On Monday, March 12, General Motors, working to introduce two
production PHEVs, assembled its top team of engineers and battery
partners to explain the issues and challenges it faces. This is part
of what Vice Chairman Bob Lutz has described as opening its processes
to media scrutiny <http://www.calcars.org/calcars-news/709.html>. In
this way, GM hopes to regain goodwill lost in the past over the EV1,
and build credibility for its assertions that it's moving as quickly
as possible.

CalCars and others have commended GM for recognizing the benefits of
such transparency. And it deserves praise for being willing to
respond to tough questions--which it faced today! At the start, GM
pointed to the 114 registered invitees in the room and the online
session as indicative of the level of interest in GM's efforts. (Most
were from traditional media; others included business analysts and a
few advocates from CalCars.org, Plug In America and other organizations.)

The results were an informative briefing, a very useful window into
the thinking of these committed executives and engineers -- and an
opening created when journalists asked the same questions PHEV
advocates have been asking for months. (See our "16 Points about GM's
PHEVs" at <http://www.calcars.org/gm-phevs-faq.html>.) We hope
you'll have the patience to read through this long but very important
report, which starts with who/what, etc. It then goes on to the new
opportunity. Finally, we give our summary response to the most
provocative topic.


BRIEFING REPORT
Below is our report (from rough handwritten notes, not a transcript.).
The event was called an "Advanced Battery Technology Briefing". At
the end, reporters got a tour of GM's lab, where 30 chemists and
engineers, consolidated from several projects, are working on the program.
* GM speakers included Beth Lowery, Vice President for Energy and
Environment; Denise Gray, Director of Hybrid Energy Storage Systems;
Joe LoGrasso, Energy Group Manager; and Volt Chief Engineer Nick Zielinski.
* From the Johnson Controls-SAFT consortium, we heard from CEO Mary
Ann Wright (former chief of Ford's hybrid program)
*From the second joint venture, we heard from A123 General Manager Ed
Bednarcik and Cobasys VP Systems and Engineering Scott Lindholm.

First, the GM speakers presented all the issues involved in designing
and validating batteries at the cell, pack and vehicle level, in
terms of lifetime, cost and safety/robustness. Then the battery
companies focused on the same issues from their perspective as well
as manufacturing challenges. This was quite informative, and designed
to communicate that there was a lot of work to do, but no
breakthroughs were required: it's an "evolution not revolution,"


QUESTIONS
We were delighted that many of the themes we've been raising were
echoed by the journalists in 13 questions.

* First, Paul Eisenstein (The Car Connection) asked how much
competitive pressure the company felt, in particular given Toyota's
statements that it intends to be first. Denise Gray said GM will
follow its plans, do the job right, and GM wants to be successful and be first.

* Second Mike Spector (The Wall Street Journal) pointed to the high
expectations, especially on Capitol Hill, and raised the potential of
the publicity about the Volt backfiring from legislators who don't
appreciate how long it will take. GM's Beth Lowery explained that
this was why the want to take the media "on the journey with us" so
they understand the complexities, challenges and timetables.

OTHER QUESTIONS FOLLOWED
A reporter asked why it had taken GM so long to get involved in
lithium-ion batteries, pointing to Tesla's progress with its lithium
battery packs; the company emphasized that it has been working on
batteries since the early 90s. Another asked about lithium supplies;
A123 said it was confident about availability for at least 10-20
years. Another asked about battery development, and GM emphasized
that it took a long time to evaluate a battery's cycle life and
calendar life to see if it could meet a 10-year/150,000 mile
standard. When asked about battery recycling, GM said it was
confident about systems to recpture lithium and create a recycling
market. In response to questions about credibility and speed, battery
makers and GM both pointed out how important it was to get things
right -- because the media write about things that fail, not things
that work! GM emphasized that it had chosen JCI-SAFT because of its
"early history" on PHEVs (most recently, the DaimlerChryser Sprint
program) and A123 because it's a technology "pioneer." To a fuel cell
industry reporter's question whether this program meant that hydrogen
would be fading into oblivion, GM said it "in no way diminishes" its
commitment to hydrogen, pointing to its Driveway fleet program and
other projects. And in response to Plug In America's Paul Scott, GM
was reluctant to give target costs for its battery packs, though
$100/kW was mentioned as a long-term goal.


