GM says Volt needs to cut costs to be competitive
10-21-09, 10:12 AM
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GM says Volt needs to cut costs to be competitive
http://news.cnet.com/8301-11128_3-10379582-54.html
GM exec: Volt not yet cost competitive
General Motors needs to wring thousands of dollars in cost from its high-profile Chevy Volt electric car before it can compete long term on price, a company executive said on Tuesday.
The biggest challenge relating to the cost of electric vehicles and the Volt specifically is the battery and related components, such as the power electronics and the motors. Compared to other plug-ins, the Volt has a very large battery--sized at 16 kilowatt hours--to ensure that drivers can meet most daily driving needs in electric mode.
For the car to get "traction" in the market, the cost of the battery components needs to drop more than $5,000, said Jonathan Lauckner, GM's vice president of global program management at the Business of Plugging In conference here.
"Clearly if we really want to have these vehicles get traction and want to bring the price of vehicles to a level that's competitive with say, a hybrid today, we got to get battery costs way down from where they are today," Lauckner said.
GM exec: Volt not yet cost competitive
General Motors needs to wring thousands of dollars in cost from its high-profile Chevy Volt electric car before it can compete long term on price, a company executive said on Tuesday.
The biggest challenge relating to the cost of electric vehicles and the Volt specifically is the battery and related components, such as the power electronics and the motors. Compared to other plug-ins, the Volt has a very large battery--sized at 16 kilowatt hours--to ensure that drivers can meet most daily driving needs in electric mode.
For the car to get "traction" in the market, the cost of the battery components needs to drop more than $5,000, said Jonathan Lauckner, GM's vice president of global program management at the Business of Plugging In conference here.
"Clearly if we really want to have these vehicles get traction and want to bring the price of vehicles to a level that's competitive with say, a hybrid today, we got to get battery costs way down from where they are today," Lauckner said.
10-21-09, 10:49 AM
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I've been complaining about the Volt since GM first unveiled it.
While it looks promising, it will be a sales flop. Why? Consumers can't justify a $40k, mid-sized Chevy. Traditionally, Chevrolet has always been GM's, base-line, inexpensive, every-man's car division. The Volt prices it outside of that market.
New technology is expensive. To bring it to market, you need to incorporate it into a platform that can absorb the cost. Most of the technology we have, started out in higher priced, luxury or flagship cars, where an additional $5-10k price tag was not a large percentage of the vehicle cost. Everything from NAV systems to traction control started out this way. Put in the high-end flagship, and as more sold, and production/manufacturing costs dropped with volume, trickle it down into the rest of the fleet.
This is where GM is gonna drop the ball with the Volt. Trickle-up doesn't work with most things in the auto industry. If they were smart, GM would add leather upholstery, some bells and whistles, and introduce the Volt as a Cadillac. Say what you will about Caddy, but at least their audience has no qualms with spending $50-70 on a new car. Let them absorb the price of the technology, and work it down into other GM platforms as it becomes cheaper to produce.
If not, the Volt will almost surely go the way of the EV-1.
While it looks promising, it will be a sales flop. Why? Consumers can't justify a $40k, mid-sized Chevy. Traditionally, Chevrolet has always been GM's, base-line, inexpensive, every-man's car division. The Volt prices it outside of that market.
New technology is expensive. To bring it to market, you need to incorporate it into a platform that can absorb the cost. Most of the technology we have, started out in higher priced, luxury or flagship cars, where an additional $5-10k price tag was not a large percentage of the vehicle cost. Everything from NAV systems to traction control started out this way. Put in the high-end flagship, and as more sold, and production/manufacturing costs dropped with volume, trickle it down into the rest of the fleet.
This is where GM is gonna drop the ball with the Volt. Trickle-up doesn't work with most things in the auto industry. If they were smart, GM would add leather upholstery, some bells and whistles, and introduce the Volt as a Cadillac. Say what you will about Caddy, but at least their audience has no qualms with spending $50-70 on a new car. Let them absorb the price of the technology, and work it down into other GM platforms as it becomes cheaper to produce.
If not, the Volt will almost surely go the way of the EV-1.
10-21-09, 11:02 AM
#5
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tesla doesn't have a business model either, except 'hoping' batteries get better and cheaper, and spending millions of google's money. 
perhaps it's a thinley veiled plea for more government bailout.
perhaps it's a thinley veiled plea for more government bailout.
10-21-09, 11:03 AM
#6
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I've been complaining about the Volt since GM first unveiled it.
While it looks promising, it will be a sales flop. Why? Consumers can't justify a $40k, mid-sized Chevy. Traditionally, Chevrolet has always been GM's, base-line, inexpensive, every-man's car division. The Volt prices it outside of that market.
