August 11th, 2009
12:15 PM ET

Financial Dispatch: GM says Volt will get 230 mpg

[cnn-photo-caption image="http://i2.cdn.turner.com/cnn/2008/TECH/biztech/10/01/volt.car.nascar/art.volt.cnn.jpg" caption="GM reveals its first electric car, the Chevy Volt."]

Andrew Torgan
CNN Financial News Producer

General Motor' says its Chevrolet Volt, the electric-drive car that's expected to go on sale in late 2010, is projected to get an estimated 230 miles per gallon in city driving.

That exceptionally-high government mileage rating could give the Volt a major boost. For the first time, car buyers will easily be able to compare electric cars with ordinary gas-powered cars.

"Having a car that gets triple-digit fuel economy can and will be a game changer for us," GM CEO Fritz Henderson said this morning at a press conference showing off the ‘Volt.’

Determining fuel economy for what is primarily an electric car is a tricky matter, and General Motors has been working with the Environmental Protection Agency for years on the issue.

Basically, you will be able to drive the Volt for about 40 miles using its lithium-ion batteries. For those driving less than that, gas mileage is essentially unlimited. It is only after 40 miles that the Volt will start using gasoline.

Stocks struggle ahead of Fed announcement

Stocks on Wall Street opened to the downside and kept sliding as the Federal Reserve's two-day policy meeting got underway today.

The central bank is widely expected to hold rates steady at historic lows near zero. In its closely scrutinized statement, policymakers are expected to say that economic activity is picking up, but that they remain cautious about the outlook. The Fed is not expected to say anything too specific about what its exit strategy may be after putting so much stimulus money into the financial system.

The Fed’s announcement is due around 2:15 p.m. Wednesday.

‘Toxic assets’ still a threat to recovery

The economy may show signs of life, but so-called “toxic assets” are still a major threat to any recovery, a bailout watchdog group warned today.

If the economy worsens and unemployment rises further, the troubled assets on bank balance sheets could lose even more value, according to the Congressional Oversight Panel, which keeps tabs on the $700 billion bailout of the financial sector.

The report reminds Congress that the bailout was initially pitched to help deal with troubled assets, hence the name: Troubled Asset Relief Program. Yet the TARP program has not relieved banks of their troubled loans.

The bailout money has instead been used to help banks boost their capital to withstand future losses. Capital injections help ease pressure and potentially free up money for lending - but the “toxic assets” are still festering.

Productivity jumps 6.4%

A new report shows employers are trying to get as much as they can out of workers these days, a move that could pave the way for better growth down the road.

Worker productivity rose 6.4% during the second quarter at its fastest rate in six years. But it doesn't mean more goods were produced. Instead, the gains came because employers are cutting jobs and hours faster than output is declining.

Labor costs are often a company’s biggest expense. But last quarter, labor costs plunged at the fastest pace in nine ears.

Gas prices shift into reverse

After 20 straight days of increases that drove price higher by nearly 19 cents, gas prices dropped by 2-tenths of a cent to $2.643.

The average price of a gallon of gas is now down $1.471 - or 35.7% - from the record high price of $4.114 that AAA reported on July 17, 2008.

The highest gas prices are in Hawaii ($3.197).  The cheapest are in South Carolina ($2.424).

Bank overdraft fees to total $38.5 billion

Banks will collect a record $38.5 billion in overdraft fees this year, with nearly all the revenue paid by just 10% of customers, according to a research report released Monday.

The windfall is nearly double the $19.9 billion collected in 2000 as overdraft fees drift higher despite the recession, said Mike Moebs,  CEO of research company Moebs Services.

The national median overdraft fee rose to $26 from $25 in 2008, while larger Wall Street banks charge a median of $35, Moebs said.

Follow the money… on Twitter: @AndrewTorganCNN

Filed under: Andrew Torgan • Economy • Finance • Gas Prices • General Motors • U.S. Federal Reserve
soundoff (5 Responses)
  1. Melissa

    See, we all knew they had the ability to do this but they wouldn't do it until they had no other choice in the matter. Now they've had it thrown in their faces that if they don't start bringing this stuff out, they're going to go under. Its about time.

    August 11, 2009 at 4:13 pm |
  2. Fed Up

    Look how many billions it cost for GM (Government motors) to create and little crappy car that nobody wants!

    August 11, 2009 at 3:00 pm |
  3. earle,florida

    Can you imagine ten years from today,mostly all American's will be driving some type of alternate-fuel vehicle with gas mileage in the 60/75mpg range. Yes,it certainly is doable today,and the auto companies will make money. Just think,no more "ball,and chain" around our necks by the oil-rich countries that would like to see our demise. The money saved from buying energy from these countries will increase our GDP and lower our debt,a two-fer! Remember,this wouldn't have been possible if not for President Obama's doings,and here's why. President Obama had the foresight to realize that we were on a death-spiral regarding our energy dependence to our sworn-enemies,and saw a once in a life'time opportunity (workers remained employed,and innovation becomes tantamount,not trumped by the status-quo) to make "Change"! Letting the US Government help in bailing out our "Auto-Industry" we became part-owners,thus we were/are in a position to advise,and direct the future of our,"huge investment" to bring us into the 21st Century with alternate energy vehicles that they(auto-industry past performance when the dust clears,go back to their old habits?) would have paid lip-service in the past,if not this situation had occured. Funny how tragedy can turn into triumph. Go President Obama!

    August 11, 2009 at 2:56 pm |
  4. Prosy Abarquez-Dela Cruz

    The President is doing his best to tackle all major issues of environment, economy, health care, jobs, and now he is beginning to rebuild the economy using green technology. I wish for more efforts to green the environment just like the community gardens in the schools and organic gardens in backyards or planting native varities of trees in our national forests and parks. That will really improve the environment and green our economy and placed ourselves in better footing with Mother Earth!er of an economy, there will be imbalances that we will not be happy with. But, when an economy is made stronger based on simply injection of monies into the system, it simply makes for an imbalanced economy that does not benefit majority of the democracy it wants to serve.

    August 11, 2009 at 2:54 pm |
  5. Joe G. (Illinois)

    And to think it only cost Billions upon Billions in stock dollars lost investments, plus Billions upon Billions of dollars in tax payers money to bail them out of bankruptcy, plus of course Dealer’s Invoice, interest, title, licensing fees, undercoating, rubber mats and also in some cases “a free $4500 voucher” (Which is really a tax payers kick in their own butt self paid voucher. Now that Obama’s directorial experience he didn’t have 200 days ago.. Surely a Genius

    August 11, 2009 at 1:50 pm |