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It was a jarring sight for those who have followed the auto industry over the last decade.

At the crowning moment of an hour-long tribute to the "bigness" of General Motors Corp. — with live video feeds from around the world spouting congratulations on GM's 100th birthday — vice-chairman Bob Lutz drove a four-door hatchback version of the Chevrolet Volt onto a runway stage much like the ones used by fashion models.

This is what the production version of the Volt will look like in two years, when this plug-in hybrid goes on sale, though GM officials insist the term "hybrid" is a misnomer. The Volt, they say, is an electric car with a range-extending gasoline motor on board — just in case you run out of juice beyond the projected 65-kilometre battery range.

Most owners will never need the gasoline engine, they say. They'll plug in at night to recharge using a regular 120-volt socket for an eight-hour charge. (If you're in a hurry, a 240-volt outlet can charge the batteries in three hours.) From a dollars-and-cents perspective, going electric will cut driving costs from about 12 cents a mile to about two cents — that is, if gas prices in the United States remain at $3.60 a gallon and electricity rates don't rise.

What was so jarring, then, was to see GM essentially bet its future, publicly, on a battery-powered car that is unproven in almost every possible way and completely at odds with the company's 100-year-old culture.

GM faces numerous hurdles in its race to get the Volt into showrooms, but perfecting the lithium-ion battery pack is the biggest one by far. The battery pack will hit the marketplace with a 10-year warranty, even though GM engineers and their suppliers will have done less than three years of testing.

"If we're going to warranty a battery for 10 years, we'd like 10 years of testing, ideally," says Tony Posawatz, the vehicle line executive who is directly responsible for getting the Volt on the road.

So GM has found "green" religion and it is, excuse the pun, shocking. Just a few years ago, GM executives dismissed hybrid technology as a fad. Electric cars? Ridiculous.

Using their best MBA-speak, they would point to the high cost of the technology and the cheap price of gasoline as factors that undermined the "business case" for vehicles such as the Toyota Prius hybrid. Why focus on fuel efficiency when Americans were snapping up SUVs and pickups as fast as GM could make them?

How odd it is to be here in 2008 and witness the largest of the three Detroit auto makers putting all its credibility eggs in the electrification basket.

"The electrification of the automobile is absolutely a foregone conclusion," says Lutz, a relatively recent green convert who heads all product development at GM. "The debate has shifted from 'if this would happen' to 'when.'"

GM is counting on the Volt to restore its tarnished reputation for technology leadership. While initial sales are expected to be only about 10,000 cars a year, with prices somewhere between $30,000 and $40,000, the Volt is being counted on to cast a broad halo over all of GM's new models.

Even as work on the Volt proceeds, GM is busy launching a barrage of revised or completely new passenger cars, hybrids and so-called crossover vehicles that often achieve better fuel economy than trucks and SUVs. The company is also pushing hard for ethanol as a fuel of the future that can dramatically reduce the U.S. dependence on fossil fuel.

But it is the Volt that is expected to supercharge GM's shift from dinosaur-like maker of gas-guzzling SUVs to steward of a future of eco-friendly driving. If the plan works, the Volt will bring in a generation of buyers who will see the "new" GM as an industry-leader selling high-tech cars that are friendly to the environment.

That's the plan, at least — the Volt as rolling metaphor for GM in the 21st century.

How it started

No one even dreamed of such a thing back in April, 2005. At a monthly strategy session for senior management in GM's Detroit headquarters, Lutz, the then-73-year-old product chief, stunned the room by suggesting the company build an electric car that would run on huge lithium-ion batteries.

It was a daring suggestion; Lutz, after all, was the godfather of the Dodge Viper when he headed product development at cross-town rival Chrysler. Moreover, GM had already taken one big black eye on electric cars. By killing the experimental EV1 electric car in the 1990s, when SUVs were the rage, it had set off a firestorm of criticism that culminated in the highly critical documentary called Who Killed the Electric Car?

GM has been ruing that day ever since. Environmentalists attacked the company for pulling the plug on a battery-powered car that had found a following in southern California, where several hundred committed souls had been leasing the car for $300 a month, meaning a big loss on each one for GM. Critics, ignoring the business fundamentals, said GM buried the EV1 to show policy-makers that clean electric cars were impossible to build at any sort of profit.

