GM: Green Motors — A8

General Motors Corp. is investing heavily in the development of next generation fuel-efficient alternatives to current car engines. The concept car, Chevrolet Volt, which uses a huge T-shape battery pack to drive the wheels, was shown in the last Detroit Auto Show. Now GM is hiring as many as 400 technical experts to work on alternative fuel technology, hoping to turn Volt to a production car in three to four years.

The Volt does have a small gas engine, but to recharge the battery instead of driving the wheels. GM estimates that the fuel efficiency of Volt can reach 150 miles per gallon, which is about three times higher than that of current hybrid cars from Toyota.

While they are putting a lot of resources into the innovation, GM executes are conscious that the vehicle, even if they are able to put it in the production line, may not make money for the company, at least not in the recent future. GM is seeking a “halo” product that will burnish the auto maker’s overall reputation as an environmentally friendly corporation, and more importantly, not merely as a maker of gas guzzlers. They want consumers to think of fuel economy when they see a GM product, just as what they perceive Toyota cars now. As the gas price reaches record high in recent months, alternative fuel innovation seems more urgent than ever, especially for the struggling Detroit auto makers.

GM’s green bet is not riskless. The company is still discussing with battery suppliers to develop the vehicle’s most critical component. Even though it has no guarantee that the battery will be ready, GM decided to start designing other parts of the car and the manufacturing process to produce them. GM is desperate to lead and cash on the new technology this time.

PS. It’s interesting to read the story and Businessweek’s recent cover story about innovation. Businessweek says now CEO’s are generally more cautious about innovations now compared to two or three years ago. They start to realize innovations are risky, costly and quite often unproductive. Persistence is not necessarily negative. After a somewhat unsuccessful “Live Green, Go Yellow” campaign for their E85 ethanol cars, it will be interesting to see what happens with GM’s innovating electric car.

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