

G.M.’s Electric Lemon - zafka
http://www.nytimes.com/2010/07/30/opinion/30neidermeyer.html?_r=1&th&emc=th

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ccc3
This article is bullshit.

His main line of argument is the same criticism that's consistently leveled at
Tesla: that it's too expensive to be a big seller. This is obvious. Batteries
are still in their early days as the primary energy source in cars. Early
technology is expensive (The original macintosh cost $5000, inflation
adjusted). The obvious point of the Volt program was to develop technology and
infrastructure for the future, not just to produce the first generation Volt.
It's certainly fair to debate GM's efficiency in building electric vehicle
capabilities, but the author of this article doesn't ever seriously
acknowledge that GM has ambitions beyond just the first generation Volt.

A few smaller arguments I have:

 _For starters, G.M.’s vision turned into a car that costs $41,000 before
relevant tax breaks_

Bob Lutz said that the Volt would cost around $40,000 when he was on letterman
a year ago, so the price shouldn't be a surprise to anyone who follows the
industry. But as I already argued, we're in the early days of electric
vehicles. Just like in the early days of personal computers, these cars will
be bought by enthusiasts. As we've seen with every other new technology in
history, price will come down over time.

 _And instead of the sleek coupe of 2007, it looks suspiciously similar to a
Toyota Prius_

It's a little difficult to take an automotive pundit seriously when he
complains about a production model not looking like the concept. Frustrating
as it may be, production models almost never look like the concept. This is
nothing new. And the reason it looks like a Prius is physics. It turns out
that there is an optimal shape for reducing aerodynamic drag, so cars that are
built with fuel efficiency as a primary design goal will all be roughly the
same shape. This also should not be a surprise to anyone who follows the auto
industry.

 _It also requires premium gasoline_

So what. It shouldn't use much of it anyway. For most owners this will not
contribute significantly to the cost of running the vehicle.

 _seats only four people(the battery runs down the center of the car,
preventing a rear bench)_

I'm guessing most of the target market won't care about this. This is also the
type of compromise that has to be made in early technology.

 _has less head and leg room than the $17,000 Chevrolet Cruze_

So does a Lamborghini. People buying a Volt are not likely to be considering
how much interior volume they get per dollar.

 _No wonder the Volt’s main competition, the Nissan Leaf, forgoes the
additional combustion engine — and ends up costing $8,000 less as a result._

It also forgoes the ability to go on a road trip. Best case the leaf will have
to recharge for 30 min every 80 miles. GM was trying to build something that
could fully replace gas-only vehicles, Nissan wasn't.

 _So the future of General Motors (and the $50 billion taxpayer investment in
it) now depends on a vehicle that costs $41,000 but offers the performance and
interior space of a $15,000 economy car_

The author should be embarrassed of making this statement. GM is a massive
company who's business units range from car parts to medium-duty commercial
trucks. The Volt is just one, albeit highly visible, program.

 _Yet G.M. seemingly has no plan for turning its low-volume “eco-flagship”
into a mass-market icon like the Prius_

A quote from Bob Lutz:

"The Volt technology is very exciting, but costs will have to come down before
it can become generalized, and U.S. fuel prices will have to rise to world
levels, meaning $5 or $6 per gallon,"

That seems to suggest that the plan is to develop the technology until prices
can be brought down and fuel prices go up (a bit of a gamble, but it seems
likely that fuel costs will increase eventually).

 _and some significant portion of the $14 billion loan G.M. got in 2008 for
“retooling” its plants_

By putting the word retooling in quotes he seems to be suggesting that GM
wasn't retooling their plants. If that's his argument, he should state it
directly and give a source.

There's no shortage of legitimate reasons to criticize GM, but calling the
Volt a failure before it's even been released is nothing but pointless
speculation.

~~~
TheCondor
So are you lining up to buy a new Volt?

It think it's great GM is doing it, taking some risks, approaching it from a
slightly different angle than the other companies are. That's all good stuff.
As someone who has bought and been burned by GM products in the past I can
boil it down to 2 things:

1) Would you pay more for a Volt than a Prius? Just on quality experience, I'd
pay a premium to go Toyota, personally. It's anecdotal but a GM is going to
have to be incredibly compelling for me to go back.

2) Would you pay $40k for anything from GM that's not a corvette, Cadillac or
like an industrial truck?

What's the overall goal of the Volt? Are they looking to have 5million of them
on the road and it'll be the next Taurus or Accord or something? Is it
supposed to be a platform for future development? Is it a one off? Is it
hitting that mark? What's so compelling for it to cost more than a prius?

------
masomenos
This criticism misses the Volt's unique powertrain configuration. Trips under
40 miles are all on battery power, so the average commuter uses no gas doing
their daily business. However, unlike an EV, you can hop in the same car &
drive as far as you want, pausing only to fill up the gas tank.

So while it is pretty damn expensive, it's not necessarily worse than having
one ICE car for long trips & one EV for commuting, especially considering that
you'll only need to buy gas for trips over 40 miles. It's not going to hit too
many people's sweet spot but there's some real potential.

~~~
lutorm
This is all true, but unfortunately the amount of money spent on gasoline over
the lifetime of a normal car doesn't approach the price premium of the Volt
unless there is a phenomenal skyrocketing of gas prices.

~~~
MikeCapone
Indeed.

But does it have to pay for itself? Nobody buys a car that is above the
cheapest model expecting it to pay for itself. A sunroof or bigger engine will
never pay for itself, and is usually bought to get some other benefit
(sometimes mostly in the mind of the buyer). The same can happen with early
PHEVs and EVs.

By the time all the early adopters who buy them for the technology or
environmental benefits have one, the technology should have improved and price
lowered enough so that the cars will be attractive to a larger group.

