The news out of Detroit had all the feel of a wake. GM announced that it was suspending production of the Chevy Volt idling its Hamtramck factory where the electric car is made from March 19 to April 23 is "to match production with demand". The 1300 workers get laid off, but because of contract terms most still get paid.
It may seem like a wake but the patient is not yet declared officially dead--but with sales at a miserable 7,671 vehicles in 2011 against a target of 10,000. With Volt sales of 1,626 cars in the first two months of 2012 against a target for the year of 45,000 even with the Federal and State subsidies-the market has spoken. In this case, matching production to demand is code for we're waiting until after the 2012 election to kill this turkey and we're betting that despite whoever occupies the White House - it will be easier to get forgiveness than permission to kill the turkey officially by then.
Why did this happen? Well are you prepared to spend $40,000 on a car that only has a range of 35 miles? I rest my case.
The concept of an all-electric vehicle is game changing and Volt will-eventually-prove a useful R&D experiment if it results in stimulating the production of better battery technology to help solve some of the most vexing problems of the energy business-electric power is a real-time pure play. Everything we put onto the power grid and everything we suck out of it must match every time, all the time.
The problem with Volt has never been the R&D experimentation. It was the 'government motors' attitude we can make a market for Volt by building it despite the inconvenient truths about it flaws and high costs. But with GM in bankruptcy, then bailed-out, and still on supervised probation by its Federal masters it had no choice but to play along.
But then there is this--maybe the GM management team is wiser than we given them credit. The Chevy Volt may be a classic example of the 'go early, go ugly' strategy of venture capital investments. Yes, it only goes 35 miles before you have to switch over to the emergency gas tank. But the 'big shot investors' loved the sustainability bragging rights it gave them. Yes, we had a few minor problems with the batteries, but it sure did draw crowds at those auto shows--and it was a symbol that Detroit was back from near death building cars of the future. So government motors tried and failed with the Chevy Volt because the public did not buy it. But it got bailed out, turned around and is digging its way back to profitability because it agreed to 'go early, go ugly' when the investors wanted it most.
Come to think of it, the corollary of 'go early, go ugly' is fail fast so you cut your losses while still getting credit for trying. For GM that may end up being both good politics and good economics-a two-fer!
By. Gary L. Hunt
Gary Hunt is President, Scalable Growth Strategy Advisors, an independent energy technology and information services adviser and a partner in Tech & Creative Labs, a disruptive innovation software collaborative of high tech companies focused on the energy vertical. He served as VP-Global Analytics & Data at IHS/CERA; global Division President at Ventyx, now an ABB company; and Assistant City Manager-Austin Texas responsible for Austin Energy and Austin Water.
Gary Hunt is President, Scalable Growth Strategy Advisors, an independent energy technology and information services adviser and a partner in Tech & Creative Labs, a… More
Comments
Goodnight oil. _
"Why did this happen? Well are you prepared to spend $40,000 on a car that only has a range of 35 miles? I rest my case."
The Chevy Volt range is 370 miles. Please check your facts because errors like this distort perception, and of course you are trying to report on the facts, right?
There are quite a few people think GM will eventually fail due to inability to compete against Toyota/Ford.
If the Volt is a turkey, then Gary you have a lot of crow to eat, forget the turkey. You're speaking from ignorance.
So long gas pumps!!!!!
The Volt was pure politics, packed with subsidies for the rich who buy them. Once this election is over, there won't be any more need for it, so it'll be Buy Buy, Volt.
Several of the Volt owners have already addressed the inacurracies in the article. However, the comments by "Truth from the start" are blatantly inaccurate and need to be addressed. Denise Gray (Ms. Gray) left GM for an opportunity to work for a battery startup on her own accord. Frank Weber, left for BMW, a company which has now committed to the development of TWO EREV vehicles (i8 and i3). Tom Stephens recently retired from General Motors as Vice Chairman and Chief Technical Officer after a 43-year career. Insinuating, or claiming they left GM for any other reason is flat out incorrect.
