General Motors No Longer Has The Capacity To Develop Or To Follow A New Business Model Based On Alternate Energy Powered Vehicles, So Why Prolong Its Agony?

by Jack Lifton on March 4, 2009

in Batteries, Hybrids & EVs, News Analysis

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I read a foolish article earlier today, which said that GM’s only problem now is a shortage of batteries and electric (I assume, drive train) motors. The author’s answer is simple: GM must build its own batteries and electric motors. The fact that such a resolution of GM’s problems is impossible, tells everyone except this author that GM is finished as an industry leading vehicle maker.

General Motors has had ten years to prepare for the introduction of alternate energy motivated power trains. It has not taken a single step towards such a goal that goes any further back in the value chain by more than two steps. Therefore, whether or not GM can even obtain the electric motors and any type of battery for a hybrid, plug-in hybrid, or electric vehicle depends entirely on the kindness of strangers. I say kindness, because GM is no longer very prompt at paying its bills, and always argues about price without much knowledge of actual costs, making its purchasing department one that no one wants to negotiate with.

In addition the only suppliers of batteries, other than lead-acid SLI types, today are in Southeast Asia. The mass production of lithium-ion batteries for vehicular power train operations has not yet begun, and it is very unlikely that if and when such production starts, that GM would be a prime customer for the early mass production lots, because GM is today literally bankrupt, not only of funding, but also of engineering continuity and basic analytical skills.

GM’s Chevrolet Volt is unlikely to be a commercial success, or to involve large numbers of units in the near term, so it would be very risky for a battery manufacturer to make a large investment of money and resources without a very high probability of a return, especially when the battery maker’s resources could be used to supply the much higher probability of success of a Southeast Asian carmaker.

General Motors no longer has the capability to manufacture SLI batteries (e.g. lead-acid), much less the new NiMH or lithium-ion technologies required for power trains. GM also no longer has the capacity or the capability to manufacture electric motors. Both manufacturing capabilities and capacities were dispensed wit,h when Delphi was created and spun off more than a decade ago.

In any case, GM no longer has any knowledge of, or access to, the value chain for the critical raw materials for such devices as power train batteries and electric motors. This knowledge and access were eliminated by the short sightedness of GM’s top management more than a decade ago, and cannot be recreated by the same people who destroyed it, all of whom are still in place.

GM is completely at the mercy of outside suppliers, whose interests are obviously not best served by advancing either technology or credit to what’s left of a once great car company.

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