Lutz Interview, Part 2: No diesels planned; Volt commentary

During Leftlane's exclusive interview with General Motors Vice Chairman Bob Lutz, we had the opportunity to ask him about the automaker's plans for alternative fuels, gas-electric hybrids and, of course, the much vaunted Chevrolet Volt plug-in hybrid.

GM's commercials during the Olympic Games have been talking about clean diesels, but we haven't seen much about diesels in anything other than the pickups. You've talked about how E85, hybrids and fuel cells are the future. Will we see them in everyday production cars here?

Bob Lutz: Well, we'll see diesels here simply because there is a certain market demand for them. It's almost become the "Good Housekeeping Seal of Approval."

Your ability to demonstrate the diesel passenger car in the United States, [ends up having the customer] say you are up on the latest technologies, thank you very much, we'll buy the gasoline version. It's almost become that sort of thing. The real truth is that diesels are already on decline in Europe, which is a little-stated fact, because one of the reasons they were so popular in Europe was there was a huge fuel price difference, where in most countries, diesel cost half the price of normal gasoline. That has gone away now as the oil refineries have trouble making the diesel mix. Now diesel fuel is about the same price as it is here. It isn't higher than it is in the United States.

What is also frequently glossed over is the cost of meeting US BIN5 Tier2 emissions and European Euro6 emissions. Right now the Europeans are struggling with Euro5. I know we are in Europe. Euro5 is very tough to meet and requires NOx aftertreatment. Euro6 will definitely involve a ton of additional hardware as will US BIN5 Tier2, so you've got your price increase of about $1,500 to $2,000 for a diesel four-cylinder over a gasoline engine, and then add another $2,000 to $2,500 for BIN5 Tier2 emission control hardware and NOx reduction catalyst. This adds about $5,000 over the costs of the gasoline engine, which the manufacturer is going to have to recover. So here's the equation for the American customer: He pays $5,000 more for the car. He gets a 20 percent fuel economy savings but buys a fuel that costs 20% more per gallon. You tell me where the benefit is.

We still have very active diesel programs in Europe; in fact, we are probably the second largest manufacturer of Diesel engines in Europe. But look at Chrysler Corporation. They produced a bunch of diesel Jeeps, and withdrew a bunch of diesel Jeeps. The overwhelming popularity of diesel engines is a fiction perpetuated by certain German manufacturers and the news media. And the suppliers of diesel injection technology, not to be forgotten! Two of which are large German corporations.

Are you satisfied with the Chevrolet Volt's development progress or would you like to see an accelerated pace?

Lutz: Well, I would have liked to have the Volt yesterday, but the point is that if anything, it's well ahead of schedule. The one vexing thing we have with every single program that's in the pipeline is that our material costs are rising as the steel companies, the plastic, rubber, paint companies, no matter what kind of supplier company they are, are passing on their higher energy costs to us, so this problem is endemic throughout the whole auto industry, domestic or foreign as the quadrupling of oil prices works its way through the entire economic system. We are going to get cost-plus inflation so every one of our future vehicle programs is having cost issues as suppliers come in their final quotes. That worries me for the Volt, but then I tell myself, why worry particularly about the Volt, it's a worry for every single program that we have, and the world public is going to have to brace for the shock of much higher automobile prices.

We have tested the Volt batteries under extreme cold and hot weather conditions. We've tested them in hot weather conditions with the battery cooling systems off. We've cycled them in the lab where the computer causes the simulation of a road load so that the battery doesn't know it's not in a vehicle. We have had some mechanical failures where solder connections between cells and elements have failed but hey, that's just prototype build and inadequate soldering. It could have been any type of battery and the solder had failed. But with the Lithium-Ion technology, everything is smooth sailing. It's doing what we thought it would do, and what the supplier said it would do, and it has been an almost eerie, almost scary absence of problems with the battery.

