Volt stays plugged in at bankrupt GM

GM's bankruptcy may claim plenty of casualties, but its Volt plug-in hybrid vehicle will not be among them, according to a statement issued by the company yesterday.

"From day one, the New GM will be well positioned to capitalise on the award-winning vehicles we have developed and launched during the past few years, and on our investments in exciting new technologies such as the Chevy Volt, so that we can build and return value to our customers and to the millions who will have a stake in our success," said president and chief executive Fritz Henderson. "The New GM will play a critical role in the future of the automobile, and assure that the US has a strong stake in this rapidly changing global manufacturing industry."

The company, which reached an agreement with the US and Canadian governments to sell off its assets to a slimmed-down "New GM", announced yesterday that it has put its US operations and three domestic subsidiaries into chapter 11 bankruptcy to expedite the relaunch process.

But the company insisted that despite the bankuptcy and expected three-month relaunch period, it still plans to launch the Volt in 2010. It added that it will also remain on track to have 14 hybrid models on the road by 2012, and vowed to have 65 per cent of its vehicles capable of running using alternative fuels by 2014.

However, GM may have its work cut out selling the plug-in hybrid vehicle into an increasingly cautious market in the short term. Charles Territo, spokesman for the Alliance of Auto Manufacturers in the US, said sales of cars are expected to top out at 10 million units in the US this year, compared to 17 million two years ago.

Sales of hybrid vehicles – which took 10 years to reach a million units – plummeted 47 per cent for the period to the end of April, compared to the same period last year. Meanwhile, sales of purely electric vehicles in the US are statistically negligible at this point.

The situation is not helped by conflicting government policy, Territo said. "Currently we have a policy that promotes cheap gasoline, but which encourages manufacturers to make more fuel-efficient vehicles, and those policies aren't always consistent," he said.

Nevertheless, John O'Dell, editor of the Green Car Advisor blog and a senior editor at Edmunds.com, said GM could not have included the Volt in its future plans without US government approval, and that what remains of the firm's tattered reputation will now rest in large part on the success of the vehicle.

"GM shot itself in the foot by killing the EV-1," he said. " It wasn't that visible initially, but as the push for more fuel-efficient vehicles grew, it suddenly became this cause célèbre."

He added that the pressure was now on the company to make a success of the Volt. "If GM doesn't do it, who's going to believe anything GM does any more?" he asked.