GM-VOLT : Chevy Volt Electric Car Site

As we move closer to the Volt’s launch date, besides pricing, people are beginning to wonder whether the Volt will be sold only, leased only, or both. Nissan has announced pricing for the electric LEAF and has also announced the lease price.

Recently a GM-Volt commentator wrote about he following observation he had made, calling it “breaking news” that GM would only be leasing the Volt:

I just received my GM Card bill, and it included a notice that we WILL NOT BE ABLE TO APPLY GM CARD EARNINGS TO LEASE A VOLT for the first year, i.e., until November 2011. Then they go on to say that “as of November 2011, you will be able to apply your GM Card earnings to the Chevy Volt.” What caught my attention was the use of the word LEASE in the first year (no mention of BUY), then ambiguous reference to the second year and beyond (no distinction whether LEASE or BUY).

I pointed this out to GM Volt strategic marking manger John Hughes.

“I wouldn’t read to much into the note from the card,” replied Hughes.  ”There will be both purchase and lease options to acquire a Volt when it goes on sale.”

GM has said it wasn’t expecting the car to compete with the LEAF, considering the two entities as occupying completely different segments.  Pricing thus should’nt be compared either.

“I (am) excited about other EV entries joining us in the vehicle electrification movement,” said Hughes.  ”It will take different types of EV’s at different price points to serve the varied needs of consumers just as there are SUV’s at various sizes and price points.”

GM will apparently not be releasing pricing in May as was first expected.  Rather Hughes says, “we’ll have quite a bit more to talk about later this summer.”

I aksed Hughes if he thought becasue Nissan has already released its pricing scheme and pre-order process that it puts them in some way ahead.

“I don’t agree that Nissan is out in front,” he said.  ”Think about it, there is little for a consumer to do but continue to wait.”

“Its very important that we deliver a quality experience and that we, our dealers, field teams digital systems,…. are prepared,” he added.

Bob Lutz, former vice chairman of General Motors retired on May 1st.  I had the pleasure of a one hour exit interview with Mr. Lutz before he left the company.  Much of what he’s said has appeared in several hopefully interesting articles over the last few weeks. Yesterday GM threw a going away party for the 47 year auto veteran.  ”If I see things going wrong, there will be the ghost of Bob Lutz,” he said told party-goers, “and it ain’t going to be friendly.”

Below are his final unpublished comments to me.  Mr. Lutz, though not working at GM anymore will continue to participate in the auto industry.  For now he is writing a book about GM, its downfall, his time there, and includes a chapter about the Volt.  He plans to complete it before the end of the year.  He will also be invited to and will appear at the Volt launch ceremony, the car he made possible.

For those that are really interested, I have included the raw 60 minute total audio conversation between us at the end of the post.

Do you think the consumers will get the benefit of an extended range electric Volt over a pure EV?
Yes.  Because the educated people like yourself and readers of your site will be among the early adopters and they will be telling all their friends.

We’re already telling them.
That’s what I figured, of course.

As the consummate gar guru for combustion cars for decades it sounds like in your heart you are really interested in getting off petroleum.
I am.  Fundamentally one of the appeals, to be totally honest, is to demonstrate General Motors’ technological capability and to reinforce that fact that people were wrong to believe that GM didn’t have advanced technology.  General Motors can do anything it wants to do and can do it better than any other car company in the world.

I truly believe that and the Volt demonstrates that.  And demonstrating that in the face of the then infatuation of America and the American media with that paragon of automotive virtue called the Toyota Motor Company, that was very important to do.  Just draw a line in the sand and say hey there’s only one technology leader in the automobile business and that’s GM.

That was important.  Secondly I fundamentally like electric cars.  As you know I have a battery background from my time at Exide.  I deeply believe in the continued progress of advanced batteries and I am the owner of five Segways and one Vectrix electric scooters. So I personally own more electric mobility devices than most people you know.

You’ve driven the Volt a lot and had it home, Iv’e read.  How do you actually like driving that car?
I love it.  I just absolutely love it.  I think it’s a great car to drive. I’m personally going to get myself on the list for one, no question about it.  No question that I think its the greatest achievement of my career.

How do you see the future of GM?
I think the future looks brilliant.  The company is very streamlined now, it does far less business with itself.

We have a much cleaner balance sheet, we’ve just repaid the government loans.  Im not allowed to say anything about future profitability but we certainly have a justified hope of making some money this year.  We also have a justified hope of doing an IPO in the reasonable future to start replacing government ownership with private ownership again.

But the most important thing is that this company now is 100 percent dedicated to product excellence.  You can see that in all the recent things that we have launched which are all selling extremely well.

That ethic of only the best is good enough because were General Motors and we know how to do the best cars and trucks in the world we just didn’t always have the will or the focus to do it.  We’ve always had the technical means.  Now we’re back at it, I think we’re approaching the top of our game again and Im very very proud of what the guys are putting out and what’s planned for the next few years.

