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Gary Hunt

Gary Hunt

Gary Hunt is President, Scalable Growth Strategy Advisors, an independent energy technology and information services adviser and a partner in Tech & Creative Labs, a…

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The Chevy Volt was Doomed to Fail from the Start

The news out of Detroit had all the feel of a wake.  GM announced that it was suspending production of the Chevy Volt idling its Hamtramck factory where the electric car is made from March 19 to April 23 is “to match production with demand”.  The 1300 workers get laid off, but because of contract terms most still get paid.

It may seem like a wake but the patient is not yet declared officially dead—-but with sales at a miserable 7,671 vehicles in 2011 against a target of 10,000.  With Volt sales of 1,626 cars in the first two months of 2012 against a target for the year of 45,000 even with the Federal and State subsidies—the market has spoken.  In this case, matching production to demand is code for we’re waiting until after the 2012 election to kill this turkey and we’re betting that despite whoever occupies the White House – it will be easier to get forgiveness than permission to kill the turkey officially by then.

Why did this happen?   Well are you prepared to spend $40,000 on a car that only has a range of 35 miles?  I rest my case.

The concept of an all-electric vehicle is game changing and Volt will—eventually—prove a useful R&D experiment if it results in stimulating the production of better battery technology to help solve some of the most vexing problems of the energy business—electric power is a real-time pure play.  Everything we put onto the power grid and everything we suck out of it must match every time, all the time.

The problem with Volt has never been the R&D experimentation.  It was the ‘government motors’ attitude we can make a market for Volt by building it despite the inconvenient truths about it flaws and high costs.  But with GM in bankruptcy, then bailed-out, and still on supervised probation by its Federal masters it had no choice but to play along.

But then there is this—-maybe the GM management team is wiser than we given them credit.  The Chevy Volt may be a classic example of the ‘go early, go ugly’ strategy of venture capital investments.  Yes, it only goes 35 miles before you have to switch over to the emergency gas tank. But the ‘big shot investors’ loved the sustainability bragging rights it gave them.  Yes, we had a few minor problems with the batteries, but it sure did draw crowds at those auto shows—-and it was a symbol that Detroit was back from near death building cars of the future.  So government motors tried and failed with the Chevy Volt because the public did not buy it.  But it got bailed out, turned around and is digging its way back to profitability because it agreed to ‘go early, go ugly’ when the investors wanted it most.

Come to think of it, the corollary of ‘go early, go ugly’ is fail fast so you cut your losses while still getting credit for trying.  For GM that may end up being both good politics and good economics—a two-fer!

By. Gary L. Hunt

Gary Hunt is President, Scalable Growth Strategy Advisors, an independent energy technology and information services adviser and a partner in Tech & Creative Labs, a disruptive innovation software collaborative of high tech companies focused on the energy vertical. He served as VP-Global Analytics & Data at IHS/CERA; global Division President at Ventyx, now an ABB company; and Assistant City Manager-Austin Texas responsible for Austin Energy and Austin Water.




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  • jay on March 07 2012 said:
    I bought a volt three months ago. Daily commute to work is forty-two miles one way. Leave home with a full charge, charge at work (which i have deducted from my paycheck), and look at what little gas the car consumes - it averages over 190 miles per gallon.
    Goodnight oil. _
  • Russella on March 07 2012 said:
    Gary, you have a factual error in your article:

    "Why did this happen? Well are you prepared to spend $40,000 on a car that only has a range of 35 miles? I rest my case."

    The Chevy Volt range is 370 miles. Please check your facts because errors like this distort perception, and of course you are trying to report on the facts, right?
  • Truth from the start on March 07 2012 said:
    From the start, GM battery team warned the management that this will NOT be commercially viable, largely due to the fact that battery cost will not be low enough to justify the premium by saving fuel cost, even at $8/gal. The management won't listen. Several high-profile people left, Ms. Gray, Mr. Tom Stephens (actually fired over the low sales volume), Mr. Weber and a few other people.
    There are quite a few people think GM will eventually fail due to inability to compete against Toyota/Ford.
  • scottf200 on March 07 2012 said:
    I've owned a Volt for a year now. My daily drive varies from 24 to 45 miles. I got 45 miles in the summer in Chicagoland and low 30s on the coldest days in the winter. Last weekend I went 120ish miles. Magic? No, when I run out of battery I get 40 MPG on the gas generator. Sporty, fun, comfortable and can be economical. I charge at midnight when my rates are lower and no grid impact for my neighbors. I switched to a hourly rate plan. Guess what? I'm paying less monthly now than *before* I got the Volt!!
  • HI-Bob on March 08 2012 said:
    I bought a volt in Nov of 2011. The dealer filled it up for me. I've driven it 5000 miles so far and I HAVE NOT PUT ANY GAS IN IT YET!!!!! I'm a 650 MPG so far and climbing. I charge at home for 2 dollars to go the 35 miles to work, I still have 19 miles on the charge when I get there. I charge there and go back home for an average commute of 75 miles per day including shopping trips on the way back.
    If the Volt is a turkey, then Gary you have a lot of crow to eat, forget the turkey. You're speaking from ignorance.
    So long gas pumps!!!!!
  • wws on March 08 2012 said:
    wow, 3 of the 12 people who drive Volts regularly in this country show up to post on this blog. What are the odds?

