Click above for a high res gallery of the 2011 Chevy Volt

During the recent conference call detailing the updates on the Chevy Volt, Executive Director of Global Engineering Bob Kruse said something that deserves to be highlighted: the price of the Volt will, in part, be determined by the cost of gas in November 2010, when the car is scheduled to go on sale. Here's the exact quote:

I will tell you though that $1.50 a gallon gasoline is not necessarily helping with the business case, but who knows what the cost of petroleum is going to be in the future.

I've been asked what's the Volt going to cost in November, 2010 or what's the price going to be? I'm not sure what the price is going to be. We know what it's going to cost and part of the go-to-market strategy will be pricing it and part of pricing it will be what the cost of petroleum is in November, 2010. I'm not wishing for higher petroleum costs, but I think we all recognize that the low cost we're experiencing now are perhaps temporary and economic forces are going to drive petroleum cost in one way. As that happens, the economic viability of what we're doing only gets greater.

Previous estimates for the Volt's price have ranged from mid- to high-30k to 40k, but no one at GM has ever named an official base price. It now makes sense that GM wants to wait as long as possible to announce this. If you're tying it to petroleum prices, that's got to be unnerving. GM CEO Rick Wagoner recently said that a $4 price floor on a gallon of gasoline was "worthy of consideration," don't forget. Kruse's statement can be found in the lengthy transcript that GM released of the call. You can find it after the jump.

[Source: GM]

Final Transcript

March 18, 2009/12:00 p.m. EDT


Brian Corbett - Manager of Hybrid Communications
Bob Kruse - Executive Director of Global Engineering
Andrew Farah - Volt Vehicle Chief Engineer
Denise Gray - Director of Global Battery Systems Engineering


Moderator Ladies and gentlemen, thank you for standing by. Welcome to the GM Media Briefing conference call. At this time all participants are in a listen-only mode. Later, we will conduct a question and answer session, and instructions will be given at that time. As a reminder, this conference is being recorded today, Wednesday, March 18, 2009 at 12:00 noon Eastern time.

I would now like to turn the conference over to our host, Mr. Brian Corbett of GM Communications. Please go ahead, sir.

B. Corbett Great. Thank you, and welcome, everybody. Thank you for joining us today, taking time out of, I'm sure, busy schedules. Hopefully, by having this presentation via the Web we're keeping you at your desks and at your offices and impacting your day a little lightly.

It was actually almost two years ago, slightly after the Chevy Volt concept car debut, that we had a very similar briefing in March of 2007, and that was really focused generally on basic battery technology. It seems like there's a constant stream of focus on battery technology since then, so we're back now and we're going to focus specifically today on GM's battery strategy following the announcements we made at the Detroit Auto Show back in January.

Among them, we established a partnership with the University of Michigan and we announced the largest automotive battery lab will be here in the U.S. in Michigan. But it was the announcements regarding the selection of the cell supplier, LG Chem, and our plans to build the volts modules and packs here at a manufacturing facility here in Michigan that seemed to garner the most attention, and that's what brings us here today. So we'll be providing you a quick look into the resources GM has and what we're adding to the volt battery. We think it's unique and we think it provides us with a competitive advantage going forward.

So joining me here today in the room are Bob Kruse, he is the Executive Director of Global Vehicle Engineering for hybrids, electric vehicles, and batteries. He's going to be presenting the first half of the presentation; followed by Andrew Farah, who is the Volt Vehicle Chief Engineer; we also have Denise Gray, Director of Global Battery Systems Engineering with us to participate in the Q&A; and online is Tony Pasawatz, Vehicle Line Director as well.

So with that, let's get rolling. First up is Bob Kruse.

B. Kruse Good afternoon, everybody, and thanks for joining us here today. What we hope to do is, we've had a whole series of announcements that have been a continuum of what we're doing to develop electric vehicles, or specifically the Volt, and hopefully as we continue today's discussion and on to the future will help you understand how strategic and long-term focused our activities are.
We have announced that not only are we doing the battery development, but the engineering of battery packs and the manufacturing of those battery packs will be a core vision. We've announced that we've named the propulsion system Voltec. As Brian indicated, we had a big announcement at the Detroit International Auto Show that we had selected LG Chem as the cell manufacturer for the generation one battery. As part of that, that means that General Motors will be integrating and designing the battery packs, the thermal system, and the control system for the battery pack to take those cells and actually make a battery that can propel the vehicle for that up to 40 miles of electric-only propulsion.

We also announced that we would be manufacturing those battery packs right here in the state of Michigan, with cooperation from the Michigan Economic Development Corporation to make that possible. We'll be announcing that specific location later on this year.

