GM plans large run of all-electric Chevy Volt

WASHINGTON, Jan 31 (Reuters) - General Motors Corp GM.N plans a strong production run for its plug-in Chevy Volt, according to a senior executive on Thursday who also urged Congress to approve tax incentives to help spark demand.

Jon Lauckner, GM vice president for global program management, said the automaker is mindful of the current high costs of battery development but expects the per-vehicle price to drop as the technology improves.

“As volume scales up, you will move down this curve to see better economics going forward. You can’t get hung up on the economics of the first unit or the tenth unit,” Lauckner told an energy forum at the Competitive Enterprise Institute.

Lauckner said GM still hopes to start production of the Volt by the end of 2010 and said the company is planning a healthy roll-out.

“We’re talking about large numbers -- in the tens of thousands,” he said. “It’s not a niche market.”

Plug-ins, viewed by the world’s two biggest automakers as one answer to reducing U.S. gasoline use and meeting sharply higher U.S. fuel efficiency standards, are designed for short trips powered entirely by an electric motor and a battery charged through a common electrical outlet. A gasoline engine would kick in after 40 miles on electric power.

GM hopes to be the first to mass production and snatch the lead on all-electric fuel-saving technology from Japan's Toyota Motor Corp 7203.T. Toyota also plans a plug-in hybrid by 2010.

The biggest hurdle to success of electric vehicles is improving lithium ion battery power and storage capacity while making it small, safe and light enough to fit easily under the hood with other components.

“Cost is the killer right now,” said Jack Deppe, a U.S. Energy Department consultant.

Current estimates show that every 10 miles of electric power adds about $1,500 in costs.

But with gasoline/electric hybrids comprising just 2 percent of the U.S. auto market even with gasoline prices above $3 per gallon, some experts are skeptical about the rush to perfect plug-in technology.

John German, a hybrid expert at Honda Motor Co 7267.T, said the case has not been made for mass-market plug-ins, arguing there are too many questions about cost, efficiency and consumer interest.

German said “plug-in hybrids are coming” but stressed that automakers have embraced and then abandoned other fuel-saving ideas before. He said industry should not try to “force feed” electric cars to consumers.

Lauckner said GM is not betting that gasoline prices will remain stable or go down and that consumers globally will rally around the Volt.

All executives recommended that Congress invest heavily in battery technology and offer tax incentives to consumers like they have for purchases of the popular Toyota Prius hybrid.

“That’s a helpful role government can play to speed the technology and bring these benefits forward,” Lauckner said.

Editing by Richard Chang