Do you feel Mr. Whitacre is doing good, I know at first he said he knew nothing about the car business?
I feel very good about it because Ed likes to delegate and he’s very quickly figured out who he can delegate to and who not.  Ed is not going to interfere in or meddle with the vehicle development process.  He has delegated that to Tom Stephens, Jon Lauckner, and Ed Wellburn.

Its not that he doesn’t want to know but he asks ‘what is the value in my approving this stuff?’  We say ‘well you’re the CEO.’  He says ‘YeahI know but I’m not a specialist in this stuff, how do I know if this vehicle is going to be great or not?’  We say ‘you don’t but we’ll tell you all about it.’  He says ’you guys know what to do, you know what the rules are. We have to do the world’s best vehicle in each category and we have to make money on it.  I assume since you know it’s the goal you guys are not going to propose a bunch of stuff that’s not the world’s best and wont make money.’  We all said ‘you’re right. ‘ He says, ‘then why do I need to see it?’

Well that’s the way he manages it and I’ll tell you its very very refreshing and I think its going to be very effective for the company, because the creative people are back in charge of product development and that hasn’t been the case around here since the late 60s.

After your retirement to you plan to stay involved in the electrification of the automobile in some manner?
I’d like to.  It depends on what kind of board memberships are offered to me.  I’m certainly not going to start an electric car company.
AUDIO INTERVIEW

Recently we discussed a report that GM was in negotiations with Internet search giant Google to integrate the Android mobile operating system into OnStar and the Chevrolet Volt. That report was unsubstantiated.

Today GM has issued a press release confirming the partnership as well as detailing the current state of the technology and future plans.

As we know, Volt drivers will have the opportunity to download Volt-specific apps to their mobile phones which include iPhones, Blackberries and Droids.

Application functionality expected at launch include:

· Charge status display – plugged in or not and voltage (120V or 240V)

· Flexibility to “Charge Now” or schedule charge timing

· Display percentage of battery charge level, electric and total ranges

· Ability to manually set grid-friendly charge mode for off-peak times when electricity rates are lowest

· Send text or email notifications for charge reminders, interruptions and full charge

· Display miles per gallon, electric only miles, and odometer readings

· Shows miles per gallon, EV miles and miles driven for last trip and lifetime

· Remotely start the vehicle to pre-condition the interior temperature

The new partnership between GM and Google will be to integrate Google maps into the mobile app. Users will find a tab labeled Maps. Once clicked, the application will shows exactly where their Volt is pin-pointed on a real-time map and their own location relative to it.

The user can then use Google search to find a destination of interest, finding it relative to both their own location and that of the car. If they choose too they can then send those direction directly to the OnStar screen in the Volt from their mobile phone where turn by turn guidance can be experienced. It will be waiting for them when they arrive in the car.

GM and Google will be displaying the technology at the Google I/O conference May 19 through 20.

Apparently the functionality will only be available on Android phones (Google and Apple aren’t friends) and won’t be available at launch, but will appear in a 2.0 version of the app.

“These two new features add to the suite of mobile application features for Volt that given Volt owners a personal connection to their car,” said Tony DiSalle, Chevrolet Volt marketing director. “Connecting customers to their cars is one way we’re using technology to provide value and a real useful benefit to the Volt owner.”

Note: apparently GM has finally chosen a new Volt marketing director, Tony DiSalle, to replace Maria Rhorer who lost the position after issuing the now infamous Volt Dance.

Source (GM)

Today General Motors announced its first quarter results. The company said it had earned $865 million in the quarter on revenue of $31.5 billion. In the same quarter last year, prior to bankruptcy, they instead lost $6 billion on revenue of $22.4 billion.

Today’s announcement indicates the first quarterly profit GM has made since 2007.

Based on a free cash flow of $991 million, GM now has $35.7 billion in cash.

Worldwide sales increased 24% to 1.9 million vehicles, including a 15% rise in US market sales, and 45% increase in international sales including China.

“We’re pleased with our first quarter performance, in particular achieving profitability,” said Chris Liddell, vice chairman and chief financial officer. “In North America we are adding production to keep up with strong demand for new products in our four brands. We’re also steadily growing in emerging markets, keeping our costs under control, generating positive cash flow and maintaining a strong balance sheet. These are all important steps as we lay the foundation for a successful GM.”

Continued profit at GM is expected to lead to an IPO possibly later this year. The US government is reported to have hired a firm to help with this process. Through the IPO the government will be able to divest its $50 billion ownership by selling its shares to the public.

So now with fewer brands, better products, lower wages, and profitability GM is poised for success in the future.

Furthermore profitability now makes GM eligible for advanced technology retooling loans. GM had applied for $14.4 billion in these loans which would be used to restructure facilities to build high efficiency cars like the Volt and other future models.

Source (CNN)

Deloitte is a large multinational consulting firm that has just released a new study analyzing electric car adoption, including a survey of 2000 would be consumers and extensive interviews with automotive industry experts. The full report can be accessed here, and is one of the most realistic I have seen.  It is called Gaining Traction: a customer view of electric vehicle mass adoption in the U.S. automotive market.

