If there's a remedy to the mammoth $39 billion loss General Motors logged in the third quarter, it's sitting in a laboratory in suburban Detroit, hooked up to computers like an ICU patient. Over the past few weeks, executives have been streaming into the lab to look at the contraption—which may represent GM's best chance to leapfrog competitors like Toyota and reassert its long-lost lead in the auto industry. It might even mark the start of a new automotive era—one that's not reliant on gasoline.
The unlikely attraction is a battery and, at roughly 300 pounds, a mighty big one. GM has pledged that just two years from now, a battery like it will power the Chevy Volt, a breakthrough car consumers will be able to charge at home like an iPod. If it works, the Volt and its potent battery could speed the replacement of traditional gas-powered engines with radical alternatives that use less fossil fuel and emit far less pollution. And if it flops, GM could end up a perennial laggard behind Toyota, which is poised to eclipse GM as the world's biggest automaker. "We now have showdown at the OK Corral," declares GM Vice Chairman Bob Lutz. "This is about recapturing General Motors' technological leadership."
Charged up. That starts with an unproven battery pack that engineers originally dubbed the "offensive lineman," for its huge size and weight. When GM kicked off the project last January, it announced that the Volt would be able to travel 40 miles—far enough to cover most people's daily commute—on a single charge, before a small gas engine kicked in. There was just one problem: Nobody had ever produced a battery that could power a car that distance, or last for the life of a car, at a reasonable cost. And critics quickly noted that GM had already blown $1 billion in the 1990s trying to build an electric vehicle that was too expensive, took too long to charge, and had no backup engine.
But the Volt—and the times—are different, GM insists. Costly gasoline and turmoil in the Middle East have raised the payoff for companies that come up with petroleum alternatives. And advanced lithium ion batteries—the kind that power laptops and BlackBerrys—outperform the nickel metal hydride batteries in hybrids like the Toyota Prius.
GM earlier this year contracted with two battery suppliers to offer prototypes. The first arrived at GM's battery lab on Halloween; others are due soon. Several months of tests will simulate 150,000 miles' worth of driving and all the unforeseen things that can happen in a car. But GM engineers think they may have a game-changer. "It's a breakthrough," says Mark Verbrugge, a top GM scientist. Still, he adds, "it will be remarkable if we pull this off by 2010."
With tighter deadlines than any GM program in 20 years, the huge automaker has streamlined procedures. "Nobody has to prepare papers prior to meetings," Lutz says. "We make decisions on the spot." When there are conflicts, engineers get in to see Lutz and other decision makers within days.
The car that's emerging from this automotive Manhattan Project will be both familiar and futuristic. The Volt will look like a compact, four-door hatchback. But its underpinnings will be novel, since the whole car is being built around the huge T-shaped battery. Performance, say GM engineers, will be startling. "Takeoff will feel exceptional," says Tony Posawatz, the Volt's program manager. That's because at low speeds the battery-powered electric motor will produce more torque than most gas engines—and be quieter, too. Fuel economy could be well over 100 miles per gallon. And charging the car from a power outlet would cost about 80 percent less than filling it with gas at $3 per gallon.
GM has made bold predictions before—with poor results. Company executives lost credibility by insisting that hybrids were a passing fad, for instance. But this time, outside experts are impressed. "GM is not blowing smoke," says David Cole, chairman of the nonprofit Center for Automotive Research. "The other guys are scared to death."
Plenty could still go wrong. Developing a new technology and a new vehicle at the same time leaves little margin for error, since the car's specifications need to be locked in before some components are even fully designed. Even if the prototype batteries turn out to be flawless, mass-production factories are still in the blueprint phase. The batteries will probably be too expensive to hit the Volt's target price of about $30,000, which means GM will have to subsidize the units on at least 60,000 cars per year—its initial sales goal—or perhaps ask consumers to lease the battery and pay for it monthly. And other new technologies, like hydrogen fuel cells or cellulosic ethanol, could end up cheaper or more reliable.
Then there is Toyota, with a proven fleet of hybrids and a formidable R&D effort funded by profits that hit $14 billion in the past fiscal year. Instead of lithium, Toyota seems to be pursuing projects like a new plug-in Prius that can be charged through a wall outlet and travel up to 7 miles on its nickel batteries before the gas engine takes over. Unlike GM, however, Toyota conducts its own battery research, usually staying mum about any killer apps—so a surprise is possible. "Nobody should ever, ever underestimate what we're doing," says Bill Reinert, a Toyota engineer who oversees advanced technology. That's a lesson GM learned once—and doesn't want to repeat.