GM CEO says Volt "down to the wire" for 2010 launch

By Kevin Krolicki

BEIJING (Reuters) - General Motors Corp is running "down to the wire" as it readies its plug-in hybrid Chevrolet Volt for a planned launch in 2010 and moving closer to picking a supplier for the next-generation battery packs that will power the electric car, GM Chief Executive Rick Wagoner said on Sunday.

"At this point the focus for us 100 percent is getting the Volt produced in the U.S.," Wagoner told reporters on the sidelines of the Beijing Auto Show. "So far, so good, but it's going to be right down to the wire to meet the production deadline we've set."

GM, which is counting on the Volt to show that it can compete with the likes of Toyota Motor Corp on fuel-saving technology, has said it intends to build the new rechargeable vehicle by the end of 2010.

That aggressive target has forced GM to compress the industry's established timeline for developing a new car by conducting experimental testing on the battery systems crucial to the Volt even as developers push ahead with work on the vehicle's other components.

GM is designing the Volt to run for 40 miles powered by a 400-pound lithium-ion battery pack that can be recharged at a standard electric outlet when the vehicle is parked. The car will also capture energy from braking like a traditional hybrid and feature an on-board engine that will be used only to send power to the battery.

The Volt marks one of the first attempts to adapt lithium-ion batteries, widely used in electronics gear such as laptop computers, to power a car, although Toyota is racing ahead with its own work on the same technology.

GM has been testing battery packs supplied by a subsidiary of Korea's LG Chem Ltd against the performance of a rival pack built by German auto parts supplier Continental AG using technology developed by privately held A123 Systems.

GM, which is already featuring the Volt in advertising, has said it wants to ensure that the hybrid car has a battery pack that can run at least 150,000 miles, last 10 years and allow drivers to accelerate to 60 miles per hour in less than 9 seconds.

Wagoner said GM was moving closer to picking a winner in the race between the rival battery suppliers, who are vying for both the contract and bragging rights in a new market expected to grow sharply in the coming years.

But he said the No. 1 U.S. automaker would hedge its bets because it was still not clear how battery technology could develop. For example, Wagoner said, GM could opt to give one of the Volt bidders the battery contract for the vehicle while keeping the other in the game with a separate development contract.

"You have to make a choice, but you don't have to make a lifetime choice," Wagoner said. "My sense is that you can make lithium ion bets today, but the outlook is far from certain."

GM used the Beijing auto show to showcase a hybrid version of its Buick LaCrosse sedan, which is being launched in China this summer, just ahead of the Olympics. The car is one of 16 hybrids that GM is rolling out over the next several years.

The hybrid Buick LaCrosse will also be the second hybrid in the fast-growing Chinese market after Toyota's Prius, but the first assembled locally.

With a relatively high price near 300,000 yuan ($43,000), GM has said it does not expect to sell a large number of the new hybrids in a market where the fastest growth is in smaller and cheaper cars for buyers entering the auto market for the first time.

But GM executives said this week that it was important to demonstrate a commitment to hybrid and other technology aimed at boosting fuel economy and reducing emissions in China at a time when government policy makers face pressure to reduce oil consumption and improve air quality.

Representatives of the No. 1 U.S. automaker have also said China will be in line as its second market after the United States to get the Volt.

GM, like other major automakers, is lobbying China's government to provide subsidies for the development and sale of alternatives to vehicles powered by traditional gas-burning engines.

Wagoner said China should consider a range of policy moves including tax credits and a commitment to developing a hydrogen refueling infrastructure that could power fuel-cell vehicles and be supplied by the dozens of nuclear power stations the nation intends to build to reduce its reliance on imported oil.

The chief executive also said GM could get a major boost in its effort to make a range of more environmentally friendly vehicles such as the Volt at a profit if the technology finds early acceptance and government support in China, which is expected to become the world's dominant auto market surpassing the United States by 2020.

"It could be huge," Wagoner said. "China could play a significant role."

(Editing by Maureen Bavdek)