Monday, April 09, 2012

Why General Motors' Electric Chevy Volt Is The Wrong Horse In The Right Race

The Driver in Chief behind the wheel of a pricey Volt
Many automakers have been slow to embrace hybrids and for some who have the technology doesn't seem to run a whole lot deeper than a badge with a green leaf on the trunk lid. A conspicuous exception has been Toyota, which introduced the fuel stingy Prius in the U.S. in 2001 and now offers hybrids throughout its Lexus lineup.

There are many ways to skin the hybrid cat and Toyota's approach has been through the ingenious Atkinson cycle gasoline-electric system that optimizes economy while not sacrificing performance. We've had a Lexus CT200h with the system for seven months and are averaging 45 miles to the gallon highway and 50 city -- or about 20 bucks to a fill-up -- at a time when gasoline prices are going through the roof.
Then there is General Motors, which marketed the EV1 electric car in small numbers between 1996 and 1999 but, depending upon who you want to believe, decided that this niche market wasn't profitable enough or self-sabotaged the car despite growing public interest. It was a stupid move in any event, but not the last that the General would make when it came to a hybrid market that is now growing by leaps and bounds.

GM belatedly reentered the hybrid fray last year with the Volt, an electric car with a standby gasoline engine that gets a boffo 94 miles to the gallon but has a puny 39 mile electric-only range and an outrageous $39,195 sticker price, nearly $10,000 more than an entry-level Lexus CT200h that is substantially better equipped. Tax credits apply only to more affluent buyers.

The goal was to sell 45,000 Volts this year, but GM sold a mere 8,000 in 2011 and only 1,000 or so in February and again in March. (Some 15,556 Priuses were sold in its first full year in the U.S., a time when gasoline was a fraction of the price it is today.) One reason for sluggish Volt sales is a recall for potential fires in the car's battery pack, but the biggest reason is that despite its slick engineering GM has priced the Volt out of the market at a time when people want an economical and affordable ride.

Some auto press pundits have suggested the GM lower the cost of the Volt by subsidizing it with the profits from its brisk-selling pickup trucks, but this is a non-starter that arch competitor Ford would use to its benefit.

It probably has not helped -- although it can't hurt that much -- that the Volt has become a whipping boy for Republicans because the Obama administration has used it to tout the resurgence of the American auto industry.

Rush Limbaugh has blasted the car as part of a nefarious White House plot to take away the precious right of Americans to own gas guzzlers, while Newt Gingrich has noted that it is too small for a gun rack.

"As for the Volt, it is emblematic of a larger problem the GOP has: the sense that they are rooting for America to fail," Paul Begala, Democratic strategist and adviser to President Obama's super PAC. "When a good jobs report comes out, Mitt Romney looks sad. When Clint Eastwood makes an unapologetic, patriotic Super Bowl ad for Chrysler, Karl Rove says it makes him sick. They booed a gay soldier at a GOP debate, and didn't even want to give the President his due for ordering the mission that killed bin Laden. One wonders if they will be rooting for communist China during the summer Olympics."


GM has announced that it is halting production of the Volt until sometime this month, so as to maintain "proper inventory levels" (cough, cough), but
sales could improve should gasoline prices continue to go through the roof.

Or not. Toyota has introduced a plug-in version of the Prius in Japan that is selling poorly while its conventional hybrid continues to sell briskly. That has everything to do with the price: A whopping 3,400,000 yen ($41,000), which is more or less that the Volt costs.

1 comment:

Rhen Nicey said...

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