Time to pull the plug on the Chevy Volt?
It just can't help GM?If you hate GM, then you probably don't think much of the Chevy Volt. In fact, you might even call it an unrealistic hype machine into which GM has sunk far too much money.
That's the argument the Washington Post makes today, and I have to admit, it's a pretty persuasive argument. For instance, the article points to numerous analyses, including some done by President Obama's auto task force, that indicate the economics simply don't make sense for a vehicle like the Volt. Thus, how can the Volt help GM's bottom line?
For example, even with $4.00 gas, it would still take, minimally, six years for the the Volt to recover its costs compared to today's Toyota Prius. And, that's assuming the Volt will only cost $30,000 after huge government tax credits and subsidies. Even at such a cost, it would still take far longer for many other Volt owners to recover their costs compared to a Prius.
Thus, this Post editorial suggests pulling the plug on the Volt, and I couldn't disagree more.
I have long argued that the Volt should never have been an excuse not to develop a Prius-contender. Perhaps GM's lithium-powered BAS hybrid system can fill this void, but cheap quality hybrids will be a necessity for any automaker in the very near future.
Fortunately, GM's billion dollar investment into the Volt could help produce such cheap hybrid vehicles, aside from the Volt. Because much of GM's Volt investment has been centered around one core technology, lithium-ion batteries, GM could conceivably parlay this knowledge into many different types of hybrid and electric vehicles.
Hence, to call GM's Volt venture a waste that helped lead to bankruptcy and a loss of corporate reputation is pure nonsense.
I've seen GM's battery labs. I've seen GM's virtual design center. These two elements alone could make GM's Volt investment worth the cost, even if the Volt itself is another decade away from any sort of real world, cost-effective impact.
Nonetheless, the Volt cannot save GM in the next decade. However, that does not mean the plug should be pulled on the Volt. Instead, it means GM needs to utilize the massive amount of intelligence gleaned from the Volt and convert it into a more well-rounded and balanced hybrid and electric vehicle portfolio, including the Volt.
If GM can do that, the Volt might just be GM's smartest investment ever. If not, maybe we shouldn't just pull the plug on the Volt, but GM.
Labels: Chevy Volt electric vehicle concept, electric cars, plug-in hybrid vehicles, toyota prius
posted by Dahcredyns at
9:25 AM
19 Comments:
Just pull the plug on GM and get it over. While I agree that GM could "parlay" it's Volt intelligence into a sensible portfolio of products, I just don't see GM as being smart enough for your gamble.
The soon defunct GM will morph into the new GREEN GM and it will by 2011, be a lithium hybrid contender.
The volt is a 'lead loss' technology item but like you say, it has allowed the needed learning curve to progress, so that the LI technology can be used in SMALL CHEAPER base models. GM Green will have to do that as by 2011 some very efficient lite wt LI cars will be available by at least 4 other world class manufacturers.
GM has held about 18% of market and its shrinking every year. I suspect it will take about 4 years for it to regain some market. I also believe it will do that MOSTLY because Americans will try to purchase quality hybrids from GM out of a desire to have it succeed, more than the fact that its quality is 'better' than any other brands(which it will rarely if ever be).
"I also believe it will do that MOSTLY because Americans will try to purchase quality hybrids from GM out of a desire to have it succeed, more than the fact that its quality is 'better' than any other brands(which it will rarely if ever be)."
I very much agree with that sentiment. I think there are many American-only buyers that would love to make a counter-Prius statement. Obviously, the Volt would be a great counter-statement, but it's just going to be too expensive in the near term for most.
If GM can complement the Volt with a Prius-priced contender, I believe they'd have a real winner, even if the quality was a bit below Toyota.
With the volts range, I could drive to and from work every day and NEVER put a drop of gas in it.
Let's get Obama's government out of the free market and let the market decide (even if I don't like it).
Well, without Obama's government and its $7500 tax credit for Volt buyers, in addition to billions in subsidies to help with Volt development, the Volt wouldn't have a chance. So, I'm not sure how Obama is the problem to the Volt.
Moreover, I would argue the government has long been an integral part of the problem in America in terms of fuel efficiency.
For example, every year the US government spends about 10 - 20 billion securing shipping lanes for US oil tankers to move in and out of the Perisan Gulf. These are non-war costs.
Yet, why are these costs not recovered at the pump? Why are such costs hidden in military taxes?
This lack of transparency is also a free market inhibitor, and I'm sure there are many other costs, especially over time, that should have been added to the pump price.
This technology doesn't make sense for a small car, but if they put it into a Caddilac Escalade, and suddenly, people are rolling down the street in 100 MPG land yachts, then maybe it would have an impact and be cost effective. Compare that mileage to the 18 you get now, and that's a huge incentive.
Says nothing about people living efficiently, but people love big cars...