We revealed a Cadillac Converge Concept at the Detroit International Auto Show, and then later in Geneva we unveiled the 2011 Opel Ampera. We've also talked about and will be having a major event later on this year, the largest automotive advanced technology battery lab will be located and announced later this year.
We have about 30 plus vehicles, mule vehicles, those Chevrolet Cruze vehicles that you've seen running right now, and later this summer we build 80 of our prototype vehicles. Those will be vehicles that form, fit and function, everything represents our Volt design, that we will use those prototype vehicles to do the final development, calibration, verification and certification of the Volt as it gets ready for Commerce in November of 2010.

Associated with this, we've been generating our share of headlines. Some of the headlines get it, some of them we require some additional explanation to help understand why. That's really the purpose of today's call as well, to help put this all in perspective and let each of you ask some questions to help understand and put this strategy into perspective and to gain understanding.

So part of it is the difference, okay? It starts with the chemistry, the cell itself. As we got ready to make some of these decisions, we evaluated over a hundred different chemistries and constructions of lithium ion cells. We have a lot of intellectual property inside the company that has assessed cell construction and cell chemistries on a common yardstick to allow us to decide what's most suitable for specific applications.
Along the line of development for the Volt, we identified both the LG cell and the A123 cell as cells that we were very interested in, and we spent all of 2008 evaluating the performance of those cells both in the lab, in the pack, in the vehicle. And on a very comprehensive evaluation process, probably one of the more thorough that I've been involved with, we did select the LG cell for the gen one volt system the system that launches in November of 2010. But the cell is just the starting place.

Obviously, there's a significant number of cells in a volt pack, but a cell by itself does not make an electric vehicle battery, there are very sophisticated thermal controls that are designed into the pack. There are very sophisticated electronic controls to control at the cell and the pack level to understand the battery state of charge at any given time. The battery state of charge estimator is intellectual property that we have, that we license to other manufacturers; it's very key to the promise of the regularization of electric vehicles.

So that thermal management and sophisticated control is all a part of what makes a great battery pack. Now we also leveraged, there's a division, a wholly-owned subsidiary of LG Chem called CPI, Compact Power Incorporated. They were an engineering consultant and participated with General Motors in designing this battery pack, and we very much appreciate their value add and their contributions to where we're at today.

If you look at and you ask the question: why lithium ion? Any time you talk about batteries, you need to understand both power and energy. Hybrid batteries need power, but they don't have to put that power out over long periods of time. Electric vehicles require significant power, but they also have to have much greater energy than a hybrid battery to be able to put that and create that power for extended periods of time in the Volt to be able to create the electric torque for up to 40 miles.

You can see on this chart here that it begins to show where some of the various technologies whether it's lead acid, nickel metal hydrides, some of the super casts that are out there, the power batteries we're doing to develop our lithium ion batteries for the BAS Plus system that we've announced, you can see what you need for electric vehicles and extended range electric vehicles and you can see how lithium ion energy batteries kind of hit the sweet spot. So that's why in the electric vehicle space you see many companies looking to lithium ion, lithium ion chemistry to fulfill the promise of vehicle electrification.

If you ask the question: why LG Chem? Like I indicated, we evaluated a hundred cells, picked two, went through a very thorough, rigorous evaluation in performance, and then looked at all of the business metrics, whether it's performance, reliability, durability. When you have many, many cells in a battery, the quality of the battery cell from the very beginning and the ability to manufacture these cells identically with pharmaceutical level quality is very key to delivering on the promise of vehicle electrification, so that existing manufacturing experience in lithium ion cells, a proven track record, we liked the advantages of the magnesium based chemistry, that was very suitable to what we did and what we needed.

There's also, any time you put any high energy dense material in an automotive application, being able to do that safely is absolutely key. Just like we put gas tanks in vehicles with sufficient safety systems, we put energy batteries in vehicles with safety systems. That safety starts at the cell level. The separator and the prismatic cells were key to our decision. The proprietary safety reinforced separator that's inside the LG cell was the differentiator for us. So from many, many facets, the LG cell was the most suitable readily available cell for our generation one Chevrolet Volt.

We have developed both the battery and the Volt in parallel. You can see on this high-level chart, we have the vehicle development and the battery development occurring in parallel. We've done a lot of cell and module testing. We're in the process now of our early packs are running around those Chevrolet Cruzes right now, our mule vehicles, that are enabling us to integrate those batteries, test the performance of the vehicle, test the performance of the battery, do the sophisticated, both battery control development, thermal system development, as well as the vehicle controls. To be able to seamlessly deliver power in all driving conditions, we're doing much of that software in-house, that's probably a story left for a different day, but building lots of internal capability to enable General Motors to maintain its leadership in vehicle electrification starting with the Volt and continuing in the portfolio into the future.

Right now this summer we will build our prototype vehicles, which will then start the final engineering phase of developing any vehicle, and it's important to understand that General Motors is regularizing this technology and making it ready for the mass market and we're doing that with the same level of sophistication and detail that we do with any product.

