Think GM's Volt is failing? Think again
The plug-in hybrid may be trailing sales projections and facing a right-wing backlash, but October sales set a record and fuel-efficiency standards are rising.
By Ted Reed
October ought to have been a bad month for the Volt. Gas prices were falling. Auto industry wisdom had it that with so many conventional cars closing in on 40 miles per gallon, why would anyone spend $30,000 for a compact?
Also, the last month of the presidential campaign reinvigorated advocates of the political construct that anything government does -- particularly saving GM (GM) -- is bad.
Nevertheless, the Volt had its best month ever in October, selling 2,961 units. This broke the record, set in September, of 2,851 units sold. That broke the August record of 2,831 units. In fact, Volt sales have increased for six consecutive months. For the first 10 months of 2012, sales totaled 19,309. Sales totaled 7,671 in 2011 and 326 in 2010.
The trend is good, especially for a car with a $40,000 list price and incentives worth around $10,000, although full-year sales will not be close to GM's one-time goal of 45,000 sales in 2012.
"I don't think Volt is where GM and Chevrolet want them to be," said Polk analyst Tom Libby. "They sold about 3,000 units in October, while the industry sold 1.1 million. They are getting volume up from where it was, but the number is very low relative to what it needs to be accepted and to meet GM production goals. Also, as a footnote, even if the number were to double to 6,000 a month, GM is still losing a lot of money."
Still, for GM, the Volt is an important car becoming more important. "Volt took GM in the opposite direction from where Hummer took it," Libby said. "In terms of image, it was a positive step." Moreover, image equates with economic necessity. A 2011 agreement between the Obama administration and 13 large automakers increases the federally mandated Corporate Average Fuel Economy (CAFE) standard to 54.5 miles per gallon for cars and light duty trucks by 2025. The high standard "will require electrification on a very large scale," said GM spokesman James Cain.
Last week, GM said it will have up to 500,000 vehicles on the road with some form of electrification by 2017, with a focus on plug-in technology.
"The unique propulsion technology pioneered in the Volt -- the same technology that will be featured in the Cadillac ELR -- will be a core piece of our electrification strategy going forward," the automaker said.
GM was not looking for the Volt to be a political symbol. As CEO Dan Akerson said in January, when he appeared before a congressional committee investigating the alleged "cover-up" of a Volt safety investigation, "We did not engineer the Volt to be a punching bag, but that's what it's become." Edmunds.com said Friday that some Volt owners have reported acts of vandalism, such as slashed tires, expletives on the windshield or, in one case, being run off the road, evidently as efforts to express outrage against the car.
A key to the Volt's increase in sales came in February when the car gained eligibility for a coveted California's Clean Air Vehicle Decal, enabling single-driver access to high-occupancy vehicle lanes after GM added a low-emissions package. Now "we're getting a lot of traction in California," Cain said. Additionally, incentives valued by TrueCar.com at about $10,000 -- including a $299 monthly lease rate for the 2013 model -- have boosted sales. The Volt is eligible for a $7,500 tax credit.
The incentive spending reflects intense competition for green buyers between Toyota's (TM) Prius, the world's best-selling hybrid; Nissan's (NSANY) Leaf; and the Volt. The three offer differing technologies. The Volt uses electricity stored in a battery to power it for 35 miles, then switches to a gasoline engine that powers an electric generator to extend the vehicle's range by about 300 miles. The Leaf is battery powered and has a range of about 73 miles. Prius has a gasoline engine that shuts down when the electric one suffices.
GM said six of 10 Volt sales are "conquest" sales to buyers who previously owned other brands: the top trade-ins are the BMW 3 Series, Honda (HMC) Civic and Prius. But Volt sales will likely slow this month due to low inventory after production is suspended for four weeks to allow for retooling so that GM's Hamtramck plant, where Volt is built, can also build the 2013 Impala.
Volt's price is high because the cost of introducing new technology is high, but "we're working hard to bring it down," Cain said. "Each new generation should bring it down further and keep us on the road to profitability. (It takes time) to get experience with the technology, to get more efficient battery packs. You just can't miracle this stuff."