So how much more would you pay for a plug-in Escalade?
I would assume a plug-in dual mode Escalade hybrid would, minimally, cost $10 - $15,000 more than a conventional Escalade.
Make it a series hybrid, such as the Volt, and you might double those costs.
Perhaps you can afford such a vehicle, but most Americans cannot.
It's true the Volt is small, but if gas hits $3.50 plus again, there will be hordes of Americans that will find Prius, Insight, and Volt interior space to be more than adequate.
Its easy to dramatically reduce the cost of the Volt, IMO, by simply cutting the battery range in half from 40 miles to 20 miles. But both versions should be offered, IMO.
But lots of folks are going to love the convenience of being able to fuel your automobile electrically-- at home!
http://newpapyrusmagazine.blogspot.com/
I most certainly can't afford a dual mode or range extended escalade, but people that can afford escalades probably can, and would probably be willing to pay huge money to feel "green" in their Canyonero's.
I'm not advocating it as anything socially responsible; I just think they're going to have trouble selling a Chevrolet for $40,000. Caddilac, maybe, but the volt competes against the prius, and though the technology is very cool, the efficiency gain does not pay for itself quite like the prius does.
A range extended escalade does have an efficiency play (and it would be huge), AND has less of a need to pay for itself, since the people who would be driving it would be less price focused.
If they made the volt with a very small electric only range (say even 5-15 miles), would the cost/efficiency rival the prius?
wiels-
i'm sure that's why GM is considering a cadillac version of the volt, or a voltec cadillac.
in terms of making the battery pack smaller, gm has discussed the possibility, however, that 40 mile range has been the priority for GM.
still, i don't think you'd be able to call such a volt a cheap volt, just, possibly, a more cost-effective volt.
The premise of this article is that Americans only think with their wallet.
Recouping all of your money back in a few years is not a "requirement" when buying an EV/Hybrid.
Believe it or not, some people are willing to pay "more money" for a "better product".
If that were not true, there would be no BMW, Lexus, or even Cadillac brands. There would only be Chevy's, Toyota's and Volkswagens.
I for one, would be willing to pay extra if the car uses less gas. That's why I own a Hybrid today. Someday I'll own an EV, or possibly a Volt.
Whether I recoup all of my money back is not as important as using less foreign oil.
I'm sure I'm not alone in the world...
If the Volt has half the range with smaller battery, it's power will be half as well. Would you accept ~15 seconds to 60 MPH plug-in series hybrid?
Toyota has been testing two generations of PHEV Prius. Honda and Nissan are now jumping into PHEV due to the financial help from the government.
I hope GM learn from the Volt and go on to make a more realistic and better PHEV. The worst they can do is tell the public that nobody wants PHEV without acknowledging the Volt's design flaw.
The proposed tax credit for phev's is kw-hr based, topping at $7500 for a 64 kw-hr, which the Volt with the current battery pack configuration should qualify. With that in mind, would decreasing the size of the battery pack really lower the price of the Volt? What you'll gain in battery cost, you would lose in tax credit. The benefit, IMO, would be mininum, if any at all.
Yes, if the PHEV pack is only 8kWh then the tax credit will only be $4,168 instead of $7,500.
If PHEV Prius has 4kWh with 12 miles range, it will qualify for $2,500 tax credit.
smurf-
you're not alone, but you're part of a very small minority. there have been many, many, many studies indicating that the consumers will not pay extra to do the right thing. moreover, they don't want to pay too much up front for long term benefits.
unfortunately, the data on this subject is clear.
last anon-
a smaller battery pack would offer more pricing power compared to the loss of some of the tax credit, especially when you factor in warranty considerations.
still, i think the points Dennis makes on performance, etc would also be very relevant and they might make such a configuration less appealing.
i think GM is banking on the 40 miles because it has marketing appeal. it implies you might never need gas for your daily commute. that's going to sell for some, regardless of the cost-effectiveness.
Dennis said...
"If the Volt has half the range with smaller battery, it's power will be half as well. Would you accept ~15 seconds to 60 MPH plug-in series hybrid?"
That's not true.
The current battery is 16KWh in energy capacity. They could easily make an 8KWh sized battery with the same power, and a 20 mile range. It would just run out of energy in 1/2 the time. (energy = power * time)
I.F. Stone,
If you drain the pack twice as fast, the life cycle of the pack will suffer.
If you drive 60 MPH, 20 miles range pack will run dry in 20 minutes. That's 3C at the cruising speed. 1C = Drain rate of an hour.
Volt has 120 kW (160 HP) electric motor. For the 8kWh pack to provide the full 120kW during acceleration, it will need to discharge at 15 C.
We don't know if the cells from LG can handle that kind of high discharge rate. Even if it can, we need to know the life cycle impact at 15C.
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