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The Almighty Buck Transportation Technology Politics

Chevy Volt Meets High Resistance, GM Suspends Sales 599

Hugh Pickens writes "The Hill reports that GM has announced to employees at one of its facilities that it is suspending production of the Chevy Volt for five weeks and temporarily laying off 1,300 employees. Back when GM launched the beleaguered electric car, it boldly targeted sales of 10,000 in 2011 and 60,000 in 2012 but GM only sold 7,671 Volts in 2011 and just 1,626 so far this year. 'We needed to maintain proper inventory and make sure that we continued to meet market demand,' says GM spokesman Chris Lee. 'We see positive trends, but we needed to make this market adjustment.' Although President Obama promised he would buy a Volt 'five years from now, when I'm not president anymore,' the Volt has come under criticism from Republicans in Congress because of reports of its batteries catching on fire during testing. Ironically, the shutdown comes as gas prices are soaring, exactly the time when an electric car should be an easy sell." If it's still true that GM was taking a loss on every Volt sold, perhaps this is a blessing in disguise.
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Chevy Volt Meets High Resistance, GM Suspends Sales

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  • by Anonymous Coward on Saturday March 03, 2012 @09:29AM (#39230571)

    Suspending production != Suspending sales. The two mean quite different things.

    • Re: (Score:3, Insightful)

      It does mean there is barely any demand for the car, even compared to what they were hoping for.

    • by WrongSizeGlass ( 838941 ) on Saturday March 03, 2012 @09:37AM (#39230617)

      Suspending production != Suspending sales. The two mean quite different things.

      Very true. The sales number are low, and that's possible related to the cost of a Chevy Volt. I just did a quick search in my area and they're about $40,000. I'm never going to save $15k - $20k in gas over the life of the car, so buying a comparable car that runs on gasoline is probably a better value. There are some tax credits for buying an electric car, but even with those the price is still going to be far more than a "regular" car.

      • by Zemran ( 3101 ) on Saturday March 03, 2012 @10:02AM (#39230699) Homepage Journal

        If I had kharma points I would credit you. I am a fanboy of the Volt but it is out of my price range. There are a lot of hurdles to overcome with the car and they are not doing enough to make it attractive. If you live in an apartment or terrace, it is impractical etc.. If you have the ability it is still going to take some modifications like not everyone has power in the garage etc. So the overall cost is a big problem. I realise that this is an early concept and that prices will come down as people switch but I think that most people will agree with you.

      • by Smidge204 ( 605297 ) on Saturday March 03, 2012 @10:41AM (#39230861) Journal

        I'm never going to save $15k - $20k in gas over the life of the car, so buying a comparable car that runs on gasoline is probably a better value.

        Lately I've been finding this argument a little disingenuous. For example, if I were to lease a $38K all-electric vehicle my payments would be roughly $360/mo. At $4/gal the money I'd save on gasoline would make my monthly payments comparable to leasing a vehicle worth $20K under identical terms*. In terms of affordability, these who vehicles would almost the same for the duration of the lease. And yes, I figured the cost of electricity as well as gasoline.

        The cost difference manifests only in the residual cost, but I need not pay that if I decide not to buy out.

        *Your mileage may vary, of course.

        • by nschubach ( 922175 ) on Saturday March 03, 2012 @11:02AM (#39230981) Journal

          Not everyone leases vehicles though. I did once, and I'll never do it again. Tracking how many miles you can put on in a year and hoping you don't change jobs to somewhere further away is a PITA.

        • by Anonymous Coward on Saturday March 03, 2012 @12:59PM (#39231891)

          The Volt is not really a "38k" vehicle in standard vehicle terms of quality and fit and finish, it's a $20k vehicle with $18k batteries. For comparison, the Chevrolet Cruze, a non-electric car which is built on the same platform as the Volt, is a 20k vehicle.

          You can lease a Cruze under similar terms as the Volt for $200/month less. So, yes, if you're spending $200 on gas and the electricity in your house is free, you pretty much break even. If you choose to buy instead of lease, $200/month over 36 months is comparable to the difference in depreciation between a 38K car and a 20K car. So you break even there too.

