Analyzing Future Automotive Trends with General Motors’ James Bell

Technologies like electric vehicles and clean and alternative fuels will play an increasingly larger role in our lives.

JOHN SHEGERIAN: Welcome back to Green is Good, and we’re so excited and honored to have with us today James Bell. He’s the Head of Consumer Affairs for GM, one of the greatest iconic brands in American history. Welcome to Green is Good, James. JAMES BELL: Thank you. It’s a pleasure to be here. JOHN SHEGERIAN: Hey, James, you know, listen. Your bio reads like a who’s who and a what’s what, and I want you to share this amazing journey from youth to how you got to become the head of Consumer Affairs for the great brand GM with our listeners today. Can you share a little bit of that first? JAMES BELL: Yeah, well, thank you. That’s a very nice way of teeing this up. It has been a crazy ride. I started off in the consumer electronics business, just because when I was just out of college, I wanted to have the coolest home theater possible. And I did, I had a good one. But then, I had this kind of epiphany moment. When I looked around my apartment, I said, “Wow, I’ve got nothing but posters of cars around my room and tickets from the recent car show that I didn’t want to throw away quite yet, and it seems like cars are really my passion,” so I started looking into how I could get into the car business. I worked for a couple different companies. I ended up not ever selling cars, but working in the data side of it, and ended up working for Kelly Blue Book. From there, General Motors kind of saw what I was doing for Kelly Blue Book as their spokesperson, analyzing the industry and talking all about new trends and where the business is going and what was important for consumers. As I said, GM was watching me, and they gave me a call and said, “We’d like you to bring your train over here, if you wouldn’t mind, and still continue to represent consumers, the outside perspective; kind of stand as an ombudsman between the consumers and the company.” So while I’m employed by General Motors, I really have this kind of latitude and freedom to talk about the entire business on their behalf. JOHN SHEGERIAN: That is so great. For our listeners out there, there are so many great things that General Motors is up to, and while we’re doing today’s interview, I’m on your great website. I want our listeners to go there as well and enjoy it. It’s www.gm.com. I actually clicked onto the innovation and environment sector, and we’ll get into that in a little bit. Part of what we do at Green is Good is education, and the fun part is to have someone as amazing as you on, who knows so much about this stuff, where I don’t know that much and I’m sure our listeners are interested. We’re going to do a little education today, so share a little bit about the considerations when our listeners want to go in and put their toe or foot into the water and get greener with regards to their transportation. What are they supposed to consider, even, when they’re looking for alternative fuel vehicles and things of that such? JAMES BELL: Well, I think it’s interesting the way the business is just changing. I mean, the idea of shopping for an alternative-fuel vehicle is going to sound — my projection — is going to sound kind of curious maybe in the next 10 years because I think every vehicle is going to have some degree of what we would consider in 2013 to be alternative fuel. But, you know, as of today, if that’s your consideration, you want to do something unique with your next set of wheels, I think the most important thing to really stand back is to really recognize what you’re going to do with the vehicle. Is it something that’s just going to be taking you around town, a lot of stop-and-go traffic, not much on the highway? Or, on the flip side, is it a vehicle that you’re going to put 20-30,000 miles on per year because you’re going to be doing a lot of road warrior highway cruising? That is the biggest consideration, and I think there’s the automatic assumption that, “Oh, I’ll just get myself into some sort of hybrid vehicle.” But, actually, you know, when it comes to highway cruising, a hybrid is not at its most efficient. By its nature, it’s going to be efficient because of the aerodynamics and the lighter weight materials and some of the electrification is done at slower speeds, but that’s really the main point. Be honest, take a month and log how you’ve used your vehicle, and then go shopping looking for the vehicle that best meets that driving requirement. JOHN SHEGERIAN: So, let’s talk a little bit about the different types of vehicles out there, because this is all sort of new vernacular to me, but it’s becoming part of our lexicon. Talk a little bit about clean diesel. What options exist in regards to clean diesel, and when should our listeners out there get interested in a clean diesel product? JAMES BELL: Sure. The word diesel in the U.S. market, for many people, is a bit of a dirty word, and it just doesn’t need to be such anymore. I’m thinking of, in the case of General Motors, we’re introducing a version of the Chevrolet Cruze that has a 2-liter clean diesel engine. These motors are really the standard. They’re the drivers, if you will, of the European market, and the European market would not be so embracing clean diesel if they were how many people consider what diesel to be, which is dirty, putting out a lot of smoke and soot, you don’t want to get behind one in the drive-thru line because it’s going to put a lot of smoke into your vehicle. Those days are gone. I mean, Europeans’ noses are just as good as ours, and clean diesel today is in many ways even more clean than a gasoline-driven car. They use different technologies. The larger displacement clean diesel engines will use a synthetic urea product that will get sprayed into the exhaust just after it comes out of the engine, and it basically treats the exhaust by capturing some of the harmful pollutants, and then also running the exhaust through a super-heated catalytic converter or a heat trap that also catches a lot of pollutants. So, what comes out of the tailpipe is very, very clean. Again, the big attraction of clean diesel is the fact that there’s more energy in a drop of diesel fuel than there is