~~~
anamax
> But does it have to pay for itself? Nobody buys a car that is above the
> cheapest model expecting it to pay for itself. A sunroof or bigger engine
> will never pay for itself, and is usually bought to get some other benefit
> (sometimes mostly in the mind of the buyer).

Bingo. So, what is Volt's corresponding benefit, how much does it cost, and
how many people are willing to pay that much for that benefit?

> By the time all the early adopters who buy them for the technology or
> environmental benefits have one, the technology should have improved

"should"?

If Volt doesn't recover its development costs, how is GM going to pay for
improving the technology?

------
maukdaddy

      Nor did the government or G.M. decide to sell the Volt at a loss, which, paradoxically, might have been the best hope for making it profitable.
    

Glad this dude isn't running my business.

~~~
_pi
Hey we're losing 20,000 dollars for each car we sell but don't worry we'll
make it up on volume!

~~~
maukdaddy
Not to mention potential anti-trust implications (US) or dumping
(international).

------
coreymull
The writer of the piece is also the writer of The Truth About Cars - a
notoriously anti-GM blog.

The Volt definitely has faults, but it's a brand-spanking-new technology -
what do people expect?

~~~
ja30278
That it be better than previous offerings in some measurable way that's valued
by the consumer?

~~~
coreymull
And how is it not? It's a car that, in normal use, will use no gasoline.
That's a big deal now, and an even bigger deal if some sort of cap and
trade/carbon tax is put into place.

But, unlike the Leaf, Tesla and other pure electrics, it is capable of driving
long distances because of the gas engine.

It's the first electric car without "range anxiety".

------
samatman
The Volt is an aspirational automobile, much like the Prius but with an added
scoop of patriotism.

This is a powerful formula, and if the car is halfway reasonable GM is going
to be selling a lot of them.

Others have said this part but it bears repeating: a car with a battery system
and a gasoline-burning electrical generator is a very different beast from a
hybrid or a pure electric. It's no surprise that it's more expensive, nor does
the price seem unreasonable, considering that a) it can cover most people's
daily commute with zero gasoline and b) it can then be filled up and driven
across the country.

~~~
samatman
Also: great name. I wonder when there will be an american electric auto that
_isn't_ named after an early scientist in the field?

I'm expecting an Amp sooner rather than later...

------
philwelch
And people say TSLA's a bad buy.

------
jswinghammer
Given that G.M. destroyed their first electric car of this decade why would
anyone trust them to build a new one but somehow better the second time
around? I've never heard of a company purposefully destroying capital in the
way G.M. did. This has to be collectively the stupidest corporation in America
right now.

The Volt will likely fail because of its massive price and less than optimal
features. Why would you buy one over a Prius anyway? At least with the Prius
you'd be getting a quality car made by a quality company. I have no idea why
people are buying cars made by G.M. these days between the poor quality
history and getting bailed out I have no interest in doing business with them.

~~~
ergo98
You really managed to fit it all in there.

>Given that G.M. destroyed their first electric car of this decade why would
anyone trust them to build a new one

Because they had the experience of building an electric car, knowing it wasn't
viable, and going back to the drawing board until the technology was refined?

>I've never heard of a company purposefully destroying capital in the way G.M.
did.

That's because your analysis of it is hipster, populist garbage. Sorry to be
impolite about it, but the whole "who killed the electric car" movement is
populated by people proud of their ignorance.

>The Volt will likely fail because of its massive price

Since when did $41K (really $33.5) get classed as a "massive price"? That is
an absolutely typical mid-level sedan price, and apparently the volt is fairly
well equipped.

>At least with the Prius you'd be getting a quality car made by a quality
company.

The number of problems with the Prius have been legendary. Toyota's quality
lead over GM has shrunk to almost a rounding error, yet we'll forever hear the
"angry at GM guy" railing his 1980s argument.

~~~
jswinghammer
>>That's because your analysis of it is hipster, populist garbage. Sorry to be
impolite about it, but the whole "who killed the electric car" movement is
populated by people proud of their ignorance.

I don't understand what you mean here? They destroyed the engines? Why would
you destroy your capital? It's their right I guess but that seems irrational.

>>Toyota's quality lead over GM has shrunk to almost a rounding error, yet
we'll forever hear the "angry at GM guy" railing his 1980s argument.

Rounding error? Every car that my parents have owned from GM in the last 30
thirty years has cost them fortunes to maintain. My Corolla costs me virtually
nothing to maintain after 10 years on the road and living on the streets of
Boston.

~~~
krschultz
Ancedotes != evidence.

From my experience the quality of a Ford beats that of a Japanese car in the
show room. Maitenance is probably a wash. I have 0 experience with GM so I
don't know, but I've owned a Ford for the last 10 years with >150k miles on it
and have had very few issues. I also own a Subaru and it has had more issues
and the quality is noticeably lower. My finance owns a Corolla from the same
year as my Subaru with the same miles and it has had fewer issues, but still
more than the Ford and the Ford is way older. I have some issues with it right
now actually. Plus the Toyota totally sucks. 0 fun, crappy interior, tiny,
horrific in the snow. We're never buying a Toyota ever again.

~~~
philwelch
Is it a Ford car or truck?