New technology is expensive. To bring it to market, you need to incorporate it into a platform that can absorb the cost. Most of the technology we have, started out in higher priced, luxury or flagship cars, where an additional $5-10k price tag was not a large percentage of the vehicle cost. Everything from NAV systems to traction control started out this way. Put in the high-end flagship, and as more sold, and production/manufacturing costs dropped with volume, trickle it down into the rest of the fleet.
This is where GM is gonna drop the ball with the Volt. Trickle-up doesn't work with most things in the auto industry. If they were smart, GM would add leather upholstery, some bells and whistles, and introduce the Volt as a Cadillac. Say what you will about Caddy, but at least their audience has no qualms with spending $50-70 on a new car. Let them absorb the price of the technology, and work it down into other GM platforms as it becomes cheaper to produce.
If not, the Volt will almost surely go the way of the EV-1.
While it looks promising, it will be a sales flop. Why? Consumers can't justify a $40k, mid-sized Chevy. Traditionally, Chevrolet has always been GM's, base-line, inexpensive, every-man's car division. The Volt prices it outside of that market.
New technology is expensive. To bring it to market, you need to incorporate it into a platform that can absorb the cost. Most of the technology we have, started out in higher priced, luxury or flagship cars, where an additional $5-10k price tag was not a large percentage of the vehicle cost. Everything from NAV systems to traction control started out this way. Put in the high-end flagship, and as more sold, and production/manufacturing costs dropped with volume, trickle it down into the rest of the fleet.
This is where GM is gonna drop the ball with the Volt. Trickle-up doesn't work with most things in the auto industry. If they were smart, GM would add leather upholstery, some bells and whistles, and introduce the Volt as a Cadillac. Say what you will about Caddy, but at least their audience has no qualms with spending $50-70 on a new car. Let them absorb the price of the technology, and work it down into other GM platforms as it becomes cheaper to produce.
If not, the Volt will almost surely go the way of the EV-1.
(awaiting conspiracy theory posts about ev-1
)
10-21-09, 11:11 AM
#7
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I've been complaining about the Volt since GM first unveiled it.
While it looks promising, it will be a sales flop. Why? Consumers can't justify a $40k, mid-sized Chevy. Traditionally, Chevrolet has always been GM's, base-line, inexpensive, every-man's car division. The Volt prices it outside of that market.
New technology is expensive. To bring it to market, you need to incorporate it into a platform that can absorb the cost. Most of the technology we have, started out in higher priced, luxury or flagship cars, where an additional $5-10k price tag was not a large percentage of the vehicle cost. Everything from NAV systems to traction control started out this way. Put in the high-end flagship, and as more sold, and production/manufacturing costs dropped with volume, trickle it down into the rest of the fleet.
This is where GM is gonna drop the ball with the Volt. Trickle-up doesn't work with most things in the auto industry. If they were smart, GM would add leather upholstery, some bells and whistles, and introduce the Volt as a Cadillac. Say what you will about Caddy, but at least their audience has no qualms with spending $50-70 on a new car. Let them absorb the price of the technology, and work it down into other GM platforms as it becomes cheaper to produce.
If not, the Volt will almost surely go the way of the EV-1.
While it looks promising, it will be a sales flop. Why? Consumers can't justify a $40k, mid-sized Chevy. Traditionally, Chevrolet has always been GM's, base-line, inexpensive, every-man's car division. The Volt prices it outside of that market.
New technology is expensive. To bring it to market, you need to incorporate it into a platform that can absorb the cost. Most of the technology we have, started out in higher priced, luxury or flagship cars, where an additional $5-10k price tag was not a large percentage of the vehicle cost. Everything from NAV systems to traction control started out this way. Put in the high-end flagship, and as more sold, and production/manufacturing costs dropped with volume, trickle it down into the rest of the fleet.
This is where GM is gonna drop the ball with the Volt. Trickle-up doesn't work with most things in the auto industry. If they were smart, GM would add leather upholstery, some bells and whistles, and introduce the Volt as a Cadillac. Say what you will about Caddy, but at least their audience has no qualms with spending $50-70 on a new car. Let them absorb the price of the technology, and work it down into other GM platforms as it becomes cheaper to produce.
If not, the Volt will almost surely go the way of the EV-1.
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10-21-09, 11:21 AM
#8
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IMO, it will only be a sales flop if GM can't deliver the expected fuel mileage. GM has already said that the car will be capable of up to 250 mpg but the EPA will likely refuse to rate it the way GM wants it rated. If the car were in fact rated by the EPA at better than 70 mpg, it would be worth every penny of 40k to many, many, people. At 100 mpg, the Volt will fly off the shelves at 40k+.