At this point in time and in through the prototype phase, we will have built more Chevrolet Volts than perhaps some other electric vehicle manufacturers. But it's our commitment to developing and regularizing this technology, and I think it speaks to our commitment to being able to do this job and deliver on the promise of vehicle electrification, 40 miles of electric petroleum free driving, in that whole ownership experience.

So if we continue, we have talked about the largest automotive battery lab in the U.S. You can see some of that is we're in the final stages of debug and operation of that lab now. The pictures in the background give you a little teaser as to what that's going to look like, and if you're interested I'd invite you here to Detroit when we announce the grand opening of this event in the next couple of months or so. It'll be something to observe and behold.

If we talk about our difference, again, our ability to assess cells, evaluate cells on a common yardstick, we have a very rigorous paper application process that eventually has potential cell manufacturers submitting their cells for us to evaluate to our criteria so that we're very, very smart cell buyers, if you will, at this point in time.
We move that down to the pack, the thermal management of the pack. Again, part of what we're learning is to have cells that last the life of the vehicle you have to treat them right from a thermal standpoint. So our understanding and designing the capability of the thermal management system is extremely sophisticated and we're doing much of that software and electronic controls engineering actually in-house in General Motors. That was part of our January announcement that we're bringing this in as a core competency, a strategic decision inside the company. And then by doing that, that enables us to tie the sophisticated electronic controls in the battery pack with the sophisticated electronic controls in the vehicle to deliver on this electric vehicle promise.

That's a picture of our T-pack. We have not taken the cover off the T-pack at this point in time. I expect as we get closer to production we will do that and you'll be able to experience the sophistication and the elegance of the design that actually takes these cells, marries them with a lot of electronics, and gets it in a very dense, highly efficient package that then goes into the vehicle.

We've talked about this that our 40 miles, why 40 miles? We think 40 miles is absolutely key. Seventy-eight percent of the U.S. driving population drives 40 miles or less each day. One of the questions I get asked is well there's other electric vehicles that have substantially more electric range than 40 miles. I think it's absolutely key that as you regularize this technology you also have to optimize it and balance it.
We have electric vehicles suffer from range anxiety, where you're at when the battery goes dead. We've chosen to address that solution by putting the range extended power train in place to generate electrical energy to create the electric torque after the battery is depleted. That's very efficient, and it also allows the vehicle to be not unique from a customer ownership experience.

Sure, could we have put larger batteries in for a larger electric range? Yes, but it doesn't matter what your battery technology is, a several hundred mile battery is going to cost more than a 40-mile battery. A several hundred mile battery is going to weigh more than a 40-mile battery, and so as part of the bringing this to market, to making it viable both for the consumer and as a business proposition, we've balanced the vehicle around these demographics, and I think they're key to the success of our strategy in vehicle electrification.

Again, just to summarize, you've got to start with a great cell, but then designing the pack, both from a thermal and an electrical standpoint, to make a great battery to enable a great vehicle is where I transition now, and I'd like to turn the presentation over to the Chevrolet Volt Chief Engineer, Andrew Farah.

A. Farah Thanks, Bob, and good afternoon, everybody. I'm going to take you through a little more of the story here and a little more of the specifics on the Volt and how to see some of these things that Bob was talking about actually coming to fruition in the product.

Just picking up on where Bob left off, yes, you've got to start with a great cell and you have to have great management systems around it, this would be thermal management, charge management, and then of course all of the controls, both sophisticated and integrated really into the rest of the vehicle system to really give you a great battery.

Let's talk a little bit about how this great battery comes about. And because with this great battery it can enable a great vehicle, and the trick to being a great vehicle is balance, and balance, we'll try to talk a little bit about what that is and what we're trying to balance off here.
Sometimes you have to think of this discussion around vehicles and batteries as a bit of a chicken and egg discussion. What comes first? Is the right thing to do to develop a battery around an existing vehicle or develop a vehicle around an existing battery? And when I say battery here, I don't mean the cell, I mean the entire package, all the things that you have to really achieve. And the answer is, is that neither of those ends of the spectrum is going to give you the best overall balanced solution.

Given a standard cell or a cell that at least has given form factors and energy and power capabilities along the lines that Bob was talking about earlier, we still have to look to balance a number of different things in the area of safety. This would be both the physical safety, having to do with impact and crashworthiness, the electrical safety, having to do with shock containment, as well as arcing; and then also chemical safety, having to do with containment of the elements, as well as any thermal issues as well.

Another thing that we have to balance is the compatibility with front-wheel drive architecture, at least in the case of the Volts. Our goal here was to get the Volt to market very, very quickly, and in order to do that we didn't want to, if you will allow me, reinvent the wheel. We wanted to start with as much of the backbone of a modern vehicle that we could, both in product and process when it comes to building this vehicle as well.

