General Motors’ Investment in the Manufacture of Plants for Hybrid Cars

April 18, 2014

cadillac elrGeneral Motors gave an official statement this past week confirming its plan to manufacture plants for hybrid cars. The automaker will invest $450 million dollars in establishing two plants for the cars in Michigan. The first plant is the Hamtramck plant, which will specialize in car assembly. The second plant is the Township factory, which will focus in the production of batteries for hybrid cars manufactured by General Motors. As expected, the investment is likely to increase the employee headcount of GM by about 1,400. The investment will also result in key modifications of two hybrid cars of GM, the Cadillac ELR and the 2016 Chevrolet Volt.

Although the unit price of Volt was reduced in March by $5,000, there was no significant change in unit sales. In the 2014 first quarter, only 3,606 car models were sold by GM. This was a fifteen percent decrease from the previous years. The same issues were encountered by the Cadillac ELR. For instance, there was a recall of 656 units of the 2014 model requiring a need to repair the electric system. It is expected that Volt’s new model will have a battery that is not only more powerful, but that will run for longer before it needs to convert to fluid fuel. The current Volt model has battery packs that provide a battery power worth 40 miles.

GM’s intention to invest in affordable electric vehicles has a high likelihood of stirring immense competition with its competitors. For example, Tesla Motors Inc. has plans of revising its electric car prices in the coming years. The revision will begin with the company’s E car that will be sold for at least $35,000. This means that GM’s plans will create stiff competition between the two companies in the near future.

Based on the current state and times, it would be fundamental for GM to be ahead of other competitors, especially the hybrid car makers. The competitors in question include Toyota Prius. It is reported that 11% of Toyota Motor Company revenue in financial year 2013, was accounted for by the Toyota Prius sales. Through that fiscal year, more than 230,000 car units were sold. Toyota has announced of its plans to further modify the design of its Prius. This means that its sales are more likely to increase in the coming years. Analysts have asserted that the investment by GM to revive its hybrid vehicles could play a key role in increasing the company’s competitive edge.

 

Filed under: Green News and Products,hybrid cars

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