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General Motors preps for Volt launch; circles wagons on battery supply chain

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GM says it's learning firsthand what it takes to scale up a supply chain to global levels as it prepares to launch the Chevy Volt.

As General Motors ramps up battery production for the coming launch of the plug-in hybrid electric Chevrolet Volt, it's learning firsthand what it takes to scale up a supply chain for the mass consumer market.

At least that's what I gathered listening in to yesterday's GM conference call on the Volt, a status update for the vehicle that's supposed to mark a turning point for the beleaguered Detroit, Mich.-based company.

On the call was Micky Bly, GM's executive director for global electrical systems, hybrids, electric vehicles and batteries and Andrew Farah, Volt chief engineer.

According to them, the Volt's batteries are "performing well" and have hit an unofficial 40-mile distance target powered by electricity alone.

"We're regularly hitting our 40 mile target and exceeding that," Farah said, adding that performance depends on driving habits, terrain and weather conditions. "I'm very confident that the batteries are delivering the energy that they need to deliver and that the vehicle's efficiencies are where it should be."

The Volt is scheduled to begin production in November.

GM recently spent $8 million to double the size of its automotive battery lab, the largest such facility in the U.S. The Global Battery Systems Lab will add 30,000 sq. ft. to accommodate for consumer demand for the Volt and other electric vehicles.

Interestingly, areas previously used for engine testing will be renovated for battery development. The facility is scheduled to be completed this summer.

Bly said GM has thus far arrived at every planned milestone on time, from developing the first cells (manufactured by Seoul, South Korea-based LG Chem) to producing pre-production battery packs.

The company is currently testing its assembly line and shipping procedures in an effort to prepare for full production, Bly said.

"It is absolutely key and fundamental for an automotive company to understand the battery," Bly said. "This has not been a walk in the park by anybody's [measure]."

"We're fully ready and able to support Andrew and the Volt team."

By described GM's supply chain process, explaining how GM has carefully brought nearly every segment of the chain -- with exception of LG Chem -- in-house through acquisitions.

He also noted that the primary path for shipping the battery cells from LG Chem in Korea is over terrain -- that includes water -- rather than via air freight, which carries a "significantly higher" expense.

"There has been a lot of discussion of shipability and freightability of lithium-ion," Blu said, adding that GM had to develop special shipping containers to ship the cells. "The ability to ship quantities in air is possible, but we're not pursuing this option."

One issue that came up on the call regarded the eventual decommissioning of lithium-ion batteries from service, or "end of life."

Bly said GM has looked at the issue, but acknowledged that there was no clear answer for what to do with the hundreds of thousands of batteries -- and the rare earth minerals contained within them -- once the cars they're in are put out to pasture.

"We've been working on a number of efforts on what happens and what we need to do with end-of-life," Bly said. "We're looking at recycleability...there's not a lot of material that's useful to the recycling industry so we're looking at second uses.

"We're designing the battery to last 10 years, 150,000 miles. If we did our job right, we're not going to have to worry about this for a long time."

Bly also said the team is already working on a third-generation version of the battery with the goal of reducing its manufacturing cost by 50 percent.

"We're probably a couple of years away from selecting gen. three architectural requirements," Bly said, adding that he expects each generation to last approximately two to three years.

The second-generation battery, largely the same from the first generation save for "customer convenience changes," will launch in 2012, he said.

Bly noted one particular struggle GM and other carmakers face as they slowly transition their fleets from gasoline-powered vehicles to EVs: the extreme demands of climate control.

"It takes as much energy to keep a human warm in the northern climates as it does to push the entire vehicle down the road at posted speeds," Bly said. "It's not that the battery isn't necessarily capable, but it's where we and other OEMs decide to spend that energy."

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Andrew Nusca

Editor Emeritus

Andrew Nusca is editor of SmartPlanet and an associate editor for ZDNet. Previously, he worked at Money, Men's Vogue and Popular Mechanics magazines. He holds degrees from the Columbia University Graduate School of Journalism and New York University. He is based in New York but resides in Philadelphia. Follow him on Twitter. Disclosure