GM's Lutz: Volt needs high gas prices to be 'generalized'

High profile vice chairman says the first-gen Chevy Volt will carry a high price tag and is not likely to be embraced by the mass market unless gas prices go higher.

The Chevy Volt may be the most exciting car coming from General Motors, but costs remain a barrier to wide-scale adoption, according to Bob Lutz, the company's vice chairman and design guru.

During a Web chat last week, Lutz said gasoline prices will need to go significantly higher in the U.S. before the car can become "generalized." His comments were reported on Thursday by GM-Volt.com, a site not affiliated with GM.

"The Volt technology is very exciting, but costs will have to come down before it can become generalized, and U.S. fuel prices will have to rise to world levels, meaning $5 or $6 per gallon," Lutz said. That was in response to a question about GM's plans to use the Volt power train, called Voltec, with other vehicles.

The first edition of the Volt, due late next year, will deliver a jump in fuel economy, offering over 100 miles per gallon . The car runs 40 miles on a large lithium ion battery and then uses a gasoline engine for longer trips.

GM executives have said before that this first-generation technology will be expensive--unconfirmed reports have put the price at about $40,000 before federal tax credits for plug-in electric vehicles.

The company is already working on bringing the costs down--particularly for the battery components--for the follow-on editions, according to the company.

Several automakers are betting on plug-in electric vehicles, which will start to come to market over the next year. This week's Frankfurt Motor Show showcased several electric and gas-electric concept cars.

Studies have shown that electric cars are less polluting than gasoline cars, particularly if vehicles are charged at off-peak times . They also allow more people to "fuel up" with a domestic source of energy.

But the high costs of battery components and range limitations of all-electric cars mean that plug-in electric vehicles will remain a small slice of the overall market, according to experts.

The Boston Consulting Group earlier this year released an analysis that predicted electric vehicles are likely to have 3 percent market share in 2020, compared to a projected 20 percent share for hybrid-electric vehicles.

An executive from Toyota, which has sold more than 2 million hybrid Priuses, said this week that it will take until 2020 before electric vehicles will be suitable for the "mass market."

 

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