Talk Back Tuesday: Chevrolet Volt -- A Tale of Two Possibilities
If we were to predict the Chevrolet Volt's future success on it's ability to generate interest, the car would have to be judged an unmitigated success. The GM folks brought one by the Edmunds.com offices yesterday to let our editors (and the rest of the company) have a first-hand look at the car some have dubbed the savior of General Motors.
That's a mighty large burden to bear if you ask me. It would be akin to assuming one man is capable of solving all the mounting challenges facing this country...
But I digress. Let's assume, for a moment, that GM succeeds in delivering a Chevrolet Volt production vehicle to consumers before the end of calendar 2010 (a promise the company has fully committed to). If said vehicle is parked in dealer showrooms 24 months from now, will it truly mark a drastic change in GM's future success?
I foresee two distinct scenarios facing the Volt in the next two years. Let's take a look at both of them.
While the specifics have yet to be confirmed we have a general idea of what the Volt will offer. For example, it is supposed to travel 40 miles on pure electric power before the internal combustion engine starts up, though we don't know if that's city driving, freeway driving, a mix of both, or if the A/C drastically affects that number. We know it is supposed to cost around $40,000, but tax and energy credits could lower the actual price to between $28,000 and $33,000. We know it should charge up in 3 hours on 240 volts...but closer to 8 hours on 110 volts. And we know that oil closed at its cheapest price in 22 months yesterday ($55 a barrel).
With that in mind, let's paint two drastically different scenarios for the Chevrolet Volt's debut:
Scenario 1: The Perfect Car at the Perfect Time
It's November, 2010. Increasing instability throughout the Middle East has cut oil production, raising the price of fuel in the U.S. to $5.85/gallon. A push by the U.S. government for increased fuel efficiency in personal vehicles has them offering a $10,000 tax credit on cars that can travel at least 25 miles on pure electricity. An energy credit from the electric companies knocks an additional $4,000 off the price of a Volt, resulting in an MSRP of $26,000. Finally, most cities will cover the cost of installing an electric outlet in a garage or parking area at local workplaces and private residences if you have proof of Volt ownership.
In real-world testing the Volt achieves 40 miles on electric-only propulsion in city driving, 32 miles in highway and 36 in mixed conditions (with the A/C on). When the internal combustion engine does kick on you can hardly tell because of effective drivetrain isolation and sound deadening.
It accelerates to 60 mph in less than 9 seconds and has plenty of room for four adults. Items like automatic climate control, keyless entry, Bluetooth hands-free communication and full iPod integration are included in the standard $26,000 price, while $28,000 gets you navigation with an on-board computer (ala Sync), plush leather seating, radar cruise control and lifetime satellite radio.
Chevrolet dealers are well stocked with shiny new Volts in a variety of colors and optional equipment, and if you custom order one (ala Mini) you can add a host of personalized touches, with your car arriving 6-to-8 weeks later.
Scenario 2: EV1, The Sequel
It's November, 2010. With both Saudi Arabia and Iraq now on U.S.-friendly terms and fully capable of maximum oil production, combined with a general slowdown in energy demands from a still-recovering global economy, average national gas prices in the U.S. are $1.80 a gallon. A cash-strapped U.S. government is more interested in revenue than tax credits or environmental concerns, so all hybrid and alternative-fuel credits have expired or been repealed. The likelihood of passing new legistlation for fuel credits or energy incentives, or even subsidized electric outlet construction, is right up there with the chance that someone will pay over $100,000 for a two-seat electric sports car in a down economy with cheap gas. As such, the MSRP for a brand new Chevrolet Volt is $40,000 in base form, $44,000 if you want nav, leather and iPod integration.
Real-world testing of the Volt has it managing 34 miles in city driving on pure electric power, but that number drops to around 19 miles if you travel at constant speeds above 45 mph or at temperatures below 40 degrees. There's also a nasty shudder through the vehicle's cabin whenever the engine starts and stops, and it takes over 10 hours to charge it on 110 volts (just over 5 hours on 240 volts). Many owners report a "noticeable dimming" to all the house lights when they plug it in, and thrown breaker switches or blown fuses are not uncommon.
Acceleration to 60 mph takes 11 seconds on a full charge, but that number stretches to 13 seconds if more than one person is in the vehicle with the A/C on. Repeated full-throttle applications can drain the battery in less than 12 miles (10 in cold climates).
Most Chevrolet dealers can't sell you a Volt because less than 200 have been produced. Orders for the car are minimal, the bulk of them originating in Southern California where Hollywood stars and environmental groups are willing to pay the Volt's steep price to promote the vehicle and/or their lifestyle.