    The Volt was pure politics, packed with subsidies for the rich who buy them. Once this election is over, there won't be any more need for it, so it'll be Buy Buy, Volt.
  • Rob Peterson on March 08 2012 said:
    My name Rob Peterson and I'm with Chevrolet Volt Communications team.

    Several of the Volt owners have already addressed the inacurracies in the article. However, the comments by "Truth from the start" are blatantly inaccurate and need to be addressed. Denise Gray (Ms. Gray) left GM for an opportunity to work for a battery startup on her own accord. Frank Weber, left for BMW, a company which has now committed to the development of TWO EREV vehicles (i8 and i3). Tom Stephens recently retired from General Motors as Vice Chairman and Chief Technical Officer after a 43-year career. Insinuating, or claiming they left GM for any other reason is flat out incorrect.

    Denise, Tom and Frank remain very proud of their involvement with a vehicle that has won North American, European, Green, Motor Trend and Automobile Car of the Year Awards - a collection of awards unmatched by ANY vehicle in history.

    Discussion threads such as this can be places of great learning and sharing of opinions - whether we agree with them or not. However, they should not be a place for the uniformed to sully the reputations of engineers who's contributions led to the most awarded vehicle in the industry.

    Rob
  • Doug L. Hoffman on March 08 2012 said:
    This piece is a nothing but a hatchet job by someone who is willfully ignoring the facts regarding the Volt's design, purpose and performance. As noted by several people above, the range of the car is not 35 miles. That is the electric only range and ignores the fact that there is an onboard gas engine. Because battery technology is not mature enough to provide sufficient single charge range or quick recharging, the Volt is designed as a full hybrid that can run on either electricity or gas. As such it is GM's first attempt to build a mass produced vehicle with an electric drivetrain. It is overly expensive and the performance leaves much to be desired but it is only a first attempt.

    Does anyone in the media remember the Chevy Vega and Ford Pinto? They were Detroit's first attempt to build a small car and they were horrid. As a first attempt the Volt is clearly a better product than either of those past embarrassments. The drum beat of disparagement has been steadily sounded by conservative leaning commentators, one FOX News talking head repeated the paltry range misinformation yesterday on The Five. There is no reason for this attempted product assassination on logical grounds—if the conservative blatherskites truly believed in their own philosophy they would simply let the market dictate the success of the Volt. I can only conclude that the smear campaign against the Volt is based on political judgments, not economic or engineering evaluations. This is very disheartening, since I lean conservative/libertarian in my own thinking. You cannot claim to fight for truth while spewing lies.
  • SteveEV on March 08 2012 said:
    This proclamation is a bit early considering Volt sales continue to climb and owners rate the Volt at the top of the satisfaction chart. I am very happy to remove gasoline from my monthly budget and expect many more car buyers would like to do the same. I suppose you would declare soccer a failure if your kid does not score a goal in the first game.
  • Michael Perine on March 08 2012 said:
    I have read Mr. Hunt's article and all comments. I hope that more comments will be filed that will educate the public about the truth about the Volt. Life is a combination of negative and positive. To my way of thinking the Volt has many more positives than negatives. One of the positives is that most miles are local and the Volt's electric power will cover most of the yearly mileage. Battery technology will improve and the Volt's performance will improve.
    Remember that new technology, i.e., computers cost much more when they were new in the market.
    The Volt was marketed as an intermediate vehicle- between gasoline only and electric only vehicles. The combination of electric and gasoline now removes the biggest opposition to electric vehicles: range anxiety.
    The Volt has good range now compared to the Leaf.
    Hopefully the Volt's cost can be reduced to be more competitive. Perhaps the tax credit could be raised above $7,500 to $10,000. I think that would help sales.
    I hope to buy a new Volt within two years. I'm an American who wants to buy American made. Import tariffs on foreign made would help equal the playing field for American made products such as the Volt.
    It is an attractive vehicle. I would be proud to own one!
  • kickincanada on March 08 2012 said:
    I’ve owned a Volt since Sept 2012 and it’s a pretty cool car. I'm not an environmentalist (previous ride was a Ford Expedition) but it's not as expensive as one would think. Ontario gov gives you $8500 and you will save about $2000 a year in gas and maintenance (oil changes once every 2 years, brakes last 100K minimum). So over 5 years thats 18.5K towards the purchase. So about $30K for a really advanced car is actually in line with the average cost of a new car these days.

