Detractors ask, “Who would buy a Chevrolet Volt?”
After all, they say, it’s $40,000. Look what else one can buy for that much. There are nice Lexus, Mercedes-Benz, Infiniti, BMW and Cadillac luxury models at that price.
Even with a government subsidy, the claim is that the Volt, an extended-range electric car, doesn’t stand on its own at $40,000. Even if gas hits $5 a gallon, it doesn’t work.
And who knows what it will be worth in 36 or 48 months? If new technology trumps it, it could be next to worthless. Why take the risk just to be known as an early adopter?
That is how it goes with some people who think the Volt will fail, or even want it to fail for their own reasons.
Bob Lutz, the father of the Volt, says General Motors didn’t expect early models would sell well. “That's why we’re leasing them for $350 a month for 39 months,” he tells an automotive fleet conference.
He attributes it to the cost of leadership. “We’ve got to start somewhere if we ever plan on achieving economies of scale.”
In true Lutz fashion, the retired GM vice chairman compares the Volt to duck hunting: “If you shoot at the duck, you will miss it every time. One has to lead the duck to hit it. We need to lead the market to have a chance to hit it.”
Using another analogy, he says, “If we wait too long, the train has left the station and we are standing on the platform saying, ‘What happened?’”
Lee Iacocca once said, “Lead, follow or get out of the way.” Lutz agrees with his fellow automotive icon.
Toyota at first lost money on every Prius hybrid it sold. That vehicle is considered profitable these days, although the auto maker typically is tight-lipped on such matters.
Toyota now is bringing a plug-in hybrid to market. It has lots of experience and satisfied hybrid customers now, along with economies of scale. GM hopes the Volt will follow the same pattern.
In the meantime, the Volt has detractors here and there, including the political arena. Right-wing radio personality Rush Limbaugh claims the Volt is a failure that can be hung around President Obama’s neck. It apparently doesn’t matter that the Volt had been in development long before Obama was elected.
As mentioned, Lutz, not Obama, is the father of the Volt. For Lutz to go after right wingers takes some doing, but he has jabbed in that direction in defense of the Volt.
A barrage of misconceptions continues. A friend claimed it would take three weeks to drive across the country in a Volt because of all the needed stops to recharge. He heard that misinformation on a political talk-radio show.
In fact, the electric range of the Volt is 25 to 50 miles (40 to 80 km) before an internal-combustion engine kicks in. The engine recharges the batteries that drive the electric motors, rather than being connected to the drivetrain in a conventional manner. To the driver, the difference is not noticeable.
Others claim Volts catch fire in a collision. The Volts that had battery fires had been crash-tested and stored improperly for weeks before the combustion occurred. A vehicle with a regular lead-acid battery stands the same risk if stored improperly. As with normal vehicles, the battery should have been removed.
A driver with a less-than-30-minute commute to work, and a place to plug in while there, could drive all month without the internal combustion engine using any fuel at all.
Figure 50 miles a day saves two tanks of fuel per month or about $120. Subtract that from the $350 monthly lease payment and the Volt easily can be justified.
But GM has not sufficiently made that case. Worse, salespeople at Chevy dealerships haven’t, either.
GM sold 5,377 Volts in the first four months of this year. The auto maker has shut down production of the vehicle for five weeks to balance inventory numbers. But GM has not done the math for consumers. It is this: $350 minus $120 equals $230 a month to lease a $40,000 car. To me, that works.
WardsAuto Dealer Business columnist David Ruggles is a former dealership general manager. He can be reached at [email protected].