One of the major challenges with the car is writing all the software codes for all of the zillions of possible interactions between driver, electric drive, battery, regeneration, when does the internal combustion engine come in, under what circumstances? For instance, and this is a huge, huge advantage over battery-only vehicles, say you are in North Dakota in the dead of winter at -40 centigrade or Fahrenheit and you've left the vehicle out overnight, no battery in the world is going to develop any energy at those temperatures, so if you had a purely electric vehicle, you'd have to find a way to heat the battery to get it up to temperature. In our case the computer will know that it has been sitting in the extreme cold, and will light you off on the internal combustion engine, which will run for a few minutes to warm up the battery so that the battery can take over.

Another neat feature we will have because the vehicle is OnStar-equipped, is it will have logic in its brain that knows how far away from home it is because it's used to being charged at a certain place. If you have taken a circuitous route home and are running low on battery, the computer knows "wait a minute, the guy is only 10 miles from home, no point giving him a full charge. I'll just run the piston engine enough to give him a ten-mile charge because he's going want to plug in at home. There are a million things like that that need to be written into the software code, and it all needs to work together seamlessly with no bugs.

I get these emails from electric vehicle fanatics saying, "Hey, what's your problem? What's taking so long? Just throw a bunch of batteries, take out the internal combustion engine, put in an electric motor and away you go. What can be so difficult here?" Well you know, it's extremely difficult, and we're not just building one of them. And with this vehicle, we have to meet ALL safety requirements around the world because it's going to be a global car.

Media reports say there might be an interest in sharing technology with Ford on the Volt. Has there been any internal discussion on this?

No, I don't think so, but I would say that especially in the area of advance technology, that many companies are in touch with many other companies because the burden of developing these advance technologies is getting pretty huge, especially in a time of drastically reduced revenues, so I think everyone puts out feelers saying, "Would you consider this, would you consider that," but to my knowledge there has been no such approach from Ford. Based just on what incidentally read, my impression is that the whole worldwide industry is converging around this Volt concept as the intelligent way to go. Lithium and Lithium-Ion batteries are not ready for the pure electric vehicle to get away from what we call range anxiety (freaking out over remaining available miles on a charge). I have a Vectrix electric motor scooter, and it's a great thing. It's got a 40 to 45-mile range, which is more than adequate for suburban use. But I experience range anxiety on that thing all the time. Because, unlike a gasoline-powered vehicle, you cannot hitch a ride to the nearest electric substation and return with a five-gallon can of electricity. When they stop, they stop! I stopped in the middle of nowhere once with the Vectrix, and had to call a friend of mine to come with a pickup truck and ramps and everything. I used a whole Sunday afternoon.

Everybody is converging on using Lithium-Ion batteries and getting a certain amount of electric range, but please don't confuse the Volt concept with what Toyota is doing with the Prius Plug-In concept. They are not going to use Lithium-Ion. They are going to use Nickel-Metal Hydride that they believe is better proven and certainly cheaper. They and Panasonic have made a massive investment in the production of Nickel-Metal Hydride, so they are probably a little reluctant to declare them obsolete. But Toyota has said their vehicle will do between eight to ten miles electrically, before it converts back to a conventional hybrid, whereas the Volt will do 40-miles and have a ten-year battery life, with engine never running. The engine is there purely as an emergency recharge. The engine is in no way connected mechanically to the car. All the engine ever does is act as a portable generator set.

We are going to do a conventional plug-in hybrid too. It's called the Saturn Vue Plug-In. It will be like Toyota where you will do about eight to 10 miles before the conventional hybrid system starts functioning. But it seems that everyone is converging on the fact to save petroleum and meet European CO2 and CAFE regulations is with the extended-range electric vehicle which is the Volt concept. Even the Volt skeptics are starting say this looks like the right solution.

Tesl's CEO Ze'ev Drori says he thinks every new car in 30 years will be pure electric. Do you agree?

Lutz: Thirty years is too far a time frame. The way battery technology is going, and with future cost reductions and fuel cells and hydrogen delivery, it's a safer bet to say they will be electric as opposed to internal combustion.