Chevy Volt: The Machine That Changes the World?
August 10, 2007

After announcing Thursday that it had signed a contract with a little-known Massachusetts company to develop lithium-ion batteries, General Motors hosted a dinner to introduce the growing team of engineers working on the electric-powered Chevrolet Volt and the newly signed-on battery makers.

David Cole, Ph.D., chairman for the Center of Automotive Research, which hosted the conference at which GM made its announcement, sat next to me. As the discussions with the engineers and, in particular, the battery developers grew deeper throughout the evening, Cole, a retired professor of mechanical engineering at the University of Michigan, could not stop saying: “Wow.”

By evening’s end, Cole, who’s privy to lots of inside information at all the auto companies and has served on boards of technical companies, said he was now very optimistic about the future prospects for the Volt and subsequent GM electrified vehicles. “This is the game changer” unlike anything he’d seen in his long automotive career, he said.

Indeed, if GM succeeds with electrified vehicles like the Volt, the automaker may well turn the auto industry and nearly every business model within it on its ear –- from the kinds of cars we drive (electric versus gasoline) to the way consumers buy cars.

Cole sees the biggest risk to GM’s venture as something seemingly simple: cheap gas.

Engineering, Not Invention

Cole’s optimism stems from the fact that, in contrast to what he and many of us thought was required for lithium-ion batteries for the Volt, was invention. Instead, it is engineering that is required.

The science is done and proven for the lithium-ion chemistry, not only in the lab but in the real world. In fact, the batteries are already in manufacturing and in commercial use on a massive scale.

A123Systems Inc. has made 10 million lithium-ion batteries –- enough to power 100,000 hybrid vehicles, pointed out Ric Fulop, company founder and vice president of business development.

Originally from Venezuela, Fulop was a Sloan Fellow at Massachusetts Institute of Technology where he received his MBA. He describes himself as someone who has an engineering bent but a business sense as well. Indeed, he’s already founded six technology companies as varied as energy storage, software (he sold one to Microsoft), semi-conductors and wireless communications. And he’s raised $170 million in private capital to fund his operations.

On the back of the menu during dinner, Fulop sketched out the short history of lithium-ion batteries, now used in laptop computers and cell phones. Lithium-ion batteries are considered the Holy Grail of plug-in hybrids and future electric cars by GM, Toyota and other automakers.

It’s All in the Chemistry

Not all lithium-ion batteries are created equal. The difference is in their chemistries, which lead to different outcomes in the key factors for batteries: power, safety and life.

The first lithium-ion batteries, using cobalt, were developed by Sony in 1992. They had lower power and a short life –- only about 300 cycles of charges. They are also expensive, heavy and require special attention to prevent overheating. The earliest chemistry is what Tesla Motors is using for its two-seat, $100,000 roadster.

A second generation, adding nickel to the blend, came along in 1995. It is this chemistry that Sony has used in its laptops, and Toyota is working with for its future generation hybrids. Fulop says it is logical Toyota would use the technology as it was the best available when it started its battery development.

A123Systems was founded in 2001 specifically to commercialize a new development in lithium-ion chemistry invented by MIT professor Yet-Ming Chiang and his colleagues. The chemistry, the invention of which was published in a 2002 issue of Nature Materials magazine, replaced cobalt and nickel with iron and phosphates. Subsequently, nanophosphates -– ground to tiny particles –- was included in the mix.

The result is a battery chemistry, one of two chemistries GM is pursuing, that excels in power and life -– 7,000 cycles or more than the 10 years GM required -– and safety. On the back of the same menu, Fulop drew the power curve of the previous-generation lithium-ion batteries versus A123’s, showing increased efficiency and power density.

The A123 batteries also have the advantage of being made of abundant, inexpensive raw materials –- lithium, iron and phosphates versus the more rare and expensive cobalt and nickel. In addition, lithium, iron and phosphates are considered earth-friendly and can be recycled.

Fulop admitted the nanophospates are expensive to process but that cost should decrease as volume increases. Eventually, he said, lithium-ion batteries will cost less than current nickel-metal hydride ones.

Five years after it was founded, A123Systems attracted more than $130 million in investment and has grown to 500 employees (doubling since January). It has research labs in Detroit and Massachusetts, with manufacturing operations in Massachusetts and China. Its batteries have been installed in an increasing variety of power tools made by Black & Decker and DeWalt.

The challenge for the growing battery company with the GM contract is doing the engineering to create battery packs of its cells big enough for a car. The cells are fully proven, but never before has a battery maker connected so many cells into a battery pack big enough to power a car.

The other challenge is to do it in the tight time frame GM has set out. GM wants Volts to sell in Chevy showrooms by the end of 2010. However, Dave Vieau, president and CEO of A123Systems, said at dinner that the entrepreneurial enterprise thrives on tight deadlines.

“Speed is our friend,” he said grinning.

Vieau joined A123Systems within three months of the company’s initial financing and brought 30 years of experience in high-tech and component businesses. He had been VP of marketing and global business development at American Power Conversion. During his tenure the company grew to 6,000 employees and from $50 million in annual revenues to $1.5 billion, becoming the world leader in power protection for computers.

GM also has set up an interesting competition among battery makers with which it has development contracts and is on two simultaneous battery chemistry paths at the same time.

