A few days ago, we posted "turn-around" comments from GM Vice
Chairman Bob Lutz on PHEVs
<http://www.calcars.org/calcars-news/529.html>. In an extraordinary
video conversation with Lou Ann Hammond, CEO and editor-in-chief of
carlist.com, Lutz touts plug-in hybrid cars over both hydrogen and
E-85 as a US alternative vehicle strategy. (Thanks again to volunteer
Michael Bender for the quick transcription, and for his
ever-increasing help on the website.) You can watch the eight minutes
at <http://www.carlist.com/video/bob_lutz>; in the excerpts below,
the PHEVs are at the very end.

[Bob Lutz:] Hello, I'm Bob Lutz, Vice President, GM, for Product Development.

[Lou Ann Hammond:] Bob, tell me what took you guys so long to get to
the hybrid market? Because you did have hybrids in buses.

[Lutz:] Yeah we had hybrids. In fact, General Motors has had hybrid
technology ever since 1968. I can show you a book called "Parade for
Progress" which was done in 1968 which shows GM hybrids. What took us
so long is that we looked at it from a business standpoint, and we
said, 'This is going to be very expensive; early hybrid systems are
going to cost a ton of money, we won't recover it from the market,
and therefore we can't take this to our board of directors.' and it
was decided not to do it. Toyota took the opposite approach: they
said 'Well, yes, we'll lose money on this, but -- it's going to be a
tremendous image and environmental play' and when we look back, they
were right.

We spend three billion dollars a year on advertising in the United
States, and we don't get anywhere near, in terms of image benefit...
we don't get a tenth of what Toyota got on whatever small amount of
money that they lost on the hybrid. So, that was a... I would say
tactical and possibly even strategic mistake, because if we had gone
when we wanted to go, we would have beaten Toyota to market with the hybrid.

[Hammond:] Gas prices are coming down again, and people are starting
to talk about the fact that hybrids might be losing their luxury...

[Lutz:] Their luster? I don't think they'll lose their luster no
matter what gasoline prices are because I think people are conscious
of the environmental impact. And even at $2.00 a gallon -- even if it
goes to $1.80 a gallon again, I think the American public is
permanently sensitized now to the volatility of gasoline prices, and
they say, 'well, it could be a dollar eighty now, but who knows? Next
year it could be $2.80 or $3.80.'

So, I think there's a bone-deep awareness in the American public now
that $1.20 gasoline while the rest of the world is paying five, six
dollars is not some God-given right because the maker decided to
bestow cheap gasoline on the American public.

[Hammond:] You've got a two-mode hybrid that you're coming out with
-- are you still going to be a forceful with the two-mode, even
though gas prices are coming down?

[Lutz:] Absolutely. I mean, we will produce as many as the market
wants, but we will have it available in the Tahoe, the Yukon, the
Escalade... So, any of our large, full-size sport utilities. And
because that system is scalable, it is capable of going into our
largest trucks, which would then go from about 21-22 miles per gallon
to about 25.5-26, and since those are the vehicles that some
Americans really need, saving that amount of fuel on those big things
actually is more beneficial to the environment and petroleum reserves
than saving the same percentage on a small vehicle that doesn't use
very much anyway.

[Hammond:] GM's always been known within the industry as having great
technology, but being late to the market with it. You now have a
hydrogen vehicle...

[We've eliminated a middle section where Lutz, in talking about what
he now calls "electric-fuel-cell vehicles," expresses disappointment
at the slow pace of federal and state support for development of the
hydrogen infrastructure, criticizes the amount of influence of the
oil industry on federal policy, and suggests that "the fuel cell
dream" may be "realized first" in China.]

[Hammond:] You know, you bring up a good point, because globally, you
are thought the world of -- China loves Buick, Brazil -- you
practically brought back the ethanol ability in Brazil with the
flex-fuel vehicles -- what are you going to do now with the USA,
because that's your biggest tackle?

[Lutz:] Well, you know... the only infrastructure that's really in
place, other than gasoline stations in the US, is -- because, even
E85, we wish that would roll out a lot faster -- but, the only
infrastructure that's really in place, besides oil, is electricity
distribution. So that tells you that if you really want to go for any
alternative vehicle -- now that battery technology is so much better
-- perhaps we are... let me put it this way: as a technology group,
we are very interested in the plug-in hybrid technology.

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Felix Kramer fkramer@...
Founder California Cars Initiative
http://www.calcars.org
http://www.calcars.org/news-index.html
http://www.hybridcars.com/blogs/power
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