Cutting the Cost: GM may take a hit on the price of hybrid systems to sell more units

DETROIT - General Motors might absorb some costs of a Two Mode hybrid transmission in its full-sized trucks to make the technology affordable to consumers, product chief Bob Lutz says.

The automaker plans to have at least three hybrid transmissions and offer as many as a dozen hybrid models in the next few years. The Two Mode system, which has two electric motors that assist the engine, would be the premium system, Lutz said.

The cost of that system is more than $10,000, sources close to the program say.

Nearly every Cadillac product could feature a hybrid variant as early as the next two years, Lutz, GM’s vice chairman of global product development, said in an interview with Automotive News.

The program has not been approved. But, Lutz said, it’s “very logical to assume” that a hybrid drivetrain would fit in nearly all Cadillac vehicles, starting with the Escalade SUV next year.

GM’s hybrid plans do not include the Chevrolet Volt concept car, which the automaker classifies as an electric car with a range assist. The Volt would run on electric power, with a gasoline, diesel or fuel cell engine recharging batteries.

3 options

Lutz said GM’s product line will have at least three hybrid systems.

1. Belt alternator starter: This low-end, bolt-on unit combines the alternator and starter. The major fuel economy gains come from the engine shutting off and quickly restarting after the vehicle comes to a stop. The belt alternator starter system provides a light boost on hard acceleration.

The system will be on four-cylinder versions of the Saturn Aura Green Line and Chevrolet Malibu sedans and the Saturn Vue crossover. Lutz said that system delivers an 11 to 12 percent improvement in fuel economy for an additional charge of about $2,000 to $3,000.

2. BAS plus: A step up from the belt alternator starter, this system likely will use lithium ion batteries instead of nickel-metal hydride batteries and provides a bigger boost of electric power when the vehicle accelerates. It might also have plug-in capability. It is about two years from production, Lutz said. It will boost fuel economy 14 percent to 15 percent and remains “relatively inexpensive,” he said.

3. Two Mode transmission: A more complex system, the Two Mode’s first generation is due out this fall in the Chevrolet Tahoe and GMC Yukon. GM officials in May said the Two Mode will deliver at least a 25 percent fuel economy gain. GM also is working on a Two Mode for front-drive vehicles.

The Two Mode transmission, to be built at GM’s Baltimore plant, is expensive to produce, and GM has cut development costs by selling the technology to BMW and DaimlerChrysler.

3 automakers cooperate

The three automakers together have invested $1 billion in the project and are working together in a facility north of Detroit to develop it.

“We haven’t decided where we’re going to price it,” Lutz said of the Two Mode system. “If we price it at full cost recovery, I’d say we probably would sell - not very many.

“If we eat some of the cost for the hybrid system, we will sell more, but then the question is: How many do you want to do and how much financial pain can you endure?”

Richard Truett contributed to this report

autoweek.com