Several other bloggers and I had a press conference with Rick Wagoner, GM’s CEO.
My second question and his answer were as follows (first question here):
Obviously GM is taking a risk in developing, marketing, promoting, and advertising a car that doesn’t exist yet, how do you feel about that risk and what it represents for the company?
“On the first point, there’s some risk. We didn’t go into the objective lightly. By the nature of the process you don’t know whether all this stuff…are we going to be able to scale up the battery and address all of the issues particularly in the timeframe. But I would say it has been kind of motivational for the people that execute, to have the data out there, and make sure they know that we want to make it as soon as we can, ideally by the timeframe indicated, and if they need help holler. If people need to put some extra resources in to keep it on the fastest pace possible, we’ll do that. So I think its been helpful for us to keep us moving as fast as we can and frankly help us with our suppliers to keep them moving on.
We take risks every day in the business, this one might just be a little more public. But it is one that is the right risk for the time, and so far I’d say its been pretty motivational for our teams working on the project, and its been a good rallying point. It’s an important car and an important technology, and the symbolism is important too. Well see how it plays out, but no regrets for being in the race.”
To see the whole video of the blogger press conference check out Matt Kelly’s post here.
This entry was posted on Saturday, January 19th, 2008 at 6:00 am and is filed under GM Q and A. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.
Jan 19th, 2008 (7:25 am)Well that sounds very good fom Rick Wagoner.
I think we all share his vision for the Volt.
He is offering resources on demand and it may be time they are called up. More software people seems to be the issue.
Jan 19th, 2008 (7:51 am)Great question, Lyle! And if “Maximum Bob” had answered it I’d guess he might have said something stronger, like perhaps…
“The Volt is our ‘moon shot’. We were betting the Country then in the sense that if we failed, we might have lost the cold war and we could have had to learn to read/write/speak Russian. But since we succeeded, it was a 1st major step toward winning the cold war!
“With the Volt, GM is betting the company! If the Volt is a failure, we might have to sell the company to the Japanese. However, if we succeed, the Japanese will keep on learning/using English and a major step will have been taken toward resolving daunting US security issues and the serious global climatological problem”.
Jan 19th, 2008 (8:41 am)Well said Nasaman #2, regards
Jan 19th, 2008 (9:23 am)I’ve lost interest, I don’t think the volt will ever be produced. I don’t understand the long delays. I am just going to buy a small diesel and use biodiesel.
Jan 19th, 2008 (9:24 am)Ditto Nasaman. I couldn’t have come close to saying it that well. I love the last paragraph.
Jan 19th, 2008 (9:28 am)How many automotive engineers have been able to work on program that can change the history of the automobile — and maybe the history of the world too? The most exciting projects I have worked on have had these characteristics — everyone knew they were the right thing to do, they were challenging, and we had the support of every level of management. This is usually a great recipe for success, and recipe for the most professionally satisfying times in a career.
Jan 19th, 2008 (11:09 am)Wow!! New look for GM-VOLT.com. Very cool. Very different. Very interesting. Will take some getting used to. But I like it. Way to go Lyle.
Jan 19th, 2008 (11:27 am)Doug @ 4, you’ve got to be kidding. 2010 is the earliest GM ever said the Volt would ever be available for purchase, which is two years away. You’ve got to give them a chance.
On another note, I drive a 2005 Passat TDI powered by B20, and I love the car. But I’d trade it in a heartbeat for an EV.
Jan 19th, 2008 (11:50 am)its simple really. if gm doesnt deliver with the volt then someone else will do it first. if they do and someone else makes a cheaper more reliable product then gm will lose out. how is it that TATA a indian company can deliver a 2500 dollar car and gm has to price the volt at 40000 i know its apples and oranges but there is a disconnect here.
Jan 19th, 2008 (12:11 pm)This is a revolution in automotive powertrains. I believe most light vehicles will be powered by some kind of EV series powertrain in the next decade.
The only risk, is doing nothing.
Jan 19th, 2008 (12:14 pm)2010.. Volt hits showrooms for sale.. 30k – 35 K with all the options, o % finanacing. Government cash back? and a 7 Year all inclusive warranty….. then you get me as a customer.. $40 K with minimal options (more options for more money) and no breaks…. I will definately be seeing the competition..
GET ER DONE GM… You already have the technology and know how…. you could have it on the road in 2009 IF YOU WANTED TO..
Jan 19th, 2008 (12:41 pm)$40,000? That’s a big risk.
