Chevy Volt Production Suspended
GM's big gamble on the future, the Chevy Volt, isn't yet paying off.
GM’s big gamble on the future, the Chevy Volt, isn’t yet paying off.
Detroit Free Press (“Volt production on hold for 5 weeks“):
General Motors has told 1,300 employees at its Detroit Hamtramck that they will be temporarily laid off for five weeks as the company halts production of the Chevrolet Volt and its European counterpart, the Opel Ampera.
“Even with sales up in February over January, we are still seeking to align our production with demand,” said GM spokesman Chris Lee. Lee said employees were told Thursday that production would put on hold from March 19 to April 23.
The Chevrolet Volt, an extended-range electric car, is both a political lightning rod and a symbol of the company’s technological capability.
Chevrolet sold 1,023 Volts in the U.S. in February and has sold 1,626 so far this year. In 2011, Chevrolet sold 7,671 Volts, but fell short of its initial goal of 10,000. GM had planned to expand production of its Volt plug-in hybrid to 60,000 this year, with 45,000 earmarked for the U.S.
Last fall, the GM and the National Highway Traffic Safety Administration spent several weeks trying to explain why two Volts whose batteries were punctured caught on fire after sitting around for at least a week. NHTSA determined that the range-extended electric Volt is as safe as any gasoline-powered vehicle on the road.
The politics of this are quite odd. One would think the concept of an American-made car that can run without gasoline imported from the Middle East or Venezuela would be universally cheered. But the sense that the car is being heavily pushed by the federal government (read: the Obama administration) and the impracticality of a too expensive car that’s useful, because of its extremely limited range, only as a daily commuter has made it quite controversial.
This is a classic Catch-22 situation. Something like this will be successful only if the price comes way down (It’s currently for an absurd $41,000 in the US) and that can only happen with huge economies of scale–which can only happen if people buy the car in droves. In that light, Chevy’s marketing slogan, “Somebody has to be first,” takes on an unintended meaning.
$41,000??
Bleagh….
@Mark Ivey: You can get a 370Z for close to that.
Yes right Jim….they’re betting the ranch. They sold 7500 last year out of total sales of around 3.25 million and about 1,300 people are employed making them. The entire future of GM hangs in the balance. It’s one product utilising a new technology which might turn into a big winner and might not. For an intelligent man you show an astonishing lack of perspective at times.
Nice to see Guthrum here with his tin hat and magnets. Be nice to the orderlies Guthrum!!
This is a good illustration why the government, if we are to develop alternative sources of energy, must push them in order to level the plying field. Eliminate direct and indirect subsidies to fossil fuels and vehicles like the Volt and the Nissan Leaf become viable. But failing that something else has to push these alternatives past the tipping point that James describes. I’m in conditional agreement with the “government shouldn’t choose winners and losers” argument. The problem is tha government already chose fossil fuels as a winner…but in the 21st century it is a loser and we need to transition. That most likely means subsidizing both for a while.
But the implication is even though it is never said directly that “green jobs” are doing to make up for the 1,000,000 jobs that are going to be lost in the defense section, the 500K jobs lost in health care, and the untold number of jobs lost in the oil and gas industry. And that does not even count the number of jobs that are going to be lost in the financial sector once the government starts having to approve (indirectly) all loans.
Maybe everyone should just admit that green jobs are a mirage and will employ few people.
One solution would be to create an energy research center or park, similar to medical and tech parks. This would bring the best scientists, engineers, inventors, mechanics together to develop new types of car engines and other technology. This could be funded by people like Bill Gates, Buffet, Trump, etc. It would be free from overbearing corporate boards and the maze of government bureaucracies and regulations. In two years or less, we could have alternatives to the gasoline engine that would include realistic electric motors, hydrogen power, or other sources that we have not even dreamed of.
@Hey Norm:
I have no problem ending subsidies for coal and oil. Only thing I ask is to make sure the playing field is truely level by ending them for wind, biomass, solar, etc. No government money, tax credits, etc for anything. If they’re viable then they can survive on their own.