    Its range is pretty good - 75Kms in the spring/summer/fall on battery - more if you use gas. If you charge at work or in between drives you can actually go 100-200kms per day on electric - basically you get to give the oil companies the middle finger when you drive by the gas station. Weird to spend more on car washes than gas. I routinely buy $2 gas just to get the discount on the car wash at PetroCanada. And my hydro bill (which in Ontario is not really sourced from coal at all) has gone up about $45 a month (including all those surcharges). I also love the fact I’m using a domestic source of fuel, not relying on sources of energy produced by hostile regimes, and buying a car made in North America!

    One more thing - the battery will likely outlast the car. The battery and all electrical components of Volt, Leaf, etc are warrantied for 8 years / 160,000kms. In California it is for 10 years. The car will fall apart before the battery goes. And even if the battery failed outside of warranty period, for the Volt it is $2400 to replace which is not bad. Me at that point 8+years out I would simply run my barely used ICE and be satisfied with the 35-40mpg on ICE only as I would have made my money back years ago.

    Bottom line is the Volt is a great fun car with great service and support from GM. People really need to get out and test drive one. And it looks great to.
    David,
    Ottawa
  • david johns on March 09 2012 said:
    Thanks to previous commentators for correcting this profoundly negative and prejudiced article.

    I am dismayed at the lack of appreciation for the American ingenuity and design engineering displayed in the Volt. The disparagement and misrepresentation going on in the right wing media is both UnAmerican and Unpatriotic. What happened to the pride and can do American tradition?

    The feeling you get from passing by every gas station is electric. If/when gas spikes to $8 a gallon these cars will double in value. And remember that battery technology is still improving - by the time it needs a replacement the new versions will likely be cheaper and more powerful.
  • pepperspray on March 09 2012 said:
    Most consumers will not buy electric/hybrid cars until they rollover their old gas guzzling car due to wear and tear.
  • John Smith on March 10 2012 said:
    I see a GM public relations person has commented on this article to correct some errors. He is quick to jump to the defense of the former GM leaders, but not quick to fill in inaccuracies in the information GM gave the public.

    For instance, GM says that its Volt workers will be temporarily fired, and then rehired. It does not mention that most of them will be paid even when not working. That's an important fact that GM hid. Why not tell the true story there?
  • FotoJames on March 10 2012 said:
    I've driven the Volt. Love it. But really GM! In 1996 you had an electric car that got 100+ miles on a single charge. I'm wondering why, 16 years after that accomplishment you cannot give us more range on the Volt? The 35 mi the Volt gets is skimpy compared to what the EV 1 had more than a decade ago! If you want to keep the gas generator onboard - fine. Just give us the 100+ all-electric power with it and you will have a winner on your hands. When you tell consumers they can go 100 miles on a charge, for about $5 - then people will take notice.
  • Chris on March 13 2012 said:
    Wait until you go to resell it. I know I won't buy a car with a $10k battery that is used. How much of that $40k are you saving on gas? None. I'll buy a $20k car and spend $10k on gas and still come out $10k ahead in the end. The volt's resale value drops to $17 in just THREE YEARS. Enjoy.
  • Jon on July 02 2012 said:
    Volt owners will defend there car to the end even though they know they bought an impractical car. They got suckered for 40 grand excluding taxes. Sorry Volt owners just come out already and admit you bought an expensive non luxury car. The whole idea behind the Volt is to save money on expensive gas. If you have 40 grand to shell out on a car chances are you dont care about gas. You guys are just hippies getting suckered into the green movement.
  • Upper5Percent on May 25 2013 said:
    Ah Gary attacking irradiated food and now the Volt with misleading information...
  • danwat1234 on January 31 2014 said:
    Chris, Well you can buy a used 2011 Volt for almost $20K now, about $23K and cheaper in the future.
    There is a Volt owner which has over 100K on the car with about 45K miles in EV mode with little to no battery degradation and a replacement battery pack is only about $2500.

    @Jon, the Volt is luxurious. It has a very luxurious drivetrain, has heated seats, is extremely quiet on the highway. It's not ultra luxurious but by no means is the driving experience like an econobox.

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