Chevy Volt: Why Don’t People Understand Two for the Price of One?

I’m a little amused by the uproar over the official announcement yesterday that the Chevy Volt will sell for $41,000.

Yes, I know, very few people have that money in their pocket.

I’m amused, first of all, because GM has been saying for years–since before they were bailed out–that the Volt would cost “around” $40,000. So you can bet that those who are shocked shocked! by this pricetag haven’t been paying attention.

Another clue that they haven’t been paying attention is the quick comparison with the Nissan Leaf. The Leaf, of course, is an electric-only car, with a 100 mile range. Want to drive home for the holidays? Better rent a car. Got planning issues somewhere in the vicinity of 90 miles since your last charge? Screwed.

But with the Volt, you get two modes of propulsion in one car, so that you can use electric only on a day to day basis (most commutes, according to GM, are under 40 miles), but then have the engine there when you need it. This car is designed to bridge people–and our country’s infrastructure–to electric consumption.

Not to mention the fact that GM’s efforts to [re]build–yeah, I know, it’s their own damn fault–infrastructure for plug-ins may well be critical for cars like the Leaf. A company as big as GM–particularly one that has just been bailed out by a federal government interested in alternative energy–has more credibility when negotiating with municipalities about plug-in infrastructure, which will make it more likely a Leaf owner will be able to find a plug when she hits that badly-planned 90th mile.

But the real reason I’m so amused is because this pricing isn’t much different from the pricing of the Prius back when it was targeted to a small group of early adopters. Back then, GM decided not to produce a hybrid because it was too expensive to sell profitably to masses of people. Toyota, on the other hand, sucked it up and lost money for years as the market for it slowly grew and the costs for it slowly came down. That decision–and the halo accorded the rest of the company because of one long-unprofitable car–has been one of the most valuable things Toyota has done.

Finally, though, it’s funny to see the shoe on the other foot. When GM decided not to embrace hybrids (stupidly), it said, over and over, “they’re too expensive.” It seems that critics (often forgetting how long the Prius remained unprofitable and significantly more expensive than other sedans) didn’t believe them.

I guess now they do.

  1. bobschacht says:

    Thanks for keeping us up to date on the green car thing, EW.
    Will you be able to keep tabs from Western MI, or will your communication lines be stretched thin?

    Bob in AZ

  2. lakeeffectsnow says:

    In light of falling car sales later in the decade, as the world oil and financial crises began to take hold, opinions of the EV1 program began to change. In 2006, former GM Chairman and CEO Rick Wagoner stated that his worst decision during his tenure at GM was “axing the EV1 electric-car program and not putting the right resources into hybrids. It didn’t affect profitability, but it did affect image.”

  3. Hugh says:

    Slap a big excise tax on SUVs and other large, inefficient vehicles and use some of the money for rebates on cars like the Volt.

    • Phoenix Woman says:

      Yup. Anything that isn’t built on a truck frame and isn’t being driven by a farmer or furniture mover or someone else who will use it as a business tool and not a way to make the station-wagon-averse husbands and fathers of the nation feel more macho.

      • bobschacht says:

        Well, in my family, I’m the one with the sporty compact station wagon (Ford Focus), and my wife is the one who prefers to drive her Toyota 4Runner, which is built on a truck frame. So, gender stereotypes don’t always take you very far. But if you get rear-ended by a speeding young adult in a compact Honda, you get to drive the 4Runner away with barely a scratch, and the Honda, if it can drive away, will limp away minus a headlight or two, and the front grill. But I prefer to drive my Ford Focus.

        Bob in AZ

      • thatvisionthing says:

        Except Neil Young’s Lincvolt.

        1959 Lincoln Continental, 20 feet long, 5000+ pounds, reengineered; presently(?) gets 65 mpg, still working on it…

        June 24 entry on Lincvolt blog says it’s coming to the Gulf in late August early September:

        We plan to be testing Lincvolt on Interstate 10 in late August and into September, doing a tour of the Gulf of Mexico along the coastline devastated by the Deep Water Horizon Oil disaster. We will tour the area in a car that is cleaner than a plug-in electric in emissions and uses domestic green renewable biodiesel fuel!