James…
Your comment about the Z car…(I have an 83 with over 200k miles)….hints at an important issue. We are Americans and to Americans cars are more than a utensil for getting from point a to point b. It is not until these cars can be made interesting…whether it is the performance of a sports car or the brute force of a pick-up…that Americans will really become interested. That’s where hot-rodders like Neil Young and his LinVolt project or Mothers and their propane development come in. The Tesla is pretty cool…but at what cost?
@tps: I certainly agree – in many cases, government is the problem.
@ tps…
Do that and alternative technologies win today.
But it’s critical to end both direct and indirect subsidies. We spend unfathomable amounts of money to support fossil fuels that don’t show up on books. For instance healt care costs related to pollution caused by burning fossil fuels.
We could stop subsidizing oil and pay for road infrastructure with a massive raise in taxes on gas like most industrialized countries do. Then suddenly Americans would like high gas mileage vehicles.
@tps:
The only problem with this theory is that just about every major technology from the railways to the internet was dependant on government support. Even the auto industry was entirely dependant on government investment in the development of highway systems that were capable of carrying internal combustion engined traffic. These nice heart warming and simplistic hymns to the natural creation and development of technologies just don’t accord with reality.
@lomax:
After all the auto companies are investing nothing in this at present and know nothing about making automobiles….and are in any case stifled by government regulations.
Except for a Volt which would have a hard time taking you across Los Angeles and back without an overnight stay. Not to mention, they are much like driving a car with less than an 1/8th of a tank of gas, your constant nag is if you’ll make it before you run out.
@JKB: One great car is the Tesla – electric, powerful, and very attractive. Now that is what we are looking for.
@JKB:
Except the current auto engine didn’t look like this 100 years ago. These technologies are in their infancy. The Volt is a glorified experiment at this stage despite the endless banging on about it by the right who are trying to demonise an alternative technology. Even JJ uses nonsensical exaggerations about it’s importance
It’s a very small wager on an alternative technology to the ICE. That’s it. If it wasn’t wrapped up with energy politics no one would be paying the slightest attention to it.
@Brummagem Joe: I’m not arguing that GM is hanging in the balance here. But this is their biggest investment in their future. They spent, what, six years on this? Presumably billions in R&D and startup costs? The fact that they’re selling at a niche level is problematic.
An electric plug-in simply doesn’t work for me or for the vast majority of Americans.
Until apartment buildings — or municipalities — provide recharging stations, those who live in apartments have no way of charging their vehicles. Three hundred-foot extension cords don’t seem a likely solution.
While most of my driving could be accomplished with an electric, not all of it can be. I make several 2K mile round trips per year and having to overnight every 300-400 miles doesn’t work at all. If I had a commute of 100+ miles per day — say, Frederickburg or Baltimore suburbs to DC and back — there’s just no way I’d hazard the trip in a car that might run out of power.
@John Burgess:
Image what would happen during a snow storm or if a tractor-trailer turns over in the middle of I-95. All of the volts will run out of battery power before getting home. And you just cannot add a little gas to get them to the next exist so that they can fill up.
Also, image what happens to the grid if everyone comes home in the even and plugs their car in.
@lomax: Just don’t drain the battery or it is a brick.
@Brummagem Joe: A hundred years ago, every improvement of the ICE offered more freedom not less. Now, the EV offers less for the money, that’s a bigger hurdle to overcome. Plus, the EVs of 100 years ago had the same range as the EVs today, now that’s progress. Granted, the modern EVs must provide comforts such as a/c, heat, radio, etc.
Now the real PR moment will be the dead EVs strewn over the freeway from a big traffic jam in August or in a hurricane evac. Or how about stuck in the snow out in the national forest?
The fact of the matter is, currently, the EV is a step backwards in transportation technology. It permits less travel at slower speeds at a higher cost and increases downtime for refueling. Perhaps someday EVs will be an advancement in transportation or perhaps the economy will decline from high oil prices causing humans to re-pool in dense urban cores but then you won’t need a car. Or perhaps EVs will remain toy technology providing hours of entertainment to the wealthy and elite but not feasible for those of modest means.