At about the time GM was burying all 1,100 EV1s, Toyota was launching its own electric car — the quirky Prius hybrid. Toyota has since sold a million Priuses around the world, including about 200,000 last year in North America. This has allowed Toyota to claim the mantle of first among auto makers for environmental responsibility. Lutz has never made a secret of how much this sticks in his craw.

That April '05 meeting did not produce instant agreement among GM's senior management on the righteousness of an electric car. But the seed was planted. Lutz, along with global product development vice-president John Lauckner, kept pushing.

By the fall of 2006, word was out that GM had something big on the way. Secret, off-the-record briefings were held for journalists, analysts, industry insiders and potential critics in the green movement. GM officials laid out their plan: they had decided to revisit the electric car, which this time would come with its own onboard charging device. It's there to eliminate "range anxiety," says Lutz. If the Volt's batteries run dry, the gas engine kicks in; no one will ever be stranded in a Volt, he says.

First showing

Then the public saw the Volt for the first time, in January, 2007, at the Detroit auto show. Chief executive officer Rick Wagoner said the Volt would be a "game changer," an electric car that would plug in to a regular outlet. It would leapfrog the competition, he said, and GM would have one for sale in three years.

GM officials, from Wagoner on down, now say their biggest fear isn't bringing the Volt to a Chevy showroom near you, on time, on budget and with bullet-proof reliability. That's not the problem.

The real fear, what keeps vice-president of advanced technology Larry Burns up at night, is gas prices. If they go down, GM will have a tough time selling the Volt to a public still enamoured of large, thirsty vehicles that have been a staple of American buyers for decades.

"It's the volatility that scares me," says Burns, referring to huge swings in the price of oil. A barrel of oil has dropped from a high of about $140 (U.S.) and has recently flirted with prices below $100. If oil prices go too low, GM knows it could be in trouble.

On GM's side is the reality of oil: it's a finite resource and the world is burning more each day, as emerging economics such as China and India continue to show an unflagging thirst for oil and energy in general. And much of the world's oil supply now comes from countries that are neither particularly stable nor friendly to the United States.Then there's the fact that, for all intents and purposes, the debate about global warming is over. Both Ottawa and Washington will impose extremely tough fuel economy rules that take full effect in 2020. In Europe, governments are pushing ahead with strict rules on carbon-dioxide emissions; the dirty diesels that dominated the continent for the past decade are being eliminated by regulation, and rising diesel fuel prices means auto makers are turning to hybrids and more-efficient gas engines.

Officials at GM say that to meet the 2020 regulations, as many as 75 per cent of its 50 models may need to be fitted with hybrid systems that combine an electric motor with a small gasoline engine. Many other models will be shrunk or fitted with some other kind of fuel-saving technology.

The system being developed for the Volt is scalable, Lutz says, so larger vehicles such as the mid-size Chevy Malibu could adopt the technology.

Bucking history

GM's green strategy is akin to a moon shot and runs counter to everything the company has stood for during its 100-year history, the GM of the V-8 engine, of the Hummer, of the Pontiac GTO. Can GM's engineers — especially the 500 or 600 working directly on the $600-million (U.S.) Volt project — lead a total corporate transformation? And at a time when GM is bleeding cash at the rate of about $1-billion a month?

Then there's the competition. On Tuesday, Chrysler announced it will put an electric car on sale in North America in 2010, and unveiled three electric prototypes: a Dodge sports car, a Jeep and a Chrysler minivan, though it hasn't decided which one will roll out first. The Dodge is completely electric, but the Jeep and minivan would have a recharging system similar to the Volt.

Nissan has also announced an electric car, and Toyota says it has already begun testing its plug-in hybrid. Mitsubishi is also pushing ahead with an electric car program, and Honda is devoting renewed energy to its hybrid efforts. Next April, Honda will launch the four-door Insight hybrid, and is promising more hybrids within the coming year.

At GM, officials all acknowledge that technology leadership today means being first in green technology — a monumental shift in thinking within GM and throughout Detroit's macho car culture.

That, more than anything, is why observers were jolted by the sight of GM putting an electric car on stage as a symbol of what the company hopes to achieve in its second 100 years — not to mention seeing it driven by Lutz himself.

So Lutz has not only seen the light, but embraced it: The future of the auto industry is electric and GM aims to be leader of the pack.