Transcript:GM Announces PHEV at LA Auto Show

This transcript is from a PodTech.net podcast at:
http://www.podtech.net/home/technology/1645/gm-announces-phev-at-la-auto-show

Guest: Rick Wagoner - General Motors
Host: Mitch - The Motor Press Guild

Mitch - The Motor Press Guild
So, on behalf of the Motor Press Guild and the LA Auto Show, I would like to welcome Chairman and Chief Executive Officer for General Motors, Rick Wagoner. Thanks for coming.

Rick Wagoner - General Motors
Thanks Mitch, he just told me we were running ten minutes behind and I need to shorten my speech, so I've to say it's great to be here and I've got a bunch as I introduce -- talking about how great LA is, I'm a little low to say that part of the speech because given that the Mayor offered the deal for us to move our headquarters here people may read more into that, that I'm prepared to address at this time, but anyway it is to be honest, if you're in a business it's always a pleasure to come to California for some other reasons we've already talked about today.

Particularly the LA Show and particularly this year and for me to have the chance to kick-off this important event, thanks to the Motor Press Guild and all of you for giving me the opportunity. I do want to congratulate the LA Show for reaching its 100th anniversary that's heck of a milestone. California is such an important part of our world; people look to see what's new in technology and design. The fact that the LA Show has been doing this longer than just about anybody the fact that as the Mayor commented this show I think has really arrived. This year is one of the industry's top international shows. That really makes it, I think, special for all of us in the business and all of you who work to make it a success year-after-year.

So, the whole team from GM extends our congratulations to the LA Auto Show and all the leaders on a great first century, and we know what's going to be great run in the years to come. Speaking of 100 years ago, it's interesting to know back in 1907, there were three major technologies competing to power the automobile - electricity, steam, and off course gasoline. Each one of these had its champions and it wasn't at all clear back then which technology would eventually dominate. In 1906 for example, the "Stanley Rocket" built by the Brothers who created the very successful "Stanley Steamer", set a new land speed record, 127 miles-per-hour and of course electrically driven vehicles had their proponents too.

Most notably Thomas Edison, who believed that electricity, was the best option for driving automobiles. In fact, he spent years improving battery technology specifically focused on use in electric cars. Well, today it looks like Edison might actually have had a great idea, maybe just a little further ahead of his time than usual, more on that in a minute. Today, as I said the auto industry is much different from the way it was 100 years ago. In fact, it's much different from the way it was five years ago. Since 2001, a series of geopolitical, natural, and economic realities, from extraordinary economic growth in places like, China and India; to regional conflicts in the Middle East, the population growth, global climate change, and natural disasters in The Gulf of Mexico all those have combined to drive home the fact that we face an increasingly uncertain energy future on a global basis.

All this has created serious concerns about energy supply, energy availability, sustainable growth, the environment, even national security, issues that collectively that have come to be called Energy Security. A few statistics, today 35% of the world's energy needs are met with petroleum products. China imports about 46% of the petroleum it uses. The US imports about 64%, the European Union about 79% and Japan imports virtually a 100%, and according to the Department of Energy from 2003 to 2030, worldwide energy demand will grow by an average of about 2% a year. In other words, we'll need 70% more energy in 2030 than we did in 2003. My conclusion from these figures, going forward it is highly unlikely that oil alone is going to supply all the worlds rapidly growing automotive energy requirements.

For the global auto industry, this means that we must as a business necessity develop alternative sources of propulsion based on alternative sources of energy in order to meet the worlds growing demand for our products. This is a huge assignment, but it's also an extraordinary opportunity. By developing alternative sources of energy and propulsion we have the chance to mitigate many of the issues surrounding energy availability. We'll be better able to cope with future increases in energy demand. We'll minimize the automobile's impact on the environment. We'll be able to take full advantage of the incredible growth opportunity, for cars and trucks around the globe.

