GM & Toyota may compete to sell Chevy Volt and Prius licensing

GM is in the midst of its validation process with the Chevy Volt, ensuring that it lives up to quality standards through driving, heat, and cold tests. While racing toward its late 2010 debut of the Volt, GM is already braced to see no direct profits during the first generation of the vehicle, but what about licensing the Voltec propulsion system to other automakers to maximize its research investment?

CEO of GM, Fritz Henderson has indicated that option is on the table. Toyota has already licensed parts of its hybrid synergy drive, which powers the 2010 Prius, to competitors including Ford and Nissan. The company is preparing to pull in more licensing customers perhaps by intimidation with its latest volley of patent applications.

In the licensing channel of the industry Toyota doesn’t have quite as large of a lead over GM and although the hybrid synergy drive provides a very fuel efficient vehicle, the Voltec system does too. Right now it’s somewhat unclear what the Chevy Volt will achieve in mileage without a nightly recharge. Initially numbers hovered around 50 miles per gallon and if that’s true the price premium for the Volt won’t make sense when something like the 2010 Toyota Prius is available.

One challenge GM faces with licensing the Voltec system is its T shaped architecture, according to Wards Auto, which could hamper how well other automakers are able to integrate it with their products. The cost to manufacture the technology is also very high, which is something the company hopes to address with economies of scale and efficiencies gained by improving the Chevy Volt manufacturing process.

Regarding the Chevy Volt, Henderson says “the cost of Generation I technology is relatively high, so we need to get it down to Generation II. That’s our focus today. I don’t rule out anything in that regard (selling electric-vehicle technology), but our focus is getting ourselves into production.”

Staying focused on bring the Chevy Volt to market makes sense, but it’s a smart thing for GM to consider other sources of income in its journey toward profitability.