DETROIT — In 2006, Bob Lutz was steaming over Toyota Motor Corp.'s success with the Prius hybrid.
General Motors Co. had scoffed while Toyota had pushed ahead with the Prius. To Lutz's chagrin, the Prius gave Toyota a glowing image as a technological and environmental leader.
"I was getting so pissed off about reading about how the wonderful, far-sighted Toyota is the only one who understands technology," the storied 77-year-old executive recalled in an interview last month.
In 2006, Lutz was GM's vice chairman for global product development; this month he became vice chairman in charge of marketing and other creative disciplines. His exasperation with the Prius gave birth to the Chevrolet Volt plug-in hybrid, scheduled to be produced in November 2010.
The Volt has given GM its own green-tech glow. But just as the Prius created publicity for Toyota, so did Lutz's back-of-the-envelope calculation for the possible price of the Volt: maybe the high $20,000s. That estimate has come back to haunt the project.
With costs running far beyond projections, GM engineers already are "beavering away," in Lutz's words, to make under-the-skin cost cuts soon after launch. The good news: Battery development and other changes to the unique engineering of the Volt give GM an opportunity to bring the cost down much faster than for a conventional car.
The Volt uses a lithium-ion battery pack to power an electric motor for about 40 miles (about 64km). After that, a small gasoline engine recharges the battery but never runs the car. When the car is not running, the Volt battery pack can be plugged into the electrical grid.
The Volt team expected the car's battery-electric drivetrain to be costly. But the costs rose even higher than projected. As they developed the car, project managers found they couldn't use off-the-shelf systems from GM's compact-car architecture, such as power steering, which draws power from the internal combustion engine. So they substituted higher-priced electrical systems.
The Volt is turning into a Cobalt-sized Chevy compact with a $40,000 sticker. The story of how that happened shows the challenges in bringing new technology into a mainstream vehicle.