagoner said 2007 may not be much better.
“We should expect more of the same, certainly for the first half of next year,” Wagoner said in an interview at the auto show. “Next year will start slower and we think it will come back toward the end of the year.” Hybrids aren’t going to be the company’s salvation, said Erich Merkle, an auto analyst at consulting firm IRN Inc. in Grand Rapids, Michigan.
PR Generator “It gets a lot of PR and a lot of media attention, but the whole market is not going over to hybrid,” Merkle said. “You may be looking at 500,000 to 600,000 units out of about 17.5 million units at the end of the decade.” Toyota’s Prius sedan, the world’s top-selling hybrid, has established the Japanese company’s reputation as the technological leader, said Brett Smith, assistant director of manufacturing, engineering and technology at the Center for Automotive Research in Ann Arbor, Michigan.
“The Prius is the Kleenex of the hybrid world; it’s still pretty much seen by buyers as the only truly legitimate hybrid,” Smith said. Toyota introduced the vehicle in 1997.
Hybrids such as the Prius use friction from braking and engine power to recharge the battery for the electric motor, which is used at start-up and lower speeds. The gasoline engine powers the vehicle at higher speeds. Toyota doesn’t sell a plug- in hybrid, such as the one GM plans.
GM’s GMC Yukon hybrid, the first product from a $1 billion program with Germany’s DaimlerChrysler AG and Bayerische Motoren Werke AG, will have 25 percent better fuel economy than the gasoline version, GM said. That hybrid goes on sale next year.
Other New Hybrids The Yukon gasoline model has a combined fuel economy of 13 to 18 miles per gallon, according to U.S. government figures. The Vue will also get a version of the system developed with Daimler and BMW, Wagoner said today.
The automaker today also said it will build a hybrid version of the new Saturn Aura sedan, which will have a 25 percent fuel economy improvement. GM has said it plans 11 new hybrids over the next several years.
IRN’s Merkle said GM’s push into hybrids is partly an “insurance policy.” You have to be dabbling in different technologies just in case gas prices shoot up. It creates a bit of a panic and you have to have something for consumers to turn to,” he said.
Surprise Confrontation At the conclusion of Wagoner’s speech today, two activists with the environmental group Jumpstart Ford, which lobbies automakers to boost fuel-efficiency, surprised the chief executive on stage and asked him to sign a pledge that GM would become the most fuel-efficient automaker by 2010.
Wagoner declined, saying “I’ll let my speech speak for me.” The two activists were escorted off the stage.
In the U.S., Toyota, GM, Ford Motor Co. and Honda Motor Co. sold a total of 211,613 hybrid cars and SUVs this year through October, a 23 percent increase from a year earlier, according to data compiled by Bloomberg. Toyota accounted for 75 percent of the sales, and its Prius was the best-selling hybrid, compared with less than 1 percent for GM.
GM also plans a fleet of more than 100 fuel-cell vehicles next year, part of a plan to have 1,000 of the models that use hydrogen for fuel and emit only water in service by 2010. Toyota has said it is less optimistic about the speed at which fuel- cell cars will be developed. Wagoner will show the first version of that car today in Los Angeles.
First Modern Electric Car Wagoner said the new models will build upon lessons learned with the EV1, the first modern electric car.
A decade ago, GM invested more than $1 billion on the EV-1. It abandoned the technology because the cars were expensive and needed frequent recharging. GM stopped leasing EV-1 models in 2001.
Toyota, which is on its way to passing GM in global vehicle sales, is spending a record 920 billion yen ($7.9 billion) on research and development this year. Toyota has said it plans to continue to expand its own hybrid lineup. GM spent $6.7 billion last year and hasn’t released a 2006 figure.
Shares of GM fell 47 cents, or 1.6 percent, to $29.50 at 4:02 p.m. in New York Stock Exchange composite trading. They have risen 52 percent this year, the biggest gain in the Dow Jones Industrial Average.
Wagoner also said today that issues are “narrowing” in labor talks at Delphi Corp., GM’s bankrupt former parts unit. “We continue to make progress,” he said in an interview. “We have had a good working relationship.”