@James Joyner:
They probably invested as much in developing and promoting the Saturn product. And it’s not in the least problematic. It’s a completely new technology for which real infrastructure exists. You’d have be fairly stupid to attempt to sell it as a volume product from day one.
@Brummagem Joe:
for which real infrastructure exists. ….for which no real infrastructure exists.
@Brummagem Joe:
Actually the horse, railways and streetcars were undoubtedly much more reliable means of transport in 1895 than the auto. .
Uh, boys, the Volt has an on-board generator. It’s range is 379 miles.
“a too expensive car that’s useful, because of its extremely limited range, only as a daily commuter has made it quite controversial.”
“Just don’t drain the battery or it is a brick.”
“All of the volts will run out of battery power before getting home. ”
Do people still not understand how a Volt works? Really? It has the exact same range as any other car with a gasoline engine. I guess this is a failure of GM’s marketing to some degree, but you folks complaining about it really don’t know a thing about the car.
@John Burgess:
The same could have been said of aeroplanes as recently 60 or 70 years ago
Exactly… no infrastructure exists. But JJ against this background finds it problematic that at this stage GM are selling it as a niche product.
@Andy:
Except that GM aren’t mass marketing the Volt. As I pointed out above this is essentially a glorified experiment at this stage. The reason all these wise men are pontificating through their hats has everything to do with politics and nothing to do with auto technology.
@Brummagem Joe:
I agree completely.
Toyota took loses for 4 years on their hybrids. This is standard for new product development with advanced technology.
Hybrids and plug-in hybrids are something that liberals like and so conservatives hate them. It’s as simple as that.
Problematic for whom? Our society has known about the downside of imported oil and being locked in to low mileage internal combustion engines for almost 40 years. Our response to this iceberg looming in the path of our country? SUVs…
@Andy:
Well I expect that from some people but not those with some reasoning capacity even if they don’t have much idea about the economics of the auto industry. Ford for godsake paid six billion dollars for Jaguar Land Rover and sold it ten years later for less than a third of that. Including carrying costs and investment in the product they essentially lost their entire investment.
Why do Republicans hate R&D? I just don’t get it. God (and Exxon) forbid we should try and figure out how to get out of the oil box.
We spent a ton of money going to the moon. Putting the political benefits aside, it’s easy to argue all we got was some rocks. Well, we also get the Apollo guidance computer. Much of modern computing flows from that point. The money was well spent.
On this, no:
You should have talked to a scientist or an engineer. He would have explained that there are actually technological limits right now. Actually there is one important limit, in battery technology. This is not the sort of “manufacturing problem” that economies of scale can correct.
Batteries are measured in their KWH(kilowatts/hour) capacity. With current tech, a KWH costs what it costs (something like $1000 per KWH) and will be in that range until some truly new invention comes along.
You can figure the battery impact on the price of any hybrid by looking at its battery size:
Toyota Prius: 1.5 KWH
Honda Civic Hytbred 1.0 KWH
Chevy Volt 16.0 KHW
Why does the Volt cost $41K versus the Honda and Toyota coming in at around $22K? It’s the battery cost. It is directly visible.
Now, we knew all this before the Chevy Volt was launched. We knew because there were hobbyists and university students who were adding $10,000 worth of batteries to a Prius to make it a Plug-in in what would later be the Volt class.
As much as they triumphed their achievement (it wasn’t really much, the electronics and controls on the Prius remained the same, they really just shoved in more batteries) all they really demonstrated was the cost.
So, the Volt was stupid from the beginning. Current technology does not justify a 16KWH hybrid. Chevy should have shot for the same sweet-spot that Honda and Toyota exploit. They use about 1KWH of battery to get you 50 honest MPG.
Just to emphasize all that “VOLT R&D”, there wasn’t any. This project was essentially a Volt before the Volt was launched:
How CalCars Green-Tuned an ’04 Prius into a PRIUS+ Plug-In Hybrid!
Remember, the Volt made production in 2010.
Another way to summarize:
As engineers we design with the materials at hand. We do not design based on the strength we wish steel had, we use the actual value.
We should not design a car based on what we wish batteries cost, we should use the actual value.
