GM’s Bob Lutz doesn’t like Better Place model

I was fortunate enough Tuesday evening to attend a small private dinner with GM vice-chairman Bob Lutz, who flew into Toronto following the launch of the Volt in Detroit earlier in the day. The 76-year-old auto executive was quite entertaining for his straight-shooting talk and occasional joke.

He dismissed the fear of “peak lithium,” adding that lithium can be recycled and pointing out that there will likely be a variety of different battery chemistries over the next decades. “People keep saying we’ve used up the whole periodic table on battery composition and that lithium-ion is about as good as it gets. I don’t believe that,” he said. Lutz also expressed hope for the North American manufacturing sector, but only if workers are prepared to “ratchet back” their expectations. “You cannot have a society where everybody has job security, wonderful benefits, high salaries, and then you go to Wal-Mart and buy $19.99 DVD players.” He also conceded that the first generation of the Volt will be more expensive than first expected, but said it won’t be an issue because it will initially appeal mostly to celebrities and other “rich” consumers. “But if we want to generalize the technology the price has to come down.”

Here is a Q&A I ran in the Toronto Star today.

There were a few comments he made that I want to highlight in this post: his opinion of Shai Agassi’s Better Place model; his response to Honda’s criticism of plug-ins based on lithium-ion technology; where solar PV and the Volt cross paths; the challenge of reaching people without easy access to charging infrastructure; how the Volt will cope with cold weather and its impact on the battery; and what could derail an otherwise successful introduction of the vehicle.

Lutz on Better Place

We don’t like it, because our batteries are purpose-built for the vehicle, and we can’t wait for Agassi to make up his mind for what his standardized battery would look like. Frankly, we’d have to be very much assured that all of these connections, the disconnect, the reconnect, and everything, that it all works well without any risk or without any danger.

I’m also somewhat troubled by the situation where a company becomes the equivalent of a cellular provider, and here is Mr. Agassi, who buys the electricity in bulk and resells it to you at a tremendous profit in the form of charged batteries. And he would have to charge a lot, because when you start thinking about the upfront investment in a dense network of charging stations all over the country, and all over every country that he’s talking about, where at each location … he would have a shed full of fully charged batteries… When you think of the expense of the battery pack, times the number of battery packs he’s got to have at each station, times the number of stations he’s got to have to make this whole thing feasible, I don’t see how the business equation could possibly work. Unless he resells it to you at a tremendous mark-up. Which wouldn’t be profiteering. It would basically be recovering his investment cost.

Look, if we were designing electric vehicles to go from New York to L.A., I’d say yeah, that’s the thing we have to do, we have to have batteries that slide out and have battery-changing stations on the main freeway between New York and L.A. and every 100 miles you pull in, pull out the rack, slide in a new rack, and away you go. But that’s not what people are going to use electric vehicles for. We think 80 per cent of Americans drive 40 miles a day or less. That’s who’s going to buy the Volt… I don’t see the role of the electric vehicle being transcontinental-enabled.

Lutz on criticism from the Japanese

I think the reason so many of our Japanese competitors are saying this lithium-ion technology will never work and it’s going to blow up on us… maybe they think we’re going to use the whole battery? In other words that we are 16 kilowatts and are going to use 16 kilowatts and stretch the battery by going to full charge and full discharge, which is very rough on lithium-ion batteries.

Actually, in anticipation of that we designed the battery pack twice as big as it needs to be… We have a 16 kilowatt battery and we use 8 kilowatts, by charging to 80 per cent only and discharging to 30 per cent only. So we’re using this 50 per cent slice of the battery’s capability, and that is the slice where a high-tech battery like lithium-ion breaths very easily.

We think that by not charging it above 80 per cent and not discharging it below 30 per cent, we can get that battery to cycle thousands and thousands of times and last 10 years… It’s the battery’s comfort zone.

Lutz on the charging have-nots

We’re really trying to get a handle on the problem of people who don’t have houses and don’t have garages, like apartment dwellers, condo dwellers, people who park in the street. Right now there’s no solution for them. A partial solution would be to encourage parking deck owners to put in one floor or half a floor that would be reserved for electric vehicles, where there would be metered parking spaces where you can plug in and swipe your credit card.

We have achieved, amazingly enough, with other manufacturers a ‘normed’ plug. We all agree on what the plug is going to look like. The way the parking meter is going to work is it’s going to have a slot, you put your plug in, and the slot will go over the cord and lock when you swipe your credit card, so that nobody can pull your plug out and put theirs in. When you re-swipe it will snap open again and you can withdraw your plug.

