GM-VOLT : Chevy Volt Electric Car Site

 

2010 will end with the introduction of two eagerly anticipated electric cars, the GM Volt, and the Nissan Leaf.

Perhaps more eagerly awaited than the cars themselves is their MSRPs. More discussion, speculation, and innuendo have been applied to what these numbers will be than almost any other aspect of the vehicles.

The Volt’s final price remains unknown, and will not be revealed until at least May or perhaps later in the summer.  Estimates vary from low to high 30s before a $7500 tax credit.

Nissan has gone on record promising to reveal the Leaf’s official price in April when the company will begin taking $100 preorders. It is expected the car will be offered either as a full purchase or with a separate battery lease in the US.

A new report in the Mainichi Japan claims to have obtained the Leaf’s expected MSRP.

“The automaker has decided to set the sales price of its new model for the Japanese market below 4 million yen,” it is written.

4 million Japanese Yen currently converts to $44,300 USD .

Another version of the report indicates the car will range anywhere from 3.5 million yen to 4 million yen, thus putting the lower limit at $38,600.

Nissan plans to sell 500,000 units globally and 150,000 in the US by 2012.

“My understanding is the article out of Japan is speculative, and we have no comment,” Nissan spokesperson Catherine Zachary told GM-Volt.com. “We have yet to disclose Nissan LEAF pricing in the U.S. or in any global market.”

If the Leaf does go sale in the US for $40,000, that would place it in the same price range as the Volt is expected. Which car would you rather have for that money?

Source (Mainichi)

Electrification of the automobile is well underway, with the first mass produced cars expected to hit the roads later this year.

There have been many speculative reports about whether these cars will catch on and be sold in high volumes over the next few years.

These predictions hinge on cost to consumers, both for the cars and for gas.  Other than for early adopters, plug-in cars must offer better cost of operation than gas-powered cars to win in the marketplace.

The bulk of an electric vehicle’s cost, however, is the cost of its lithium-ion batteries.

Reports predicting low EV sales volumes often use $1000 per kwh as the price for lithium-ion batteries, but that is unrealisticly high and should no longer be used.

A new report issued by Deutsche Bank indicates prices that are considerably lower.  They write “we continue to believe that the market underestimates the potential for growth in this segment” and “we’ve noted evidence of steeper than-expected battery price declines which will likely bolster the consumer value proposition and potentially lead to stronger demand than we originally envisioned.”

The firm notes the average lithium-ion cell price in 2009 has been $650 per kwh, but claims automakers are already seeing bids for $450 per kwh from battery companies for delivery contracts in the 2011/2012 timeframe.

Furthermore, they predict an additional 25% decline in price over the next 5 years and a 50% decline over the next 10 years along with a doubling of performance over the next 7 years.

Previously LG Chem subsidiary Compact Power’s CEO Prabahkar Patil told GM-Volt he expected cell cost to drop up to four-fold in the next 10 years, and said lithium ion cells for non automotive applications is already $350 per kwh.

Furthermore, last March GM vice president Jon Lauckner stated GM is already paying “many hundreds of dollars per kWh,” less than $1000 for the Volt’s lithium ion cells.

If one considers the Volt has a 16 kwh lithium ion battery, at $450 per kwh its total cell cost would be $7200.

Fuel costs about 2 cents per mile using electricity, and about 10 cents per mile using gas. At $450 per kwh at today’s gas prices, after 90,000 miles of electric driving fuel savings will cover the added cost of the battery.

Source (Deutsche Bank, PDF)

Deja Vu.

Those were Bob Lutz’ words back in 2007 when he first stated GMs intention to sell the Chevy Volt comfortably below $30,000.

In the ensuing months and years we’ve been through a see-saw of predictions about how much people would eventually be able to buy the car for.

GM has not officially, and will not officially release a price until closer to launch.

Back in March of last year, GM VP Jon Lauckner stated “we won’t set the price of the Volt until 6 months prior to start of production.”

Although announcing the purchase process, Nissan has not announced the LEAF EV pricing either though claims it should cost around as much as a comparable gas sedan.

In the most recent twist of the Chevy Volt Price tale, volt vehicle line director Tony Posawatz responded to the question when pressed by Globe and Mail reporter Jeremy Cato.

“We have not priced it yet,” Posawatz said initially.

After being asked again he finally said that the real or effective cost to consumers “is easily less than $30,000.”