We'll take a lot of risk out of our business and likely improve the profitability of the industry; and not to be overlooked we'll have the opportunity to make the automobile more exciting, more functional, and more fun to drive than ever before. The key to all this as we see it at GM, is energy diversity. We believe that the best way to power the automobile in the years to come is to do so with many different sources of energy. So, what are the conventional and alternative energy sources we're talking about and how do we see them playing out?

First on the list are conventional gasoline and diesels fuels and they will continue to be the principle automotive fuel source for some time. This means several things; first, as an industry, we must continue to improve the efficiency of the internal combustion engine as we've done for decades. Second, we must work to reduce the use of traditional petroleum-based fuels by partially displacing them with alternatives, such as biofuels like E-85; E-85 ethanol, and synthetic fuels such as those derived from coal, natural gas, and biomass.

At GM we believe that the biofuels with the greatest potential to displace petroleum-based fuels in the US is ethanol. So, we have made a major commitment to vehicles that can run on E-85 ethanol. At GM, we now have more than 2 million E-85 vehicles on the road with plans to expand production going forward. In fact, along with DaimlerChrysler and Ford, we announced in June that America's three domestic car companies will double our production of vehicles capable of running on renewable fuels by 2010. That's more than 2 million E-85 and biodiesel capable vehicles a year by the end of this decade - the largest single commitment to renewable fuels in our nation's history.

And then, in a meeting with President Bush earlier this month, Tom LaSorda, Allan Mulally, and I announced that America's domestic auto companies will prepared to make fully half of our annual vehicle production biofuel capable by 2012 provided there's ample availability and distribution of E-85, as part of an overall national energy strategy. You see, flex-fuel vehicle alone won't get the job done. Right now there're about 170,000 gas stations in the United States and only about 1,000 E-85 pumps. At GM, we've been partnering with government fuel providers and fuel retailers across the US to help grow the E-85 ethanol fueling station infrastructure.

Since May of 2005, we've helped add 175 E-85 fueling stations in 11 states with more to come. In fact, the Department of Energy awarded a grant just last month to a team from GM, CALSTART, Pacific Ethanol, CleanFUEL USA, the Community Environmental Council, and others to add 15 E-85 pumps in California. We need to do a lot more of this. To the skeptics on ethanol, I say keep an open mind. We need to diversify our energy sources. Consumers are looking for alternatives. Ethanol is a proven winner in countries like Brazil and the growth of the Biofuel Industry in the US continues. In 2007, ethanol production alone will approach 7 billion gallons and that's from grain-based crops.

Also promising is the potential to produce fuel from biomass and researching commercialization in this area is gaining momentum through programs with the Department Of Energy, Universities, and the private sector. Ethanol has the potential to significantly offset energy demand growth and we owe it to ourselves to encourage continued development of the ethanol fuel industry. At GM we'll continue to support the use of E-85 as an important part of a comprehensive national energy policy and toward that end I'm pleased announce this morning that within the next three years GM's HUMMER brand will offer biofuel powertrains across its entire vehicle lineup including future HUMMER products, which makes HUMMER the first auto company to make such a commitment.

Okay, biofuels are important, but what about the other fuel options that we have available to us. Well, despite its success on the sands of Daytona Beach 100 years ago, steam is not one of the technologies we are pursuing today. But we're very serious about the third option that was big in 1906 that is, electrically driven vehicles. In fact, I'm announcing today the GM is significantly expanding and accelerating our commitment to the development of electrically driven vehicles beyond what we've already committed to with our fuel cell and hybrid programs. Why electricity?

First, electricity offers outstanding benefits beginning with the opportunity to diversify fuel sources "upstream" of the vehicle. In other words the electricity that is used to drive the vehicle can be made from the best local fuel sources natural gas, coal, nuclear, wind, hydroelectric, and so on. So, before you even start your vehicle, you're working toward energy diversity. Second, electrically driven vehicles when operated in all-electric mode are zero-emission vehicles. And when the electricity itself is made from a renewable source the entire energy pathway is emissions free. Third, electrically driven vehicles offer great performance with extraordinary acceleration, instant torque, improved driving dynamics, and so on.