(And sure, we should research the hell out of cheaper alternatives … you just don’t design the car on the wish.)
@john personna: I’ve at least vaguely familiar with the battery production issue; Dave Schuler has harped on that one quite a bit over the years. I’m just saying that there’s never going to be a huge market for a limited range car unless the costs become competitive.
@anjin-san: I like R&D! I just recognize that it can be expensive and that the idea is to recoup it with eventual sales of product.
@James Joyner:
OK. FWIW, the Volt is not a limited range car though. It is a hybrid with different trade-offs. You can drive it as far as you want, adding gasoline as needed.
The Nissan Leaf on the other hand is a limited range vehicle. It’s battery capacity of 24 KHW means that (by my estimate) it should have $24K of battery cost built in. With a MSRP of $35K that’s reasonable. What they’ve done is double-down on battery and save by dropping the gasoline engine and all associated costs.
Without tax credits I personally would not call the Leaf an appropriate solution either … but as I understand it the government will help you get down to $27.7K, which might be reasonable for a second or third family car.
Otherwise, for current tech, a 4 cyl engine, with ~1KWH hybrid assist is the sweet spot.
@James Joyner:
So what I’m really saying is don’t say “a limited range car” or other euphemism. There is not a market for “badly designed cars.”
GM is pushing the meme that they need economies of scale or whatever other bullshit, but they are covering at this point for a bad car.
Of course. But there are no sure things. Products fail constantly.
There is also the possibility that the R&D investment in the Volt will pay downstream/unexpected benefits. In the big picture, the money that was spent on the Volt, indeed the entire cost of the auto industry bailout, is trivial.
Unless we want to stay in the oil trap, we have to get serious about alternative engine technology, mass transit, or both. The majority of Republicans seem happy to trust the future to Exxon/Chevron, and magic drilling ponies.
@john personna:
Of course GM has no scientists, engineers or technologists.
Would you like to provide a link to where GM is making such claims?
@Brummagem Joe:
You apparently want another argument, but I can’t make heads nor tails what you are arguing about.
My difference with James was that his “generic” argument about economies of scale and cost was not applicable to the Chevy Volt in specifics.
All hybrid manufacturers face the same battery cost issue, and if they are not dumb, they design a car to match that price structure.
Of course GM trots out a lot of R&D bullshit in its marketing, and especially for the Volt, but that is pretty much standard operating procedure for any manufacturing company:
2011 Automobile of the Year: Chevrolet Volt
Here is another example, from Edumnds, of a wrong-headed “generic” argument:
Or, it was a dumb thing to build.
@john personna:
I’m not arguing and in fact I totally broadly with your comments about JJ’s and other’s misrepresenting of the technology and the positioning of the various products. It was the “ask an engineer” comment as if GM isn’t asking engineers every day of the week and your claim that GM has said the techological limitations of the Volt could be cured by volume production .I’m quite sure they haven’t because it would be a very dumb thing to say. The Volt may be a dead end but even if it is it’s hardly fatal for GM or the development of vehicle technologies.
@Brummagem Joe:
and in fact I
totally broadly….broadly agree@Brummagem Joe:
Heh. I’ve been an engineer. There are all sorts of questions management is careful not to ask us.
As I say, CalCars laid out the cost and realities very early on. GM engineers, if they were asked, probably said “with $X per KHW batteries, you can hit $Y MSRP.” And then management … well we know they were really hoping for lower cost batteries. They even PR’d some joint ventures with jokers(*) who promised revolutions. But again, you design the car with the materials you have.
* – I remember a TV interview with a “charismatic” individual. Googling now I can’t see him, but I see GM doing battery partnerships world-wide. That’s as they should do, but it’s a little late for the Volt.
Contrast to Toyota’s strategy, to resize and offer plug-in options on their hybrids only after needed battery tech hits the right price-point.
@john personna:
This may or may not be true but is hardly compelling evidence that GM management aren’t asking tough questions of their engineers about an entirely new technology.
No doubt the folks at Google or Zuckerberg were considered jokers at one time.
