GM aims to build 500,000 electric-technology vehicles a year

SAN FRANCISCO Wed Nov 14, 2012 1:52pm EST

A GM logo is seen on a Hydrogen car during a presentation in Berlin, August 28, 2009. REUTERS/Pawel Kopczynski

A GM logo is seen on a Hydrogen car during a presentation in Berlin, August 28, 2009.

Credit: Reuters/Pawel Kopczynski

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SAN FRANCISCO (Reuters) - General Motors Co aims by 2017 to buld up to 500,000 vehicles a year that include some form of electric power in the engine, including cars like the Chevrolet Volt plug-in hybrid, a top executive said on Wednesday.

GM has made rolling out cars with electrical technology -- including its eAssist system that boosts fuel efficiency in gasoline-powered cars -- a central part of its global strategy, global product development chief Mary Barra told reporters.

"Our plans call for producing up to 500,000 vehicles annually with some form of electrification globally by 2017," she said via satellite.

That would be slightly more than 5 percent of GM's global sales last year of about 9 million.

The forecast includes plug-in hybrids; pure electric vehicles like the Chevy Spark EV that will go on sale next summer; and eAssist system, which GM offers on several vehicles, she said. GM introduced the Volt in the fall of 2010.

So far this year, GM has sold more than 50,000 vehicles that include electrification technologies in the United States, with eAssist accounting for slightly more than half that total. Barra did not break down how much of GM's target would be cars that do not include a gasoline engine, but she said plug-in technology will remain central to GM's strategy.

"A major focus for GM's electrification strategy will center on the plug," she said. "We have every intention of maintaining our leadership position in plug-in vehicles."

Barra said GM is not turning its back on traditional hybrid or hydrogen fuel-cell vehicles.

GM plans call for its eAssist system, which boosts fuel efficiency as much as 25 percent in some gasoline-powered vehicles, to be on "hundreds of thousands" of vehicles annually by 2017, she said.

Barra said the Spark EV minicar, which will take on Nissan Motor Co's Leaf, will be a global vehicle, launching first in select markets in the United States and South Korea before moving to other countries. GM will sell the car, rather than limiting access to lease deals, she added.

"We're not building the Spark EV to check a regulatory box," Barra said.

The EV's battery will be made by A123 Systems Inc, which filed for bankruptcy last month.

The rollout of the Spark continues GM's push to seize the mantle of "greenest automaker in the world" from Toyota Motor Corp, which makes the popular Prius hybrid car. Toyota also sells a plug-in version of the Prius as well.

Chief Executive Dan Akerson has driven GM more aggressively toward EVs. Efforts have centered on rolling out the plug-in technology in a broader range of vehicles to recoup its investment in the money-losing Volt.

In August 2011, GM said it would build a Cadillac ELR luxury coupe based on the Volt's plug-in hybrid technology. In October, the company said the ELR will begin in late 2013 at the same plant that makes the Volt.

GM, like other automakers, also needs more fuel-efficient cars as the industry pushes toward more stringent U.S. requirements that will be in place by 2025.

Ford expects hybrids, plug-in hybrids and EVs will account for as much as a quarter of its global sales by 2020. GM's smaller rival said in August it was accelerating development of its hybrid and electric vehicles by bringing design and production of key parts in-house.

The No. 2 U.S. automaker, which has launched the Focus EV and C-Max Energi plug-in hybrid car this year, said it will spend $135 million to design parts for its next wave of EVs and double its battery testing capabilities by next year.

President Barack Obama's administration has been a strong proponent of electric vehicles like the Volt and set a goal of reaching 1 million battery-powered vehicles on the road by 2015.

Analysts are less optimistic as prices remain too high for EVs, and driving range and wide availability of public battery charging stations remain the chief concerns for consumers. Lux Research estimates the number will actually be fewer than 200,000, and Boston Consulting Group has predicted EVs and plug-in hybrids will make up only 5 percent of the market within eight years.

However, Elon Musk, the CEO of electric carmaker Tesla Motors Inc, said on Monday that Obama's re-election would likely mean a continuation of the U.S. government's policy promoting EVs. He said he would back any efforts to boost federal tax credits for electric cars to as much as $10,000 from $7,500 now and added Tesla would install fast-charging stations on major U.S. routes by the end of next year.

(Reporting By Ben Klayman in San Francisco; Editing by David Gregorio)

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