At the same time, Honda's Insight and Toyota's Prius are entering the third year of their latest production cycle. Both cars start at less than $25,000, offer 45-plus real-world mpg and can carry five adults while accelerating to 60 in less than 9 seconds. Interest in the Volt, and in plug-in hybrids in general, has inspired Toyota to offer a $1,200 "Prius Plug-In" option. It allows owners to plug in the Prius and charge the battery pack in 4-6 hours, at which point the Prius will go approximately 17 miles at speeds up to 50 mph on pure electric power.
Obviously I've painted two extreme possibilities above. It's likely the Volt's future reality will land somewhere between these scenarios. But as my examples show, there are a multitude of variables at play here, many of which lay far beyond the boundaries of GM's control.
So, is the Volt GM's savior or an EV1 in the making? What say you?
- Posted by
- Karl Brauer November 18, 2008, 6:00 AM
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I don't think it will be a savior on its own - though maybe after several years on the market it will have helped GM claw back some respect/market share. I'm also apprehensive when I see people justify the Volt's price with government incentives and credits. This is a dangerous game to play - credits and incentives should be seen as a bonus, not something to rely on in order to sell/buy a vehicle.
The battery charging 'scenarios' are not really an issue for me. If it does take 8-10 hours on 110V, then I could very easily do it overnight. This isn't a car that's suited for a traveling salesman, its for the every day commuter. If there is somewhere to plug the vehicle in at work (which right now, seems unlikely?) then you are set no problem even if it needs a longer charge (a la scenario 2).
The Prius/Insight pricing and plug in option seems to be a big hurdle.
Karl what did you think of the Volt upon seeing it? I love the front end, really dislike the iPod interior and the rear end. I really don't care for light colored interiors, and I hate this current iPod trend of white electronics. Can't we be more original? Leave the white products to Apple.
"Karl what did you think of the Volt upon seeing it? "
I know you commented yesterday - my question here was looking for a more in-depth opinion of the vehicle.
Good article - I think the design is futuristic whilst being practical. Lets see how it does but kudos to GM for being the first to come out with something like this and with less than 2 years to go. I am pretty sure the tax credit will be their and the pricing will be nearer to Option 1 (allowing for inflation in 2 years). I think expecting leather, navigation system and other goodies for $2,000 is optimistic in any car.
I don't think GM has ever said the car is intented to be the savior of the company. If they did or even slighly illuded such a claim, I'd love for someone to provide the quote. Secondly, Scenario 2 is beyond farfetched and mocks every engineer working on a pioneering design of the future. The 2.4L Ecotec in the current mild hybrids don't experience cabin shocking starts so why would tis engine considering it won't even be connected to the rolling stock? Since when are acceleration times considered on regular gas powered vehicles with the a/c on? How long does a Fit take to accelerate with a full load of adults, cargo and the a/c burning? The double standards of these "expert" automotive journalists are endless and never cease to amaze me. If every new "green" vehicle attempted to immulate what Honda and Toyota have done, how would technology advance? Toyota has openly criticized GM/BMW's two mode hybrid system even though its technologically superior to its single mode system which does nothing but add drag at highway velocities. Kind of shows us that they feel they have achieved the zenith the hybrid technology and will do nothing new any time soon. Honda's hybrid efforts so far have been a laugh and what the hell is anyone else doing? Mazda? Nissan?
"But as my examples show, there are a multitude of variables at play here, many of which lay far beyond the boundaries of GM's control"
The only variable they won't be able to control is the reliability and quality of the battery packs which is why this thing ain't being released for two more years(among other reasons). From a engineering and development standpoint, I find that ample time for a large company with tons of resources to sucessfully overcome.
I'll put my money on 80% possibility 1, 20% possibility 2.
Something everyone is forgetting regarding the Volt: It's purpose is not to be a big selling, high profit source for GM.
Rather, it's main job is to make GM look more competent than the Japanese competition. To start to restore the luster to GM products in general, something that hasn't been there for the last 35 years.
If it fails at that, you're going to have a future for GM that's no different from the present - cars that are only worth buying if the rebates are high enough, or the financing is low enough, or if the price has been dropped to employee pricing.
What GM desperately needs is the aura of "cars worth buying for the name on the hood". They've already got the Corvette. Volt is hopefully the second step.
"The only variable they won't be able to control is the reliability and quality of the battery packs "
What about the price of gasoline?
And the amount of government tax breaks and subsidies?
And the state of the economy affecting consumers ability to spend.
And the existance, performance or availability of the Prius and Insight plugins?
It seems like there is a lot of things GM is not in control of, and you are working hard to ignore them (and convice others to as well).
That interior design is fantastic.
I've got to believe that with all of the resources GM is pouring into this car that the end result will be closer to the first scenario than the second.
