Archive for the ‘Marketing’ Category

 

Feb 15

Lutz: Hybrids and EVs Won’t Surpass 10% of US Market Share For 10 Years

 

Outspoken GM vice chairman Bob Lutz turned 78 on Friday and as usual had something to say when he met with reporters in Florida.

He admitted that GM loses and will always continue to lose money on hybrids, including it seems the Volt when it comes to market.

“GM will lose money on hybrids,” he told reporters. “We will continue to build them–they are required by (Corporate Average Fuel Economy regulations)–and the cost will be spread across other cars.”

Lutz also doesn’t think hybrids will ever obtain much market share, blaming their very existence on corporate fuel economy requirements.

“We may see up to 10%, but a lot of it will be driven by fuel-economy regulations,” he said.

I reached out to Mr. Lutz for confirmation and he clarified he was specifically referring to hybrids, PHEVs like the Volt, and pure EVs.

“For the next 10 years, that’s the way we see it!” he replied.  ”That would would be over 1.2 million units per year; at today’s price premium for plug-ins, that’s even an optimistic estimate, I think.”

“If it turns out to be more,” he added.  ”We’re better prepared than anyone else!”

Lutz also went on to declare Toyota having lost its edge due to its recent massive recall of 8 million cars including 270,000 2010 Prius hybrids.

“With one of our competitors that the positive halo is gone, or fading,” he said but added the opposite is true for GM.  ”In our case, the negativism is fading.”

People used to say “only Toyota knows how to do environmentally friendly cars,” said Lutz. “The Volt was one way to change perceptions about Chevrolet and in a larger sense, GM by leapfrogging the then-viewed technology leader, which was Toyota.”

Lutz confirmed GM’s plans to produce 8,000 to 10,000 Volts by the end of 2011, increasing to 50,000 to 60,000 per year as the market demands.

He said a price of near $40,000 before a $7500 federal tax credit was a ” good working figure” but would not confirm it.

Source (Dow Jones) and (Reuters)

 

Jan 25

Washington DC Chosen as Initial Volt Launch Market

 

Chevy Volt in Washington DC Shopping Mall

Today General Motors announced that Washington DC will join California and Michigan as an initial market for Chevrolet Volt rollout.  The rollout region will include the nation’s capital and its suburbs.

“Concentrating Volt sales in these three key initial markets allows us to give our first customers a high-quality experience,” said Jim Campbell, Chevrolet general manager. “In addition to geographical considerations, each market also has progressive local and state government leaders and utility partners who are crucial in bringing electric vehicles to market.”

GM has also developed an agreement with DC utility companies Pepco and Dominian to take delivery Chevy Volt fleet test vehicles.  These vehicles will join a total fleet of 100 cars nationwide that will remain in the hands of utility companies for a demonstration and learning project funded by a $30 million DOE grant.

GM also reports they have tested the 80 pre-production Volts on over 250,000 test miles, and that some of those cars are in 24 hour/7 day per week operation.  Cars have been tested in the extreme heat of  Death Valley and the extreme cold of northern Canada.  300 pre-production battery packs have already been built.

GM has not confirmed if these three markets are the only initial ones which will be announced, nor how many cars will be allocated to each through the end of this year.  There are reports that the company hopes to begin rollout even sooner than the projected November deadline.

‘We could announce additional retail markets later,’ said GM spokesperson Dave Darovitz.

Pricing has also not been announced, though the GM Chairman and CEO Ed Whitacre recently told GM-Volt.com it would be in the “low 30s,” without specifically referring to the $7500 tax credit.

It is expected Mr. Whitacre will be named permanent CEO of GM today.

 

Jan 17

Will New York City be an Initial Volt Market? They’re Ready!

 

I am a lifelong new Yorker, born in the Bronx.  It is important to me for my state and city to play a leading role in our country’s exodus from the gasoline-powered automobile.

Part of my effort has been to meet with utility company and government officials to help find and promote ways to encourage the adoption of electric vehicles.

In December I attended a stakeholder meeting at Con Edison (NYC’s utility co) headquarters in Manhattan which was coordinated by Britta Gross, GMs director of infrastructure.  The intention of the inaugural meeting was to see what is needed to get New York City ready for plugin vehicles.

Earlier this week a report was issued by Mayor Bloomberg’s office as part of what is known as the PlaNYC initiative to reduce greenhouse gas emissions by 60% by 2030 and ensure a sustainable city.  The report looked specifically about how electric vehicles would be adopted by New York City.  It was created by McKinsey and Company.

There were 6 major findings:

1.  There is a large early adopter group in NYC who are willing to making lifestyle changes to be able to own electric cars

2.  The early adopters’ demand will outstrip supply for at least 5 years.  14 to 16% of all new vehicle purchases in NYC from 2010 to 2015 are expected to be electric cars.

3.  Policies should be developed to help early adopters enter the market

4.  Early adopters will not require high density public charging nor special tax incentives

5.  The expected level of EV adoption will not threaten the stability of NYC’s electric grid, as the early adopters expect to charge at night

6.  Automakers and utilities have an opportunity to prepare for and  enourgage EV adoption over the next 5 years.

For those that like math, 16% of all cars purchased by New York City amounts to 70,000 electric cars over the next 5 years.

It looks like New York is ready for the Volt, is GM ready for us?

