By Jeff Green
Sept. 26 (Bloomberg) -- General Motors Corp. reached a preliminary agreement with U.S. regulators to certify the Chevrolet Volt, an electric vehicle that can be recharged at home or with a 1.4-liter gasoline engine, as the first 100 mile- per-gallon car, the company said.
The country's biggest automaker, whose sales of pickup trucks and sport-utility vehicles collapsed this year as gasoline topped $4 a gallon, is cutting the mileage deal while urging Congress to approve $25 billion in government loans to help the industry meet new federal fuel-economy standards.
Earning a 100 mpg certification would give Detroit-based GM the holy grail auto companies began seeking following the oil shocks of the 1970s. The Environmental Protection Agency agreed to a testing method that will produce a rating at least that high, said Tony Posawatz, 48, vehicle-line director for the Volt in Warren, Michigan. The four-passenger car, which goes on sale in November 2010, will be able to travel 40 miles (64 kilometers) before the internal-combustion engine needs to recharge the battery.
``It's a huge milestone to beat 100 mpg. It's bragging rights,'' said Rebecca Lindland, an analyst at Global Insight Inc. in Lexington, Massachusetts. ``To many people, GM is just about gas-guzzling SUVs. They never get credit for fuel economy. If Toyota were doing the Volt, they would be having parades and waving flags.''
While the Volt is classified as an electric car, GM will still be able to claim it's the most fuel-efficient vehicle on the road because the gasoline-powered generator will start after the sedan exceeds the battery's 40-mile range.
`Final Policy'
The EPA won't confirm how it gauges fuel economy of plug-in models until testing methodology is complete, spokeswoman Catherine C. Milbourn said in a statement. The agency ``hopes to have a final policy soon,'' she said.
The government- and industry-backed Partnership for a New Generation of Vehicles tried to create an 80-mpg auto in the 1990s. The group disbanded in 2001 after failing to develop one. The Progressive Automotive X Prize is offering $10 million to the first team to produce a 100-mpg vehicle that passes its tests and can be commercially produced.
Toyota Motor Corp.'s hybrid Prius is the highest-rated car on the road today, achieving 48 mpg in the city and 45 mpg on the highway. It has a 1.5-liter gasoline engine, isn't rechargeable at an electric outlet and can drive only 2 miles on its battery, according to the company, which leads global sales in the category.
$25 Billion More
As with all automakers selling in the U.S., GM must increase the average mileage of the fleet as much as 40 percent to 35 mpg by 2020 to comply with new federal standards. The House agreed to fund $25 billion in low-interest loans Sept. 24 to help offset investment by GM, Ford Motor Co. and Chrysler LLC in fuel-saving technologies. The Senate may vote on the plan this week.
U.S. auto companies estimate they'll need $80 billion to $100 billion to meet the new fuel-economy mandate. Members of Michigan's congressional delegation said this week they'll seek an additional $25 billion in credit.
The Volt may sell for more than $30,000, according to GM Vice Chairman Robert Lutz, 76. The sedan is the centerpiece of a drive by Chief Executive Officer Rick Wagoner, 55, to narrow the technology gap with competitors including Toyota.
GM lost $18.7 billion in the first half as sales of pickups, SUVs and vans dropped 16 percent. The shares, which declined 60 percent in 2008 through yesterday, fell 24 cents to $9.80 at 10:02 a.m. in New York Stock Exchange composite trading.
Difficult Measurement
Obtaining a 100-mpg rating will require the EPA to develop a new way of measuring fuel efficiency for a car that's likely to rely more heavily on electric than internal-combustion power, according to GM's Posawatz. The automaker promised to share mileage data captured from the Volt's onboard computers to verify real-world performance if EPA will grant the certification now, he said.
``It's a new process. No one has done a vehicle like this before,'' said Posawatz. ``We would like to have 80 percent of the people get better than the label.''
A vehicle of the Volt's design should be able to exceed 100 mpg in tests, said Michael Duoba, a research engineer at Argonne National Laboratory in Argonne, Illinois, and chairman of the Society of Automotive Engineers committee trying to develop fuel-economy tests for plug-in cars. Argonne is testing models that use similar technology to make its assessment.
Depending on assumptions about how much gasoline is consumed after the battery needs recharging on the road, Volt could get 120 mpg to 200 mpg, he said. Modified Prius models, with an electric range of about 10 miles, may have difficulty beating 100 mpg in the same tests, he said.
Toyota Plug-In
Toyota City, Japan-based Toyota may launch a plug-in model for 2010 with an all-electric range of at least 10 miles, spokesman John Hanson said. Closely held Chrysler plans its own plug-in electric car for 2010, to be developed in part with General Electric Co.
``It's too early to say what the overall miles-per-gallon figure is going to be'' on the plug-in Prius, Hanson said.
Honda Motor Co.'s FCX Clarity fuel-cell car, leased since July to celebrities in Los Angeles including actress Jamie Lee Curtis, is rated at 72 mpg via a formula that converts hydrogen fuel into the equivalent of gasoline efficiency ratings. Honda, based in Tokyo, hasn't announced full-scale production for the model.
Chevy's Volt can be plugged into a standard 120-volt outlet and be charged in about eight hours, GM said. The process takes less than three hours with a 240-volt outlet.
The cost for a full charge providing 40 miles of driving is about 80 cents per day, at an electricity cost of 10 cents per kilowatt hour, according to GM.
Charging the Volt about once daily will consume less electricity annually than the average home's refrigerator and freezer, the company said.
To contact the reporter on this story: Jeff Green in Southfield, Michigan, at jgreen16@bloomberg.net
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