          Either way, you have to drive at least 20k miles/year to spend ~$200/month in gas for it to be financially worthwhile to go with the Volt. And you're not driving a car of any better quality or fit and finish than a Cruze.

  • expected outcome (Score:4, Insightful)

    by UncleWilly ( 1128141 ) <> on Saturday March 03, 2012 @09:33AM (#39230599)
    It's kind of a do-nothing-well car for $40,000USD
    • Exactly. I was considering buy a Volt but not only are they hideously expensive but the resale value is almost nil because the batteries need to be fully replaced after 10 years and that costs $20,000.
  • Too expensive (Score:5, Interesting)

    by dietdew7 ( 1171613 ) on Saturday March 03, 2012 @09:39AM (#39230621)
    Without significant subsidies GM would have sold even fewer cars. The subsidy is a just transfer payment to the well off. High efficiency diesel engines are probably the most cost effective option for the masses and our stupid EPA requirements keep best ones out of the USA.
    • Re:Too expensive (Score:4, Insightful)

      by Anonymous Coward on Saturday March 03, 2012 @10:17AM (#39230765)

      Without significant subsidies GM would have sold even fewer cars. The subsidy is a just transfer payment to the well off. High efficiency diesel engines are probably the most cost effective option for the masses and our stupid EPA requirements keep best ones out of the USA.

      Yes, it is quite stupid of the EPA to worry about nitrogen dioxide. The masses need cost-effective cars, not healthy lungs.

  • No surprise (Score:5, Insightful)

    by msobkow ( 48369 ) on Saturday March 03, 2012 @09:42AM (#39230625) Homepage Journal

    I can buy TWO Ford Focus 40mpg cars for the same price as a Volt.

    Unlike other districts, there are no subsidies for the Volt in Saskatchewan.

    $20,000 buys a HELL of a lot of gasoline.

    • by Geoffrey.landis ( 926948 ) on Saturday March 03, 2012 @10:48AM (#39230905) Homepage

      I can buy TWO Ford Focus 40mpg cars for the same price as a Volt.

      Wow, I haven't heard anybody else suggest that simple technique for getting 80 mpg.

  • With some things you can afford a loss on the first N units if you later sell M and get more than your setup costs back.
    So yes, a lot of things that are low volume but expected to sell later at a high volume can initially be sold at a loss without it being a total stuffup. Then of course you can have total stuffups where things are sold for less than the cost of the materials but that's rare.
  • A Joke (Score:5, Informative)

    by chill ( 34294 ) on Saturday March 03, 2012 @09:48AM (#39230645) Journal

    The Volt costs $40,000 before tax rebates and only gets you 35 miles on an electric charge. Then 35 MPG city/40 hwy (gas) for 375 miles.

    The Toyota Prius starts at $24,000 and goes to $30,000 for their top end. Mileage is 51 MPG city/48 hwy for approximately 600 miles.

    So Chevrolet's market was people who have lots of money, are willing to spend it with abandon, want a car, but don't really need to drive much. In short, semi-rich idiot hipsters.

    I think they probably just saturated their customer base.

    • Re: (Score:3, Insightful)

      by drinkypoo ( 153816 )

      So Chevrolet's market was people who have lots of money, are willing to spend it with abandon, want a car, but don't really need to drive much. In short, semi-rich idiot hipsters.

      You forgot "willing to drive a car that looks like total dogshit". The Prius is ugly but it looks futuristic. The volt is ugly, and it's also ugly.

      • Prius Looks Green (Score:4, Interesting)

        by acomj ( 20611 ) on Saturday March 03, 2012 @11:39AM (#39231249) Homepage

        There are a lot of hybrids that look like normal cars (toyota camray, ford escape....).

        I like hatchbacks, but the prius shape now screams I like the environment. It makes a statement which probably shouldn't be discounted as a reason people buy them.

          Plus that shape is areodynamic, thus the honda insight looking almost the same

    • Re: (Score:3, Informative)

      by hey! ( 33014 )

      Didn't we have an article here recently about the impact of innumeracy?