        Ustream channel, live webcam.

        Maybe FDL can catch a ride?

  4. behindthefall says:

    Here’s what I think I don’t understand about the Volt’s approach. I learned some time ago that any internal combustion engine, no matter how well-designed, will have one “sweet spot/band” in terms of efficiency versus torque “and” rpm; it can be quite efficient there, but out of the spot/band, it’ll be pretty dreadful. This leads to the tactic of using the i.c.e. as a generator for charging batteries for running electric motors. (Electric motors are not automatically efficient, either, and I never have really understood a commutator. I lean towards wheel hubs containing software-controlled electric/magnetic torque-generating thingies …) So, there’s the Volt: the batteries go flat and the i.c.e. takes over. Now you’re back in the soup, with all the usual problems of trying to get performance out of an inherently inflexible engine. Why’d they do that?

    • brantl says:

      Nope, you’re not running the wheels directly, so there isn’t any problem with the sweet spot in terms of RPM range. Gear it so that the engine runs the generator at it’s sweet spot speed, re-fill the battery to capacity and shut the generator down. You’re nut running the transmission with the gas motor, you’re running the generator. Big difference.

      • behindthefall says:

        Late seeing your response …

        I see. Wikipedia tells me the same thing. I ought to have gone looking for info on Volt architecture before I commented. I thought that “reverts to gas engine” meant “engine drives the wheels directly”

        I would have been happy with Mode II (beyond 40 miles) by itself, but GM does deserve a compliment for pushing for Mode I. There may be plug-in complications, but at the very least, Mode I would reduce carbon emissions on the roadway even farther than Mode II alone.

        Now I see that the “Two for One” is “Pure Electric plus Hybrid Gas/Electric on One Chassis”. The Wikipedia article says that GM decided not to call the Volt a hybrid. Have to say, I think that staying away from calling a hybrid a hybrid is just confusing — -I- got confused, at any rate. “Extended Range”, indeed. “Extended” by what method? It’s a gas/electric hybrid, guys, with a socket on the side, for kicks. Call it what it is.

        • behindthefall says:

          If you call something an “Extended Range” vehicle, that implies that it is innately “Limited Range”, and that’s really the last thing you want to keep reminding people of with an electric car. It’s a gas/electric plug-in series hybrid (see Lohner-Porsche’s). I hope GM pulls this off, despite their marketers.

  5. PJEvans says:

    this pricing isn’t much different from the pricing of the Prius back when it was targeted to a small group of early adopters

    Must have been really early adopters, because mine cost $21000 in 2002. (New, stock. Still getting 45mpg.)

  6. zhiv says:

    The LA Times put this story up on the front of the business page today and did a good job of selling the tax rebate and the lease program. GM couldn’t have asked for a better version of the story and the announcement, in an important location (not that anybody besides us old fogies is reading dead trees of course). I was surprised. It compared the Leaf and the Prius, and even explained how you could drive the Leaf for most trips and have a Volt or Prius as a 2nd car to go visit bmaz in Arizona. Or something like that.

  7. Casual Observer says:

    I don’t blame GE or any number of other companies for being greedy and shortsighted. Hey, it’s what they do. Reminds me of how the power companies couldn’t bring power to rural areas when all the cities were fully lit up. There was no money in it.

    imo it was the administration who cringed when they could have had an impact, on account of being major shareholders. Gov could have helped bring that rollout price down, eased the sticker shock, and had a deeper and more immediate impact on gas consumption. Not just regarding the volt, but across the industry.

  8. rosalind says:

    via LA Business Observed: Big jump in local car sales

    New vehicle registrations in L.A. County were up 43.1 percent in June from a year earlier, a somewhat surprising sign of increased local spending. OC registrations were up 52.8 percent. Year to date, L.A. registrations were up 17 percent and OC 15.4 percent. All stats from Experian Automotive. Toyota posted big increases from a year earlier (42.8 percent for L.A., 35 percent for OC).