@Brummagem Joe:
Here are some engineers talking to GM management:
That from Wikipedia
They are saying that GM was told of the battery problem, of the PHEV vs HEV tradeoff, and waved hands in response.
If Volt batteries really do cost “many hundreds of dollars” less than $1000, we should see it in a lower retail price.
@john personna:
Okay according to you the current management of GM are bunch of idiots who don’t know their ass from their elbow when it comes to developing new technologies and introducing new products. After all Wikipedia told you and they are privy to the entire decision making process at GM. You’re welcome to that assumption but I don’t find it persuasive. Sorry.
@Brummagem Joe:
There were well-known constraints. That’s documented a number of ways. There was that CalCars Prius+, there was that Presidential Task Force on the Auto Industry, there was that Carnegie Mellon University study.
Why would you say “according to you?”
Is it because you are stuck in a stupid position and don’t know when to back off?
You know, you sometimes (even often) make sensible arguments, but you’ve got this real problem that when you are in a hole, you keep digging.
As an aside, the history of the Volt is that it was an auto show “design car” that caught fire in the public imagination. They wanted the cardboard promise, and GM management said “ah .. sure we can do that”
I’m sure they told their engineers at that point to “make it happen.”
Sometimes that works, but there is a bit of an art to asking your engineers for the impossible. You can only really ask for the possible, impossible.
All of the discussion and arguments show the problems of working through the government bureacracy or some corporate structure.
James, this displays a stunning ignorance of our energy consumption. Does the Middle East or Venezuela even make up the top five of our oil imports? Or do the origins of oil imports really make a difference at all in a global commodities market?
@Davebo: Aside from the Israel issue, almost our entire Middle East policy is governed by oil. As you say, it’s a global market so the fact that a handful of MENA countries produce most of the oil is relevant even if we don’t import it directly. But, actually, we do:
Saudi Arabia is 2nd and Venezuala 4th on our list of import nations. Further, with the notable exceptions of Canada and Brazil, all of the countries on the list are rather problematic.
@above:
Someone objected to “dumb.” Let me illustrate with a quick 5 year total cost of ownership comparison. Assume that insurance and repairs for a Prius and Volt are the same. That does not favor the Prius, which has a low insurance and repair record by this point, but that’s fine.
The Volt gets an impressive 150 mpg in real-world conditions. The Prius only gets 50.
Assume five years at $5 per gallon, driving 16,000 miles per year:
Prius 23,000 purchase plus 8000 fuel cost equals a 5 year TCO of 31,000
Volt 41,000 purchase plus the much lower 2667 fuel cost still equals 44,667
You gotta really like running on battery, and not going to gas stations, for it to be worth 13,667 dollars to you.
@John Burgess:
In my way of thinking, if you have a commute of more than about 20 miles per day, you’re living in the wrong location.
@Franklin:
It really depends. I’d have never considered it years ago. But it’s commonplace in major metropolitan areas. And it’s doubly hard to avoid in dual-career households.
When my late wife and I bought our house in 2006, she was working 15 minutes away and I was working from home. I subsequently took a job in downtown DC that’s maybe 17 miles away but 45-60 minutes one way. We weren’t going to move based on my new job.
In the DC area, in particular, a lot of people change jobs frequently and will go from working in DC’s Virginia suburbs to its Maryland suburbs. Or, I know one couple where the husband works in Old Town Alexandria, VA and the wife works in Baltimore, MD. They live near Annapolis, MD, splitting the difference.
And that’s to say nothing of the fact that, in major metro areas, people routinely live well away from their work in order to afford a decent home or to live in a decent school district.
@john personna: You forgot a few hidden costs:
You have to have a home of your own, or an understanding landlord.
You have to have a garage wired for electricity.
You have to plan meticulously for long trips of up to 100 miles.
You have to worry about your battery being depleted if you go on a prolonged trip away from a charger.
You have to remember that most of the energy used by your car comes from burning coal.
You have to worry about driving on roads supported largely by taxes on gasoline, and you’re “robbing” the government by using the roads without paying that tax.
I got no problems with anyone who wants a Volt. I don’t want one, because I can’t support one And I don’t like how I’m paying for them whether I get one or not.