And then finally, although this is probably maybe more of overriding is the overall performance. Not only does it have to deliver up to 40 miles of pure EV driving, but it also has to meet the customer's needs relative to accommodation in the passenger compartment with cargo, those sorts of things, as well as then ride and handling to present this overall balanced vehicle.

If we take a little look at the battery pack, while Bob was right, we haven't lifted the cover off the pack yet, but I will go into a little bit of detail on what's inside the pack here. We've got over 200 of the cells from LG Chem and we first pre-build those into modules and these modules include all of the thermal management systems, as well as the sensors and some of the control mechanisms. And again this is an extremely efficient package and it needs to be, so that we can get all of the power and energy into the vehicle that we have.

This package is about 94% efficient when it comes to the thermal management activities going on in there and the content that it has, and we think that's pretty good and probably the best in the industry. The modules then go together to form the pack, and of course there will be a number of them in there, and this also kind of leads you to say, "Well, this is great for the Volt. Does it also lead you to some other things in the future?"

And if you take a look here, we do have a reuse strategy in mind, and as Bob mentioned, the cell itself, we hope to be able to reuse in a wide range of vehicles, whether they be front-wheel drive architecture or otherwise. The modules we believe will be very reusable with a class of vehicles, in certain applications, maybe not everything. And then the total pack, particularly the one that you saw here, we think will be reusable in other vehicle types within the same front-wheel drive architecture. The idea here is to again, not reinvent everything, to put some basic building blocks on our shelf and then continue to improve those over time and reuse them in other vehicle products as well.

One last point, if I could, the difference really between a good cell and a great cell is really all about the things that surround it and the way that it comes together. Again, the energy management, the thermal management, the integration of those specific controls into the rest of the vehicle will really allow this balance that we're trying to get, and let's talk a little bit about that if we could.

Let's take a look at our physical battery again. Here is some design data right out of our systems here that we're using to design the system, and what I want to get into now is how, we're going to go after and talk about three areas here. We're going to talk about ride and handling, crashworthiness, and customer accommodation as it relates specifically to the Volt.

If we take our battery pack here and we flip it over and you look at the bottom, you see a lot of things, the reinforcements, the different things there and you say, "Gee, why are those there? We don't need those for the battery pack itself, even though they're actually integrated into the battery pack." And then when we bring the rest of the vehicle around it, the picture becomes clearer. You can see here that what we've got is the pack actually becoming a part of the vehicle structure itself, and this helps us in providing greater rigidity to the overall body. It can help and carry the crash loads across from one side of the vehicle to the other for some of the different standard tests that we do, as well as real world application. And it also helps to securely retain the over 400 pounds of battery that we have here in the vehicle, and of course that's very important in a crashworthiness situation.

One more thing I want to point out here, you heard me earlier mention process. This is the process of building the vehicle in the assembly plant. As you can see here, the pack is loaded from the bottom of the vehicle. It comes in just like other chassis components, whether it be the front cradle including the power train or rear axle unit, so we don't have to redevelop the way that we actually build the vehicle in the assembly plant.

In case it's not clear here in this photo, the battery is the yellow item running longitudinally and then you see some blue pieces over it. These are the reinforcement parts that help carry many of these loads through and into the body structure.

The other great thing about this location that we've got here in the vehicle fully integrated is that while we've got a pretty massive battery, we've managed to keep it centrally located and low in the vehicle and this helps us with the overall center of gravity of the vehicle. It's actually lower than our base global small car architecture that we're launching off of here and this of course will help with the overall ride and handling of the vehicle in cornering maneuvers.

What I want to show you next are a series of photos of an actual mule crash test. This is a 35 mile per hour frontal test, very similar to that that is done for the new car evaluation program, or end cap that you're probably familiar with. Forward end car is to the right of the screen here. This is different than the other photos, I apologize for that. So as you can see, the T-shaped pack there is in orange and the vehicle here is just prior to the front end of the car coming in contact with the barrier.

Go to the next slide. Here, the vehicle has come into contact with the barrier and is actually compressing the front end, which is off screen here, because I wanted to focus on the battery itself. And as you can see it still looks very similar to in the first frame.

Going to the next slide. Here now the vehicle has compressed all the way into the barrier and is on its way back out with the rebound, the energy coming off of the barrier. Again, very little difference And then final frame, you can see after the impact here, other than the exhaust pipe having a small bend in it there near the front of the tunnel, very little difference.

We go to the next slide. I tried to line these up so you can see, if you look on the left side, before and after impact, very few differences there, again, other than the exhaust pipe being relocated slightly. And then if you look during the compression and rebound again, very little difference in those. And that goes to show that we have accomplished exactly what we set out to do, which is to go ahead and retain those batteries exactly the way that we wanted to during this impact.