As an aside, why is it that cars such as the Tesla Roadster and this new Dodge EV can get 150 miles of range on an electric charge, but the Volt can only go 40? Is it because the first two cars are only 2 seaters and don't have the weight of the extra engine that the Volt has?
Well, my personal opinion looks a lot more like #2 than #1.
It will be a nice car. There will be tax credits galore under Obama and the 111th Congress. No reason to expect a nasty shudder, be fair, start/stop technology is plenty advanced. But even in the "best case" scenario (that is, best case for the Volt, worse for the other 300,000,000 of us...) with gas prices high again, it will still be not quite economical. It might "pay for itself" in fuel savings versus a brand new Malibu, but there will be diesels and hybrids that still make more sense financially. Or, you know, just keep your old car longer. Or buy a Ford instead of a BMW. I know how painful it would be to the enthusiasts among us, but come on, you don't "need" any car over $25K, period. If you can't cut your gas bill, you can cut your car payment. Or your house payment or your Macy's payment or your fancy restaurant habit. People still have plenty of money, they just like to piss and moan when they have to spend more on gas and less on designer jeans.
Bottom line - the Volt will a low volume halo car, nothing more. It won't be enough to save GM (if it's even still around in 2010 - scenario three is the Toyota Volt). And when Toyota and Honda and BMW start building their electric cars in the US, nobody will want the Chevy any more because of good old import snobbery.
And I'm glad this colossal flop will happen under Democratic leadership so that all those loonies who want to know "who killed the electric car?" will have one of their own to "blame" for it.
On the product side, I give GM engineers credit that they wouldn't spend this much time and money on a dud vehicle as described in Scen 2. At nearly 40K to build, it's going to be very good at what it does.
The question is will the market buy them. With the world economy in the toilet, oil demand way down, and Barack's hope and change and much higher taxes nigh upon us, spending 10K over a Malibu to feel smug about saving 50 bucks a month on gas isn't real smart.
I'd call it the perfect car four or five years late.
At the moment it's vaporware draining much needed money away from viable products.
Think about the first generation Prius - it was a niche car that sold in paltry numbers. Now the current Prius is in the top 10 of all car models sold.
It seems like a no-brainer to bet on oil prices going back up to where gas is $4.00+/gal. I view this Volt as perhaps the first generation Prius. Hopefully for GM, by the second generation Volt, it will be one of their high volume cars and the technology will be spreading across other GM products.
I don't think GM, or any other major auto manufacturer, has any option but to bet heavily on hybrid/electric cars. We as a country have several alternative sources of electricity generation (nuclear, coal, solar, etc) to foreign oil, but no alternative source when it comes to gasoline.
Karl, great article! I wish you could blog everyday.....
"Rather, it's main job is to make GM look more competent than the Japanese competition. To start to restore the luster to GM products in general, something that hasn't been there for the last 35 years."
Syke, I couldn't agree with you more! The Volt is not going to be GM's saviour in an economic or business sense, but more in a psychological sense.
I also think the situation in 2010 would be something between the two scenarios. I think a price of $26k is too optimistic; it'll probably be slightly north of $30k. In that case, even at $6, a Prius hybrid makes more sense.
I think the Volt would make more sense to relatively affluent buyers who have a home with a garage....and who do not have long commutes. It'll be a limited-numbers vehicle, much like a BMW is.
BTW, why do I sense that every commentator here is a conservative/Obama basher? I think he'll be a fantastic president and far better than what McCain would have been! McCain/Palin were a joke, and much of the GOP is.
I'll have the last laugh when y'all conservatives are proven wrong in 4+ years' time.... :-)
"What about the price of gasoline?
And the amount of government tax breaks and subsidies?
And the state of the economy affecting consumers ability to spend.
And the existance, performance or availability of the Prius and Insight plugins?
It seems like there is a lot of things GM is not in control of, and you are working hard to ignore them (and convice others to as well)."
Those factors go for any car at any given time. The car will NOT make money anytime soon so I don't see how anyone could interpret this car as a possible "savior" for the company. This car is a test mule for this new type of powertrain so its main goal is to test the viability of such a solution. If proven sucessful, it could improved upon then transfered to other vehicles and miniturized for smaller less expensive vehicles (think Cruze hybrid). People will either buy it or they won't but that says nothing about the overall execution of the vehicle or whether or not it delivers on the promises. For example, greenies will buy the Prius regardless of the subpar driving experience, rock hard plastic interior or if gas fluctuates from $1.79 to $4.79. Those with more cash to spend will do the same with the Volt. Secondly, I'm not trying to convince anyone of anything, that's Karl's job. I don't have a crystal ball nor have I ever tried to predict the state of the economy or how much oil will go for in 2010. My comments were in reference to the engineering of the vechile and whether it can meet its goals. If anything, the published goals will be conservative so as to avoid the backlash the press can't wait to deliver. I'll leave the economic predictions to the experts who, incidentally enough, didn't see this current meltdown coming.