Jan 19th, 2008 (1:01 pm)1. I’m glad to see the site moving on with more information.
2. Doug #4- Have you had your head in the sand? They will build it. The questions at hand are “Will they price it out of most peoples reach?” and “Will they sell it like a normal car or screw with us by leasing it or parts of it then scrapping it at the end?”
3. At $25k they would sell these like crazy. If it was your car and you lost money on every sale how pumped would you be to sell more? At $30k it thins out the crowd but middle class people like me would still be in the running. At $35k it starts to hurt and at $40+k it becomes close to impossible.
4. The industry is headed in the EV direction. Weither its fear of oil running out, price of oil, consumer demand or someone finally giving a crap about the earth, it really doesnt matter. Multiple car companies are going to produce this type of vehicle. There will be competition which is good for the bottom line price and good for all of us.
5. Ive seen more than a few comments about using new battery tech instead of existing tech that could get the car on the road sooner. I see few sides to this, first that getting the car on the road sooner would be great but it wont be as good a product(less range-shorter battery life). I could live with that and hope that the batteries are changable. Second that if they used old tech the price might be lower and third, if we kept sticking with existing tech we would still be living in caves. Its better to look to the future and remember that necessity is the best inventor we have and be thankfull its backed by GM’s check book.
Jan 19th, 2008 (2:05 pm)GM is surely to file Chapter 7 in 12 month, don’t put any hope on Volt. My relative Vincent chan was killed by racial Chrysler worker 27 years ago, now god punish big three by sending Japanesee angels to America to decimate detroit business. May god bring justice to the detroit auto companies!
http://en.wikipedia.org/wiki/Ronald_Ebens
Jan 19th, 2008 (2:15 pm)#14: Sorry to hear about the relative. That sucks.
What does religion have to do with the Volt?
Nothing. GM will continue to survive but will continue to lose market share because they can’t seem to build cars that people really want to buy. Too bad though.
I understand they are in business to make money. I understand the need to recover development costs. But GM is big enough to lose money in the beginning and make money a few years later. They’re entire line could have EREV options. In my heart, EREV is the answer for GM to regain the number 1 spot.
Jan 19th, 2008 (2:16 pm)Hey Lyle, what happened to your new look?
That really freaked me out when I first saw it. Looked cool though. It is just an experiment or are you really thinking of going that way?
Jan 19th, 2008 (2:55 pm)There is a new theme under development, there may be an occasional “peak” as we get the bugs ironed out.
It is very cool and the forum will be dramatically improved. Hopefully will be up in a week or two.
I had to hire a professional to build it custom for our needs.
Jan 19th, 2008 (3:15 pm)The only risk Rick Wagoner should be talking about is the risk of GM losing customers and market share if they don’t build the Volt.
Doug (comment#4) always nice to see you on the forums, keep on living oil free.
Jan 19th, 2008 (3:49 pm)My desire is to have GM come out with this before anyone else. They need to pay attention to history though.
Henry Ford sold his cars as cheap as possible in the early 1920′s to get one in every driveway. The emerging middle class put him and the company on the top of the heap because they could afford one to purchase his cars.
GM must replicate that same stance. They don’t have to loose a ton of money on each one, sell them close to cost, slightly below if need be. The point is to get them on the road by the thousands. More and more people will be exposed to it and want one. Japanese manufacturers did this successfully in the 1980′s, by selling earth moving equipment, televisions, VCR’s etc at a loss for a year or two. Then they raised the price to cover costs and make a modest profit. By that time, so many people were buying their products that they owned that segment of the marketplace. You don’t corner a market by pricing yourself out of the ability of a strapped middle class to make the purchase. Stealth and a long view will do wonders for GM’s bottom line. If the Japanese can do it, so can GM. To hell with the stock market or investors in the short term. Go for market share and the long view….Henry Ford did.
Jan 19th, 2008 (5:57 pm)Heres a little piece of history for you. Check out the caption under the R&D title.
http://artwork.barewalls.com/product/closeupFrame.asp?ArtworkID=213569&img=w4011967&type=noframe&addtocart=undefined
Jan 19th, 2008 (6:09 pm)Hey Lyle … it like the new look (when it periodically shows up). Could you please make sure that with the “new look” that the posting number for each comment remains? It’s very useful when referring to someone else’s post.
Jan 19th, 2008 (6:18 pm)How much would the tax rebate be on the Volt?
