By on January 24, 2011

Production of Chevrolet’s Volt was supposed to be limited to 10k units this year, a target GM has already set its sights on surpassing. With 2012 volume projections now reaching 25k units, the next step in The General’s quest to prove that the Volt is a viable vehicle is a staggering goal: doubling its 2013 production target from 60k  to 120k units of production. According to Bloomberg, GM has not officially announced the 120k volume goal and may not build that many Volts in 2013 at all, if energy prices and supplier challenges don’t allow it. And though supplier issues could well leave the goal out of reach, even if GM is able to ramp up production to fulfill its 120k unit goal by next year, there are no signs yet that the market will support those production levels. After all, GM is essentially banking on the kind of volume-to-price niche that BMW has taken years to cultivate with its 3 Series… which starts at prices slightly below the Volt’s $41k, and still moved fewer than 110k units last year.

But GM CEO Dan Akerson doesn’t see the pushing Volt volume as a pure business play, but as a strategic hedge. He explains

We want to stay sharply focused on technology. We don’t want to be caught flat-footed as we were in 2008.

And thanks to heavy government support, GM can afford to make those kinds of strategic gambles… although government support has its own hazards as well. For example, GM may be able to build its Volt sales volume to near five-digit numbers… but only as long as it gets a $7k government consumer tax credit which brings the Volt’s effective purchase price into the mid-$30k range. After GM sells 200k Volts, however, that credit will expire and GM will have to sell Volts at MSRP, putting it into the tough situation of having to replicate the BMW Dreier’s high-MSRP, high-volume formula. If GM’s efforts to build production volume brings costs down within those first 200k units, it could then reduce the price of the Volt and potentially have a better chance of keeping sales volume up… on the other hand, if demand remains weak, no supplier is going to jump to reduce costs on a vehicle with little hope for ever achieving mass sales volume. More likely, however, the government will simply re-up the tax credits allowing GM’s plug-in to continue avoiding the market pressures that make EV gambling so tricky.

Get the latest TTAC e-Newsletter!

60 Comments on “Will GM Sell 120k Volts Next Year?...”


  • avatar
    SVX pearlie

    Obviously, the point is for GM to maximize subsidized sales to get volume under the unique drivetrain tooling and technology development investments.

    If GM can sell 120k Volts to eat up the lion’s share of the 200k $7500 credit pool, they should do so, especially with Leaf, Miev, and other EVs coming out as competition.

    In this case, there is a clear first mover advantage, as waiting may see the credits go to another OEM. Or delayed / reduced additional credits in the future.

    Right now, GM has the market to themselves, so they should maximize that advantage.

    • 0 avatar
      KixStart

      It’s hard to see what advantage there is owning the market for astonishingly expensive compact cars.

      Until the price comes down, volume is limited to the number of absolute EV fanatics that can be landed.  Even with the subsidy, the Volt is hardly a steal and the existence of the 50mpg Prius starting for $11K less than the Volt’s effective price gives everybody but the real hard core pause.

      And price depends almost entirely on the battery.  The Volt isn’t all that much different than the Prius, in terms of drivetrain; the big difference is the size of the battery, the size of the electric motors and the software in the Volt that holds the gas engine at bay until the battery is depleted.

      GM doesn’t own the underlying battery technology, so they pay the same as everyone else and don’t have a lasting market advantage there.  In fact, the entire rebate program amounts to a subsidy of LG.

      When battery prices (and reliability) are such that Toyota’s marketers think they can market a Prius-EV/PHEV, then it won’t take them long to do it.  And it’s going to be relatively easy to price the Prius-EV/PHEV lower than the Volt, since so many of the components will be bog-standard Prius components.  Their entry will have built-in economies of scale from the get-go.

    • 0 avatar
      John Horner

      The Bowmar Brain (the first US made portable electronic calculator) first retailed for $249 in 1971. Within a few years the price for similar units had dropped by more than half, and today that functionality costs pennies.
       

    • 0 avatar

      Unfortunately, Moore’s law only applies to transistor density.  Most of the cost delta on the Volt comes from the batteries and AC motors.  Even the most optimistic price projection for Li-ion such as the Deutsche Bank report show mid single digit declines for $/kWh over the next decade.  As for these permanent magnet AC motors, their reliance on elements mined in China has been covered extensively here and elsewhere.

  • avatar
    jmo

    Much of it would seem to hinge on what oil prices do in 2011.  I’d say the chances are quite high that prices in January of 2012 will be higher than they are now.

  • avatar

    Here’s a question…
    Can the VOLT regain any energy from the sudden change in air pressure when a 300C SRT8 FLIES PAST THEM ON THE HIGHWAY?

  • avatar
    FleetofWheel

    “Right now, GM has the market to themselves, so they should maximize that advantage.”
     