      The problem with the Volt / Prius comparison is that it's not that simple. You've got to factor in operation costs. The Volt costs $0.90 less per mile to run on electric mode than the Prius. When the gasoline engine kicks in, the Volt costs $0.80 *more* per mile.

      So the more affordable choice depends on what your transportation needs. Let's start somebody who is a ridiculously ideal Volt candidate. She uses her car to commute and run err

      • Re:A Joke (Score:5, Insightful)

        by Rakishi ( 759894 ) on Saturday March 03, 2012 @02:18PM (#39232479)

        Your numbers are way way way off. You probably missed a decimal point, it's $0.09 less (at best) per mile and not $0.90. Not counting maintenance and so on.

        That changes your examples significantly.

        Now your hypothetical ideal Volt candidate only saves $985.50 per year. And pays $20000 more for the car. In other words even the ideal user would lose money by buying a volt because they'd never make up the cost premium

        So yes, the comparison is very simple. The Volt sucks and no one should buy one.

    • Re:A Joke (Score:5, Informative)

      by recursivedescent ( 2587699 ) on Saturday March 03, 2012 @11:17AM (#39231075)
      Hmm, looks like none of the other ~7000 Volt owners read /. Had to go and create and create an account to provide at least one pro Volt response here. I bought my Volt in December, the pessimal time to get an electric car unless you live in LA or Florida. Yep, cold weather knocks a good 5 to 10 miles off the range. Even so, I really like this car. Growing up my parents had Pontiac station wagons, and I never thought I'd spend a dime on an American car, so I've owned a Saab, a Subaru, a VW, and a Toyota (Prius).

      I work out of two offices, my primary one which is a 36 mile commute, and another regional office, which is an 84 mile commute. Generally I go to my primary office 4 days a week. In cold weather, I'm on the gas engine maybe 2 to 3 miles, but if it's warm I'm electric all the way. I'm on gas for about 44 miles on the longer commute.

      I'm getting around 109mpg. Since early December, I've bought around $60 in gas. It's hard to tell due to the mild winter, but I think my electric bill has gone up around $25/mo.

      Sure, I could have bought a cheaper car, and I'll never save enough in gas (well, unless Iran destabilizes the middle East and we end up with $10/gal gas) to recover my cost, but I actually like driving the Volt. It's not a sports car, but it's not sluggish either. 0-60 is 9.2 seconds, but the instant torque from the electric engine makes it feel much faster. In "Sport" mode, it does 0-30 in 3.0 seconds.

      And it's made by Americans who seem to have figured out how to make a car that's as fun as any import I've owned. GM has plenty of problems, but maybe some of the cool Volt engineering will seep into their other cars.

  • by medcalf ( 68293 ) on Saturday March 03, 2012 @09:50AM (#39230655) Homepage
    When you make a product for political reasons, not because there's a market, and then subject it to the market, it tends not to do well. Huh.
  • Ohm I God! (Score:5, Funny)

    by Anna Merikin ( 529843 ) on Saturday March 03, 2012 @09:55AM (#39230663) Journal

    Volt meets Resistance. I couldn't resist.

    On a serious note, GM does not have a good record with respect to embracing effective change. Its management is still intellectually corrupt, except it is no longer led by executives who came up through sales/marketing and now has had government surrogates put in their places.

    GM has never had a working grip on the obvious, and I'm old enough to remember when GM-made cars were more than half of the world's output. They no longer have a monopoly, nor the world's biggest dealer network, and only, apparently, one profitable brand of auto -- Cadillac.

    So, as I told a friend who had inherited money in 2001 -- "Sell GM short. They're going down."

    It's true again, How long must GM wait before it can return to the courts for relief?.

  • by srussia ( 884021 ) on Saturday March 03, 2012 @09:58AM (#39230679)
    How much resistance was there exactly to cause no current to flow?
  • by crow_t_robot ( 528562 ) on Saturday March 03, 2012 @10:53AM (#39230937)
    ...low current ensues.
  • by rudy_wayne ( 414635 ) on Saturday March 03, 2012 @11:00AM (#39230967)

    Ironically, the shutdown comes as gas prices are soaring, exactly the time when an electric car should be an easy sell.

