Episode 234 – U.S. Automakers Recovering, VW May Buy Ssangyong, GM Looks To Reduce Battery Costs
September 23rd, 2009 at 12:10pm
Runtime 6:52
Sure signs the American automakers are starting to recover. Volkswagen might buy Korean automaker Ssangyong Motors with help from its Chinese joint venture partner, SAIC. All that and more, plus a key way GM will be able to slash the cost of the batteries in the Chevy Volt.
Transcript and Story Links after the jump . . .
Here are today’s top headlines. Sure signs the American automakers are starting to recover. VW might buy a Korean car company. And how GM plans to drastically cut the cost of batteries for the Volt.
Up next, we’ll be back with the news behind the headlines.
This is Autoline Daily for Wednesday, September 23, 2009. And now, the news.
In a clear sign that the American car market is starting to heal, Reuters reports that General Motors is hiring back 3,000 workers and will raise production in North America next year by 45 percent. Ward’s reports that GMC is getting three times more orders for the new Terrain than it has the capacity to build (subscription required). It expects to sell 10,000 Terrains by the end of the year.
Meanwhile, Bloomberg reports that Ford expects sales in the American market to hit 11-million units this year, which means sales will have to be strong in the fourth quarter. Ford then expects sales to hit 12.5 million next year and 14.5 million by 2011. Funny, just two years ago we would have described those forecasts as disastrous, and now we can’t wait for them to hit that level.
It sure pays to have good friends in high places. The Associated Press reports that the U.S. Energy Department is providing Fisker with a loan of over half a billion dollars to make plug-in electric cars. Now, it could turn out that Fisker becomes a successful car company, but so far it has never put a car in production, is still a year away from putting any cars in production, and when they do build them, they’re going to build them in Finland. One of the major investors in Fisker is the private equity firm of Kleiner Perkins Caufield & Byers, which counts former vice president Al Gore as a partner.
Last week we reported that Volkswagen was going to add two brands to its portfolio. We thought it might be Suzuki, MAN or Ducati. Now Gasgoo.com, that one of those brands will be Korean automaker Ssangyong Motors. VW will acquire it with its Chinese joint venture partner, SAIC, which already holds a stake in Ssangyong. The acquisition can boost production for Volkswagen by 250,000 units.
Dassault and a joint venture between Dow and Kokam are teaming up to develop batteries for electric cars and hybrids. According to the AFP, last year the companies worked together to develop liquid-cooled lithium batteries and high-precision electronics.
Earlier today Ford unveiled a new small car in India and other Asia-Pacific markets. CEO Alan Mulally himself introduced the Figo, a compact hatchback that looks roughly the same size as a Fiesta, which is not surprising because the two cars share the same “underlying technology.” Italy was the inspiration for the car’s “kinetic” styling and its name. Figo is casual Italian for “cool.” Ford recently invested $500 million at its plant in India, which doubled its capacity to 200,000 units.
As the value of the dollar continues to fall, the U.S. becomes more attractive for exports. Ward’s reports that Nissan is exporting American-built engines to Japan (subscription required). This is the first time the company has ever done this. It’s assembling 5.6-liter V8s in Tennessee plant for the Infiniti QX56 SUV. In related news, Honda announced that it’s building Civic sedans in Indiana for export to Mexico and 22 other markets in Latin America and the Caribbean.
Coming up next, a key way GM will be able to slash the cost of the batteries in the Chevy Volt.
On Monday, as most of you know, we did a live webcast with Tom Stephens, the head of all product development at General Motors. We got a really good question from a viewer, an S. Peterson from Scottsdale Arizona, who asked about a 150,000 mile battery warranty that the California Air Resources Board is requiring of all plug-ins and extended-range EVs. Strangely, CARB does not require that hybrids or battery-electric cars have this kind of warranty. But to make sure that it can absolutely meet that 150,000 mile warranty, Tom Stephens told us they only use about half the capacity of the batteries in the Chevy Volt.
If I’m reading this right, what Tom Stephens is saying is that as they get more comfortable with meeting that 150,000 mile battery warranty and can work those batteries harder, they will quickly be able to cut the cost of them. In other words, if the Volt batteries now cost $10,000 but they only use half the capacity, then if they can get to 80 percent capacity in a few years, and use smaller batteries, they might be able to take $3,000 to $4,000 out of the cost.
Anyway, that’s it for today’s show. Thanks for watching, we’ll see you tomorrow.
