Affordable Electric Vehicles Like Volt The Focus For GM

By Ben Klayman

WARREN, Michigan (Reuters) – General Motors Co’s electric vehicle program will continue to focus on affordable electric cars for the mainstream public even though it plans to launch a luxury Cadillac-badged companion to its Chevrolet Volt, a top executive said on Monday.

While the Cadillac ELR coupe will debut late this year and bring GM more closely into competition with electric carmaker Tesla Motors Inc <TSLA.O>, GM Vice President for Global Product Programs Doug Parks said the automaker wants to improve the performance and lower the costs of the Volt and its future siblings.

“We’re trying to put more stress on getting this right for the lower-priced vehicles,” he told reporters at the company’s global battery systems laboratory outside Detroit.

GM sells the Volt for about $35,000 before federal tax credits, compared with $71,000 for Tesla’s Model S electric car. So far this year, Tesla has sold almost as many of its luxury cars as GM has sold Volts. Parks said GM officials “haven’t simplified the message” enough to consumers about the Volt’s value.

GM also sells the Chevy Spark EV small car for about $27,500 and offers discounted leases on it and the Volt. The company has said the next version of the Volt, due in 2015 or 2016, will cost $7,000 to $10,000 less.

The Detroit automaker is aiming by 2017 to build up to 500,000 vehicles a year with some form of electrification. The vehicles would include the Volt, the Spark EV and those with its eAssist hybrid system that boosts fuel efficiency in gas-powered cars.

Regarding Tesla’s approach to grouping together inexpensive laptop batteries to get a better electric driving range that starts at 200 miles, Parks called the Model S is an “intriguing” car but the “real trick” is hitting that target at a price point that appeals to a broader customer base.

“Coming in and matching what Tesla did isn’t that exciting for us,” he said.

Nevertheless, GM has formed a team to study the electric carmaker and whether it poses a threat. GM Chief Executive Dan Akerson said in March GM was working on new EVs, including one with a 200-mile electric driving range.

Tesla founder and chief executive Elon Musk has said a compact electric sedan known internally as Gen 3 that is due in 2016, will have a 200-mile range per charge. He described the car on a previous call with analysts as a “high-volume affordable car” that will be priced from around $35,000.

Parks said Tesla will look good if it moves down market successfully, but he wasn’t jealous of its success so far.

Parks said GM will stick with its current strategy, focusing on improving the Volt’s extended range electric system in tandem with a gasoline engine that addresses consumer anxiety about being stranded if the electric power runs out.

“The game is afoot,” he said of the electric vehicle market. “This is a long race.”

Parks said GM likely won’t stop at the Cadillac ELR and would look at doing other EVs in the $100,000 plus price range. “We may do a couple of cars up there too because that’s a great place to be and we’re a full-line manufacturer,” he said.

Of the next-generation Volt, Parks said GM is pushing to build it more efficiently, with a lighter curb weight and a higher electric driving range, as well as a lower sticker price.

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