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Is GM making too big of a bet on Chevrolet Volt?

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Is GM making too big of a bet on Chevrolet Volt?

08:42 AM

If you think General Motor's first "extended-range" electic, the Chevrolet Volt, will become the new show car for the automaker, think again, says David Roeder, writing in the Chicago Sun-Times. Nissan's decision to low-ball the pricing of its all-electric Leaf could cause big problems for GM.

Reasons Roeder:

The Volt is supposed to represent the "new" GM, but some in the industry say it can't possibly live up to the billing. They argue it might flop as bad as the old Chevy Vega. That seems over the top, but consider that the Volt is entering the market at about a $15,000 price disadvantage for comparable cars.

GM Vice Chairman Bob Lutz said on David Letterman's show, of all places, that the Volt would carry a sticker of around $40,000. He may have been testing the reaction. Afterward, GM backed off that figure, but something close to it seems likely. GM will emphasize that the sticker price should be lowered by $7,500, the value of a tax rebate for electric cars. Since the Volt promises an extended range for its gas-assisted electric motor, it probably believes it can justify a higher price than the electric-only Nissan Leaf, which will retail for around $32,000.

Volt is going to invite comparisons to hybrid compacts, not bigger or fancier cars., Roeder argues. And most of those cars sell for around $25,000. So GM could be in a rough financial ride. Volt is due to arrive in showrooms by the end of the year.

link:

http://content.usatoday.com/communities/driveon/post/2010/04/is-gm-making-too-big-of-a-bet-on-chevrolet-volt/1

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Given that it probably helped secure the government bailout and therefore saved GM, that GM has had three years of positive PR out of it, and that GM probably spent a large portion on the development pre-bankruptcy, how could one possibly say it was "too big of a bet"?

Now if someone expects the Volt or EREV to be mainstream, a money-maker in terms of sales, or even have much of a future, then they are probably mistaken. But given GM's recent actions (e.g. moving the Cadillac to a two-mode plug rather than an EREV, small Volt production numbers, etc.) and the fact that they have been victims of the "dreaded leapfrog" by Nissan before the Volt even came out, I'd say that GM knows the real situation.

Plus we haven't even seen the bad test numbers that GM is most likely sitting on.

<edit>

The media is fickle:

Welcome Chevy Volt, GM’s Next Flop

http://www.minyanville.com/businessmarkets/articles/chevy-volt-chevy-volt-toyota-honda/4/1/2010/id/27590

</edit>

Edited by GXT
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Not by anymeans since the goverment jacked up the CAFE. Everyone is scrambling and most are no where near a technology that the mainstream public will accept except GM.

Right now there is no full electric car out there that most average drivers would buy. The fear of running out power is a real deal. The Volt has solved that and given us a car that will keep on going while driving and riding like a real car.

Is the first gen the perfect car. Hell No! But you have to start somewhere and this is a good place to start. In the near future the technology will grow at a faster rate since more is now being invested.

Benz first car was not perfect nor was H Fords or Winton. They were weak, slow and fragile. But once people started to buy them more was invested and they moved ahead fast.

The battery technology not only working here but in the lap top industry and other areas.

I am glad GM is trying to set the lead in where this is going and I only hope they continue to lead as to drop the ball now would be a blunder after the investment made.

There is a perfect storm coming to the auto industry in the coming 15 years. Many will struggle as they are behind now and will never catch up unless they buy technology from others that will permit them to survive.

Think of the Volt as the Mercury program and we are just now sending Glenn in Orbit. The goal is to build on this to get Apollo and Armstrong to the Moon. You are not going to do this with just one car in one year.

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Not by anymeans since the goverment jacked up the CAFE. Everyone is scrambling and most are no where near a technology that the mainstream public will accept except GM.

Even with their crazy MPG numbers, the low volume of the Volt will have only a minor impact.

GM knows this and is already moving away to other hybrids.

Right now there is no full electric car out there that most average drivers would buy. The fear of running out power is a real deal. The Volt has solved that and given us a car that will keep on going while driving and riding like a real car.

The LEAF will be out this year and is very much an all-electric (something the Volt really isn't, even if you try to spin it) and yes it will be something that a lot of people will buy. Range anxiety does exist, but I don't believe it is the factor that some expect. You can't tell me that 40 miles is enough for 80% of the population's commute and then tell me that there isn't a large portion of the populate that can get by just fine with 100 miles (downrate to 80 if you want, the same is still true). If you are one of the people that routinely drives 100 miles then the Volt isn't for you anyways... you will probably use less gas and save yourself 10,000+ up front by buying a hybrid. If you routinely drive very little then there is also little point in buying the Volt.

To put it another way, it may be acceptable to virtually everyone, but that doesn't mean that virtually everyone doesn't have a better alternative. You don't sell a car to everyone, you sell them to individual customers. That's why there are trucks, vans, convertibles, etc. Remember Homer's car?

Is the first gen the perfect car. Hell No! But you have to start somewhere and this is a good place to start. In the near future the technology will grow at a faster rate since more is now being invested.

Benz first car was not perfect nor was H Fords or Winton. They were weak, slow and fragile. But once people started to buy them more was invested and they moved ahead fast.

