With GM Suffering, Will the Volt Plug In?

(MoneyWatch)  General Motors' economic woes are deepening, with the company's auditors saying that its continued survival is in "substantial doubt." Among many other serious issues, that raises questions about the future of one of the company's most touted products, the 2011 Chevrolet Volt plug-in hybrid vehicle.

The Volt is different, of course, because it's an "extended range" hybrid whose gas motor is only there to produce electricity to drive the wheels. A new study by engineers at Carnegie Mellon University concludes that more conventional plug-in hybrids with smaller battery packs are more economically viable. (GM responded that, despite a few valid points, the study was ill-informed about the latest battery costs.)

David Darovitz, the communications manager for the Volt, says the program is moving full steam ahead. "We remain committed to the late 2010 production timing," he said. "It remains the number one program at General Motors, and we're adding resources to the program."

But even if the Volt is viable, its high cost (around $40,000) and low projected initial production numbers means it's unlikely to do much for GM's bottom line in the near future. That could change, of course--the Detroit-Hamtramck (DHAM) plant where the Volt will be built is capable of producing 200,000 cars a year. And buyers are eligible for a $7,500 tax break.

GM has 200 engineers and 50 designers working on the Volt, plus another 400 people working on subsystems and electrical components. They're by all accounts extremely dedicated, and the car appears to be on track for production. I don't doubt the commitment of the Volt team, but the work must be going on in an extremely difficult environment. Robert Kruse, GM's executive director of EVs and hybrids, told GM-Volt.com that the company isn't announcing first-year production figures, "but I can tell you we're not going through all this effort and to this extreme to be a little niche player." Ironically, even if the Volt is never produced, it will have served a purpose. It helped jump-start the plug-in hybrid movement that, in the U.S., has grown bigger than the Big Three. Fisker is building one, and so is Aptera, Bright Automotive and many more. There will be plug-in hybrids on the market, even without (but preferably with) GM.