  9. thatvisionthing says:

    Re the $41,000 Volt price — when one of the (<800?) uncrushed 1997-2003 Toyota Rav4 EVs goes on sale on ebay, the price is $40-50,000.

    Chelsea Sexton, May 2010: There’s several hundred of them still out there, still being used, still being loved, and they’re holding up really, really well. They actually sell for $40,000, $50,000 still on eBay as used cars, and drivers are hanging on to them ’til there’s something new available.

    And an intact original GM EV1 in Canada (the only one to have escaped the mass crushing and shredding of all the others?) sold for $465,000 in 2008.

    I can’t see why it’s taking so long to reinvent the wheel. I remember one of the lines from the movie Who Killed the Electric Car — “This isn’t the car of the future, this is the car of today.” They said that yesterday.

    • bmaz says:

      The EV-1 was a complete pile of shit that deserved to be killed. I “got” to drive one for maybe half hour or so and it was, and remains to this day, the worst piece of shit death trap vehicle I have ever driven in my life. Total and unmitigated crap.

      • Argonaut says:

        WTF? Is that you, Ralph? You spelled “Corvair” wrong.

        But seriously, purely from a consumer POV you are a minority of one. People fought like hell to keep their EV-1s even at the high monthly lease rates. I am inclined to believe that someone’s nym has been stolen.

        • bmaz says:

          First off, I am am obviously not Nader. Secondly, there were very few “consumers” that ever had an EV-1, in fact somewhere less than 1,200 were produced and many of them went to clustered fleet applications. The few individuals that got them were the rabid granola types that were simply thrilled with the concept. But as a functioning automobile, it made the Ford Pinto look like a competent performer. It had a horrid feel through the steering wheel, bizarre braking characteristics and felt like a slug. It was not very comfortable ergonomically either. In short, it was a piece of shit as far as an automobile. I am inclined to believe you have never driven one and don’t know what you are talking about.

      • Casual Observer says:

        Not only killed, but taken out of state and literally shredded. You dismiss those who rented the vehicle over many months (the car was never available for sale–only for lease) of driving as “granola eaters”. In contrast, you drove the car for an hour and you’re acting as if you are the undisputed expert, and everyone else is crazy.

        So which is it? Does actual experience with the car count or not, and if so, what was it about that golden hour you had in the EV1 one day that makes it so much more valuable / accurate than the opinions of those who drove the car regularly for months?

    • bmaz says:

      Yes; the engine is quite small and efficient and basically runs a generator that runs through the batteries to the electric drive.

  10. rosalind says:

    important Toyota update via LATimes: Toyota appears to do an about-face on reliability of black boxes in its vehicles

    Toyota Motor Corp. has argued for years that the electronic black boxes in its vehicles used unproven technology that could not be relied upon to determine the cause of accidents.

    Now, facing continued claims that its vehicles are defective, Toyota appears to have done an about-face.

    Lawyers who have battled Toyota in court cases say the company is contradicting itself.

    “Sometimes they’ve claimed it’s unreliable, other times they say they can’t even access the data, and now they’re holding it up as proof that they’re innocent,” said Steve Van Gaasbeck, a Texas attorney who has been stymied by Toyota in several attempts to get EDR data admitted in trials. “They want it both ways.”

  11. Petrocelli says:

    Spot on, Marcy ! I thought the tech. in the Volt would push it closer to $50K.

    Now is the time for those calling for Green Cars to put up or shut up.

    Green Cars will be expensive up front but yield big savings down the road [pun intended].

  12. perris says:

    one thing though

    people talk about toyota like it is a privately owned and run success

    toyota was government subsidized and could have never been marketable without their government stepping in

    that’s the real lesson to learn from toyota when people try comparing their profit model to gm