In the introduction they note a convergence of factors including government incentives are making electric cars “look good”, but warn there are considerable challenges to mass adoption.

Four areas were analyzed: market opportunity, target customers, barriers to adoption, and market forecast.

Market Opportunity
They note electric cars offer unprecedented opportunity for automakers, yet unprecedented threat as extensive, expensive restructuring has to take place.

Target Customers
The study builds a profile of who the early adopters will be noting they “will be a small number of buyers, nowhere near the volume needed for mass adoption.”  They are considered to be young high income (>200 k household) people, mostly centered in Southern California who already own one to two vehicles. The vast majority of the US population are expected to be non adopters.

The next wave that will enter the market immediately after the early adopters, are called the early majority. These people are generally 40 to 44 with a household income of 114K. Ninety percent will have garages and their weekly driving mileage will be about 100. This group consist of 1.3 million individuals.

Barriers to Adoption
The study notes the majority of the population would consider purchasing EVs but four barriers to adoption will hinder actual sales.

Familiarity: the research suggests though people have heard of electric cars, they are not familiar enough with the technology to be comfortable buying them. In their survey of 2000 people it was found the majority were familiar with the terms hybrid and plugin hybrid.  The least familiar term was “range extender,” even less than next up from the bottom “battery swapping stations.”

Brand: would-be consumers said they would be most likely to buy an electric car if it was from a brand they trusted. The study showed that 17% would prefer to buy and electric car from Toyota, 15% from Honda, and 12% from Ford.  The Chevrolet brand came in forth at 8%, and Nissan came in ninth at 4%.  Tesla came in at just 2%, and Fisker was zero.

Range: though most participants drove little enough that a 100 mile EV could satisfy their needs, range anxiety was determined to be “pervasive.” Seventy percent of respondents believed they needed a minimum of 300 miles of total range before they would feel comfortable purchasing an electric car.

Charging: 81% said they would want to charge at home, but 61% said they wouldn’t have the right  access for home charging. Only 17% said they would be willing to wait 8 hours to charge a car, and more than half said they wouldn’t buy an electric car until there were ample easy-to-find public fast charging stations.

Price: 69% said price is the most important issue in deciding to buy an electric car, and most felt the price should be less than $30,000. It was determined that lithium-ion batteries would have to drop 40% from their current value for EVs to be on par with ICE cars. 2014 was the projected year for this price point to be reached and thus will likely be the inflection point at which the early majority will enter the market.

Market Forecast
Based on the barriers to adoption and target customers as outlined above, the study concluded a rather conservative forecast of electric car sales. It was estimated that by 2020 electric cars of all types will account for only 3.1% of the US market, or approximately 465k units. If five different automakers are in the 2020 market, the forecast is that each company would only sell a total of 93,000 electric cars per year by then. These low levels of market acceptance, they conclude, would make it very difficult for the automakers to recover up-front investment costs.

Source (Deloitte, PDF)

Nissan has been working hard to achieve positive publicity since they first began discussing the LEAF program.  By then the Volt had been in the spotlight for two years and they had a lot of catching up to do.

Nissan has repeatedly contended they would make a profit from selling the LEAF, which contrasted from GM’s admission that they wouldn’t profit from the first year or two of Volt sales. GM always said the Volt was an investment in the future where Gen 2 and beyond economies of scale and price reductions would make the car profitable. After all lithium-ion batteries are very expensive at today’s prices.

Nissan has now admitted they are in a similar position to GM.

According to a report in the Wall Street Journal, Nissan US sales and marketing cheif Brian Carolin said the LEAF also would lose money in its first two years.

“Over the course of the vehicle life, it is profitable—in year three,” he said.

The intial supply of LEAFs  for the first two years will be built in Japan.  That plant has an annual capacity of 50,000 cars, 20,000 of which will be shipped to the US.

In late 2012, Nissan will open its US-government funded Smyrna Tennessee LEAF plant that can build 150,000 cars per year.

It is at that volume when the cars will first turn a profit said Carolin.

According to Nissan USA director Mark Perry, the 24 kwh, 600 pound battery pack will cost less than $18,000 ($750 per kwh).  The packs will eventually be made in the US at a plant in Tennessee that will have an annual capacity of 200,000.

Nissan has an internal target of $9000 ($370 per kwh) for the pack which it hopes to achieve when US high volume production starts.

The caveat here is Nissan can thus only turn a profit if the cars can sell at the projected volumes.  Despite its low cost of $25,780 after the tax credit, and assuming no major gouging, concerns about range anxiety may hamper sales, especially if prospective buyers directly compare the car to the Volt and the flexibility it provides.

Though some will adjust their lifestyles to avoid using any gas at all cost, and they are to be commended, a larger segment of the population are more likely to consider EREVs for now.

Source (WSJ)