GM + Chevy Volt = FAIL
Posted by guestblogger on July 29th, 2010NOTE: The following article comes from ITE? guestblogger CadillacMan.
General Motors is just now emerging from bankruptcy after surviving on our tax money for far too long. They have downsized, closed dealerships and eliminated brands, but the thing they haven’t done is actually come up with a new American-made car that is a knockout hit.
Enter the Volt…
When the Chevy Volt plug-in hybrid electric car concept was announced years ago it got a lot of good ink (it can travel 40 miles on battery power alone and then a small gas engine starts and keeps the car going up to 300 miles more on a tank of gas), but it took an awful long time to develop.
And in the meantime, everyone and their brother came out with a hybrid. Here’s some highlights:
- Toyota sold all the Prius hybrids they could build at a starting price of $22,800
- Honda brought out the Insight hybrid, which did everything the Prius did, for only $19,800
- Lexus released the CT200H starting at $28,900
- Nissan recently announced that the new Nissan Leaf, which is an all-electric car (take that, hybrids!) with a driving range up to 120 miles on a charge, will start at $32,780
$32,780?!? That sounds expensive for a small car, doesn’t it? Nah, that’s chump change in comparison to the Volt, which will be priced STARTING AT $41,000!
What? Wow.
That is BMW and Mercedes territory. There might be a few rich techies or greenies like Ed Begley Jr. that can afford that but regular folks in need of a commuter car will just laugh and look elsewhere.
If GM really wanted to get back in business with American buyers they should have designed the Volt for a starting price just below the Honda or Prius, beating them at their own game. Instead they jacked up their profit margin to a ridiculous level and will most likely cut their own throats when the car doesn’t sell in quantity. Plus the whole thing is just another example of foreign companies maintaining and expanding their market share while American manufacturing plants continue to shut down.
Thanks a lot, GM. Nice work.
[CadillacMan is an automobile enthusiast. He is also Drocolate's dad.]
Tags: CadillacMan, cars, Detroit's armageddon, guestblog, guestblogger
“Instead they jacked up their profit margin to a ridiculous level…” This sounds like an assumption, do you know what the profit margin is on a Chevy Volt?
Though it doesn’t even matter because none of the other cars you mentioned can be compared to the Volt because none of them can do what the Volt can do (drive on electricity alone for 40 miles, and then use gas). The only one that comes close is the Leaf, but that one will only take you 120 miles. If you can’t compare the Volt to any other car, then you can’t compare their prices either.
Here’s some more information on the Chevy Volt. It was recently announced that the vehicle, because of its design, can only run on premium gasoline.
So, while some drivers will be able to take it out without ever buying a tank of gas, those who go more than 40 miles a day will have to pay top dollars to do so.
I’m curious as to how something like this works for apartment dwellers who don’t have convenient access to outdoor electrical outlets. I guess those people are just out of luck.
Not that any apartment dwellers would have the money to afford this thing anyway.
Fail, GM. Fail.
You are mistakenly grouping the Volt with the other hybrid cars. Standard hybrids sill follow the old model of “gas it up and drive”. The Volt is an entirely new paradigm for driving that solves the critical failure of EVs from the 90′s: the extended range problem. The volt is not a hybrid in the traditional sense. The industry term is an extended-range electric vehicle (EREV). The main difference is that it features a relatively ENORMOUS battery compared to the Prius @ 16 KWh, compared to the Prius’s paltry 1.3 KWh.
Those big battery packs are not easy or cheap to produce. The pack alone currently costs GM more than $8000, far more than the cost of nearly any engine. In fact, even at the $41K price point, GM will likely be able to barely keep up high production numbers and they are not making Suburban-sized profit margins on this car. The first year, they are only making 30,000 vehicles.
GM’s in a tough spot now. They need to make some money, and it appears they will probably sell their production capacity at this price point, so it would be irresponsible to their share holders to price it away any cheaper. They’re definitely not making a lot of money at this price though…
GM invested over $700 million in plant upgrades just for this car alone, so they are not going to even break even on the infrastructure costs, much less the massive amount of R&D they put into this vehicle.
Remember, this is the world’s first production consumer EREV. There will be more and they will get cheaper. They are not for everyone this year, but they are a critical first step. The Volt is initially launching in only a handful of cities. Once we see it hit full production, we will see that price come down. It is apparent that the Volt is not right for you, right NOW, which is fine, but this does not make the car a failure. GM is taking an unprecedented risk in bringing this car to market, and they should be applauded for that.