    Until a huge breakthrough is made in battery technology, electric cars are doomed to fail, no matter how high the price of gasoline.

    Electric cars are too expensive -- it's cheaper to just pay the high gasoline prices.
    Electric cars have an extremely limited range and take too to charge -- people will pay for gasoline as a "convenience fee" to be able to go farther, faster.

    And even if those two problems are somehow fixed, the elephant in the room, that everyone is desperately trying to ignore, is the enormous cost of replacing the batteries. A conventional gasoline engine, which proper maintenance can last a very long time. And if you do have problems, you can replace/rebuild/replace parts as needed. Worst case -- you can go to a local junk yard and buy a used engine for a few hundred dollars.

    With batteries, there is no repair or rebuild or get a used one from a junk yard. Once the batteries reach the end of their life they have to be replaced at a very high cost. As a result, the re-sale value of an electric car is going to be pretty close to zero -- who would want to buy a used electric car knowing that they are guaranteed to get hit with a bill for several thousand dollars in the near future.

  • by Beorytis ( 1014777 ) on Saturday March 03, 2012 @11:06AM (#39231003)
    Chevy Volt meets high resistance... Makes reductions in Chevy Ampere.
  • by orbitalia ( 470425 ) on Saturday March 03, 2012 @11:26AM (#39231143) Homepage

    After how GM completely mishandled SAAB, and continue to mishandle SAAB in my hometown, I have no sympathy for them (but of course sympathy for the workers).

  • Bogus accounting (Score:3, Insightful)

    by frisket ( 149522 ) <> on Saturday March 03, 2012 @11:34AM (#39231211) Homepage

    If it's still true that GM was taking a loss on every Volt sold, perhaps this is a blessing in disguise.

    This is because the beancounters have set too short a time for the RoI. Large-scale long-term investments like tooling up a car need a long-term RoI. A realistic term would be 15-20 years, given that the immediate product (the Volt) is likely going to have to go through numerous mutations before it settles on a money-making model. Expecting to make back the setup cost in a year or two means that the beancounters or VCs have lost all grasp on reality, if they even had it to start with.

  • by SloWave ( 52801 ) on Saturday March 03, 2012 @11:39AM (#39231245) Journal

    This cannot be 'current' news.
    > Chevy Volt Meets High Resistance, GM Suspends Sales

  • Two words (Score:5, Interesting)

    by cortex ( 168860 ) <> on Saturday March 03, 2012 @12:27PM (#39231651)

    Tesla Motors []

    Telsa is planning on an ~$30,000 model in the next few years. If they achieve this price point and maintain the quality of their current models, I think that they will have an all electric car that many people will want

  • by silverhalide ( 584408 ) on Saturday March 03, 2012 @12:52PM (#39231833)

    The volt is a completely new class of car. It's a trailblazer. The first year is always a challenge.

    You can't compare a Volt to a Prius or Leaf any more than you can compare a Corvette to a dump truck. Yes, they both have wheels, electric battery packs, and doors, but they are entirely different classes of vehicles.

    The Prius is still largely a gasoline-only vehicle. Yes, the plug-in version is out this year, but it only gets you 8-11 miles, vs. the Volt's 30-40 miles. .
    The Leaf is electric-only. For the vast majority of Americans, it's stuck as a second car because you can't practically road-trip in it with the current American infrastructure.

    The Volt seeks to address these shortfalls.

    It is the first production extended range electric vehicle. You cannot compare it to a Prius or Leaf, which are two different classes of vehicles altogether. The Prius's battery pack and electric range are only a fraction of the Volt's. The Leaf is just an electric car that requires charging stations. The Volt is actually engineered for the current infrastructure reality of the US - you can get gas everywhere, and you can only charge your car in so many locations, so it's a "crossover" vehicle that can let a broader class of folks adopt to a MOSTLY electric style of living.