10-21-09, 11:45 AM
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IMO, it will only be a sales flop if GM can't deliver the expected fuel mileage. GM has already said that the car will be capable of up to 250 mpg but the EPA will likely refuse to rate it the way GM wants it rated. If the car were in fact rated by the EPA at better than 70 mpg, it would be worth every penny of 40k to many, many, people. At 100 mpg, the Volt will fly off the shelves at 40k+.
For it's size, at it's current price-point, it puts it squarely the mid-size luxury market - 5-series, GS, CTS, A6, etc.. That consumer base won't consider a $45k Chevy.
I hope I'm wrong, but I'm not holding my breath.
10-21-09, 01:08 PM
#10
$40k for this? Why did our government bother to give them bailout money?
I really hope that this isn't just some half assed attempt to be the first to market with an electric car. If this thing is a sales flop I wonder what that would mean for the future of GM... It seemed like they were banking on this car in bringing interest to their company and if it does nothing I wonder how much more that will hurt GM.
Perhaps a better plan for this thing is to put out a "cheaper" version and then wait to see how the market responds and then add a more expensive version in 6 mos to a year; selling it as a Caddy as mentioned about would not be that bad of an idea either for another model.
I really hope that this isn't just some half assed attempt to be the first to market with an electric car. If this thing is a sales flop I wonder what that would mean for the future of GM... It seemed like they were banking on this car in bringing interest to their company and if it does nothing I wonder how much more that will hurt GM.
Perhaps a better plan for this thing is to put out a "cheaper" version and then wait to see how the market responds and then add a more expensive version in 6 mos to a year; selling it as a Caddy as mentioned about would not be that bad of an idea either for another model.
10-21-09, 02:04 PM
#11
Cheaper MSRP is always a good thing. I like the Volt though. If/when it comes out, if the current normal looking hybrids don't get much better than they are now the Volt would be my top choice. My inlaws 2009 Camry Hybrid only gets about 30-31 MPG and that is the only other Hybrid I'd consider right now since it looks nice. I hope they bring out a Hybrid Venza.
10-21-09, 04:01 PM
#12
Lexus Fanatic
Well, wait for a test-drive and then see if you still feel the same way. I've seen new products come out that I had bad feelings about at first, but, after seeing them in person and driving them, changed my mind (at least to an extent).
Not necessarily, consideriung the Volt's technology. You can spend almost 35K on a fully-loaded 2010 Toyota Phase-V Prius.......even more sometimes, with the mark-ups some dealers charge. The Prius Phase V I reviewed a few months ago listed for over 32K.
You also have economies of scale. The more of them GM can build and sell (depending, of course, on the per-unit profit margin) the more the per-unit cost of production will probably fall on each one.
True...but not with hybrids. They have worked the opposite. Hybrid technology started out on the low end.
It worked well for Toyota and Honda....Toyota, of course, more so. Both companies first started hybrid technology with small cars and adapted them to larger, more expensive ones. Honda adapted the Civic/Insight hybrid technology to the Accord, but it didn't work out as well.
Wrong. GM tried, in the 1980's, to take a sub-compact Chevy Cavalier, add some trim, slap a Cadillac nameplate on it, and market it as the Cadillac Cimarron. The result was a TOTAL disaster.......it became the laughingstock of the auto industry, and, even today, still ranks as one of the worst auto marketing boodoggles of all time. Believe me, GM learned a lesson from that......and the ill-fated Cadillac Catera of the late 90's.
While it looks promising, it will be a sales flop. Why? Consumers can't justify a $40k, mid-sized Chevy. Traditionally, Chevrolet has always been GM's, base-line, inexpensive, every-man's car division. The Volt prices it outside of that market.
New technology is expensive. To bring it to market, you need to incorporate it into a platform that can absorb the cost.
Most of the technology we have, started out in higher priced, luxury or flagship cars, where an additional $5-10k price tag was not a large percentage of the vehicle cost.
This is where GM is gonna drop the ball with the Volt. Trickle-up doesn't work with most things in the auto industry.
If they were smart, GM would add leather upholstery, some bells and whistles, and introduce the Volt as a Cadillac.
10-21-09, 05:31 PM
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Mmarshal,
I can't totally disagree with you arguments, but...
Comparing it to a fully loaded Prius isn't quite fair. $45k for the base Volt is still ten grand more than the Toyota with all the bells and whistles. Yes, GM's system has great promise, but the general public is still gonna want to compare it to luxury sedans for the price of entry.