Now, some of you maybe thinking, "Wait a minute, what about hybrids? What about fuel cells? Didn't GM commit to those technologies?" and the answer is, "Yes, we did." They're both big parts of our broader commitment to electrically driven vehicles. So, rest assured we remain committed to both. Let me explain. First, what is an "electrically driven vehicle?" Well, no simple answer. In short, there are degrees there's a continuum. For example, there is what most people think of as "electric vehicles" pure battery-powered vehicles, such as GM's EV1.

The EV1 ran solely on electricity that was generated outside the vehicle from the power grid which was stored onboard the vehicle in lead-acid or nickel-metal-hydride batteries. Then there are gas-electric hybrids which are not, per se, electric vehicles but which are, in part, electrically driven. How's that? Well, a conventional hybrid vehicle has both an internal combustion engine and an electric drive. And, it can be powered by both systems simultaneously or by either system independently. The electric energy in a conventional hybrid vehicle is generated by the vehicle itself, and stored onboard in a battery.
At GM, we have several kinds of hybrid vehicles, either on the road or under development, including more than 550 GM-equipped hybrid transit buses including more than 70 in California in locations like Orange County and Yosemite National Park; the Saturn VUE Green Line which uses our high-value "belt alternator starter" system and gets the highest highway fuel economy of any SUV in the market, at a great price to consumers; and beginning in about a year, our advanced "two-mode" hybrid system which is being co-developed with BMW and DaimlerChrysler on our full-size SUVs and pickups.

Another type of hybrid that has attracted a lot of interest recently is the "plug-in hybrid. A plug-in hybrid will be a conventional hybrid vehicle with an important difference the battery will be much more advanced; it can store significantly more energy and, of course, you'll be able to "plug-it-in" and recharge it at a standard electrical outlet. The result will be significantly better fuel economy, and the ability to use once again diverse energy sources. Well, that all sounds great, but so far no major OEM has built a plug-in hybrid for commercial use because the battery technology simply doesn't exist today. In fact, given what we know today, it's pretty clear that it will take several years to bring to market a plug-in hybrid at least one that will meet the expectations and real-world performance standards that our customers expect things like safety, durability, driving range, recharge time, operating temperature range, and affordability.

So, when will someone take the plunge and announce plans to build a plug-in hybrid? Well, I'm glad you asked. At our GM press conference scheduled to begin in about 45 minutes, Saturn General Manager Jill Lajdziak will introduce the new 2008 Saturn VUE which will continue to offer a high-value hybrid option based on our "belt alternator starter" system. Not to steal too much of Jill's thunder, but the all-new VUE will also be the launch platform for the first front-wheel-drive version of our advanced "two-mode" hybrid system in 2008 and this will deliver even more fuel economy. And importantly, this VUE "two-mode" hybrid can also be configured as a plug-in hybrid.

In that regard, I'm pleased to announce that General Motors has begun work on a Saturn VUE plug-in hybrid production vehicle. The VUE plug-in hybrid, GM's first, will use an advanced battery like Lithium-Ion. As I said a moment ago, production timing will depend heavily on battery technology development. But, based on our work with EV1 and our different hybrid-electric vehicles we at GM already have a lot of experience developing and integrating advanced battery technology into our vehicles and we're working today with a number of battery companies to develop the technology necessary to build a plug-in hybrid. The technological hurdles are real, but we believe they're surmountable.

I can't give you a date certain at this point for our plug-in hybrid, but I can tell that this a top priority program for General Motors, given the huge potential it offers for fuel economy improvement. For example, the current VUE Green Line delivers customers a 20% fuel economy improvement over the base model. We expect the front-wheel-drive, two-mode hybrid VUE to improve overall fuel economy by 45% over today's base VUE. And the VUE plug-in hybrid will provide significantly higher fuel savings on top of that. Now, there are other types of electrically driven vehicles that we'll see more and more of as well, including hydrogen fuel cell vehicles, such as our Chevrolet Sequel.

