**Testimony of Elizabeth Lowery**

**Before the Senate Energy Committee**

**Regarding GM Advanced Technology Vehicle Plans**

(January 30, 2007)

Good afternoon. My name is Elizabeth Lowery and I am Vice President for
Environment and Energy at General Motors. I am pleased to be able to
speak to you today regarding GM's plans for development and
implementation of advanced technologies.

Today's automotive industry provides more in the way of opportunities --
and challenges -- than we have seen in its entire history. On the
challenge side, there are serious concerns about energy supply, energy
availability, sustainable growth, the environment, and even national
security issues that, collectively, have come to be called "energy
security." And the fact of the matter is that it is highly unlikely that
oil alone is going to supply all of the world's rapidly growing
automotive energy requirements. For the global auto industry, this means
that we must -- as a business necessity -- develop alternative sources
of propulsion, based on alternative sources of energy in order to meet
the world's growing demand for our products. The key is energy
diversity, which can help us displace substantial quantities of oil that
are consumed by U.S. vehicles today.

This is a huge assignment. But it's also an extraordinary opportunity.

By developing alternative sources of energy and propulsion, we have the
chance to mitigate many of the issues surrounding energy availability.
We will be able to better cope with future increases in global energy
demand. We will minimize the automobile's impact on the environment.

This means that we must continue to improve the efficiency of the
internal combustion engine, as we have for decades. But, it also means
we need to dramatically intensify our efforts to displace
petroleum-based fuels by building more vehicles that run on
alternatives, such as E-85 ethanol, and, very importantly, by
significantly expanding and accelerating our commitment to the
development of electrically driven vehicles.

First let me speak about biofuels. We believe that the biofuel with the
greatest potential to displace petroleum-based fuels in the U.S. is
ethanol. We have made a major commitment to vehicles that can run on
E-85 ethanol. We now have more than 2 million E-85 capable vehicles on
the road. Last year, we committed to double our production of vehicles
capable of running on renewable fuels by 2010. That's almost one million
E-85 capable vehicles a year by the end of the decade -- the single
largest commitment to renewable fuels in our nation's history. But
that's not all. Late last year, we also said that we are prepared to
make fully half of our annual vehicle production biofuel- capable by
2012 \-- provided there is ample availability and distribution of E-85,
as part of an overall national energy strategy.

But as you know, flex-fuel vehicles alone will not get the job done.
Right now, there are about 170,000 gas stations in the United States and
only about 1,000 E-85 pumps. So, we are also partnering with government,
fuel providers, and fuel retailers across the U.S. to help grow the E-85
ethanol fueling station infrastructure. Since May of 2005, we've helped
add 175 E-85 fueling stations in 11 states with more to come.

Now let me turn to potentially the even more exciting opportunity for
the future of our products \-- electrification of the automobile. Over
the last few months, GM has made several announcements related to our
commitment to electrically driven vehicles. The benefits of electricity
include the opportunity to diversify fuel sources "upstream" of the
vehicle. In other words, the electricity that is used to drive the
vehicle can be made from the best local fuel sources -- natural gas,
coal, nuclear, wind, hydroelectric, and so on. So, before you even start
your vehicle, you're working toward energy diversity. Second,
electrically driven vehicles \-- when operated in an all-electric mode
\-- are zero-emission vehicles. And when the electricity itself is made
from a renewable source, the entire energy pathway is effectively
greenhouse gas emissions free. Third, electrically driven vehicles offer
great performance \-- with extraordinary acceleration, instant torque,
and improved driving dynamics.

There is a continuum of electrification of vehicles -- and we are
working along that entire range. For example, there are what most people
think of as "electric vehicles" -- pure battery-powered vehicles, such
as GM's EV1. The EV1 ran solely on electricity that was generated
outside the vehicle and was stored onboard the vehicle, in lead-acid and
nickel-metal-hydride batteries.

Then there are gas-electric hybrids \-- which are not, per se, electric
vehicles \-- but which are, in part, electrically driven. This type of
conventional hybrid vehicle has both an internal combustion engine and
an electric drive. And, it can be powered by both systems simultaneously
or by either system independently. The electric energy in a conventional
hybrid vehicle is generated by the vehicle itself and stored onboard in
a battery.

We have several kinds of hybrid vehicles, either on the road or under
development -- from the heavy duty hybrid that is used in more than 550
transit buses -- to the Saturn VUE Green Line (which uses our high-value
"belt alternator starter" system and gets the highest highway fuel
economy of any SUV on the market) \-- to our advanced "two-mode" hybrid
system (which will begin to show up on our full-size SUVs and pickups
later this year).

At the Los Angeles auto show, we announced work on another type of
hybrid, the Saturn VUE "plug-in hybrid." A plug-in hybrid will be a
conventional hybrid vehicle with an important difference -- the battery
will be much more advanced -- storing significantly more energy and, of
course, being able to be plugged into a standard outlet to recharge it.
The result will be significantly better "fuel economy" \-- based on the
petroleum consumption of the vehicle \-- and the ability to use diverse
energy sources.

No major OEM has built a plug-in hybrid for retail sale because the
required battery technology doesn't yet exist. In fact, given what we
know today, it's pretty clear that it will take several years to see if
the battery technology will occur that will let us bring to market, a
plug-in hybrid that will meet the expectations and real-world
performance standards that our customers expect \-- things like safety,
reliability, durability, driving range, recharge time, and
affordability.