Next, what I want to do is go back to the math data and basically turn the vehicle back over, and now you're looking into what would be the passenger compartment, I've put the seats in for reference, and what you can see here is that inside the vehicle you don't really notice anything significantly different about it. The interior accommodations are all there. There's space for cargo in the back. There's plenty of room in the front seat and in the rear seats. Those front seats are in the rearward position in this graphic here.

Here's the situation where, again, we're trying to give the customer exactly what they're used to. We're trying to give them the interior and the accommodation that they want and need in a vehicle that can be their only vehicle, because again, since we have an extended range electric vehicle, this is not something that they have to worry about going on long trips, anything like that. We're trying to meet the needs that they have for this being their only vehicle.

And as we take vehicles like the Volt and other vehicles to come after that into the marketplace, the key thing here is, we don't want to ask the customer to change. We don't want to say, "You need to change the way you drive or the way you act or the way you go from point A to point B to have this greater independence from petroleum or greater or better overall cost when it comes to what it takes to operate your vehicle," those kinds of things. So the goal here with the vehicle and as we try to get this balance is to do just that, give them what they're used to in as many ways as possible without asking them really to change their daily habits.

With that, I'm going to hand it back to Bob for a minute.

B. Kruse Okay, this is Kruse again. So to summarize, General Motors is thinking long term here with its electric vehicle strategy and the advanced technology that we're bringing to personal mobility. And we're making a significant bet, a significant investment in vehicle electrification, both in the Volt, the Volt power train, and the battery itself. We believe that vehicle electrification is the future of the industry and where the industry is headed and we believe that the battery technology and the mastery of battery technology for automotive environment is key to us and our success and to the success of our intent on vehicle electrification.

Now make no bones about it, we still have a lot of work to do. We're very encouraged by the work that we've done so far. We're gaining optimism as we continue to gain experience and gain exposure. And we're doing all this design and development right here in the United States, right here in Michigan, both for the vehicle, for the battery and the vehicle integration that goes into the battery and the vehicle itself, and that's a big commitment to what we can do.

We think that improving vehicle integration safety performance and flexibility to quickly adapt to other technologies, other chemistries – we know there are lots of lithium ion chemistries, for example, being developed right now, and we're working on our generation two and our generation three systems in parallel. That speaks to our commitment of this promise. Typically in the automotive industry, you do gen one, you launch gen one, you learn from gen one, you apply it to a gen two design and so on and so forth, you do that very thoroughly. Because of our commitment, our excitement of this promise, we have resources working on gen two and gen three systems while we're launching our gen one system. Again, it speaks to the commitment that we have, the long-term commitment we have to vehicle electrification.

So I think with that, I'm going to wrap it up and see if we have any questions.

B. Corbett Matt, do we have any questions or any comments on the line? Could you give the directions, please?

Moderator Your first question comes from the line of Matt Wald of New York Times. Please go ahead.

M. Wald Hello, gentlemen. Thank you for your time this afternoon. I was on the phone with the U.S. Advanced Battery Consortium trying to get an overview of where lithium ion stands. One place clearly where it lags, but you're going ahead anyway, is in price. They talked about the price of a kilowatt hour of storage being in the neighborhood of $600 to $1,000 depending on the power density required, and you've got a fairly small pack so I would imagine you're at the high power density end. I wanted to ask, how many kilowatt hours does this carry and are you able to say in round numbers what the battery pack itself costs and what the goal is before this can become a real mass market product? At $40,000 a pop, you would be changing the way I drive, because I can't afford it.

B. Kruse Yes, absolutely. This is Bob Kruse responding to your question. First off, you're correct in your assumption. We do have a very efficient package, so the energy density is high. Our pack we've announced is a 16 kilowatt hour pack, and we use 8 kilowatt hours of that 16 kilowatt hour total to deliver the 40 miles of electric range. The reason we do that is to use the sweet spot of the battery and then treating it appropriately, not over charging it, not over discharging it, not doing that at too high a temperature or too low a temperature is how we're able to deliver on the promise of a life of the vehicle battery.

And so from a cost standpoint, I've seen a lot of cost projections on how much it costs per kilowatt hour. I think I probably have, or we probably have a better assessment of that than perhaps others. We have not released our cost per kilowatt hour, but we do have a viable business proposition in what we're doing with the Volt. But at the same time, I will tell you that this first generation technology is expensive and that's why some of the incentives that we see happening both at the state and federal level to help with vehicle electrification to adopt this first generation technology, that coupled with the lower usage cost of electric energy versus petroleum energy we think makes a fairly viable proposition for first generation technology.

But leaving that said, the primary motivation behind my generation two and generation three efforts is trying to get at cost and for our teams to take cost out of this electric energy storage to make it more viable for the mass market. That's where we're at with generation one. As we have the epiphanies and the greater understanding for gen two and gen three systems, I trust we'll be talking to all of you in the future.