Denise, Tom and Frank remain very proud of their involvement with a vehicle that has won North American, European, Green, Motor Trend and Automobile Car of the Year Awards - a collection of awards unmatched by ANY vehicle in history.
Discussion threads such as this can be places of great learning and sharing of opinions - whether we agree with them or not. However, they should not be a place for the uniformed to sully the reputations of engineers who's contributions led to the most awarded vehicle in the industry.
Rob
Does anyone in the media remember the Chevy Vega and Ford Pinto? They were Detroit's first attempt to build a small car and they were horrid. As a first attempt the Volt is clearly a better product than either of those past embarrassments. The drum beat of disparagement has been steadily sounded by conservative leaning commentators, one FOX News talking head repeated the paltry range misinformation yesterday on The Five. There is no reason for this attempted product assassination on logical grounds—if the conservative blatherskites truly believed in their own philosophy they would simply let the market dictate the success of the Volt. I can only conclude that the smear campaign against the Volt is based on political judgments, not economic or engineering evaluations. This is very disheartening, since I lean conservative/libertarian in my own thinking. You cannot claim to fight for truth while spewing lies.
Remember that new technology, i.e., computers cost much more when they were new in the market.
The Volt was marketed as an intermediate vehicle- between gasoline only and electric only vehicles. The combination of electric and gasoline now removes the biggest opposition to electric vehicles: range anxiety.
The Volt has good range now compared to the Leaf.
Hopefully the Volt's cost can be reduced to be more competitive. Perhaps the tax credit could be raised above $7,500 to $10,000. I think that would help sales.
I hope to buy a new Volt within two years. I'm an American who wants to buy American made. Import tariffs on foreign made would help equal the playing field for American made products such as the Volt.
It is an attractive vehicle. I would be proud to own one!
Its range is pretty good - 75Kms in the spring/summer/fall on battery - more if you use gas. If you charge at work or in between drives you can actually go 100-200kms per day on electric - basically you get to give the oil companies the middle finger when you drive by the gas station. Weird to spend more on car washes than gas. I routinely buy $2 gas just to get the discount on the car wash at PetroCanada. And my hydro bill (which in Ontario is not really sourced from coal at all) has gone up about $45 a month (including all those surcharges). I also love the fact I’m using a domestic source of fuel, not relying on sources of energy produced by hostile regimes, and buying a car made in North America!
One more thing - the battery will likely outlast the car. The battery and all electrical components of Volt, Leaf, etc are warrantied for 8 years / 160,000kms. In California it is for 10 years. The car will fall apart before the battery goes. And even if the battery failed outside of warranty period, for the Volt it is $2400 to replace which is not bad. Me at that point 8+years out I would simply run my barely used ICE and be satisfied with the 35-40mpg on ICE only as I would have made my money back years ago.
Bottom line is the Volt is a great fun car with great service and support from GM. People really need to get out and test drive one. And it looks great to.
David,
Ottawa
I am dismayed at the lack of appreciation for the American ingenuity and design engineering displayed in the Volt. The disparagement and misrepresentation going on in the right wing media is both UnAmerican and Unpatriotic. What happened to the pride and can do American tradition?
The feeling you get from passing by every gas station is electric. If/when gas spikes to $8 a gallon these cars will double in value. And remember that battery technology is still improving - by the time it needs a replacement the new versions will likely be cheaper and more powerful.
For instance, GM says that its Volt workers will be temporarily fired, and then rehired. It does not mention that most of them will be paid even when not working. That's an important fact that GM hid. Why not tell the true story there?
There is a Volt owner which has over 100K on the car with about 45K miles in EV mode with little to no battery degradation and a replacement battery pack is only about $2500.
@Jon, the Volt is luxurious. It has a very luxurious drivetrain, has heated seats, is extremely quiet on the highway. It's not ultra luxurious but by no means is the driving experience like an econobox.