The figure used was US, not Canadian dollars.

Posawatz was not talking purely about MSRP but net effective cost including the $7500 US tax credit given to consumers who will purchase a Volt.

“The reference was accounting for the US tax credits and effective savings in electricity and other benefits,” Posawatz told GM-Volt.  ”It was a comparative statistic, not an exact number, to position the VOLT as a bit more expensive than an equivalent compact car.”

Source (Globe and Mail)

How often has the car buying public been subjected to a headline like “Big Auto Company Introduces it Fabulous Concept Electric Show Car With 22″ Wheels…That Is Coming Soon-ish,” only to have that be the last word we ever hear on it? Fifty? A Hundred Times?

Personally, when I spot a new concept EV, I think to myself, ‘it looks like somebody had a couple thousand pounds of modelling clay getting old somewhere and this is the end result. Or perhaps there was just too many design interns last summer, and they didn’t know how to keep them all busy.’

I doubt the thought of, ‘I wonder what the demand for this car will be once they start producing it,’ crosses many people’s minds. That is of course until recently.

With GM currently ramping up for production of the Volt at its Hamtramck facility in Michigan, and Nissan on the cusp of actually taking orders in a few weeks, we can now focus somewhat on the acceptance of electric vehicles themselves once they hit the market.

Given the Volt’s very low initial production levels (8,000-10,000 for the first year), it is assured that it will be a virtual sell-out heading into 2012. But what happens when full line utilization is reached?

GM hopes to be producing 50,000-60,000 copies a year starting sometime in 2012. Looking even further out to 2015, Bob Lutz (GM’s vice chairman) predicted that the total market for the plug-in vehicles “will reach 250,000-300,000 units annually,” and added “they will mostly be our products.” /that is a lot of Volts Bob.

These are lofty goals, but are they reasonable?

Brent Dewar, while having his ‘cup of tea’ as head of Chevrolet, put it pretty succinctly, “There definitely is demand. We just need to get the cost and infrastructure in balance. Our biggest problem (right now) is infrastructure.” Brent ‘elected to retire’ a few days after making this statement, so we never got a chance for him to expound on just what he saw ongoing demand for the Volt to be…and new boss James Campbell seems to have his hands full catching up with the demands of Volt’s roll out to be making his own predictions at this point. /fortunately I have all the time in the world to do some armchair quarterbacking

For the Volt to achieve a level of 60,000 units per year in 2012, GM would have to sell 5,000/month. To achieve Lutz’s goal of more than half of his estimated plug in market for 2015, GM would have to sell 12,500 copies per month in five years time.

Demand will come from one of three main areas:
-existing customers currently buying vehicles at a similar price point
-current hybrid/eco sensitive buyers
-price trade ups in the same size (middle/compact) class

Existing High End Customers (Luxury/Sedans Over 30K)
This segment is the playground of the more affluent among us. According to NADA (National Automobile Dealer’s Association), 1 in every 13 cars sold in January (7.8%) were in the luxury car segment. More specifically than that, there was 46,000+ 4 door sedans sold in the month that had a starting MSRP of over $30,000 (only 7,000 of which were domestics). At a $40,000 price tag, that number drops to under 15,000. The Volt with a estimated MSRP around $40,000 (pre-rebate) would seem likely to take a portion of this segment.

The most likely casualty from the arrival of the Volt in this niche would probably be the Nissan Maxima, which tips the scales starting at $30,460. (The Maxima also sells the most of any non series/class car priced at this level, with 4,016 units sold last month)

Hybrid/Eco Customers

While this is the smallest of the three groups, statistically the Volt stands to gain the most ground as a percentage here by far. The hybrid group is growing at a year over year rate of almost 30%, and adding electric vehicles into the mix will only expand it further. (Last month there were 14,511 hybrid passenger cars sold compared to 11,221 the year previous)

While it is hard to judge at this point whether the Prius’ numbers (8,484 units sold in January) will take a direct hit from the Volt, it would seem likely that its sibling, the Lexus HS 250h (think suped up Prius with a trunk) will certainly lose some business to Chevy’s extended range car. The hybrid Lexus sold a not insignificant (considering the base price point of $34,650) 1,247 units. That was good for 3rd spot on the hybrid best sellers list. (156 ahead of the Fusion)

The Sell-Up
This is the wild card, and where ultimately the future success or failure of the Volt will be judged. The willingness of a customer to expand their price range to make the massive jump into MSRPs that start with a 3. This is where the Volt’s eventual MSRP and the government rebate ($7,500) really comes into play. At a pre-rebate starting price of $40,000, you are not likely to convert a lot of Honda Accord/Toyota Corolla buyers…but at $35,000, many will choose Volt over traditional best sellers.