Thanks to our Partners for embedding Autoline Daily on their websites: Autoblog, The Auto Channel, vLane, WardsAuto.com and WWJ Newsradio 950
Share
Embed
Permalink
Comments (9)
September 23rd, 2009 at 12:23 pm
I remember Nancy Gioia of Ford explaining on AAH that one way they got such good mileage figures on the Focus Hybrid was by extending the operating range of their batteries. It looks like GM is taking the same path.
One way this development can reduce battery costs could also be that a given size pack will be able to move heavier cars, and create more scale economies simply because of more applications.
ps, the name FIGO is pretty close to the ‘Italian casual’ FIGA. Now I know why Mulally has that silly grin.
September 23rd, 2009 at 12:27 pm
Ford invests $500 mil in a plant and gains 100,000 cars of production capacity.
US Taxpayer invests $500 mil in a startup and gets a Finnish car…..maybe.
Dear Lord get the Government out of the car business.
September 23rd, 2009 at 12:28 pm
“how GM plans to drastically cut the cost of batteries for the Volt”
gee, guess they heard us bitch … still not going to solve the problem, have to get people to buy it first … if comparing to LCD tv’s, the old CRT had to be discontinued to get people to buy, but the LCD’s also came down in cost very fast, and R&D was paid for by other apps, football stadiums, NYC … guess the Volt could be used for the post office first ?
September 23rd, 2009 at 1:28 pm
no … WE need to get the govt out of the car business – blowoutcongress.com
September 23rd, 2009 at 2:12 pm
If this were another era, this Fisker news would be a big scandal, but since we’re in the “anything goes”, and the American taxpayers get screwed more than the bunny ranch girls, nothing happens, nobody stands up and complains and the Finnish will soon have electric cars to export along with their cheese.
September 23rd, 2009 at 2:27 pm
ps. Isn’t Finland quite cold? Battery powered cars should do very well there, NOT!
September 23rd, 2009 at 4:12 pm
I learn so much from you, Mr. McElroy. You are the most knowledgeable automotive journalist in North America.
September 23rd, 2009 at 8:16 pm
Mr. McElroy,
When I wrote that email to you, about Volt warranties, I was fully aware of the extra attempts to “baby” the battery put into the Volt, to extend the battery life. There can be as many as 75 extra cells added to allow that “babying” and provide the over-sizing, Mr. Stephens described.
But I remember a Bob Lutz interview in which he said, that, IN ADDITION, GM was not at all certain that this oversizing and battery “babying” would be enough to meet the out-sized 150,000 mile warranty requirement.
So the accountants assumed they would need to totally replace a substantial proportion of the Volt batteries, for customers before 150,000 miles expired. So they were including, in addition, the cost of a second, new battery in their cost roll-up figures for the warranty. Naturally this shows up in the rumored high price of the VOLT.
There is a lot of price that can come out of even a Gen I VOLT, if the warranty mileage requirement were more reasonable.
For example, what is the engine warranty on any any car maker’s ICE autos. It can range from as low as 36,000 miles to 50,000 or 70,000 miles or even maybe 100,000 miles. You just can’t get a better engine warranty than that.
What is the warranty for the life of a Tesla power pack? Its rumored to be 50,000 or 5 years. On other EVs it can be as little as “What is a Warranty”?
The next time you interview Dr, Quack-Quack of CARB, why not ask Dr. McQuaken where this requirement came from, and why it is not applied equitably to every type of propulsion. Most of all ask:
“Why is CARB delaying and impeding the Electrification of Ground Transport”?
That is something they have stated as an aim of their existence, many times.
PS: When does CARB intend to “un-unify” regulations, and tighten diesel rules to meet actual ICE achievements? I.E. When do CARB and US, diesel regulations tighten to T2B2, or sub-T2B2 levels, (CARB sub-SULEV II), that new ICE autos now meet in practice, routinely?
Without doing that, California air quality will deteriorate over the hard won gains that have been made, when T2B5 diesels start appearing in quantity.
September 23rd, 2009 at 10:52 pm
“Dear Lord get the Government out of the car business.”
And if Dear Lord doesn’t do it, we should, in nOV 2010, throw all the corrupt bums auto illiterates out of the IUS Congress.. a good first step..
“still not going to solve the problem, have to get people to buy the stupid Volt first”
Absolutely. And since they are so few, it was really moronic of gm to make it cobalt-siczed and price it at $40k., if it made it into a big luxury vehicle people would pay $60k and 100k gladly, and it would sell just qas many, but At a PROFIT.
”
guess the Volt could be used for the post office first ?”
It should, and tghen it does not even need the gas engine, in most cities thre Mail trucks could easily do their job with electric (pure)A covered golf carts.