Plug In America suggests reducing warranty time to lower cost of Chevy Volt

One of the Obama Auto Task Force's findings RE the Chevy Volt was that it will be a wee bit pricey, too pricey, in fact to play a role in saving GM from itself. Plug In America (PIA), the advocacy group for vehicles with a cord, is trying to make the case that part of the problem for the Volt's expected high cost (GM hasn't given any official price estimate, but there's a general agreement that $40,000 is a reasonable expectation) is a California law that requires batteries to be waranteed for 10 years. To try an reach this goal, GM is putting in a 16 kWh lithium-ion battery pack, but only expects 8 kWh to ever be used. GM engineers have expressed nothing but confidence that their battery will work, but everyone knows it will be expensive.

PIA's solution: allow an exception to the California law for this new technology, say a five year warranty instead of 10, and let the automakers phase in the decade-long deal. Reduced warranty time could mean a smaller, cheaper battery and, presto, a cheaper Volt. As PIA's Paul Scott writes, "In order to comply with a stringent 10 year warranty, we have to buy twice the battery we need. This is an example of perfection being the enemy of the good. [...] Getting EVs on the road is more important than waiting till they are perfect."

PIA's official statement is available after the jump.

[Source: PIA]

PRESS RELEASE:

Plug In America Refutes Obama Auto Task Force Conclusion on GM Volt

Advocacy Group Proposes Plan to Make Car More Affordable

In response to an Obama Administration auto task force report, Plug In America on Tuesday proposed a plan to make GM's Chevy Volt and other plug-in cars more affordable, noting that most advanced new technologies are initially more costly.

California law requires that the Volt and other plug-in hybrids come with a 10-year warranty. To ensure this longer life, automakers are as much as doubling the size of the battery pack, increasing cost to manufacturer and consumer. But not a single production plug-in electric vehicle sold to date, from GM's early EV1 to today's Tesla, has had a warranty of more than five years, noted Plug In America advisory board member Chelsea Sexton.

"To support early deployment, California should relax the warranty requirement for cars like the Volt to five years, phasing to 10 years over time," said Sexton, a former GM employee. "This alone could cut the number of batteries required by as much as half and reduce the cost of each vehicle by thousands of dollars."

The warranty reduction would not impose added liability on GM or consumers, Sexton noted, because President Obama has said the federal government will guarantee the warranties of GM and Chrysler vehicles should they go bankrupt. And dealers can sell extended warranties, providing additional security for consumers who want it as well as revenue when auto companies need it most.

"The minimum Volt warranty we're asking for has historically been the maximum ever given for any plug-in car," Sexton said.

Plug In America's legislative director Jay Friedland further noted that the existing $7,500 tax credit for plug-in vehicles would further reduce the Volt's cost. Moreover, several states are implementing additional tax credits of up to $5,000 per vehicle.

"These incentives reduce costs for consumers and will increase sales, helping auto manufacturers reach economies of scale sooner," Friedland said.

Said Sexton: "We applaud the Obama Administration for its robust support for plug-in vehicle technology. But, this discouraging statement about the Volt's early viability is counter-productive to the President's own goal of 1 million plug-in vehicles by 2015.

"It is unreasonable to expect the Volt and any similar new technology to be immediately profitable when others that similarly started with a price premium, such as the Toyota Prius, became wild successes. Even the first DVD player costs many times more than it does today."

About Plug In America: Plug In America leads the plug-in vehicle movement. The nonprofit organization works to accelerate the shift to plug-in vehicles powered by clean, affordable, domestic electricity to reduce our nation's dependence on petroleum and improve the global environment. For more information: http://www.pluginamerica.org.