gasoline, so you end up with two things. You end up with this better fuel efficiency because it doesn’t take as much fuel to drive the car forward, plus you have more power, more torque. Torque is what you feel when the light turns green, that first rush of power that gets you going. That’s torque. Everybody says, “I need more horsepower in my car.” Well, actually, that’s not what you need. You need torque. Clean diesel has that in abundance. As I said earlier, it’s out on the highway, that’s where it really shines. So, if you’re doing a lot of highway running and you want to do something alternative and out of the norm, then clean diesel is your choice. JOHN SHEGERIAN: Got it. How about hybrids? When is hybrid a choice over clean diesel or instead of? JAMES BELL: I would say a hybrid is really your choice if you’re going to be doing a mixed amount of driving, so city driving, some highway driving, not huge distances. Just kind of what probably many Americans are doing, using the car to drive their kids to school a few miles away and in those situations, it would be acting primarily as an electric car, but then having that ability to obviously go on the highway and carry on from there. So, if you’re doing not a huge amount of miles and a mixed collection of driving environments, then a hybrid is probably your best bet. JOHN SHEGERIAN: Let’s shift over, then, to the battery-powered. We’ve talked about clean diesel, hybrids, now share what your thoughts on battery-powered cars, and are there concerns with regards to batteries with regards to battery-powered cars? JAMES BELL: First off, a battery-powered car is going to be much more common and prevalent, and the cost of battery technology comes down and the ability for the battery to take on power quickly and give you longer range increases. That’s how technology works; it will eventually get to that point. Really, the person who’s designated for that kind of car is one who has a very defined drive on a daily basis. My wife would be a perfect owner of a battery-operated car because she drives maybe 7 or 8 miles a day. In fact, the average American drives about 28 miles a day, so when we have these battery-operated cars that are in the range of, say, 100 miles or 150 miles, that should be more than enough. But, again, that’s where that rational moment has to come through, where you say, “OK, I may be only driving 20 miles a day, but on the weekends I love to drive to grandma’s house 300 miles away,” or whatever. Then a battery-operated car is not for you. Then you need to look at a plug-in hybrid car or a hybrid car. JOHN SHEGERIAN: For our listeners that just joined us, we’re so excited and lucky to have James Bell on. He’s the Head of Consumer Affairs with GM, one of the greatest brands in America. You can check out all the great work GM is doing at www.gm.com. Let’s do a little shameless plug here, because listen, that’s OK. This is about education, this is about getting the word out. So we just talked about clean diesel, alternative fuel vehicles, battery-powered hybrids. What vehicles does GM have for our consumers out there, for our listeners out there, in these categories? What would you recommend? JAMES BELL: Sure. Well, when it comes to clean diesel, again if you’re a road warrior, then you’re going to be looking at the Chevrolet Cruze 2.0 TD or 2.0 Turbo Diesel. That’s a vehicle that’s going to be on sale in certain markets, I think it’s seven or eight states to begin, where we already see pretty good penetration of clean diesel products from Volkswagen, BMW, Mercedes, etc. So, again, the Cruze 2.0 TD, but you’re going to be seeing more clean diesel from other General Motors products in the future. I can’t divulge which ones they’re going to be, but you heard it here first. JOHN SHEGERIAN: OK. And, how about hybrids and battery-powered? Talk a little bit about those. What cars should we be looking at for those? JAMES BELL: Well, in regards to hybrids, our best bet is the Chevrolet Volt. Where that gets exciting and special, that’s a plug-in hybrid. So, you plug the car in overnight, just like you do your cell phone at the end of the day, and the first 35 miles or so that you drive are pure electric. So, again, remember that I told you that the average American drives about 28 miles a day, so that more than compensates. In fact, people that own Volts, and we’ve got millions and millions of consumer miles in vehicles now, their kind of badge of honor is the fact that they’re only going to the gas station once a month, every 1,000 miles or so, because most of their driving is done in pure electric mode. But they have that range-extending engine just in case they go past that 35-mile range. It would be considered a hybrid vehicle in that it does have that gasoline-powered engine that acts like a generator to kind of keep you going, so if you go past that 30-mile range or 35-mile range, you’re not stuck on the side of the road. And, then on the battery electric side, we are just in the process of introducing something called the Spark EV, or Electric Vehicle. This is a car that we basically took the gas tank out, because there is a gasoline equivalent, and put a battery pack in there, so it will get about 100 miles on charge and again, doesn’t even know what gasoline is for. It would be perfect for somebody who’s just really using it as a defined ride on a weekly basis and/or has another gasoline-powered car for those days when they need to go further. JOHN SHEGERIAN: So, you know, now the whole issue becomes, for our listeners out there, now you’ve made the case for hybrids, battery-powered cars, clean diesel, and now you’ve given them a couple of different brands to go look at and potentially enjoy. Let’s talk about the cost benefit analysis. How does the cost of owning these great cars that you’re producing now for this generation and beyond compare against our legacy cars, the gas-powered cars? JAMES BELL: Right. Well, let’s see. In the clean diesel vehicle that we talked about, the Cruze, it’s a small premium, about $1,000-$1,500 premium over a gasoline-powered version. But you’re going to pay that back fairly quickly when you’re getting 45 miles per gallon. The cost of ownership balance pays you back quickly, not only in the miles you’re going to be getting, but