Can the Chevy Volt Save GM?

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Far away from the complex merger negotiations and dicey political maneuvering (BusinessWeek.com, 10/28/08) that promise to reshape America's largest automaker, General Motors (GM), design director Bob Boniface is coolly contemplating the company's future. Sitting in front of him, bathed in the soft, yellow light of a Manhattan showroom, is the production Chevrolet Volt.

The Volt is probably GM's last, best hope for the future and certainly its most significant upcoming vehicle. Saddled with dwindling market share, credit-strapped consumers, and a lingering reputation as a purveyor of gas-thirsty vehicles, GM executives need the Volt to become an iconic product, like Apple's (AAPL) 1998 iMac or even Chrysler's 1980s K-car before. The Volt has to affirm the company's ability to innovate and, eventually, create a financial foothold from which the battered automaker can begin to turn itself around.

The car is also GM's gambit to outpace foreign competitors like Toyota (TM) and Honda (HMC). Unlike conventional hybrids—including the best-selling Prius—the Volt is essentially a plug-in electric car with an onboard gas-burning engine that can recharge the vehicle's batteries. This enables the Volt to travel some 40 miles before the driver turns on the gas. Because most daily commuters in the U.S. don't travel that far, GM says many drivers will not have to use any fuel at all, simply recharging the vehicle via a regular outlet at home overnight. GM is still wrangling with the Environmental Protection Agency over the vehicle's efficiency, but executives say the final number should be north of 100 mpg for both types of power.

Windswept Shape

Boniface runs his hand along the Volt's metal grille, which does not sport the little holes that aerate the engine. Instead, the embossed plate of armor is intended to reduce drag as air hits the car's front bumper. Indeed, the vehicle's detailing is a study in aerodynamic design, from the windswept shape of the rearview mirror to the subtly integrated spoiler on the rear hatchback. "We spent over 700 hours in the wind tunnel with this thing," recalls Boniface.

The vehicle's interior (BusinessWeek.com, 1/28/08) also distinguishes itself from other cars. The front dash is swathed in shiny white plastics, reminiscent of the iPod. Sporting two customizable LCD screens, it could be one of the sleekest in the industry. Controls for the audio and climate systems, meanwhile, are touch-sensitive, more like an iPhone than the chunky knobs of other vehicles. The company is also toying with the idea of customizable interior door panels featuring interchangeable graphics.

Since it was announced at the North American International Auto Show in Detroit last January, the Volt's expected retail price has steadily crept upward and is now expected to cost between $30,000 and $40,000, a hefty sum for a Chevrolet. (The Volt will qualify for a $7,500 tax credit recently added to the energy bill.) But in some instances, Boniface says, the higher price helped the design team get what it wanted. "This isn't going to be a budget vehicle, and this helped us win some important arguments," he says. "Take a look at your iPhone," he instructs me, pointing to the metal bezel around the phone's edge.