The Saturn VUE plug-in hybrid will use an advanced battery, like
lithium-ion. Production timing will depend on battery technology
development. But, based on our work with EV1 and our different
conventional hybrid-electric vehicles, we already have a lot of
experience developing and integrating advanced battery technology into
our vehicles, and we're already working today with a number of battery
companies to develop the technology necessary to build a plug-in hybrid.
The technological hurdles are real, but we believe they're also
surmountable. I can't give you a date certain for our plug-in hybrid,
but I can tell you that this is a top priority program for GM, given the
huge potential it offers for oil consumption improvements.

Earlier this month, we unveiled the Concept Chevrolet Volt at the North
American International Auto Show in Detroit. The Chevrolet Volt is
designed to be powered by GM's next-generation electric propulsion
system, the E-flex System. The E-flex System can be configured to
produce electricity for mechanical propulsion from gasoline, ethanol,
biodiesel or hydrogen. The Volt uses a large high energy battery pack
and a small, one liter turbo gasoline engine to produce electricity.

The Concept Chevrolet Volt can be charged by plugging it into a 110-volt
outlet for approximately six hours each day. When the advanced
lithium-ion battery pack is fully charged, the Volt is expected to
deliver 40 city miles of pure electric vehicle range. When the battery
pack is close to depletion, the small engine spins at a constant speed
to create electricity and replenish the battery pack.

One technological breakthrough required to make this concept a reality
is the large lithium-ion battery pack. This type of electric car, which
the technical community calls an "EV range-extender," would require a
battery pack that weighs nearly 400 pounds.

There are other types of electrically driven vehicles that we expect to
see in the future as well, including hydrogen fuel cell vehicles, such
as the Chevrolet Sequel concept vehicle. A hydrogen fuel cell vehicle
is, in fact, an electric vehicle. It drives on electricity that is
created by the fuel cell. The fuel cell is little more than a battery
that stores electricity in the form of hydrogen. The beauty of a fuel
cell vehicle like the Sequel is that the electricity is generated
onboard the vehicle without using petroleum-based fuel, and without
emissions. And like electricity, hydrogen can be made from diverse
energy sources before it ever powers a vehicle. As part of a
comprehensive deployment plan dubbed Project Driveway, we are building
more than 100 next-generation Chevrolet Equinox Fuel Cell vehicles that
will operate and refuel with hydrogen in California, New York, and
Washington D.C.

GM is developing a prototype fuel cell variant of the Chevy Volt that
mirrors the propulsion system in the Chevrolet Sequel (fuel cell
vehicle). Instead of a big battery pack and a small engine generator
used in the Volt concept vehicle, we would use a fuel cell propulsion
system with a small battery to capture energy when the vehicle brakes.
Because the Volt is so small and lightweight, we would need only about
half of the hydrogen storage as the Sequel to get 300 miles of range. In
fact, we continue to make significant progress in this area, and we
continue to see fuel cells as the best long-term solution for reducing
our dependence on oil.

So, the technology front in automobile development and design looks very
exciting. And, as we pursue these technologies -- and more energy
diversity -- there are steps the government can take to help.

-   First, the government should fund a major effort to strengthen
    domestic advanced battery capabilities. Advanced lithium-ion
    batteries are a key enabler to a number of advanced vehicle
    technologies - including plug-in hybrids. Government funding should
    increase R&D in this area and develop new support for domestic
    manufacturing of advanced batteries.

-   Second, biofuels production and infrastructure should be
    significantly expanded. The market response to renewable fuels is
    encouraging, but it needs to reach a self sustaining level that is
    not lessened when gasoline prices fall. Steps to increase the
    availability of biofuels should help increase its use. Government
    should continue incentives for: the manufacture of biofuel-capable
    flex fuel vehicles; increases in biofuels production; increases for
    R&D into cellulosic ethanol; and increased support for broad-based
    infrastructure conversion.

-   Third, government funding should continue and expand development and
    demonstration of hydrogen and fuel cells. Tremendous progress has
    been made this decade on fulfilling the promise of hydrogen powered
    fuel cells. The U.S. needs to stay the course on the President's
    hydrogen program and begin to prepare for the 2010-2015 transition
    to market phase. Funding should continue for hydrogen and fuel cell
    R&D and demonstration activities at DOE. The government should also
    commit to early purchases by government fleets and support for early
    refueling infrastructure in targeted locals in the 2010-2015
    timeframe.

-   Fourth, government purchasing should set the example. Government
    fleets can help lead the way to bringing new automotive technology
    to market and bringing down the cost of new technologies. The
    government should continue to purchase flex fuel vehicles; demand
    maximum utilization of E-85 in the government flex fuel fleets; use
    federal fueling to stimulate publicly accessible pumps; provide
    funding to permit purchase of electric, plug-in and fuel cell
    vehicles into federal fleets as soon as technology is available.

-   Finally, there should be further incentives for advanced automotive
    technology so that these technologies may be adopted by consumers in
    large numbers to help address national energy security. Well crafted
    tax incentives can accelerate adoption of new technologies and
    strengthen domestic manufacturing. Consumer tax credits should be
    focused on technologies that have the greatest potential to actually
    reduce petroleum consumption and provide support for
    manufacturers/suppliers to build/convert facilities that provide
    advanced technologies.

In summary, we believe tomorrow's automobiles must be flexible enough to
accommodate many different energy sources. And a key part of that
flexibility will be enabled by the development of electrically driven
cars and trucks. From conventional gasoline and diesel fuel \-- to
biofuels that can displace them, like E-85 and biodiesel \-- to
electricity -- whether it is stored or generated on the vehicle, with an
internal combustion engine or a hydrogen fuel cell -- we see a logical
journey from stand-alone, largely mechanical automobiles to vehicles
that run on electricity.