also in the resale value. Even if, let’s say, you decide three years later to go from the clean diesel vehicle into an electric car because you realize that your commute is much less, or it’s changing or something. The resale value on clean diesel vehicles is always higher than gasoline-powered because clean diesel engines, by their nature, just last longer. They’re made of a little higher-grade materials. I won’t bore you with the details, but the combustion process in clean diesel is a little bit more violent than it is in a gasoline-powered car, so it has to be made of a little more sturdy materials, so by its nature, they last longer. So, the resale value really does pay you back that additional cost of purchase when you go trade it in or sell it. On the Chevrolet Volt, it starts at $40,000, but there are many state and federal tax incentives and credits which is actual money back in your pocket, not a deduction, which are still available. So, that really takes the price down. I think in the state of Colorado when you combine the federal and the state incentives, it comes down to about a $28,000 car, so it really depends on the state where you live and what’s available there. JOHN SHEGERIAN: So, really the overriding theme of what you’re telling me today, James, and our listeners is that the ROI, the return on investment, for any of these great cars, battery, hybrids, clean diesel, is compelling enough to get us out of our old gas-powered cars and into these new energy-efficient cars. JAMES BELL: I firmly believe that, and that’s been one of the criticisms. As I said earlier, I used to work for Kelly Blue Book, so by no means am I stuck to saying only GM’s line. I was part of that criticism as well, that the cost was a little higher than what we were hoping for to be kind of a mainstream car, but having said that, the results and people that we’re seeing now who own them, that additional cost of purchase is really paid back quickly because of the fuel savings you do. Driving it under pure electric power is very inexpensive. I had a Volt for about four months, charged it every night at my house in California, and California has higher electric rates than many other states, and it raised my electric bill maybe $10-$15 a month. So, yes, you do pay a little bit more to start the ownership of one of these vehicles, but the payback when you pencil it out over five, six, seven, eight years of use, it really crosses it off really quickly. JOHN SHEGERIAN: You know, James, we’re down to the last four minutes or so, and here becomes the fun part of our discussion. You have a unique position at GM, and GM spends all sorts of dough and resources on research and development. Take our listeners, now, give us a little bit of the crystal ball and the future of GM and the future of green cars, so we can all get a little bit excited about what’s coming down the pike here. JAMES BELL: Well, I think from General Motors, in particular, you’re going to see much more diverse use of the technology that you see in the Volt today. The idea of being an electric car for a vast majority of its use, but having that range extension, I think, is a really wise move. Again, it takes away the premise, the very really fear of range anxiety. I always use an example of somebody who has a pure electric vehicle, and maybe their daily commute takes them within 15-20 miles of the range of the vehicle, and then on the way home from work they get a call from a friend saying, “Hey, come over, we’re going to watch the game tonight,” and he has to turn them down because he doesn’t have enough range to go to his friend’s house and back home. So, that is where I think that range-extended vehicles is really going to be, at least in regards to General Motors, the key, because it really gives the best of all worlds. People, again, are using them as electric vehicles. They’re going to the gas station once every 1,000 miles. There are other guys who own Volts that still have all the gasoline that the dealer put in the car when they took delivery 10,000 miles ago. By the way, Jay Leno is one of those guys. He’s very proud of the fact that he still has all of his original gasoline. So, I think that’s really the way it’s going to go in the future. So, when you get the cost of battery to come down, the range to increase, and just getting a more diverse selection of vehicles, not only from Chevrolet but also from Cadillac and Buick and GMC, I think you’ll really see that range extension powering a lot of GM vehicles going in the future. JOHN SHEGERIAN: James, we’re down to the last minute or so. Are we only in the top of the second inning when it comes to car and green technology? JAMES BELL: I think that’s a great analogy, definitely so. I mean, as I said at the very start of our show here, in the next decade, buying something green is going to be just the normal choice. The idea that you go out and buy a car that sits and idles noisily and dirtily at the stoplight, is going to seem very, very distant and very, very archaic. Transportation is definitely in a transformation mode, and we’re just feeling the beginning of it. JOHN SHEGERIAN: That’s awesome. For our listeners out there, one last pearl of wisdom how to become the next James Bell, OK? JAMES BELL: Man, I wish I knew the answer to that. Listen, it’s real simple. No matter what your passion is, just make it yours. Own it. Really learn everything you can about it, and in my case, I don’t want to sound funny, but I kind of became an expert on this stuff. The world recognized it, and I’ve ended up in this wonderful position. JOHN SHEGERIAN: Well, we’re so thrilled you’re in that position. We’re all better for it, and we’re thankful you came on Green is Good. You’re always welcome back here. For our listeners out there, to learn more about what James is doing and the great brand of General Motors is doing, please go to www.gm.com. This was a great show because we learned a lot more, we should all buy American, we should get out of our gas guzzlers, and buy these great GM products that are more green, and we can all have a part in changing the face of where we’re going. James Bell, you are driving the green and sustainability transportation movement forward at GM, and you are truly living proof that green is good.