By on June 19, 2008

p_lutz.jpgIn yet another Lutzie-worthy display, "Maximum" Bob Lutz tells the Seattle Times that even though first-gen Volts will retail for $40k and generate no profit for GM, "for the first time, our well-thought-of Asian competitors will be left in the dust" by its magnificence. And who wouldn't be terrified at the prospect of competing with a $40k profitless wonder? But Lutz didn't only highlight the tensions between the Volt's aspirations to neo-Model T status, and its mounting sticker shock. He actually gloats about the project, saying "We are simply quite startled and amazed at how everything is working according to plan." Because apparently making money and offering an affordable PHEV were never part of the plan. But Lutz isn't totally delusional. He estimates that by 2020 or 2025 between a quarter and half of all new vehicles sold in the U.S. will be electric or hydrogen-powered, and that nuclear power is "the only real option" for this mass electrification. So why can't he stop spewing disingenuous optimism about the Volt project? When even the die-hard fanboys of gm-volt.com are starting to say things like "If they retail it at $40,000, the Volt is going to switch from a 'game changer' to 'another EV-1 disaster,'" what else can you do?

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27 Comments on “Volt Birth Watch 57: $40k and a Jackass...”


  • avatar
    Geotpf

    They won’t sell at 40k (well, they will sell a few hundred a month, but not in numbers like the Prius, which sells twenty thousand a month or more). They have to cost no more than a Prius, 22-25k for mainstream acceptance. Everybody will just laugh at GM.

  • avatar
    jaje

    Things are going to plan (don’t listen to earlier promises to have a full working model by Spring 2008), etc.? Are they going to use Cobasys batteries – those went according to plan – recalls due to failed batteries and going out of business so that GM had to buy them. Some plan there Bobby!

  • avatar
    SkiD666

    If the battery makes up roughly $10,000 of the cost, is anyone really surprised that the car is closer to $40,000 than $30,000?

    I also have to wonder why people think that the next gen, plug in, Li-Ion Prius will cost the same as it is right now. TANSTAAFL.

  • avatar
    Jonny Lieberman

    He’s right about the nuclear thing.

    Nukes + hydrogen fuel cells = good future

  • avatar
    Bunter1

    SkiD666- I think people expect the next Prius (std) to be similarly priced to the current but I haven’t had the impression that they aren’t expecting to pay a premium for the plug-in.

    I certainly expect it to go for more.
    And arrive before the Volt.
    And out perform it when it arrives (2013?) at a lower price.
    No I don’t expect the first plug in Prius to go 40 miles on a charge. But by the time the Volt gets here…

    Good old Bob.

    Bunter

  • avatar
    seoultrain

    The first Volt will not be the overwhelming success that GM wants it to be, $10 gallons of gas notwithstanding. What GM needs to do is stick with the Volt for a few generations with constant improvements. Once the technology matures with corresponding electric range increases and cost decreases, Chevy will have a winner. The 2010/2011 Volt won’t be a grand slam game-winner, but most likely a solid base hit to start off a rally. This is a 10-year project for GM, not a 3-year one.

  • avatar
    Geotpf

    seoultrain :

    If that’s true, then it might succeed, assuming GM doesn’t go out of business first. But basically, the Volt will be less of a success than the first gen Prius, which arrived in Japan in 1997 and in the US in 2000 (as a 2001 model). The 2001 Prius was not overpriced like the Volt will be (it started at $19,995), and still sold modestly. It wasn’t until the current gen was released in 2003 (as a 2004 model) that the Prius’s sales really took off. Even best case scenerio, GM is a decade behind Toyota here.

    Basically, I must repeat my point-the Volt can’t cost much more than the Prius for it to succeed. Maybe five grand more, since one could easily argue that the long pure-electric range is a very good feature, but not fifteen grand or more. The Volt will be a sales failure at $40,000.