I, unfortunately, do remember the Cimmeron and Catera all too well. But the big difference with the Volt is that GM is starting from the bottom up with a brand new platform. It's a blank slate. It's not already associated with a sub-par, low budget platform.
Toyota and Honda have indeed been able to make trickle-up work with hybrids. But at a $25k price point. An audiance that is already much more concerned with fuel economy, and how it affects their wallet. Most consumers who are able to afford the Volt's initial price also have enough disposible income to afford to fuel their cars. I'm not trying to imply that they're rich, or aren't worried about fuel economy. Just that the real market for the Volt, as a Chevy, is in the $20-25k range.
I like the Volt. It's a good idea at a good time. My complaint has always just been the marketing of it as a Chevy. Market it as not just a Caddy, but as a luxury car that also makes financial and environmental sense, and you have a a product that can sell at the necessary price point.
Just my 2-cents.
I can't totally disagree with you arguments, but...
Comparing it to a fully loaded Prius isn't quite fair. $45k for the base Volt is still ten grand more than the Toyota with all the bells and whistles. Yes, GM's system has great promise, but the general public is still gonna want to compare it to luxury sedans for the price of entry.
I, unfortunately, do remember the Cimmeron and Catera all too well. But the big difference with the Volt is that GM is starting from the bottom up with a brand new platform. It's a blank slate. It's not already associated with a sub-par, low budget platform.
Toyota and Honda have indeed been able to make trickle-up work with hybrids. But at a $25k price point. An audiance that is already much more concerned with fuel economy, and how it affects their wallet. Most consumers who are able to afford the Volt's initial price also have enough disposible income to afford to fuel their cars. I'm not trying to imply that they're rich, or aren't worried about fuel economy. Just that the real market for the Volt, as a Chevy, is in the $20-25k range.
I like the Volt. It's a good idea at a good time. My complaint has always just been the marketing of it as a Chevy. Market it as not just a Caddy, but as a luxury car that also makes financial and environmental sense, and you have a a product that can sell at the necessary price point.
Just my 2-cents.
10-21-09, 06:38 PM
#15
Moderator
I've been complaining about the Volt since GM first unveiled it.
While it looks promising, it will be a sales flop. Why? Consumers can't justify a $40k, mid-sized Chevy. Traditionally, Chevrolet has always been GM's, base-line, inexpensive, every-man's car division. The Volt prices it outside of that market.
New technology is expensive. To bring it to market, you need to incorporate it into a platform that can absorb the cost. Most of the technology we have, started out in higher priced, luxury or flagship cars, where an additional $5-10k price tag was not a large percentage of the vehicle cost. Everything from NAV systems to traction control started out this way. Put in the high-end flagship, and as more sold, and production/manufacturing costs dropped with volume, trickle it down into the rest of the fleet.
This is where GM is gonna drop the ball with the Volt. Trickle-up doesn't work with most things in the auto industry. If they were smart, GM would add leather upholstery, some bells and whistles, and introduce the Volt as a Cadillac. Say what you will about Caddy, but at least their audience has no qualms with spending $50-70 on a new car. Let them absorb the price of the technology, and work it down into other GM platforms as it becomes cheaper to produce.
If not, the Volt will almost surely go the way of the EV-1.
While it looks promising, it will be a sales flop. Why? Consumers can't justify a $40k, mid-sized Chevy. Traditionally, Chevrolet has always been GM's, base-line, inexpensive, every-man's car division. The Volt prices it outside of that market.
New technology is expensive. To bring it to market, you need to incorporate it into a platform that can absorb the cost. Most of the technology we have, started out in higher priced, luxury or flagship cars, where an additional $5-10k price tag was not a large percentage of the vehicle cost. Everything from NAV systems to traction control started out this way. Put in the high-end flagship, and as more sold, and production/manufacturing costs dropped with volume, trickle it down into the rest of the fleet.
This is where GM is gonna drop the ball with the Volt. Trickle-up doesn't work with most things in the auto industry. If they were smart, GM would add leather upholstery, some bells and whistles, and introduce the Volt as a Cadillac. Say what you will about Caddy, but at least their audience has no qualms with spending $50-70 on a new car. Let them absorb the price of the technology, and work it down into other GM platforms as it becomes cheaper to produce.
If not, the Volt will almost surely go the way of the EV-1.
Government Motors should have died back in December 2008.
2010 Toyota Prius invoices at $20,900 - $25,358 and MSRP's at $22,000 - $27,270.
2010 Lexus HS 250h invoices at $31,122 - $33,642 and MSRP's at $34,200 - $36,970.
Why would anyone purchase a Chevrolet Volt for $40,000 plus tax?
Last edited by Trexus; 10-21-09 at 06:42 PM.