Lutz on solar PV

Next year we will have a photovoltaic roof (introduced at the Detroit auto show). It can’t contribute a lot, because the state of photovoltaics itself is not at that point. But here’s what it can do: If you leave your car, say, take it to the airport and the car sits in the airport for a few days in the blazing hot sun, you could get a quarter to a third of a charge off that… And what it can do on a daily basis, when left in the sun in the summer it can power the air conditioning system. So when you get in the car it’s already cooled down, which will save you driving range, because now you won’t have to draw as much energy to cool the car down. The sun will have done that for you. And in the winter, we could reasonably do the reverse, which is use the solar energy for heating the car.

Lutz on the cold

The computer will know how cold it is outside. If the computer determines it’s too cold for the battery to function, the car will simply start on the gasoline engine. It will run on the gasoline engine until the battery is prepped, at which point the gasoline engine konks out and you’re on battery again. Which is what the pure electric vehicle is not going to do.

Lutz on a worst-case scenario

Let us say that over the next 18 months the world goes into a major recession, car sales and fuel use drop dramatically, the steel companies produce less steel and therefore use less energy, China finds it main export markets drying up, so they are into a contraction and use less steel and aluminum and plastic. And at the same time Canadian tar sands come onstream, and coal-to-liquids come onstream. All of a sudden there is a reduction in primary demand in petroleum plus all these additional new supply sources… And the oil barrel drops to $25 a barrel and we’re looking at gas pump prices at $1.25 a gallon. I personally don’t think that’s going to happen, but that would be a dramatic event for the Volt because everybody would say, ‘Ha!, why should I bother?’

14 thoughts on “GM’s Bob Lutz doesn’t like Better Place model”

  1. Very good insights from Mr. Lutz- an interesting read into what he is thinking. I agree with him on Project Better Place- I like Shai Agassi, and I am almost swept up by his vision of turning a given country into an entirely electric transportation system in one fell swoop! But his battery swapping idea…I just do not think it is going to fly here in the US- people will want to own their own cars, lock, stock and battery. It will be interesting to see how his ideas take form in other places, like Israel and Denmark (I think that is the other signee for this right now), and if his business model changes somewhat away from battery-swapping as a part of his project. What I would rather see, and what would foster more competition, is instead of entrusting this to one company, even one as benevolent as Project Better Place, is to simply mandate from the Federal level that all ICE vehichles are to be banned from new sales in, say, 6 years. That should give all car companies time to switch out their lines to EV’s and/or EREV’s like the Volt- and have a minimum range on the EREV’s of 40 miles. This would have the same effect as Mr. Agassi’s plan, both of which require Government mandates, and would quickly bring the cost of EV’s down to, or even below, current car prices much more quickly. IMHO, of course;-)

  2. Thanks for the post. I have to admit that I sigh whenever someone confuses kilowatts and kilowatt-hours — Lutz should know better.

    Good news on the solution for apartment dwellers.


  3. How is the “apartment dwellers” solution (“swipe your credit card”) more enlightened than Agassi’s Utopian approach?

  4. I am not sure ‘enlightened’ is the word I would use, but Coulomb’s solution would be preferable, both in terms of cost and, I believe, in consumer preference. There are not going to be many who will buy a car, but not own the battery to run it. Also, can you see paying to have your battery swapped, and get one that is older or does not hold a charge for long and you run out of juice after a few miles- then back you have to go- not quite the same when this happens to just your laptop. Plus, Mr Agassi’s solution will lock in, more than likely, the battery supplier, the size of the battery, and the equipement to encase the battery- there are too many manufacturers, both of batteries and cars who will not want to be so constrained and left out. Plus, I do not see this as a boon to battery developement, which is what we really need for the long term. And lastly, while the consumer will save some up front for the battery, it will cost much more in the long run, to pay for this infrastructure and for the profits to be made by leasing batteries.

  5. a battery easy to swap in and out will be a battery easy to steal. Batteries in that case would be prized items for thieves on a battery black market.

  6. Seems to hold a lot of contempt for other’s ideas because is doing such a great job running GM?

    “He also conceded that the first generation of the Volt will be more expensive than first expected, but said it won’t be an issue because it will initially appeal mostly to celebrities and other “rich” consumers. ”

    HOW expensive IS this thing going to be?

    fyi Bob. Rich people don’t buy Chevy’s.


  7. Nice article, covers a lot of questions I had also.
    The electric car is long overdue, trains have been using a hybrid (diesel electric) source of power all along.
    We need these electric cars now, oil will rise in price again. Think back to the oil shock of the 1970’s.
    Everybody was driving huge cars that were getting 12 MPG. All of a sudden oil went up and people switched to smaller more efficient cars like Datsuns Toyotas and VWs. I bought a new VW Rabbit back then, it got close to 45 MPG on the highway.
    The American carmakers just kept building more of the same to the brink of bankruptcy.
    Chrysler was bailed out to live another day.

Comments are closed.