The most likely casualty of the Volt’s success in this category, would be GM’s own Chevy Malibu/Impala. (Which I’m sure they would be ok with in the long run)

So What Is the Secret to Demand?
No secrets here at all. Even Brent Dewar knew it in his short stay at the top of the Chevrolet pecking order; GM has to “get the cost in balance with the market.”

With gas prices hovering at $2.60 nationally, the economy not going so well, and Nissan now threatening to make good on the rumor to set the price of the Leaf in the mid 20s after rebate, (“…we promise there will be a “wow” factor with how affordable it is!”) GM will have to do a lot better than $39,999 to sell at the volumes they are looking for.

Hopefully with the benefit of scale, good engineering, and falling battery prices, GM can find a way to get to market with a MSRP in the mid 30s and be a leader in this new segment. But then again…maybe they really don’t want to be. Maybe selling 2,000 Volts a month plus a few hundred even more pricey Volt-based EREVs is good enough for them. /I hope not

There is no debate that GM is years ahead of the competition in getting a extended range EV to market. The platform’s advantages are obvious. Hopefully, GM management doesn’t use this opportunity for short term gain by over pricing a handful of cars (relatively speaking) in lieu of owning a big piece of the future of the automobile.

(My own ‘guesstimate’ for ongoing sales (post initial demand) for the Volt follows below)

In the first IPO of an automaker since Ford went public in 1956, Telsa Motors has filed with the SEC an application to sell shares to the public and become a publicly traded company.

This is seen as a victory of sorts for the Silicon Valley start-up company that has been plagued with difficulties, controversies and delays. It is another landmark on the path to electrification of the automobile for the company that Bob Lutz admits inspired the Volt concept. Its CEO Elon Musk, billionaire founder of PayPal is not one to give up, and he has been pushing for this event for some time.

The timing of the IPO is not specified but is expected to raise $100 million dollar or more for the sale of shares.  Telsa has already received $465 million in goverment loans for the building of its Model S sedan assembly plant and a powertrain plant.

In the filing Tesla, has indicated it has sold 937 Roadsters for $109,000 each.  In the first three quarters of last year the company lost $31 million on revenue of $93 million.

The company warns that revenue is likely to become lower until 2012 when the Model S Pure EV goes into production.  The car was initially projected to go on sale in 2011, but was moved back. There are 2000 people who have put down $5000 deposits for it. Tesla will also acutally be ending the production of its current 2-seat Roadster in 2011, for which there are only 220 more backorders. A replacement isn’t due until 2013.

The filing also contains an easter-egg of sorts for current Tesla owners.  They will be considered “friends and family” of Tesla which means they will be permitted the option of purchasing shares of the company at its inital price prior to entering the secondary public market. This is a way for Tesla to extend their appreciation to their loyal early customers.

This year is also expected to potentially bring the IPO of the new GM.

Risks or rewards.  Will you buy these companies’ shares?

(Read Prospectus)

Interim CEO Ed Whitacre announced today that he was going to continue permanently is his position as Chairman and CEO of General Motors, and that a search for a new leader was being called off.

“The board of directors asked if I would be willing to stay on at GM and help continue the company’s road back to success,” Whitacre said. “Having spent the past few months learning the business, meeting with our employees, customers and dealers, and working with the GM leadership team, I was both honored and pleased to accept this role. This is a great company with an even greater future, and I want to be part of it.”

Whitacre noted his motivation for staying was “not for a personal benefit for me, but more an act partly of “public service.”

“I think this company is good for America,” he said.

He also indicated he was optimistic about the company’s future, profitability, and ability to pay back government debt.

“We’ve made significant progress in the past couple of months, so much so that I can confirm with certainty that we will pay back in full the U.S. Treasury and Canadian and Ontario government loans by June,” Whitacre said. “This represents a significant milestone in our journey back to being a profitable and viable company.”

Whitacre was initially coaxed into taking the position of Chairman of the Board after bankruptcy re-organization of GM by the government. He assumed the CEO role after Fritz Henderson was ousted in December.