  • avatar

    Well, at least he’s now clued in on the fact that you need to generate power to run all those newfangled ‘lectric vehicles — and he’s right again, nuclear is the only way to go – but should one go that way?

    Should be fairly straightforward to compute the energy equivalent being consumed by today’s rolling stock, and then to calculate what we’ll need to perform similar automotion with electrical power (deducting for weight of vehicle and addind for loss of energy between plant and powerplant.)

    Ah – the glorious times ahead. But I think I’d rather by an PHEV from GE before I buy one from GM.

  • avatar
    KixStart

    SkiD666,

    The plug-in Li-Ion Prius WILL cost more.

    However, Toyota’s updating the basic Prius (somewhat larger battery, more electric power, larger gas engine but basically the same as the current car, no radical or expensive changes) early next year and it is expected to cost about the same as the current Prius.

    Seoultrain,

    You’re right, it’s a 10-year project. Is GM a 10-year company? And I mean that two ways… Do they have the will to do 10-year projects? And… Do you think they’ll be around in 10 years?

    Don’t give the the posters on GM-Volt.com too much credit…. Plenty of the Volt FanBoys over there still believe this $40K figure is just Machiavellian manuevering on Lutz’ part to trick Toyota into announcing a $45K plug-in Prius… and then the $30K Volt will eat Toyota’s lunch.

  • avatar
    NN

    They will probably sell out at $40k, because they will only make 1000 of them for the first couple years..that’s my bet.

  • avatar
    Engineer

    Q: Isn’t neo-Model T status and mounting sticker shock a HUGE oxymoron?

    Nukes + hydrogen fuel cells = good future
    My rule of thumb: Once you have figured out a way to get clean hydrogen, just eliminate the hydrogen to get an even better solution, e.g.
    Nukes + hydrogen fuel cells = good future

  • avatar
    Paul Niedermeyer

    Jonny: Nukes + hydrogen fuel cells = good future

    I’m really relieved to know someone has the formula for a good future. Brought some sunshine to my day.

  • avatar
    Kevin

    So that makes the “Plug-in hybrid” premium, what? $20,000? Wait til people start analyzing that cost-benefit ratio.

  • avatar
    romanjetfighter

    Won’t your electric bill be really high if you plug your car in? That energy isn’t free.

    The energy that you get from regenerative brakes, however, IS!

    Screw plug-in hybrids!

  • avatar
    KixStart

    If your electricity is about a dime/kilowatt, you get a “fillup” of your Volt’s battery for about $.80 and it takes you 40 miles. Putting $.80 into a Prius, at $4/gallon, takes you just 9 miles.

  • avatar
    reclusive_in_nature

    This whole subject will be a moot point once the speculative oil bubble pops.

  • avatar
    Engineer

    This whole subject will be a moot point once the speculative oil bubble pops.
    Will be? Great to see you guys are so convinced that it is just a matter of time. Any bets on when we can expect this happy event? What would precipitate the pop? New president? New congress? Panic selling caused by…?

    In the meantime, steady as she goes. Pretty soon we’ll consider a drop to $120/bbl a popping of the bubble.

  • avatar
    Engineer

    If your electricity is about a dime/kilowatt…
    On a technicality: That would be a dime/kilowatt-hour (kWh), as kW is a unit of power (hp) and kWh is a unit of energy (BTU, cal, J, barrel of oil equivalent, etc.).

    And the economics for the Volt does not look promising @~$40,000 per unit, as pointed out by Paul Niedermeyer.

  • avatar
    KixStart

    Engineer, Yes, thank you, I meant KWh but the brain got ahead of the fingers.

    And I remember Niedermeyer’s article. Of course, many of us have looked at the economics and it’s hard to imagine a scenario where the Volt wins. Driving exactly 40 miles per day, 365 days per year is the optimal scenario for the Volt but, even at that, the high price makes the vehicle uneconomic.