* MILLION-DOLLAR QUESTIONS
Then Matthew Wald (The New York Times) asked two key questions: Why
expect the batteries to last the lifetime of the vehicle? And why not
explore secondary uses for batteries once they no longer can accept a
full charge? Nick Zielinski replied that the company was setting
aggressive targets for durability, and would not want batteries to be
seen as a "maintenance part." Wald suggested this approach might lead
to setting goals that would be hard to meet and would slow PHEVs'
reaching the market. GM described a battery that lasts the lifetime
of the vehicle as its firm goal.

After a few additional questions, GM was gracious enough to recognize
me. I complimented Lutz and Lowery for the open process, then
followed up on Wald's questions. I asked Lowery if they had
considered the possibility that legislators, government regulators
and fleet owners could come together to support GM's production of
PHEVs with a 75,000 mile/5 year warranty, supplanted by third-party
warranties on the first thousands of vehicles, thereby eliminating
risk factors to buyers and sellers, and enabling them to get cars out
on the road sooner.

Lowery agreed that demonstration fleets were important and emphasized
that GM was "in the business of getting things right." She said the
third-party warranty was an "interesting concept," but she said it
would be difficult to put in place. When I asked point-blank if they
had discussed with any government officials either warranties or
easing the regulatory requirements for 150,000 miles/10 years
(California and 10 states) or 100,000 miles/8 years (federal
requirements for other states), she said no. (We and others sure
have!) She did re-iterate that the company was very interested in
consumer incentives and other government programs.


INSTITUTIONS THAT WANT PHEVS NOW HAVE A CHALLENGE.
Even if the car-makers don't ask, the key players can step up with answers.
* The California Air Resources Board and other agencies can come back
with offers to help smooth the path to commercialization by exempting
the first PHEVs from lifetime requirements -- for the battery only;
the rest of the emissions system would still be covered.
* To reduce the cost of warranties, utilities can evaluate the
batteries in current conversions and those expected to go in the Vue
and Volt and estimate what they might pay for "80% good" batteries
that could go into the basement of downtown office buildings to be
charged at night and discharged during the day.
* Federal and state legislators can transform proposed incentives for
PHEVs into payments for battery warranties -- and swiftly pass the
Federal DRIVE Act and send it to the President.


A SUMMARY: CALCARS' PERSPECTIVE
In creating a development program that requires a 150,000-mile
battery now, GM may be making the perfect the enemy of the good.
Validating the full lifetime of batteries takes a long time -- it
could be the challenge that delays the introduction of a vehicle that
might otherwise be ready sooner. GM can't imagine the first PHEV
batteries as a "maintenance part." Why not? Tires and other major
components get replaced -- and they're warranted separately from cars.

All PHEV advocates want car-makers to be sure to get everything right
on safety, durability and performance. Then, for large demonstration
fleets, CalCars has proposed starting with "good enough" 75,000-mile
batteries plus a third-party warranty to remove the risk factors from
both buyers and sellers. And planners at electric utilities have said
they would consider buying used batteries for secondary stationery
applications.

If GM and other car-makers can partner with government regulators,
legislators and utilities, we'll be we're on our way to more rapid
commercialization of PHEVs. The first large demonstration fleets will
give car-makers market research from drivers and help them "get PHEVs
right" by improving other aspects of the car. And while they get
ready for volume production, with the rapid changes in the energy
storage industry, they may have even better battery choices in as
little as two years.

(See the next posting or
<<http://blogs.edmunds.com/.ee99159>http://blogs.edmunds.com/.ee99159>
for Edmunds'com's perspective on this event.)

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Felix Kramer fkramer@...
Founder California Cars Initiative
http://www.calcars.org
http://www.calcars.org/news-archive.html
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