Volt Sleeps With the Fishes

[chevydude26]

At 40 grand the whole practicality of saving spending on gas goes away thus it makes the car useseless for practicality and its not a luxury car

http://spectator.org/archives/2012/0...ith-the-fishes

GM has just announced it will be idling the plant (and the 1,300 workers at that plant) where the "game changing" Chevy Volt electric car is -- uh, was -- built. GM says it's only temporary -- until they figure out how to "align production with demand."

It could be a long wait for those workers.

GM projected production of 45,000 Volts this year. That may have been just a little bright-sided. Last year, 7,621 of them found buyers (about 2,400 fewer than the 10,000 GM had hoped for). This past month, just over 1,000 of the $40,000 sort-of electric cars (sort of, because deep inside the thing, there's a gas engine that serves as a sort of carry-it-with-you "range extender"), which means "production" and "demand" have a ways to go before they are, er, aligned.

One reason why, obviously -- though perhaps not to GM -- is that the concept itself was misaligned. Electric (and hybrid-electric) cars exist for one reason: To do an end-run around gasoline. The whole point of the exercise, as a practical matter, is to lower the cost of driving by cutting the driver loose from $4 a gallon fuel. But when it takes $40,000 to do that, it becomes pointless as a practical matter. Yes, it's a clever bit of engineering. I know. I've driven the Volt. Remarkable. It can operate at steady 60 MPH for several miles (rather than coast for a few seconds, like most hybrids) purely on the strength of its electric motor and batteries. Very cool. But also very expensive -- and that's the point that matters.

The Volt's sticker price is in BMW 3 Series/Lexus GS land. Do people who purchase $40k cars have to worry much about $4 gas? Apparently this thought did not occur to the people at GM responsible for the Volt. Even with a $7k direct federal subsidy to each buyer (more on the indirect subsidies below) a new Volt still costs what we call in the car business "entry luxury" money. Easily two (even three) times the amount that would buy you any one of several very appealing compact sedans, several of which get 40 MPG on the highway.

So, drum roll, people looking for something economical did not look at the Volt. Who did? CEO Dan Akerson conceded that the average income of a Volt buyer is $170,000 annually -- not exactly hard times.

GM figured (so it said) the Volt could be sold to the less flush on the basis of its down-the-road economies. But those are theoretical and ill-defined (including, for instance, such as variables as winter driving; how will extreme cold weather affect the electric drivetrain? Etc.). But the up-front costs are very real -- and forbidding. People facing lean times are not lining up to finance a $40k purchase, even with a $7k carrot dangled in front of them. And the potential buyer pool of 170k'ers per year is just about dried up.

Is GM unaware? I doubt it, because all kidding aside, GM is anything but stupid. That is, the people running it can do math. They also understand marketing -- and politics. And that's where the troof comes out about the Volt and why it ever saw the light of day.

GM, like every car company, has embraced the politics of green because it leads to taxpayer-financed green. Think Solyndra was a boondoggle? The Mackinac Center for Public Policy estimates that the actual cost-per-car of each Volt, once all the federal subsidies are factored in, comes to $250,000 or $3 billion, total. (Lookee here for more.)

Guess who paid for that?

It wasn't GM's money. It was your money. And mine. And the money taken from millions of other taxpayers, all poured into the coffers of GM to further the advancement of otherwise economically untenable projects that would never have see the light of day except for the fact that we have a system of crony capitalism that distorts the free market like a funhouse mirror.

The Mackinac study's author, James Hohman, tartly described the Volt as "the most government-supported car since the Trabant" -- a reference to the infamous two-stroke, plastic-bodied POS manufactured in the old DDR -- that's East Germany, for the edification of younger readers.

And that's what rubs. If you or I decided to build a Homer Mobile (remember?) in our garage, it'd be up to us to finance the thing and if we went next door to our neighbor's place and flashed a gun demanding money or else to "help" we'd be shot by the neighbor or tossed in jail. But that's because we are not Too Big To Fail. GM, of course, is. And has many big friends in Washington, too. So it can indulge in the building of electric Homer Mobiles and send the tab to us -- and pocket the proceeds.

Because keep in mind that GM is not losing money on the Volt. We are.

The joke's on us -- again.

[Brokinarrow]

With the tax credit it was about the same price as a Prius plug-in hybrid... just sayin. And the Volt could also go about 3 - 4 times farther than the Prius plug-in in all electric mode.

[motorhead]

Just wondering from the guys in the know here. Why do you think this is when gas is quickly approaching five bucks? I thought with the tax incentives that this car would have been a hit. It doesn't seem like the public is ready for a car like this.
I had the pleasure of driving one the other day ,and I was very impressed with the quality of build, the styling and the performance.

Discuss.

[FenwickHockey65]

$40k pricetag.

Although that may change this summer...but EV sales as a whole are low. Leaf had a crappy month as well.

[motorhead]

Either way, I see it as a great car that's worth the money. If I had to worry more about gas(I have a company vehicle.) I would be all over it. I don't believe the leaf is even half the car the volt is. I know it looks like crap compared to the volt. Heck, it looks like crap compared to just about anything. LOL

I hope GM finds a way to get sales moving on it. They have a lot of money invested in it ,and it would be nice to get those works back on the job.

[FenwickHockey65]

GM figured from the start that they would lose money on the 1st gen Volt. Have to start somewhere.

Consider this: When Toyota first released the Prius, they lost a crapload of money on the 1st gen. Now those damn things are everywhere.

[TheReaper]

I read this on GMI and yes a price drop would help sales.

[motorhead]

Originally Posted by FenwickHockey65

GM figured from the start that they would lose money on the 1st gen Volt. Have to start somewhere.

Consider this: When Toyota first released the Prius, they lost a crapload of money on the 1st gen. Now those damn things are everywhere.

Yeah and they just keep getting uglier. That's what impressed me so much with the volt. It feels like a higher end car plus it looks good.

[a_Username]

Profit per unit (read: profit per Volt) is not what matters to a firm; total profit over the long-run is what is sought after. The author of that article needs to get that through his head.

[DarkneSS]

Because people who can afford to buy new $30,000+ cars arent worried by gas prices. And if they were, they wouldnt buy a 30k car. There are great options from Chevy alone that get great gas mileage for half the cost. The Sonic gets great mileage and starts at what 13k?

Need I say more?

[Mr. Wyndham]

That article is ridiculous.

What everyone seems to be forgetting amid the rampant "Volt-hating" (which is absolutely astounding to me, in and of itself...), is that while GM was perhaps overly optimistic of the Volt's sales projections....Volt sales are actually increasing, nonetheless.

They're not ceasing production, so Chevydude - I'm not sure I understand your "sleeping with the fishes" comment...They're idling the plant for a few weeks to let inventory settle down to mirror demand.

And for the record, we never acted like you were the devil...funny how things are remembered....

[RiCorvette]

My utility company (SCE) charges me more if I go over 'Baseline'; the rates go up quite a bit. I am a miserly user and my average bill is 80-$100/mo. On the rare occasions that I do use more the rates go up exponentially. IF I added an EV, my usage would skyrocket and my rate would probably double or triple.
THEREFORE, what I save on gas, I would pay in increased electric rates.
So, more expensive car, more money spent on electricity means a lose - lose for me. I'm sure others have figured it out. Only guilt-ridden or snobbish fools can afford the luxury. I choose NOT to give SCE more money; they're overcharging and over compensated as it is.

[GEEo]

I personally think the volt is freacking overpriced!!

[Indpowr]

Once they make an EV that can go 200-300 on a charge we will consider it. The Telsa Model S does everything we like plus looks amazing..