Challenges Ahead

Frank Weber (FAY-ber), imported from GM's European operations to be global vehicle line executive and chief engineer for E-Flex Systems Development Team, carefully noted much work needs to be done, particularly to put the Volt on the road by 2010, a tight time frame.

“This is not easy,” he cautioned. His job is to integrate the batteries into the Volt. A surprise, he said, was that the batteries beneath the floor hurt the handling of the Volt so the thought now is to make the batteries part of the structure.

His biggest challenge is to manage the thermal dynamics of the batteries within the car so that the batteries are the same temperature from the front to the back of the car and accommodate such things as accessories, heating and cooling.

Another question his team is considering is the fine-tuning. He uses a dishwasher as an example. A person can set the dishwasher on the heavy-duty pots and pans mode to ensure the absolutely cleanest job, or, the energy-efficient mode, which saves energy but some cleanliness may be sacrificed. Perhaps the Volt will have different modes –- on ultimate energy efficiency the heat or air-conditioning might not work to the max, for instance. Whatever solution GM decides on, Weber said, it will have to be simple for the consumer.

And Toyota, despite its recent setbacks with battery development, can't be counted out of the race. Toyota likely will quickly shift gears, change its battery chemistry, as Lutz pointed out and be in the race again -- one that will be neck-and-neck to be first.

More Than a Battery on Wheels

Weber said GM believes electric power is the only way to achieve the automaker's goal of taking the automobile out of the environmental equation because it emits no emissions.

Electric power also offers the consumer the advantage of quietness, immediate torque (electric vehicles are now making their way on to racetracks) and fuel economy consumers have never seen before, said Weber.

During his speech to the Center for Automotive Research management seminar attendees, Weber showed the cost per mile is dramatically better for electric vehicles than gasoline-powered ones at current gas prices: about 10 cents a mile for gas vehicles versus 2 cents a mile for electric vehicles.

And lithium-ion batteries are the only way to go, primarily they are 40 percent lighter and have 20 percent less mass than do nickel-metal hydride batteries.

Weber also noted a new and improved propulsion system and fuel source is not enough. "A new and advanced powertrain is nice," he told the audience, "but consumers also want a sexy vehicle."

To that end, GM has established a design studio solely for the Volt and other E-Flex models just as other divisions and programs have.

And it has amenities, such as entertainment systems and Internet connectivity, that customers are and will be demanding.

The Volt will be built on GM's global Delta compact car architecture, for larger economies of scale and commonality of components. The Volt will be built in both left- and right-hand drive so it can be sold in the U.S. as well as overseas.

Weber also said GM is simultaneously developing a couple of versions of the Volt. There may be more as another E-Flex version will be unveiled at the Frankfurt auto show.

One will be what GM calls the range-extending electric vehicle, like the one shown in the Chevy Volt at the Detroit auto show in January. That one will have a large battery with a small -- like 3.0-liter -- flex-fuel engine that runs on gasoline and/or ethanol. The engine doesn't propel the car but acts as a generator. When the battery runs dry at about 40 miles, the gas engine kicks in, generating electricity that goes to the battery.

Weber reiterated that the 40-mile goal (far higher than the 7-10 miles Toyota is planning for its next-generation Prius hybrid) is to accommodate the 75 percent of Americans whose average daily commute is about 40 miles round trip.

The other version will be like the Chevrolet Sequel unveiled at the Shanghai motor show. It has a smaller battery and hydrogen fuel cells.

Not PR, Not a Science Fair Project

Jon Lauckner, who has headed Chevrolet Volt program from Day One and is often mentioned as the heir apparent to Lutz, reminded those at dinner on Thursday what he has been telling us since January that the Volt is not a science fair project nor is it a public relations stunt.

It is a real car program. GM has assigned 150 engineers to the Volt/E-Flex program; that number likely will rise to 200, said Weber. Another 400 researchers who had been working on fuel cells have been moved into the powertrain and product development groups. In other words, research -- and those who do it -- are moving out of the lab and into vehicle development.

And the Volt/E-Flex program has the backing of top GM leadership. In fact it was Vice Chairman Bob Lutz, R&D chief Larry Burns and other top managers who a year ago, put their heads together to come up with a way to reinvent the automobile to make it a nonissue in environmental conversations.

Denise Gray, GM's recently appointed battery czar, said at dinner that the work load and time schedules are intense, and she feels she's living in fish bowl with top management scrutinizing the team's progress. But, she said, top managers are constantly asking: what can we do to help?

"People have called this a game changer," said Weber in his Friday morning talk. He modestly calls it "a big project" and a huge step forward in electrifying vehicles.

More Promise Than Before

Indeed, terms like game changer and paradigm shift are being used to describe the Volt. Many of us, including Dr. Cole, left dinner more convinced that the Volt and E-Flex are not science projects nor public relations ploys, but are real product programs that may well see the light of day. And it will be a significant breakthrough when it does.

Cole said the greatest risk to the Volt is $10 a barrel gas price, which would radically change the Volt's economic equation. Cole believes the industry must press for a floor to gas prices so that automakers can develop alternative fuel vehicles without such a risk.

As we departed the restaurant, one journalist snapped a photo of the back of the menu outline sketched out by A123System’s Fulop, as if it could someday have the value of the paper upon which Henry Ford might have sketched his Model T.

Dr. Cole saw the value; he took it home with him.

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