As far as those arguing this vehicle won't make sense at the various proposed selling prices, let's remember something- no hybrid makes sense from a $$ perspective when gas is cheap. They don't even make much sense when gas is expensive. Just as diesel is proving, the amount of money you save at the pump is just a mirage- an oasis in the desert. Anyone taking out a new auto loan to save money at the gas pump just proves that saving money is not of their concern. Gas will probably be super expensive at some point in the near future given the rate at which the world is consuming pertroluem. So, whichever company is ready to deliver a fleet of fuel sipping cars will be at the top of buyers' lists.
I agree with gmg66. If it's a hit, it'll be after a couple of generations. But GM has a bad habit of killing cars after just one low-selling generation. They have to stick this one out.
I predict a scenerio between the extremes. The Chevrolet Volt becomes a marketing success and a commercial failure. It functions as a low volume halo car that brings customers into Chevrolet showrooms and helps post-bankruptsy GM secure government funds. The Volt has too much in-your-face plastic for a $40,000 car and with gasoline selling at about $3.00 per gallon, fuel savings and government tax credits don't cover the cost premium over Chevrolet's Cruze and Malibu. The silver lining is Volt hype brings new customers into Chevrolet showrooms where a significant number buy a Cruze or Malibu instead. With most of GM's post-bankruptsy marketing budget focused on one brand, Chevrolet, GM crawls back from oblivion.
Good one George. A fully viable middle-ground between my extremes.
I'm betting it will be closer to #2 the #1.
Too much money for a car that will be nothing special to own and I'll be surprised if it can come close to the marketing claims of mileage and range in a real world test.
Two complete drivetrains is to give it the best of both worlds but it will also give it the negatives of both.
I'd actually go a step further than scenario 2. I bet GM won't even have the Volt ready by November '10. Keep in mind that deadline was announced before the credit crisis hit and bankruptcy became a very real option (although a no less viable one).
Scenario #3:
GM delays production due to supplier headaches and exponentially increasing costs.
GM is either recovering from, or still emerging from, bankruptcy and is begging for additional capital to continue funding of the Volt project.
The Volt ends up costing an additional $5K (bringing sale prices to $45K), a shocking (pun intended) 50% increase from the original $30K price tag estimate. The first Volts are delivered mid 2012.
Roadworthiness is adequate, certainly no less inspiring than a Prius.
Most other manufacturers offer hybrids with a plug in option (or even standard) of comparable size for ~$26K.
The Volt is discontinued in 2017 due to meagre sales. Chevy begins production of a hybrid Cobalt.
Well, it would be a hybrid Cruze, but otherwise your scenario seems plausible.
This car wont be a savior and GM has never claimed it will be. This car is about having a green halo like Toyota enjoys as it churns out trucks and SUvs that get 13mpg. This car is about making Tom Friedman and his ilk look like fools. To some degree I think many of GM's critics are hoping that either a) the company goes under before the Volt can be delivered or b)the Volt fails in spectacular fashion. If this car is delivered for a price around $35k and sells DECENTLY (lets say 50k) in its first year many "experts" will have to eat crow.
From a financial perspective this car will not save GM at all. The volume and cost to produce guarantee that it wont make money at first. This is likely why GM is looking to use E-flex on at least 2 other vehicles after the Volt debuts.
Scenario #3:
GM? What GM? Ah! yes, now I recollect that 800 pound gorilla that almost drowned the country and their families by building trash cans and selling them as cars.
Remember how their CEO (Wagoner) along with Ford's and Chrysler's went pan handling (in their private jets) to Washington DC begging for tax payers dollars. Phew! good thing it got rejected and GM died.
Good news though is that Chevy and Cadillac survived. They were the only one's worth saving anyway. Here is how the lineup looks now:
Chevy: Cobalt, Malibu, Impala, Corvette, Tahoe, Suburban and Volt.
Cadillac: CTS, STS, Escalade, XLR
After making such bold and smart choices both Chevy and Cadillac are now making cars that American's are proud to buy ... once again.
Again, Cruze not Cobalt. And why no pickups?
I bet at some point after the Volt is released some news outlet runs a story about a Volt that burst into flames - it might have nothing to do with the engineering.
"GM? What GM? Ah! yes, now I recollect that 800 pound gorilla that almost drowned the country and their families by building trash cans and selling them as cars. "
trash cans????
Care to share which GM model you're referring too?