Electro-Shock Therapy

With the Chevy Volt, General Motors—battered, struggling for profitability, fed up with being eclipsed by Toyota and the Prius—is out to reinvent the automobile, and itself.
‘It Was Completely Backwards’

The company then made a series of decisions that look, in hindsight, startlingly audacious. Instead of becoming a safer bet as it ran the internal slalom, the iCar became more ambitious. Its target range on a single charge increased from “at least” 10 miles to 40—the outer limit of what seemed possible. Not a few outsiders think this decision was misguided; a 20-mile battery, say, would still allow many commuters to drive gas-free most days, and it would be easier and cheaper to build. But Lauckner, always pushing, insisted on a car that the public would perceive not just as saving gasoline (that was Prius territory) but as replacing gasoline. The Volt, as the iCar was eventually renamed, had to be perceived as severing the umbilical cord between the car and the gas pump, and nothing less than the longest feasible gas-free range, he believed, would accomplish that.

Yet this adventurous car would be branded Chevrolet. Chevy is GM’s biggest brand, and the only brand it sells everywhere it does business. The last time GM tried for a big breakthrough, in the 1980s, it avoided the Chevy brand, instead creating a new division under a new name (Saturn). This time, GM was proposing to tie its core brand to an untested technology. “If we want to make a big difference with this,” Wagoner told me, “we have to do this with a big brand.”

Producing a high-end statement car for trendsetters, as Tesla is doing, would have been pretty safe, but positioning the Volt as affordable family transportation—Chevy’s bread and butter—is an order of magnitude harder. It implies selling not thousands but hundreds of thousands of cars, and at Chevrolet rather than Cadillac prices. The battery alone is likely to cost something in the high four figures. At Chevy prices, GM can expect to lose money on every Volt it sells, at least in the early going, and possibly for years.

Outflanking Toyota makes good sense strategically, but GM’s market capitalization is less than a tenth of Toyota’s. Unless battery costs fall as quickly as GM hopes, the car could break the bank by succeeding.

Perhaps most audacious of all was a decision to allow unusual public access to the Volt program. The industry’s standard procedure is to develop new products, especially risky ones, out of sight, unveiling them only when proven. GM decided to do exactly the opposite. The PR department flung open the doors. GM executives discuss the program’s progress as publicly as if it were a bill in Congress. They show off photos of batteries under development. They promise to let reporters ride in test cars. They lead them through the labs and design centers and even into the wind tunnel. They run ads, for instance in this magazine, touting the Volt in the present tense, as if it already existed. By earlier this year, expectations were so high that President Bush was commending the car, and it had developed a national grassroots following. This article is itself a product of the fishbowl strategy.

GM is using the publicity to excite the public, of course. It is also using the publicity to push itself. “We thought it would be a motivating thing to do,” Wagoner says. “Certainly it gets everybody aligned”—not always easy in a giant corporation. And GM wants credit for trying, which it never received for the EV1. “If it fails,” Harris says of the Volt, “we want people to know exactly why it failed. It wasn’t lack of commitment or passion on our part; we hit a hard point we couldn’t get around.”

On the other hand, if it fails, it will fail in full view. GM will have given its critics the most spectacular example yet of a broken promise, and Toyota will look prudent instead of timid.

Each of these decisions was ambitious; together, they amounted to an all-in commitment. The company hoped to make a splash with the Volt at the concept car’s unveiling in January 2007, at the Detroit auto show. Even so, executives were stunned by the public’s reaction. GM won both North American Car and Truck of the Year, but the enthusiasm created by the Volt completely eclipsed that news. “We were pumped for something big,” Wagoner says, “but this was a lot bigger.”

Riding the wave of euphoria following the show, GM’s board of directors urged the project on. Although GM had made no formal decision to produce the Volt, what had begun as an experiment was coming to be regarded inside the company as destined. Momentum built still further that spring, as GM began staffing the project with dozens of its ablest engineers—people like Andrew Farah, plucked on short notice from whatever it was they were doing, anywhere in the world.

The pencil pushers had done none of the marketing and cost studies that typically precede a product launch, but no matter. Normally, Bob Lutz says, “you basically define the whole future of the car on paper before you give the go-ahead to start spending some serious engineering and design money on it. And in this case it was completely backwards. We saw that we had a smash hit that hugely resonated with the public, and we just decided: let’s go to work. No business case, but let’s get this thing into production-ready form, and we’ll worry about the cost and investment and the profitability later.”

If GM was seeking to seize the world’s attention and upstage Toyota, it had succeeded, spectacularly. But now it had to build the car.

‘I’m All Giddy’

Lance Turner is 43, of medium height, with a thatch of brown hair and a soft, round face commandeered by heavy, square glasses. Like many at the heart of the Volt project, Turner is a gearhead, the sort of person who gets excited by a histogram of cell voltages. (Don’t ask.) GM is full of people who have labored for years on advanced-technology concept cars and test vehicles—“science projects,” in the company vernacular—with no prospect of seeing their handiwork reach showrooms. For them, the Volt is a jailbreak. Turner, an electrical engineer who worked on the ill-starred EV1 and a series of forgotten electric concept cars with names like Precept (bad name for a car) and Impact (even worse), woke up one morning to find himself in the middle of GM’s busiest intersection. He is the guy testing the battery.

“It’s swim. I already know,” Turner told me, when I asked if the battery was likely to sink or swim. This was during a visit in December to GM’s mile-square technical center in Warren, Michigan, just outside Detroit. Volt development is going on both here and in Germany, allowing for around-the-clock testing. The battery lab, an expansive but otherwise unimpressive room containing test chambers and consoles with digital readouts, clearly had not been dressed up for visiting journalists, of whom I was only the latest. “Before I’d even started the project, we’d opened up the lab to 50 reporters that came in,” Turner told me, sounding bemused. “You’re not allowed to bring a camera or a cell phone into this building. Here we were with a TV crew.”

During this visit, I found the technical center brimming with optimism, and the battery lab was no exception. One of two suppliers, a company called Compact Power (a subsidiary of a big South Korean chemical and advanced-materials company, LG Chem), had delivered two copies of its version of the battery, and on the bench they were testing brilliantly. “They may not look beautiful,” Turner said—the battery was a six-foot-long T-shaped object from which wires, clamps, and circuit boards protruded—“but as far as the data goes, they’re the best I’ve worked with.” Heat is a problem with lithium-ion batteries, but this one was staying cool even when run hard—and the cooling system had yet to be attached.

Moreover, improvements were being incorporated as fast as they could be conceived; the battery would be on its second generation in January, its third in June. “It’s incredible,” Turner said. “The design they’ve come up with for thermal changed 10 times before they delivered the first battery.” And all of this was before the arrival of a competing battery that might be as good or even better, designed jointly by the Massachusetts-based company A123 Systems and the German company Continental A.G. “We’re inventing and creating on the critical path,” Turner said. He was using the industry jargon for the countdown to production, when time is money and delays can cost millions. “I’ve got guys trying to release things before they’re actually invented.”

As I got ready to go, Turner pointed to a laptop wired to the battery. “I’m testing as I’m talking to you,” he said. “It’s working great. I’m all giddy.”

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Jonathan Rauch is a contributing editor of The Atlantic and National Journal and a senior fellow at the Brookings Institution.

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