M. Wald Thank you.

Moderator Your next question comes from the line of Richard Truitt of Automotive News. Please go ahead.

R. Truitt Good afternoon, gentlemen. I have two questions for you and the first one goes like this. You're talking about the battery lasting the life of the vehicle, but then you're saying that you can reuse the battery. So I don't understand if it's going to last the life of the vehicle, why is there any need to reuse the battery?

And the second question is, who is going to own the battery in the Volt? Will it be you guys or the consumers?

A. Farah Alright, this is Andrew Farah, let me try to address that. On the first point, battery reuse, I think you're talking about after the vehicle has gone through its life, and the reason that we talk about that is that the biggest limiting factor to a battery is the way that it can deliver power. It still has a lot of energy in it when it's done being a vehicle battery.

R. Truitt Okay.

A. Farah So it could be used for other things, standby power supplies, any number of things that you need to store large amounts of energy and still deliver them, but maybe not at the same power rate needed to accelerate a vehicle from zero to 60 in nine seconds.

R. Truitt Okay.

A. Farah Again, there's still a lot of usable life in there, but maybe not vehicle life at that point.

R. Truitt Okay. Now who's going to own the battery? If you're going to say take it back after the car's done with its lifespan, does that mean you guys own the battery in it?

A. Farah We haven't made the decisions completely on the business model for the way the battery will be handled. Clearly, as you point out, or certainly thinking, there are lots of options there. It could be sold with the vehicle.

B. Kruse Our goal basically, our go-to-market strategy will be unveiled as we get closer to the launch of the vehicle.

R. Truitt Okay.

B. Kruse But I will also point out in addition to having a life, the battery at the end of the life of the Volt will have 40 miles of electric range. There's a lot of battery left. Andrew talked about some of the other applications for these batteries as a battery, but even when they have exhausted their use as a battery, the lithium that's inside the battery pack is extremely recoverable and recyclable.

R. Truitt Okay, thank you.

Moderator Your next question comes from the line of John O'Dell from Please go ahead.

J. O'Dell Good morning. A couple of quick questions. One is pretty minor, but just so that I understand something, is that a battery tunnel between the rear seats or is that tunnel for something else?

A. Farah No, that is where the battery is, and yes, when I talked about interior accommodation, I should have pointed out that we did set this up to be a four-seater when we did it, and part of it is because we do have to accommodate the battery. So the battery, it's not like we didn't have to make any compromises whatsoever to do this, the picture is back up on the screen there, and you can see that is the battery tunnel continuing up ...

J. O'Dell Got you.

A. Farah ... in between the seats.

J. O'Dell By the way, the picture is not back up on my screen.

A. Farah Okay.

J. O'Dell I know what it looks like. I just wanted to make sure so I didn't misrepresent – yes, there we go.

B. Kruse Yes, the top of the "T" runs under the rear seat.

J. O'Dell Right, got you. You talked about 94% efficiency regarding thermal management. Can you be a little more specific? That efficiency refers to what, the efficiency of the thermal management, meaning you've got a 6% "problem?" You can't get 100% thermal management ...
A. Farah No, no, no.

J. O'Dell ... or the thermal management allows you to pull 94% of the energy out of the batteries?

A. Farah Neither of those. What I was referring to is the overall package efficiency, okay. The components that we have inside to do the thermal management in the longitudinal direction, which is key because we're actually going in and cooling the entire cell, and so again, this number being up that high is great, because that way we can do this and still pack all the energy and power we need into the vehicle.

B. Kruse And not have a dramatically larger battery pack to be able to provide the thermal management system at the cell level.

A. Farah Correct.

J. O'Dell Okay, and I believe it was Mr. Kruse who made a couple of comments that make me have to ask this last question, which is, you're still on track, you still believe that you're going to launch towards the end of 2010 with retail ready models, and has the state of the economy caused you to rethink your first full year sales goals?

B. Kruse John, a great question. We remain confident and committed to the November, 2010 launch of the Chevrolet Volt. Everything that we have experienced in the last year leads us to the conclusion that we're on track, or maybe even slightly ahead, have not had any major discoveries or events that sometimes can happen in the development of any new vehicle. And from a battery pack standpoint, we still have the very first pack we received back a year and a half ago, still is on test in the lab going through charge and discharge cycles. Again, gaining valuable data, valuable intellectual property on how this chemistry, this construction matures and evolves and ages.

J. O'Dell And as for first-year sales projections given the state of the economy?

B. Kruse Yes, I mean I think we're very confident in our first-year sales projection. I will tell you though that $1.50 a gallon gasoline is not necessarily helping with the business case, but who knows what the cost of petroleum is going to be in the future.

