GM’s approach to meeting the 35.5 mpg fleet average

A Wall Street journal article (February 7,2011) describes a plan by General Motors to offer eAssist – a system consisting of a lithium battery pack and a motor – across all models. This system is expected to increase mpg by 20-25 %.  The main drive to increase mileage efficiency is the upcoming Federal standard of 35.5 mpg across a automakers fleet by 2016.  Unlike GM, Toyota’s approach and that of other automakers seems to be to focus on offering hybrids or plug-ins that boost mileage of specific models to levels higher than 40-45mpg.  While GMs approach would take out the uncertainty of forecasting customer demand for the hybrid models, it may leave sustainability sensitive customers pining for better performance. On the other hand, the approach of other automakers may permit a greener moniker while requiring the flexibility to cater to their uncertain market size.  Which one of these approaches is appropriate ? Would the larger volumes implied by GMs approach enable faster learning and thus cost reduction ? Will cars specifically designed to be hybrids offer much better performance than a bolt on solution ?

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About aviyer2010

Professor
This entry was posted in Operations Management, Supply Chain Issues, Sustainability and tagged , , , . Bookmark the permalink.

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