Washington, D.C. – The planned Chevrolet Volt extended-range hybrid holds promise, but will be too expensive to be immediately viable, according to the U.S. government’s viability assessment of General Motors.
The plan was made public following the Obama Administration’s requirement for a viable restructuring plan from the automaker within 60 days, and the resignation of CEO and chairman Rick Wagoner.
The assessment said that General Motors has been losing market share to its competitors for decades, “yet its plan assumes only a very moderate decline, despite reducing fleet sales and shuttering brands that represent 1.8 per cent of its current market share.”
Regarding product mix and CAFE compliance, the report said that, “GM earns a disproportionate share of its profits from high-margin trucks and SUVs and is thus vulnerable to energy cost-driven shifts in consumer demand. For example, of its top 20 profit contributors in 2008, only nine were cars. GM is at least one generation behind Toyota on advanced, ‘green’ powertrain development. In an attempt to leapfrog Toyota, GM has devoted significant resources to the Chevy Volt. While the Volt holds promise, it is currently projected to be much more expensive than its gasoline-fuelled peers and will likely need substantial reductions in manufacturing cost to order to become commercially viable.”