I've been asked what's the Volt going to cost in November, 2010 or what's the price going to be? I'm not sure what the price is going to be. We know what it's going to cost and part of the go-to-market strategy will be pricing it and part of pricing it will be what the cost of petroleum is in November, 2010. I'm not wishing for higher petroleum costs, but I think we all recognize that the low cost we're experiencing now are perhaps temporary and economic forces are going to drive petroleum cost in one way. As that happens, the economic viability of what we're doing only gets greater.

But the bottom line, our production plans have not changed. We're committed to this program. We're committed to the long-term prognosis for intent of vehicle electrification.

J. O'Dell Alright, thank you.

Moderator Your next question comes from the line of Michael Strong of Detroit Bureau. Please go ahead.

M. Strong Hello there. I found the crash test photo sequence interesting, largely because there didn't seem like there was much damage to the battery pack. What damages the battery pack? How is that determined? What happens if you're in a crash? What does all that mean? What does it all add up to?

A. Farah Well clearly, there are a number of things. First, you want to protect the passenger compartment. This is a typical, we would do it with any vehicle, that's the number one constraint. Second, is you want to make sure that you're protecting the cell in the sense of any impact to it, crush, intrusion, those kinds of things.

So these are really the first two items there that we're trying to avoid and I think as you saw from the test there, in a frontal situation we did that. Of course, a side situation is more interesting sometimes, and we've also run preliminary tests like that on the mule vehicles that we've got out running around and have done very good in those as well. I just didn't have any footage to show.

B. Kruse And there are layers of safety, both at the vehicle level, at the pack level, at the electrical control level, all the way down to the cell level, and how the cells are designed, including that very critical separator that I talked about. I think you saw, there's like an orange plug or a green plug. In this picture a green plug right where the base of the "T" meets the top of the "T". That's a high voltage disconnect plug that's accessible through the console so that if you pull that plug, high voltage energy is disconnected from the entire vehicle and maintained to the pack.

A. Farah I think the other thing to add is and we really didn't get into this, but there's also a very sophisticated system similar to the ground fault interrupter system that you have in your home, say in your bathroom, you might be familiar with. We have a very similar system throughout the entire vehicle that protects all high voltage circuits. It's constantly looking for any violation of contact to the body or loss of energy, and then if that is detected, there is a shutdown mechanism that is located within the pack and so we re-contain the high voltage within the pack.

B. Kruse So the bottom line, the layers of safety that are in the vehicle, in the battery, in the cell are very sophisticated and thorough and complete and are part of what it takes to deliver electric vehicles to mass commercialization.

M. Strong Okay, thanks.

Moderator Your next question comes from the line of Josie Garthwate of Earth2Tech. Please go ahead.

J. Garthwate Hello there. I'm wondering if you could just speak to some of your strategy for bringing down the cost of the battery pack and any challenges that you foresee coming up for those second and third generation vehicles?

B. Kruse Yes, I'd like to introduce Denise Gray. Denise is the director of our battery organization and she'll talk about some of our specific activities for cost.

D. Gray Thanks, Bob. Yes, we've had a number of different activities happening today as we analyze our current, our generation one battery pack, and as we come up with the ideas for generation two and three. For example, the cells themselves, we've been working with a number of different cell companies, separator companies, electrolyte companies, looking for cross down opportunities to allow us to have to maintain the performance, but as the sophistication, as the research and development is happening at universities and in national labs, help us to understand what the possibilities maybe for the foreseeable future.

So even at the very smallest level of component from the cell, we've been working through different ideas from that perspective and, thank goodness, the number of ideas are plentiful. As you look into the electronic system for example, you've seen the electronics world really progress from computers that were desktop and they were huge and they were very expensive. And now even on our BlackBerry, there are little computers, and so you've seen how in the electronics age, the technology has progressed to a point where they're affordable by many and they weigh a lot less. We're looking for those kinds of innovations with our electronic suppliers as well.

The thermal designs, we're looking into advanced thermal designs that allow us to get to reject even more heat, if you will, as you go through the different technologies. There's liquid coal. There's air coal, and even the materials themselves, we've moved from steel to magnesium to a number of different compositions when it goes to the weight of the overall battery pack.

We're looking at high voltage distribution and how can we up integrate some of these devices where our current generation maybe four pieces to give you a particular function, and how can we up integrate those to become one piece that gives me all of those functions. So there are a number of ideas that we have for generation two and generation three in order to progress the cost down opportunities.

B. Kruse Yes, to add to that, there is something called the learning curve or a cost curve that technology typically goes through. This technology is no different, so as there's additional intellectual property at the cell, the thermal, the electronic, we'll be able to do that. We'll be able to integrate more at a vehicle level, combining things, and then as the volumes go up, the cost go down.

Based on what we know of the business case of the Volt and what's coming, we're very bullish on the viability of this technology to meet the mass market needs of personal transportation.

