Higher gas prices good for Volt, but what about GM?
When will it be profitable?At a plug-in conference hosted by GM in Detroit last week, news of rising gas prices was seen as a good thing.
"Every penny added to the price of gas makes alternative power just a little more attractive," said Tony Posawatz, head of the Volt program. "If petroleum hit $150 a barrel and stays there, he and others agree, the low cost of electricity would make plug-ins fairly competitive on an operating cost basis."
So, what's good for the Chevy Volt is good for GM?
Let's say gas hits a sustained $150 per barrel and $4.00+ at the pump in 2011, during the first full year of Volt production. That would be good for GM? While such gas prices might make the Volt more competitive - after a $7500 tax credit - what about the Silverado, Traverse or Impala, for instance?
Today, GM's profits are not driven by fuel efficiency. Can the Chevy Cruze and a limited production Volt change the troubles GM felt during the gas spike of 2008?
It seems to me, what's good for the Volt is not good for GM, at least not any time soon. While higher gas prices might make the Volt more competitive, can higher gas prices really make GM more competitive and profitable without radical changes to their product lineup?
Labels: Chevy Volt electric vehicle concept, fuel efficiency, gas prices
posted by Dahcredyns at
8:52 AM
12 Comments:
Indigo Incarnates
Sure, high gas prices always helps hybrids and small econo cars (like my awesome Scion xD). But I still see the Volt as something of a niche vehicle. It's awesome for a series of very short drives, but the further you drive it, the lower the fuel economy gets. For instance, in a non-stop ten-hour highway drive, my Scion would beat the Volt for fuel economy (although the same would certainly not be true for twenty 30-minute drives.
For people with mixed city and highway driving, the Insight and Prius might be better picks for overall fuel efficiency.
well .. given the apparently differing longer term strategies between GM and others, perhaps the question is " Is what is good for Toyota goo for GM or is what is good for GM, good for Toyota?
Bonus Question - what situation will be the best for GM an the worst for Toyota? good luck on this one.
Sorry to offend all the Toyota lovers here, but the Volt is the future of automobiles and Toyota did not invent it. The Prius plug in hybrid is inferior to the Volt and Toyota pushed that development after GM and they are now behind.
This is a new product. It will cost more to start with like Blu-ray players and LCD TVs. People will buy it because they do not want to buy one drop of gasoline if they can help it. The power equivalent for electricity is about 50 cents a gallon. Power plants are under-utilized at night when the cars would be plugged in, so it makes sense. Hydrogen still requires power to produce, so that is not a godsend. Electric cars are much more efficient than internal combustion engines.
Pickups are needed by some people regardless of the fuel efficiency. The Traverse is the more efficient answer to the suburban and the higher fuel efficiency of the Malibu and Equinox shows the direction of GMs newer vehicles.
I don't think the Toyota Sequoia or the Tundra are the most fuel efficient cars in the world, but Toyota recently built the Tundra factory in Texas. I guess they are not the world saviors.
Sorry about my slant, but I finally see GM moving in the right direction. Hopefully, they don't get sidetracked by ignorant journalists and pundits and move away from the Volt technology in the future.
"Volt is the future of automobiles "
This is the one statement about Volt that gives it the most promise.
Yes. Volt has the potential to start the trend towards "all-electric drive trains", with gasoline engines having a more secondary role of charging the battery.
Once gasoline's role is diminished to simply a charging mechanism, it can be replaced by any number of fuels and technologies that are greener and do not rely on foreign imports.
This is what could make the Volt the "game changer" that some are predicting.
Bob-
Maybe you should read some of the studies about the Volt that suggest that Volt is the most cost-ineffective of any of the plug-in technologies being developed.
That doesn't come from pundits and journalists, but from scientific review.
Of course, why care about cost-effectiveness? Only every single consumer survey shows it dictates more than 90 percent of auto consumer's behavior.
In terms of plug-ins, 90 percent of consumers are only willing to pay 10 percent more, or less, for a plug-in version of their favorite vehicle.
The scalability of Volt technology will take a long time to achieve that. By then, there will probably be 300 mile+ EVs and quick charging, and any other number of breakthroughs that could make range extended EVs terribly obsolete.
