GM may have to eat development cost on hybrids

As you may remember from back in June, GM is considering hybrids for its entire Cadillac lineup with the Escalade to be the first in 2009. Well now according to GM product Chief, Bob Lutz, GM may have to eat some costs of a Two Mode hybrid transmission that it plans to use in its full-sized trucks in order to make the technology affordable for its consumers.

GM plans to have at least three hybrid transmissions and hopes to offer a dozen hybrid models within the next two years. One of the hybrid transmissions, the Two Mode system which has two electric motors, would be the premium engine costing at least $10,000.

“We haven’t decided where we’re going to price it,” Lutz said told Automotive News. “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?”

The Two Mode system will make its debut this fall in the Chevrolet Tahoe and the GMC Yukon with GM claiming a 25 percent fuel economy gain. GM has already cut development costs of the hybrid system by teaming up with BMW and DaimlerChrylser. The three have invested $1 billion in the project and are working together in a facility north of Detroit for development

Lutz said that nearly every Cadillac product could feature a hybrid variant as early as the next two years.

Source: Automotive News (Subscription Required)

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