Interview with GM Chairman Rick Wagoner

As previously mentioned, as a guest of GM we had excellent access to top level GM executives - and you don’t get any more top level than GM Chairman Rick Wagoner.

A group of online journalists had nearly an hour where we asked questions on several topics from the such as the Coskata announcement, Hummer’s future, gas prices and Tata Motors’ Nano. If you just want to watch the video (courtesy of Matt Kelly’s excellent Next Gear Show Green), then it’s embedded below and is nearly an hour long. I’ve paraphrased and grouped some of the discussion below.

Q: Why get into the fuel business with the Coskata ethanol announcement?
A: We’re big believers in ethanol. It’s a broad based partnership that is not about profit making, it’s about bringing forward a fundamental change in refueling infrastructure which GM believes is necessary. Demand for oil is growing by 2.5m barrels a year. Low fuel prices and increased miles driven has massively increased oil use despite cars being 2 times more efficient than 40 years ago. The government pass legislation to reduce oil use but give massive subsidies to the oil industry. Need to get subsidies and incentives to the ethanol industry so consumers can use it more. China has less polluting vehicles, not because of better technology but of stronger vehicle emissions regulations.

Q: With current car payments at the limit of people’s affordability, what is the impact of the new environmental measures?
A: The two-mode hybrid is currently very expensive, but not sure how low we can get the “cost penalty” compared to the combustion engine. Fuel cells have the long-term potential to be low cost. GM are working hard on keeping resale value of vehicles high (less fleet sales) and not over-financing customers.

Q: The Chevy Volt is not even being produced but is being advertised. Toyota want to release a competitor - so what are your thoughts on that?

A: Chevy Volt is on the fastest pace possible. It will be a public risk, but it’s the right risk for this time, and the Toyota announcement makes me think GM are on the right track. All battery power is not the primary focus as our experience with the EV-1 showed that range was very important.

Alternative fuel options are an “inevitable and critical opportunity for the auto industry”. GM want to have the global standard of most sophisticated hybrid which they think they have with the two-mode, although it is expensive at the moment. Watch the full interview below.

Ethanol From Garbage?

In Detroit General Motors (GM) announced a deal with a small company called Coskata to produce ethanol for <$1 per gallon from virtually anything.

Currently ethanol is primarily corn or plant based, but that has its concerns with water usage. What Coskata have done is create a process that allows almost any material to be “turned into” ethanol. That means plastic, trash, wood, old tyres/tires, waste and so on can be used, just not glass or metal.

The great thing about this process is that it takes around 1 gallon of water to produce 1 gallon of ethanol. This compares to about 3 or 4 gallons of water for traditional corn/plant based ethanol that use cellulosic production. They also say they do not use genetically modified organisms (GMOs) in the production, just “carefully selected ones”. The result is 97% ethanol with the rest being water. The production and use of this ethanol apparently emits 84% less greenhouse gases than gasoline.

Ethanol also has it’s advantages over other alternative fuels for several reasons:
- It’s suitable for the current refuelling structure (i.e. gas/petrol stations).
- It doesn’t ned to be imported (in the US), cutting reliance on other countries and reducing the environmental impact of drilling, processing and shipping oil.
- It doesn’t require a change in customer behaviour, you can fill up your vehicle in a similar fashion that you do now.

Currently only 1% of the US’s 170,000 gas stations offer ethanol, but by the end of 2008 GM will have 25 co-called “flex-fuel” models and potentially 50% of new GM vehicles could be capable of running on ethanol.

More information will be disclosed in my report on my (small group) interview with Bob Lutz, GM’s Vice Chairman that will be posted in a day or two.