Monday, April 16, 2012
Who In Their Right Mind Would BUY a Chevy VOLT?
After all, it’s $40K – think about what else one can buy for $40K! There are very nice Lexus, Benz, Infiniti, BMW, and Cadillac models in that price range. AND even with a government subsidy it doesn't stand on its own at $40K. Even if gas hits $5, it doesn't work. Plus who knows what it will be worth in 39 months, or 36 or 48 for that matter. If new technology trumps it, it could be next to worthless. Why take the risk just to be known as an "early adopter?" That's why Bob Lutz, the Father of the VOLT, told us at a fleet conference a while back, "It won't SELL. That's why we're leasing them for $350/month for 39 months."
Lutz says, "We gotta start somewhere if we EVER plan on achieving economies of scale." In true Lutz fashion he compared the VOLT to hunting ducks. "If you shoot at the duck, you will miss it every time. One has to "lead" the duck to hit it. We need to lead the market to have a chance to hit it. If we wait too long, the train has left the station and we are standing on the platform saying, "What happened?"
"Lead, follow, or get out of the way, said Lee Iaccoca. Lutz concurs.
Toyota lost money on every PRIUS beginning in 1996, and did for quite a while. That vehicle is thought to be profitable these days, although they are typically "tight lipped "on such matters. Toyota is now bringing a plug in hybrid to market. (The VOLT was the world’s first plug in hybrid.) Toyota has lots of experience and satisfied hybrid customers now, along with economies of scale.
In the meantime, the VOLT has attracted detractors. The Right Wing in the person of Rush Limbaugh has embraced the VOLT as a car they can hang around the President's neck, despite the fact it had been in development long before he was elected. Actually, Lutz IS the actual "Father of the VOLT." For Lutz to get after the Right Wing takes some doing -- see his Forbe article.
The barrage of untruths continue. A friend from told me that it would take 3 weeks to drive across the country in a VOLT with all the stops to recharge. He said heard it on Right Wing talk radio. In fact, the electric range on VOLT is about 45 miles before the internal combustion engine takes over to propel one across the country as with a normal car. It IS true that the internal combustion engine recharges the batteries which drives the electric motors rather than being actually connected to the drive train in a conventional manner. But to the driver, the difference is not noticeable except the engine doesn’t change RPM based on throttle position.
Others claim they catch fire in a collision. The VOLTs that caught fire had been crash tested and stored improperly for weeks before they caught fire. A vehicle with a regular lead acid battery stands the same risk if stored improperly. As with normal vehicles, the battery should have been removed.
A driver with a less than 30 minute commute to work, and a place to plug in while there, could drive all month without the internal combustion engine using any fuel at all. Figuring 50 miles per day plus other driving, one saves two tanks of fuel per month or about $120. Subtract that from the $350 lease payment and the VOLT can be easily justified. BUT GM has NOT made that case. Worse yet, sales people in Chevy dealerships haven't either. And coupled with the Right Wing misinformation blitz, GM has shut down production for 5 weeks to balance inventories. In my mind, the story has been that GM has not done the math for consumers in their marketing efforts. The marketing story is "$350 minus $120 equals $230./month. That WORKS!!!!!
[Smitka: But obviously consumers don't do the math -- ditto with the Prius, as there's no strong case for buying it on the basis of fuel savings, which is why no other hybrid, including those made by Toyota, sell well. In other words, people buy a Prius to make a statement – hence you don't find "base" models on the lot, the main reason Toyota may make money on the vehicle, despite the cost of installing two powertrains plus a battery pack. GM needs to borrow a bit of that marketing. At the moment, of course, so does Toyota....]
David Ruggles, April 17, 2012