Likewise, there are other studies that suggest that as gas prices go higher, people will want to pay less upfront for their cars.
If you can buy a $15,000 Fit hybrid, why would a consumer pay $33,000 for a Volt - after a $7500 tax credit - when you'll never recover that extra $18,000 in gas prices, for instance?
Also, it is complete nonsense to suggest that GM beat Toyota to plug-in vehicles. Toyota has quietly been testing plug-ins with proprietary lithium technology for longer than the Volt was even conceptualized.
Still, the Volt will be a player in the plug-in game, but that's it, a player.
Not long ago GM predicted that both the dual mode hybrid powertrain and their BAS hybrid powertrain would be superior to Toyota's Hybrid Synergy Drive.
So far, GM is 0 for 2 on its hybrid technology. Let's hope the Volt isn't strike 3 in GM's bold predictions.
Smurf either knows something the rest of us don't know or Smurf lives on a different planet than us.
I might have to eat my words but I wouldn't trust GM to design a game-changing technology for nothing....
GM might have a good R&D capability but somewhere between what they do at the R&D level and how it ends up in a product at the consumer level it often get messed up.
often..they eventually get it straight after 3 or 4 years of fiddling with it but by that time the product has such a bad reputation that people avoid it like the plague...
Notice how Toyota works hard to LOWER expectations.. they often go out of their way to lowball the expectations for a new technology while the GM folks can't way to beat their breasts?
They do make better cars than they used to... but they don't understand that it will take years to get their reputation back .. and in the meantime if their marketing folks oversell the VOLT.. it's only going to confirm in some folks minds that they have not changed.
A LOT is riding on GM's reputation on the Volt and it appears to me to be a high risk gamble on their part to keep promoting something at a high level when Toyota is warning people off and talking about other technologies downstream.
I actually WISH.. GM would take Toyota's approach and take the Spotsylight off the Volt and tell us what they are doing in the other areas - and if the Volt later on turns out to be a winner.. they won't have to pound their chests .. because people will know..
It take years to build a good reputation and one or two smart asses in the marketing department to ruin it...
i'm a big fan of the underselling and over-delivering theory of business as well.
unfortunately, gm has been getting hammered for years about their green efforts, especially since crushing the EV1 and refusing to take on the Prius while, until recently, rolling out new lines of bigger and bigger gas guzzlers.
so, gm had to hype the Volt to get some of this green pressure off their backs.
and the volt will help there, and it will help push GM's r&d around battery techology. still, i don't think GM's approach to such technologies is well-rounded enough.
if we can get through the next decade with stable gas prices gm will hobble along. if not, i think gm gets crushed. in such a scenario i'd put my money on chrysler over gm.
even if the volt is a home run it won't stop this. the volt, and more important, the voltecs powering the volt, need to be a grand slam. unfortunately, the independent analysis thus far indicate even a home run is a bit of a long shot.
the volt will be a player, but more is needed.
Larry,
LOL.
I am painting a bit of a rosy picture with the Volt, mainly because I like electric drive trains...not only because they don't use gasoline, but because of the way electric motors perform.
Because of GM's track record though, I remain cautiously optimistic.
Maybe the Volt can become a game changer the same way that GM hybrids did. The "threat" of such a vehicle will cause the Japanese companies to develope a similar product just to compete. They when GM fails to produce the Volt in great numbers, the Japanese companies will come in and dominate the PHEV market.
GM can change the game....even if they don't sell any vehicles in great numbers.
I'll guess I'll eat my hat when GM delivers this car and it blows the Prius and other Hybrids out of the water...
until then.. I plan on wearing that hat...
;-)
Good one, Smurf.
What a sad, ironic bit of history.
On top of that, GM basically owned the battery technology as well.
Boy, how might things be different had GM demonstrated a bit more long term vision?
In the end, I think the GM bankruptcy may be a blessing in disguise.
1. If the path they were on led to bankruptcy, maybe they will change paths?
2. The bankruptcy let GM get rid of a few anchors like health care for retirees over 65. This may help them to be competitive in the car market, as it reduces the overhead for each car.
Without doubt bankruptcy let GM cut loose a lot of fat.
I guess we'll have to wait a bit longer to see if it leads to any serious change in thinking.
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