A lot of people are confused by this, but yes, a hydrogen fuel cell vehicle is in fact an electric vehicle. It drives on electricity that is created by the fuel cell. In fact, electricity and hydrogen are actually interchangeable, and a fuel cell is a little more than a battery that stores electricity in the form of hydrogen. The beauty of a fuel cell vehicle like Sequel, is that the electricity is generated onboard the vehicle without using petroleum-based fuel, and without emissions. And like electricity, hydrogen can be made from diverse energy sources before it ever powers a vehicle. So, please do understand, GM remains fully committed to fuel cell development. In fact, we continue to make significant progress in this area, and we continue to see fuel cells as the best long-term solution for reducing our dependence on oil.

One of the most recent advanced hydrogen fuel-cell concept vehicles that we've done, the most recent, is the Chevy Sequel, which has an operating range of 300 miles. In fact, some of you joined us in Camp Pendleton in September when we demonstrated our new drivable version. I think those who did will agree with me when that it is without a doubt, the most technologically advanced car that GM has ever built. And a lot of that technology is finding it's way into our latest fuel cell vehicles more than 100 Chevy Equinox SUV's, which we'll use to create the world's largest fuel-cell test fleet next year. We'll begin placing those vehicles with customers next fall including, as I'm pleased to announce today, 50 here in the greater Los Angeles area.

I should point out that GM's commitment to improving fuel economy, reducing vehicle emissions, and developing electrically driven vehicles is not a short-term strategy. We're in this game for the long term. We see energy and environmental leadership as a critical element of GM's ongoing turnaround plan a key part of our future business strategy and we intend to bring our substantial global resources to bear on this issue starting yesterday. As I said, GM is significantly expanding and accelerating our commitment to the development of electrically driven vehicles beyond what we have already committed to with our fuel cell and hybrid programs.

We're proud of our work to date but now, we're taking it to another level. GM is committed to the development of electrically driven vehicles that will help improve energy diversity, and minimize the automobile's impact on the environment and, we'll follow today's announcements with additional announcements during the auto show season, including at Detroit in about six weeks. There is much more to come from us on this issue please stay tuned.

One more point, at GM we understand that technology by itself is of little value if it isn't put to use on a big scale. To make a difference, technology has to be adopted and embraced by automotive consumer's, lots of them, and that's only going to happen if we package this technology in great cars and trucks that are beautifully designed both inside and out. That's why we're committed to and I might even say better we're obsessed with once again making our cars and trucks the leaders in design. You see it now in a number of our new and upcoming products the Pontiac Solstice, Saturn Aura, the new full-size pickups, our Cadillac lineup and wait till you see what's coming there.

You see it clearly in our most recent concept vehicles like the Saab Aero-X, the Chevy Camaro, and the Buick Enclave which is going from concept vehicle to production vehicle right here at the LA Show. In short, we're committed to leading in both technology and design and we can't wait to show you what we have coming down the road. Let me wrap up by reiterating that we at GM believe tomorrow's automobiles must be flexible enough to accommodate many different energy sources. And a key part of that flexibility will be enabled by the development of electrically driven cars and trucks.

When you connect the dots from conventional gasoline and diesel fuel to biofuels that can displace them like E-85 and biodiesel to electricity, whether it is stored or generated on the vehicle, with an internal combustion engine or a hydrogen fuel cell, we at GM see a logical journey from stand-alone, largely mechanical automobiles to vehicles that run on electricity. At the end of the day, this transformation will be as important as the transition from horses to horsepower and we believe that no company is better positioned to make it happen than General Motors.

It's an unrivalled opportunity to really reinvent the automobile, as well as, the auto business itself. It can help us accelerate industry growth in a sustainable way, mitigate and ultimately solve the energy and environmental challenges of the automobile, and create vehicles that are fundamentally better than their predecessors in virtually every way. It's a journey that began in Thomas Edison's day and one that will drive us straight into the future. I have no doubt that when the LA Auto Show celebrates its 125th anniversary it will look back at this time as a period of great change and as the formative years of the age of the electrically driven automobile. Thanks very much.