D. Gray If I could add just one more comment, when we began our track to the Chevy Volt, January, 2007, there were a lot of folks who thought that we did not have a plan, that this was the impossible. And I think as time has progressed, two years later, we're on track to where we thought we were going to be. In fact, I think in some areas, we've accelerated our learning, but you have to begin the process in order to get, you have to get through generation one to get to generation two and to generation three, and that's why the efforts that we've got here is very, very, very important.

B. Kruse Denise and her team are leading and we're continuing to make the investments in people and resources to maintain that leadership.

J. Garthwate Great, thank you.

Moderator Your next question comes from the line of Peter Valdezdepana of CNN Money. Please go ahead.

P. Valdezdepana Thank you very much. I'm just wondering, there's a lot of emphasis here on as you were talking about developing this in house and doing this developing in house, which obviously involves I think significant costs for General Motors opposed to letting partner companies do more in the development. Why so much emphasis on doing this in house, especially given the current state of the economy, given GM's financial state. Why is it so important to do this development in house and make this a core competency for GM instead of sharing more of that burden?

B. Kruse Yes, part of this, this is Bob Kruse again, part of that is trying to be able to control our own destiny and make the future a reality. As we progressed through this learning, I think we've learned a lot. We've also found that we have many core competencies that are very applicable to efficiency doing battery packs.

The bottom line we're doing that is because it's in the best interest of the company and the vehicle to be able to do that, and we also see there's a competitive advantage and it's a sustainable competitive advantage by being able to do this first and do it faster and do subsequent generation better than anybody else.

A. Farah This is Andrew, I'd like to add, and really part of many of the balancing things that we talked about here depends on us actually controlling very much so the development of the modules and the packs and controlling at least the requirements on the cell very specifically so that we can deliver that competitive advantage as a vehicle, not just as a great cell or as a great battery pack. Nobody cares about that. They really care about whether or not they're getting a great vehicle in the end and we think this is the way to do it.

B. Kruse And again, we've leveraged the engineering expertise of companies like CPI, who have been in the pack business to help us with the engineering of the pack as we increase our own capability.

D. Gray If I could just add, as I looked at, this is Denise Gray again, the number of parts or the unique part numbers in my battery pack, there's over 150. And then as you look at the number of parts in the vehicle itself, there's probably thousands of those, and so who might be most able to balance all of those parts and to give you a great car and that's the General Motors that we are because we've had such experience in doing that. And so it's not just a part, but it's a part integrated into a vehicle that gives it life and I think that's where our competitive advantage is.

B. Kruse Yes, and remember, we did the EV1 program, which we learned an awful lot about vehicle electrification and part of that enables us to do the Volt. As a matter of fact, the Chief Engineer of the program, Andrew Farah, has his roots back to the EV1 program.

A. Farah Yes, and again, I was going to add, we learned that full integration of the battery, whether it's a lead acid battery or nickel metal hydride battery or now in the case of the Volt, Lithium Ion. It's very important to be able to control all of those aspects, because the pack really needs the rest of the vehicle and the vehicle needs the rest of the pack and that has to be tightly integrated.

Moderator Your next question comes from the line of Lindsay Brook of Automotive Engineering Magazine. Please go ahead.

L. Brook Good afternoon and this is for Bob Kruse. Bob, as you know, there are some so called battery swap schemes that are being bandied about that seem highly problematic. I'm wondering as an alternative, is rapid charging perhaps going beyond 220/240 volt and at higher amps, perhaps more of a practical solution in your mind and is GM looking at these sort of strategies?

B. Kruse Actually, I'm very glad you made those comments and those statements. Problematic is a reasonable way to describe them and you're also the alternative, this rapid charging. This DC to DC, a lithium ion battery can take large quantities of energy over rapid periods of time. So having an infrastructure to enable that as those standards emerge, that to me seems much more viable and a much greater opportunity than battery swapping concepts, but we'll let the marketplace decide. Did that answer your question?

L. Brook Yes, thanks, Bob.

B. Kruse Yes. And I guess to also add, yes, we're working on rapid charging scenarios and alternatives.

L. Brook Thanks.

Moderator Your next question comes from the line of Ben Stewart of Popular Mechanics. Please go ahead.

B. Stewart Hello. Are any parts of the battery pack going to be manufactured in Korea? That's the first part of the question.

The second part would be, have you done any modeling cradle-to-grave comparing say a Volt to a Cruze, a conventional power train car of similar size that gets 30 to 35 miles per gallon on the highway? I'm just curious.

B. Kruse Yes, to answer that first question, is the initial cell will come from LG's manufacturing capability in Korea. What the future holds, obviously I think you're well aware of what the stimulus bill includes as it relates to cell manufacturing. We're in the process of evaluating those alternatives now and as we know more you'll know more.

As far as balancing and how it compares at a vehicle level, I

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