    GM knew full well going into the project that it was risky and it caters to a VERY specific audience of "Green Early Adopters" - folks that are willing to pay a premium for cutting their petroleum footprint.

    If you don't like the Volt, you are obviously outside the target demographic. The Volt serves a lot of purposes outside of selling a EREV (Extended Range Electric Vehicle) - it also helps get actual production units to start building the battery production capabilities and infrastructure needed to sustain an electric vehicle fleet. Yes, the Prius has laid some inroads here, and the Volt is another push by another manufacturer.

    If you study history at all, the Insight and the Prius were in very similar positions when they came out. Both were sold at low-to-no margins and had relatively crappy first-year sales.

    The First Generation Honda Insight (the first mass-produced hybrid) only sold 17,000 units over several years.
    The First Generation Prius was initially sold at low-to-no margins by

    There is unanimous consensus among the engineering an scientific community that we need to reduce our petroleum usage. There is also a general consensus that an electric vehicle fleet is the most practical way of achieving this goal (and this includes fuel cells which are nothing more than expensive batteries).

    Let the technology bake. The battery cost is rapidly falling. Get a few model years out. You may be pleasantly surprised. If it's outside of your budget, don't buy it. It's not for you anyway. You will still benefit from the technological advances of the vehicle. You can't afford a space shuttle but you still benefit from the fringe developments of that program. These types of projects are critical to the development of our electric vehicle infrastructure. You can't convert the American fleet to electric overnight anyway, the grid would have some major problems anyway with a million vehicles charging on it suddenly; they need a few years to get that upgraded. The Volt is the first step of many.

    • by Virtucon ( 127420 ) on Saturday March 03, 2012 @02:02PM (#39232339)

      While I agree with most of your points I have to say that the Volt has missed it on quite a few fronts:

      1) When you go to a Chevy dealer and you want to see one, good luck. They don't have any details, information or even cars for you to test drive. Some dealers in my area are now getting "Volt Specialists" who will work on answer questions but at the sales outlet I expect that I should be able to look, see and feel one.
      2) There's been a lot of fraud regarding the Volt and the Gov't Tax incentives. Instead of buying a "new" volt, some people originally were purchasing one that had been cross sold to other dealers. [] Why would I want to deal with a dishonest dealer? No pun intended.
      3) It's overpriced for what you get. A plug in Prius can be had for less and the Leaf is kicking the Volt's butt in sales.
      4) I have two teenage sons now getting ready to drive (twins) and I'm looking for something economical and safe for them to drive. Electric, Hybrid or high mileage is something I would like to look at. Will I buy two? I don't know but if I don't fit a demographic where I'd at least like to know more and drive one to see, then I don't know what the target demographic is?
      5) I can go to a Nissan dealer, touch a Leaf, drive a Leaf, get all of the information and I might add see all of the technical innovations that Volt doesn't have, for less money and I can still get my tax incentive because the dealer hasn't done a swap for the vehicle, negating any benefit I would receive.
      6) I can go to a VW dealer and buy any of the blue diesel models that are ready, available and priced less than the Volt, Leaf and in some cases Prius and get better mileage overall. That's another alternative. So, have they all missed the target? No, but the Volt sure has.

  • by owlnation ( 858981 ) on Saturday March 03, 2012 @01:52PM (#39232265)
    I'd never heard of this car before. So I checked out its wikipedia entry... and noted that absolutely none of any of the controversy about it is listed there. There is a great deal of information about the car -- marketing information, that is. I can find out how many awards it has won (like that really matters), I can find out how good it is at so many things.

    What I can't find, is any objective truth there. Admittedly, no surprise, since I've never seen any wikipedia car entry that isn't so-obviously written by a fan, or the marketing dept of the manufacturer. The Volt's page was clearly written by someone with connections to GM. Just like so many other wikipedia pages. It's a complete waste of time using wikipedia for anything that has a fanbase, commercial interests, or political implications.
  • by Animats ( 122034 ) on Saturday March 03, 2012 @02:05PM (#39232377) Homepage

    The problem is the $40K price. We're still in a major recession.

A university faculty is 500 egotists with a common parking problem.