The battery technology not only working here but in the lap top industry and other areas.

GM would disagree. They have already indicated that Volt version 3 (10 years from now?) will have smaller batteries with less management. Obviously if they expected batteries to come down in price they would not be considering this.

I am glad GM is trying to set the lead in where this is going and I only hope they continue to lead as to drop the ball now would be a blunder after the investment made.

Think of the Volt as the Mercury program and we are just now sending Glenn in Orbit. The goal is to build on this to get Apollo and Armstrong to the Moon. You are not going to do this with just one car in one year.

Better that they had tried to build the "right car" rather than the "leapfrog car". For all intents and purposes, Nissan has already jumped GM. In the meantime they have all but given up the hybrid market.

Time will tell. If the LEAF is what it claims to be then the time for the Volt has already passed.

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The LEAF is a nice idea but it would only sell to people as a second car or very urban dwellers who need something for when they can't get there via subway. The Volt can be someone's only car. It has no less utility than a Cruze.

To put it another way. The LEAF would be fine for me as a daily car, but since I regularly have to make runs to Columbus, Ohio (225miles) or Philly (300miles) or Northern NJ (380miles) it is inadequate in utility.

If the LEAF retails for $32,000 and the Volt retails for $38,000, even before the tax breaks I think people will pay the extra $6,000 for triple the range and the ability to "recharge" anywhere in under 5 minutes. If they won't pay that money, I don't think they'll see the LEAF as a viable alternative and just move over to either a standard hybrid or just a regular sedan. The LEAF is attractive for what it is, but it's a different market than the Volt. The Volt is a sedan alternative. The LEAF is a SMART/SCION iQ alternative.

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While wide-spread development of viable and relatively inexpensive technology is the only thing that needs to catch up to the expectations of the people, those denying the viability of the green movement and vehicles like the Volt aren't ready to embrace the big picture, the future.

I expect the Volt will succeed or fail based on external factors beyond its control. The only thing that can work against the Volt is the competitive edge of other makes with their offerings to an established market.

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The LEAF is a nice idea but it would only sell to people as a second car or very urban dwellers who need something for when they can't get there via subway. The Volt can be someone's only car. It has no less utility than a Cruze.

I think that is a substantial group. The LEAF certainly won't be demand constrained.

As for the Volt/Cruze... The Volt may not have less utility, but it does have an incremental cost of almost a second small car.

To put it another way. The LEAF would be fine for me as a daily car, but since I regularly have to make runs to Columbus, Ohio (225miles) or Philly (300miles) or Northern NJ (380miles) it is inadequate in utility.

If you "regularly" make such runs then a Volt is likely not an appropriate car for you. On that 300 mile run the Volt will use ~25% more gas than a Prius. On the 380 mile run it will use ~30% more gas. On the 225 miles run it will still use ~20% more gas.

(Based on: The Volt is destined to have real electric range of 32 miles (As per GM and the EPA) and have a real MPG on ICE of high 30's (as per what we have seen and GM has already hinted). As far as I know the Prius does get 50 MPG.)

So as mentioned previously, if you drive a lot, the Volt isn't for you. If you drive very little, the Volt isn't for you. The in-between ranges are occupied by less expensive cars like the LEAF, Prius, Fusion, etc. The Volt just isn't a very efficient design, and it will suffer for it.

If the LEAF retails for $32,000 and the Volt retails for $38,000, even before the tax breaks I think people will pay the extra $6,000 for triple the range and the ability to "recharge" anywhere in under 5 minutes. If they won't pay that money, I don't think they'll see the LEAF as a viable alternative and just move over to either a standard hybrid or just a regular sedan. The LEAF is attractive for what it is, but it's a different market than the Volt. The Volt is a sedan alternative. The LEAF is a SMART/SCION iQ alternative.

After all these years of watching the eco-crowd going mindlessly ga-ga over the Prius, why would you now assume that having a full, Zero Emissions Electric Car for $6-8,000 less than a Volt and only a couple thousand more than a Prius WON'T be the new media/eco darling? The Volt will always fall short in this comparison because it does use gas.

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My daily commute would be very well served by a Volt because it's under 30 miles round trip. I make those runs just enough to make the range of a LEAF insufficient. The Pruis is the real competitor to the Volt. The LEAF is a SMART car competitor.

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My daily commute would be very well served by a Volt because it's under 30 miles round trip. I make those runs just enough to make the range of a LEAF insufficient. The Pruis is the real competitor to the Volt. The LEAF is a SMART car competitor.

The Leaf is a AMF golf cart competitor. The Smart will at least go the distance and cost you half as much to buy. I thought I saw the Leaf was going to go for $37,000.

At least with the Smart if you run our of fuel you can fill it up.

The key to the Volt is it will get you there no matter where you have to go. Also the Volt will ride and drive like a normal car the one key failure of many of these freak cars.

I think over time the Volt will improve in tech, lower cost with higher gas prices will prove to be a itme that will set the direction in the future.

Right now that is the only system I see that I could buy and live with other than a Prius in a normal real world driving.

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