    There are a few posters on GM-Volt who have some sense. This note:
    $28,600 is the maximum for competitive Volt pricing
    caught my eye. I think “Tom” is on to something. I don’t know what “studies” he’s referring to, so it’s very hard to say how much confidence should be put in that number.

  • avatar
    golden2husky

    None of this matters if you take GM history into account. The GM playbook says to make sure the first iteration sucks. Not that the engineers want that, but in order to do anything, they have to sell it to the beancounters by recycling enough existing parts to shock the Sierra Club. Then, after you cement the products’ reputation for being a POS (fill in your favorite here – Quad 4, Fiero, Auoura, etc) you get the aforementioned beanie boys to cough up the cash, mostly because of the staggering warranty costs. But by then nobody is interested. So when the product finally begins to resemble what it should have been from day one, it gets canceled. So, why will the Volt be any different?

    By the way, how much are we quoting for a KWH of electrical energy? I pay almost 20 cents per KWH!!

  • avatar
    KixStart

    My wife pays the electric bills and I never look. The last time I checked it was $.08/KWh. I understand some areas still have that.

    But at $.20/KWh and gas a mere $4/gallon… the Volt is impossibly uneconomic. In CA, $.30+ is not unusual, I hear. Of course, at that price, solar looks much more attractive. Buy a Volt and 4KW in solar panels to feed it and you might have something. Or not.

  • avatar
    Under_the_Bus

    We are simply quite startled and amazed at how everything is working according to plan

    Tells you how long it has been doesn’t it?

  • avatar
    rtz

    This happens far to often. A car company builds something people would actually like to buy. Then they price it out of reach, and guess what? It doesn’t sell in large numbers! Happens every time.

    Remember the SSR? What’d that cost? Like forty or fifty thousand? How many total did they sell? Five?

    Are the NSX and the Viper rare cars? More rare then a Corvette that’s for sure.

  • avatar

    For those waiting for the “speculative oil bubble to burst,” the intervening time could be spent studying this slideshow, by one person who is convinced you ain’t seen nothing yet.

    Matthew R. Simmons is fairly well clued into energy issues, and was the first one to call the juggling with facts by OPEC as to the size of their reservoirs.
    But this very well illustrated slideshow gives you the lowdown on the oil industry’s woes – and you really ain’t seen nothing yet.

    http://www.simmonsco-intl.com/research.aspx?Type=msspeeches
    The speech in question is The Unknowns in 2008, number two from the top.
    pdf link: http://www.simmonsco-intl.com/files/Platts%20Crude%20Oil%20Conf.pdf

  • avatar
    Pat Holliday

    I don’t know how much this figures in GM’s plan, but in principle at least I can see the Volt being extremely suitable for over here (UK.) Probably in many parts of Western Europe too.

    Our fuel prices are more than twice yours, our roads are smaller, cities denser..

    And new cars are more expensive to buy. A pricey Volt could still sell well, given the general high costs of living.

    Not enough to save the General necessarily… just worth considering.

  • avatar
    Nicholas Weaver

    Note that Honda is doing the opposite: They are in quiet mode, with a new Hybrid for 2009, as a 5-door, based on the FCX Clarity (so think “Prius Profile but doesn’t look like a prius”), and focused entirely on cost (“You should see full cost recovery in 2 years of driving”).

    Unlike the Volt, it hasn’t been hyped, they have a blank spot on their web site, but you know there is that shark in the water as well.

  • avatar
    1138

    i know people are arguing for Nukes as the wave of the future and I see the positives but what about waste? How do we dispose of it? France has even admitted that they are beginning to have problems disposing the waste their plants create. Are we going to end up burying our waste? and where? Your backyard or mine?

    Whatever happened to the possibilities of Solar? Is the tech that impossible to mature or evolve and make it efficient and cheap? I see solar cells on top of our parking meters and wonder if our charging stations for the volt could be powered by solar cells. Now that would be cool!

    I know nuclear is the short term solution but wonder if the long term results could spell a disaster for us?


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