GM CEO Mary Barra explains what the Chevy Bolt means for electric cars.

GM May Have Just Changed the Game for Electric Cars. Here’s What It’s Up To.

GM May Have Just Changed the Game for Electric Cars. Here’s What It’s Up To.

Moneybox
A blog about business and economics.
Jan. 11 2016 1:57 PM

GM May Have Just Changed the Game for Electric Cars. Here’s What It’s Up To.

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GM CEO Mary Barra shows the Chevrolet Bolt EV to the news media at the 2016 North American International Auto Show on Jan. 11, 2016, in Detroit.

Photo by Bill Pugliano/Getty Images

General Motors, America’s largest carmaker, has been slow on the uptake when it comes to the most significant trend in mobility: using more electricity to power automobiles. It famously killed a promising electric vehicle in the 1990s, and invested in the gas-guzzling Hummer as Toyota rolled out the Prius. The Chevrolet Volt, unveiled in 2010, wasn’t an electric car—it was a plug-in hybrid whose high sticker price and weak battery (it could go only about 35 miles on the all-electric charge) made it an ineffectual demonstration project.

But the Chevrolet Bolt, which GM is showing off this week at the Detroit Auto Show, represents both a quantum leap and a leap of faith by the company. It has a battery that can propel a car for 200 miles—six times more than the original Volt could travel on electricity. After federal tax rebates, it costs about $30,000—substantially less than the Volt, and a price point at which millions of cars sell each year. Unlike the Volt, which seemed to have lukewarm backing from GM’s top brass, the Bolt seems to have enthusiastic support at headquarters. “First of all, with 200 miles plus, you really take away range anxiety,” GM CEO Mary Barra told me Monday. And she quickly pivoted to point out the Bolt’s driver-friendly technology—connectivity, upgradability—that has nothing to do with mileage. “When we look at the Bolt EV, it’s a great car to drive,” Barra said.

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Add in the aggressive price, and it’s clear GM isn’t trying to sell the Bolt as a sop to environmentalists or a nod to regulators. Rather, GM says it’s trying to make a car that might find buyers whether gasoline costs $4 a gallon or $2 a gallon. “You can look at the car, and you can buy it just because you love the car as well as the fact that it has a 200-mile electric range,” said Barra. “This wasn’t a compliance play.” All shrewd CEOs talk up their products. But I was on a Volt test drive several years and never heard an executive refer to that car as “fun,” as Barra described the Bolt.

Barra wouldn’t comment on production numbers or sales expectations. “We’re building it at Orion [a factory in Michigan], and we’re flexible at that plant.” But she indicated that the Bolt is an important sign of things to come—not that GM’s fleet will be all-electric, but that it will be more electric. GM has demonstrated that it can make a nonluxury electric car that offers Tesla-like range. And it can plug the knowledge and components it developed to build the Bolt into other vehicles. “Across the portfolio, you will see higher-density batteries with improved costs and that’s one of the things we can achieve with our scale,” Barra said. “You’ll also see more hybrids. You’ll see everything as being more fuel-efficient.”

The idea that GM—or any American company—could speak credibly about leading in fuel efficiency and alternative power sources would have seemed fanciful seven years ago, when GM was still in bankruptcy. But because of its persistence, and because of the reluctance of Ford and Chrysler to plunge ahead with all-electric cars, GM has acquired a bit of swagger.  

While many other mainstream auto companies are announcing plans to develop more plug-in hybrids and all-electric vehicles in years to come, GM dealers will have products to sell within 12 months. “A lot of other [original equipment manufacturers] are announcing what they’ll have down the road,” Barra said. “But look at what we have. We have the second-generation Volt. We now have the next-generation Bolt. And look at the Malibu hybrid. We’re not stopping. We have a leadership position in electrification.”

The Bolt may not be able to singlehandedly alter the sales dynamics of the car industry. And it’s entirely possible that it won’t find a niche in the marketplace. But it’s already helping to alter the narrative. In the U.S., a startup (Tesla) and a Japanese company (Nissan) have largely owned the dialogue (and growing market) surrounding all-electric vehicles. With a range nearly twice that of a Nissan Leaf and at a price less than half today’s entry-level Tesla, the Bolt has the potential to change that.