Right now, the top tax rebate is $1,575 for the Prius. The Volt is overwhelmingly more important to the environment and the country. Both John McCain and Hillary Clinton are concerned about global warming, and McCain especially is concerned about energy independence. With one of them as president, there is no reason we can’t have a $4,000 plus tax rebate. If they could price it at $29,995 plus a $4,000 rebate plus the huge savings on fuel, this thing would make sense for darn near everyone in America.
Does this make sense?
Jan 19th, 2008 (8:07 pm)Have you guys seen the new look for this site?
http://www.gm-volt.com/forum/
Jan 19th, 2008 (9:03 pm)Lyle,
I saw the blogger press conference with Rick Waggoner. You broached the subject of risks (market et al.) with him but I found that his response was a bit dismissive of the risks and how they will deal with them. I would like him to address these risks and GM’s risk mitigation plan. He glossed over the technical risks and, more importantly the substantial marketing risks, with the major one being price. Specifically, the Volt may be a technical tour de force but people will be reluctant to pay much of a premium over a similarly equipped conventional auto even if it can be shown that the life cycle cost of a Volt is much less than its conventional equivalent. For example, look at the market acceptance of compact fluorescent light-bulbs (CFLs) versus incandescent bulbs.
Ten years ago, with power at 8¢ per kWh, it could be shown that a 15-watt CFL at $15 represented about a $25 savings over its 10,000 hour life compared to ten 60-watt incandescent bulbs at $0.50 a pop with a 1,000 hour life. Despite these demonstrable savings and the added benefit of fewer bulb replacements, CFLs did not fly off the shelves. Yes, the form factor was nerdy and the light was a bit stark but CFLs did not even take the basement or garage lighting market by storm. Even now with better quality of light, improved form factor, a price under $3 and higher power rates, CFLs have not displaced incandescent bulbs to the degree that logic says they should. It seems that the higher price is the sticking point. Will the Volt premium price have a similar effect on its market acceptance?
A key difference between a light bulb purchase and an automobile purchase is the four orders of magnitude difference in price. An auto motive purchase entails a detailed examination of choices (color, style, etc.) and affordability, which should include some life cycle cost considerations that will work in the favor of a Volt versus a conventional equivalent – for example, a calculation of the monthly cost (lease payments, fuel expenses, maintenance, insurance) of the possible choices. Sales people are sure to present the Volt in the most favorable light, e.g., fewer trips to the gas station, since its premium price translates to premium commission. For the customer, the premium price will lead to the demand for strong guarantees, particularly on the battery, to provide assurance that the Volt’s useful life is sufficient to recoup the premium price differential in the form of lower fuel and maintenance costs, e.g., fewer brake jobs. These strong guarantees will increase the carmakers risk which they can mitigate. I am thinking of other stakeholders in PHEV development that should be shouldering some of this risk. These stakeholders include environmentalists, government and the power companies.
The power companies would be major beneficiaries of market acceptance of the Volt. It is estimated that the current US power system has sufficient capacity to recharge 80 million PHEVs nightly with NO additional infrastructure. At 8 to 10 kWh per PHEV per night, we are talking additional annual revenue of about $300 per PHEV. The power companies recognize this potential windfall and have conducted studies that support the economics of PHEVs and better yet (for the power companies) EVs. As major beneficiaries, the power companies should be able to help in decreasing the risks of PHEV development. For example, Austin (TX) Power has talked about providing a $1,000 grant to PHEV purchasers in its serving area. Here is a link to a 2004 Electric Power Research Institute (EPRI) studies on PHEV and EV economics.
http://www.epriweb.com/public/000000000001009299.pdf
So, the question that I would like you to forward to GM is, “What are you doing to involve any of the other PHEV stakeholders in your Volt development?”
Jan 20th, 2008 (12:24 am)http://www.gmsurveys2.com/se.ashx
Jan 20th, 2008 (11:29 am)#25 The Saint. is there a code to go with that?
Jan 20th, 2008 (5:35 pm)Seen in the general advertising for the Brussels Auto Shosw held until end of next week and good to know to show GM that the competition is on the verge to be ready.
In all the pages of the Volkswagen folder presenting their “bluemotion” versions of the popular cars (Golf, Polo, Passat, Jetta), that is versions with low CO2 emissions, and very popular here, they were also noting matteroffactly that the next step after “bluemotion” would be the electrification of all these models.
I never heard before that VW was doing anything in the world of EVs and the first announcement I see is for the general public, GM think about it.