[NYC Electric Vehicle Adoption Study 2010, PDF]

 

Jan 10

Breaking: Volt May Launch Before November in California, Detroit, and Washington DC

 

For over two years GM has held to its plan for launching the Chevy Volt in November of this year. But there have been a lot of changes since then including the surprise seizure of the CEO position by Ed Whitacre. Whitacre spoke to the Detroit Press about the Chevy Volt and his eagerness to get the car into consumers hands.

“I wish it were on the market today,” he said. “We’re going to push as hard as we can to get this vehicle out there. It’s a complicated process.”

Whitacre also said he expected the car to cost consumers $32,000 after tax breaks.

He suggested a significant motivation for building the Volt at least in his eyes, is for the environment.

“This is a bold journey for us. We want to do this for the environment. … We think this is part of the future for us,” he told the reporter. “We’re putting a lot at risk here, but we’re going to do it.”

Earlier reports suggested that Whitacre and the board have been pushing to beginning selling the Volt earlier than the long cited November timeframe, as long as quality measures can be achieved.

The new goal according to anonymous sources: late September or October.

Whitacre has also been surprised by what its like driving the Volt

“I was prepared for something like a golf cart. This is no golf cart,” he told the Press. “This is very powerful, a lot of acceleration, it feels really solid and it goes fast. It’s a very impressive car.”

The first three markets the Volt will be sold have now been revealed.

“The first markets that we anticiapte retail sales will be California and Michigan,” Lauckner told Autoline Detroit last week.

According to the Detroit Press the third region will be Washington DC.

Source (Detroit Free Press)

 

Jan 09

Study Finds Cost Will Limit Electric Car Adoption

 

As we sit here on the verge of an autmotive revolution, a significant amount of uncertainty remains.

Early adopters want electric cars here and now, and are willing to pay more to get them, but how large the market will eventually be, and how fast it will grow is unknown.

It is this uncertainty and lack of concensus that keeps automakers guessgin.  It is a large part of why GM cannot project what ultimate Volt sales volumes will be or how many different EREV models they should build.

A new study follows others in painting a more pessimistic picture.

The Boston Consulting Group released a report earlier thus week which concludes without a battery breakthrough, lithium ion battery costs will limit widespread adoption of electric cars through the next decade.

The study claims that automakers are basing their sales projections on being able to acheive a cost of $250per kwh for lithium ion cells.  They argue that although those prices have been achieved in the consumer electronics segment, the complexity of car batteries makes it untenable.

They report current electric car battery cost as being from $1000 – $1200 per kwh, and that in addition to complexity, longevity requirements and the needed technology and redundancy to obtain them will stricly limit ability to reduce cost.

“Given current technology options, we see substantial challenges to achieving this goal by 2020,” said Xavier Mosquet, Detroit-based leader of BCG’s global automotive practice and a coauthor of the study. “For years, people have been saying that one of the keys to reducing our dependency on fossil fuels is the electrification of the vehicle fleet. The reality is, electric-car batteries are both too expensive and too technologically limited for this to happen in the foreseeable future.”

BCG still expects about 26% of global auto sales to be electrics and hybrids by 2020, or 14 million cars.  Of this group, they project, 1.5 million will be fully electric, 1.5 million will be range extenders, and 11 million will be a mix of hybrids.  Seventy percent will use lithium-ion technology.

They warn, however, that by 2020 a 15kwh pack in an EREV would still effectively cost consumers $8000 to $10000 per vehicle, making those cars more expensive than their ICE counterparts, thereby limiting demand.

It is expected that the early EV market will be driven by early adopters and tax credits but by 2020, the total cost of ownership versus ICE cars will determine the market size.  If there is a low cost battery breakthough, or if gas prices rise substantially the market could improve.

Source (BCG, pdf)

 

Jan 05

Could the Volt Flop?

 

One of the main missions of this site is to spread the message about the Chevy Volt, initially to get it built, and now to help make it a success. It is our goal to begin the process of weaning this country off of oil. A mainstream car with broad appeal and utility that runs without gasoline for most daily needs is a critical first step.

Not everyone it seems agrees.

Intermittently various pundits suggest the Volt will actually turn out to be a flop.

The idea was most recently revisited in a report on a site called VentureBeat and later amplified by Autoblog.

The report was ostensibly about predictions for 2010.  Venture Beat is a popular tech-oriented site and the story included predictions such as Twitter selling ads and Google’s continued success, as examples.

The Volt, however, was predicted to fail.  ”It seems like it’s more poised to fizzle out than become a wild success,” the author wrote.

The reasons she gave was:

1)  That the public would be disappointed with the car’s true efficiency, and that the famous 230 number would turn out to be misleading.

2)  That the Volt’s lithium batteries would already be “out-of-date” when the car arrives.

3)  The car would be priced too high for sigificant sales.  The author thinks GM’s unpopularity combined with the poor state of the economy might make even the 50,000 sales pet year target unreachable.

The author even went so far as to predict the Volt’s failure would lead to failure by association for all EV’s including the Nissan Leaf, and future Tesla and Fisker offerings.

So who is the Camille Ricketts who made these predictions?

She is a “the lead writer for GreenBeat, “previously worked at Google” and “before that was a reporter for the Wall Street Journal.”

Could she be right and we all be wrong?  Nah.

Source (Venture Beat)