General Motors doubles down on Chevy Volt

Adam Jeffery | CNBC Chevy Volt.

Adam Jeffery | CNBC
Chevy Volt.

General Motors believes the second time will be the charm for its controversial Chevy Volt.

The newest version of the range-extended electric vehicle will be unveiled at the North American International Auto Show in Detroit next January.

“When it launches in the second half of 2015, it will represent a significant leap forward in technology, design and overall refinement,” said GM CEO Mary Barra in announcing the new Volt at the Detroit Economic Club. “It (the new Volt) will store more energy in its battery pack with fewer cells, yet go further on a charge.”

Despite lackluster sales and numerous questions about the public’s appetite for electric vehicles, the company is not backing down from its commitment to the Chevy Volt. In fact, America’s largest automaker plans to build the electric drive unit for the second generation of the range-extended electric car at the company’s transmission plant in Warren, Michigan.

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The decision to build the Volt electric drive unit at the Warren plant is not a surprise since much of the major assembly work on the Volt has taken place at GM plants in southeast Michigan.

“Our investments in the Chevy Volt and Michigan signify our commitment to lead the industry in technology and innovation,” Barra said.

Volt struggling to charge up sales

GM’s renewed commitment to the Volt comes at a time when sales of the range-extended electric car have been slipping.

This year, GM has sold just 14,450 Volts, a decline of 13.2 percent from last year. That decline comes at a time when the U.S. auto market is running at its strongest pace since 2006, with sales up 5.5 percent in 2014.

Selling the Volt has never been an easy task for Chevy dealers.

While owners have routinely given the Volt high marks, many potential buyers do not think the suggested price of $34,995 (before $7,500 Federal tax credit) justifies the potential saving of driving an EV.

In addition, with gas selling for an average of $3.04/gallon in the U.S., electric and hybrid cars are not in demand.

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Still, Barra and GM believe the second generation of the Volt will be an easier sell.

For starters, the next Volt is expected to have a far greater range when powered strictly by the electric car’s batteries. With the current Volt, the first 40 miles are all electric before the gas-assist engines kicks in.

Also, by the time the second generation Volt hits showrooms in 2015, the price of gas could be much higher than it is right now. That would change the calculation with buyers.

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Finally, if GM can manage to bring down the cost of the Volt and lower its MSRP, the odds of increasing sales could be substantially higher.

Barra will announce the latest investments to the Volt program at a speech Tuesday at the Detroit Economic Club.

Questions? Comments? BehindTheWheel@cnbc.com.

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