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Kevin Bullis, energy editor of the MIT Technology Review, recently wrote an essay titled "As GM Volt Sales Increase, That Doesn't Mean It's Successful." He remains skeptical. "It is too early to know how things are going," Bullis said, in an interview. "The Volt is doing well, but still falling far short of what GM had originally claimed it would be doing by this point.
"The costs are very high because battery costs are still high and the whole architecture of the Volt is expensive," he said. "It has everything you put in an ordinary car, plus a more expensive and complicated transmission, a huge battery, and all the power electronics that go into controlling the battery. There is no way this kind of architecture will ever be as cheap as a pure electric vehicle or a pure internal combustion engine."
However, "over time, battery costs come down," he said. "GM has made a lot of investment in bringing down battery costs and there are a lot of interesting technologies around. Then you start to talk about does it make sense economically (if) it pays for itself in a few years.
"I don't want to come across as thinking this cannot work," he said.
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The Volt is another taxpayer rip off. Any one with a fundenental knowledge of science knows current battery technology is not commercially viable, nor likely to be for a long time, if ever. I wont bore anyone with costs/outpiut here knowing it will be rebutted with idealogical rants, none having any scientific or rational basis. Wait until you see the taxpayers bill for the battery powered Cadillac, you could buy a Bentley for less.
This is all a continuation of duping the public into believing GM is a going concern. Subtract government purchases, GM is in the tank.
How do you quantify success? How many Prius’ and Leafs were sold that month?
Americans should be proud, that one of our companies got the technology right over the foreign automakers. This is the best PHEV car on the road at a fraction of the cost of a Tesla. Seriously, do your research. There is NO OTHER car on the road that can do what this car does. The competition has wimpy alternatives. The Leaf, no one gets the stated mileage and you have to worry about range anxiety. The Prius Plug In doesn't run all electric at highway speed and only has an electric range of about 15 miles max (not to mention drives like a golf cart). The Fusion Energi has the same problems as the Prius, but is larger than any other PHEV. Wait till you see the msrp on that one. When the tax credits are subtracted, the Volt is a very viable vehicle compared to others in its class with the same options.
So here's the dirty little secret no one wants us to know about the electric vehicle industry: Electric cars use about one-third the electricity of a typical household. That means that every 3 million electric vehicles sold equates to one million new housing starts. We buy 12-15 million new cars every year. Converting one-third of these to electric vehicles by 2025 would mean a HUGE increase in electrical demand and a HUGE decrease in gasoline demand. In fact, typical housing starts are less than one million a year, so our electrical demand from vehicles would be ten times as much as current residential demand by 2025.
At the same time that the Obama administration is demanding increased electrical vehicle production, it is refusing permits for coal, nuclear and natural gas utliity plants, setting up a supply demand squeeze that will cause electrical rates to rise ten fold by 2025.
So, Virginia, EVERYONE will pay for this administration meddling in the supposedly free market. It matters not how you feel about electric vehicles, you will pay for them anyway through $1,000+ monthly electricity bills by 2025. Start saving for them now.....
This car is a dud. The general public is not asking for these cars.
This whole "electrification" strategy is being pushed from the government.
Most of the registered sales are to municipalities, and those cashing in on government tax rebates.
Take those away, and let the vehicle sell on its own.
These pompous schmucks that buy these electric/hybrid cars are total idiots !
They over pay for the car to begin with and yes they buy less gas BUT they ALSO spend big on electric. Somehow you never hear them crow about the cost of their electric bills ?
Is it FREE electric ? LOL
Why is electric energy GOOD and oil, BAD because GE/MSN/NBC (ALL ONE COMPANY ) TELL YOU IT'S BAD ?
These lefty lemmings are so pathetic , they really think they are saving the planet by driving a sheety Prius with thier Obuma stickers attached
Exactly like the poster said below about the green scam .It's yet another Obuma/Soros scam to rob the taxpayers
solyndra anyone ?
Our Bozo government is wearing one shred of clothing.
If this machine was at all practical,which it is not, the government would not have to cover up it's collective foolishness and lack of touch with reality.
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The company has made at least 4 acquisitions in the space, and few people have paid any attention.
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