General Motors vice chairman Bob Lutz spoke to the convention of the National Automobile Dealers Association this past weekend and, as usual, he was good for a few quotes. Of particular interest, he told the gathering that he didn't expect hybrid vehicles to ever comprise more than 10 percent of the U.S. new vehicle market.
The Dow Jones report didn't elaborate on why Lutz felt this way, although we would guess it has to do mostly with the cost premium associated with hybrids. No matter how far costs may be driven down, a hybrid will always be more expensive than a conventional powertrain simply because more hardware is added and nothing is taken away.
Lutz also reportedly went on to say that he expected GM would always lose money on its hybrid vehicles. While this is likely true for the current generation two-mode hybrid system which is very complex and expensive to manufacture, we would hope that at some point GM could develop a system that would at least break even if not be profitable. Certainly at the volumes being sold right now, profitability is a non-starter. GM is currently selling about 500 hybrid trucks a month, down from the peak in 2008 of nearly 2,000 units a month. Perhaps if GM offered a hybrid in a package more likely to appeal to consumers, it would sell more those. That, unfortunately, is unlikely to happen until later in 2011 at the earliest.
[Source: Dow Jones]
The Dow Jones report didn't elaborate on why Lutz felt this way, although we would guess it has to do mostly with the cost premium associated with hybrids. No matter how far costs may be driven down, a hybrid will always be more expensive than a conventional powertrain simply because more hardware is added and nothing is taken away.
Lutz also reportedly went on to say that he expected GM would always lose money on its hybrid vehicles. While this is likely true for the current generation two-mode hybrid system which is very complex and expensive to manufacture, we would hope that at some point GM could develop a system that would at least break even if not be profitable. Certainly at the volumes being sold right now, profitability is a non-starter. GM is currently selling about 500 hybrid trucks a month, down from the peak in 2008 of nearly 2,000 units a month. Perhaps if GM offered a hybrid in a package more likely to appeal to consumers, it would sell more those. That, unfortunately, is unlikely to happen until later in 2011 at the earliest.
[Source: Dow Jones]
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