    And what stable, readily defined market is that?

    • 0 avatar
      SVX pearlie

      That would be the “EV” market.

      GM has moved well over 300 of them last year, and will sell far more this year.

      Everybody else is playing catch-up:
      - Leaf didn’t even sell 2 dozen last year, deliveries are on hold
      - Miev isn’t on market
      - plug Prius not yet available
      - Escort EV not yet available
      - Mini EVs withdrawn & headed to crushers

      In 6 months, that should (will?) change, but right now, GM owns the “EV” market simply by weight of numbers sold. In a year, if GM manages to move 80-100k Volts to take 80+% of the market, GM’s Volt may gets to define “EV” in the same way that Toyota defined the word “hybrid” with their Prius. It would be amusing if BEVs end up DOA if they don’t include expensive EREV technology.

    • 0 avatar

      Nope. It’s the plug-in hybrid market… and while GM has that niche to itself for now, all bets are off once the plug-in Prius comes on line for less money, and with a better reputation.

      (Yeah, I know, GM would love for all of us to call the Volt an EV… but not all of us are as gullible (complicit?) as the feds are. All the Volt is, is a glorified hybrid.)

    • 0 avatar
      SVX pearlie

      In theory, the Leaf was supposed to come out last year, and should be giving the Volt a run for the money.

      In reality, there are thousands of Leafs sitting at the Nissan factory in Japan, and only GM is delivering.

      It sounds easy, and should be easy, but reality shows this not to be the case.

      The question is which Toyota will be making the plug Prius? The current one which decontents like crazy and releases operating software without any failsafes, or the original one which made a reputation for quality and value?

    • 0 avatar
      golden2husky

      (Yeah, I know, GM would love for all of us to call the Volt an EV… but not all of us are as gullible (complicit?) as the feds are. All the Volt is, is a glorified hybrid.)
       
      I really think you do the Volt a serious injustice.  In fact, GM should be commended for making a vehicle that can run for at least 25 miles on electric, generate its own electricity, and at high speeds couple the engine to the drive wheels.  It does everything the plug in Prius will do, plus a lot more.  No offense, but I detect a bit of “Farago-Itis” with your comment.  Can it on value and cost, sure.  But the fact that it can run solely on engine power alone is a plus and GM should be praised for it.

    • 0 avatar

      But the fact that it can run solely on engine power alone is a plus and GM should be praised for it.

      So can my 2006 Mazda, and it was half the price of a Volt… (I know, you meant “electric.”)

  • avatar
    OldandSlow

    To GM: Don’t count your chickens to all the eggs have hatched.  As far as I know the first Volts are just now hitting the streets.

    • 0 avatar
      SVX pearlie

      Indeed. And getting product on the streets is task 1, which, from the silence appears to be going well.

      Nissan isn’t even delivering as promised.

      GM seems not to have customer issues making the press.

  • avatar
    gslippy

    It’s hard to justify even mid-30s for an economy car.
     
    The Volt doesn’t offer the passenger room of a typical mid-30s sedan, and its overall cost of ownership is high.  I just don’t see 120k demand for a novelty vehicle, particularly of this complexity.

    • 0 avatar
      SVX pearlie

      It’s got more passenger room than a Porsche 911 2+2 costing more than twice as much.

      If someone wanted passenger comfort above all, they’d take that same $40k and buy an Enclave.

    • 0 avatar
      CJinSD

      GM misplaces more cars each year than Porsche sells. I’m sure they can sell just as many Volts as Porsche sells 911s, but that won’t help the bottom line.

    • 0 avatar
      geeber

      That 911 2+2 has a “Porsche” badge on the front. People will tolerate less space in the 911 for that badge alone. The Volt has a Chevy bowtie there, and people who buy Chevys use them as everyday cars.

      Let’s compare apples to apples, please.

    • 0 avatar
      HoldenSSVSE

      It’s hard to justify even mid-30s for an economy car.
       
      The Volt doesn’t offer the passenger room of a typical mid-30s sedan, and its overall cost of ownership is high.  I just don’t see 120k demand for a novelty vehicle, particularly of this complexity.

      ====================================================
       
      The Prius doesn’t offer the passenger room of a typical sedan, and its overall cost of ownership is high.  I just don’t see 120k demand for a novelty vehicle, particularly of this complexity.

      Circa 2003…

      just sayin’

    • 0 avatar
      KixStart

      HoldenSSVSE: “just sayin’”

      It’s $33K.  At current gas prices, the Prius, which MSRPs for $22.8K (if you ask nicely, it can be discounted a bit from that), is selling maybe 11K per month.  Taxes and insurance are higher for the Volt.  Economically, the Prius makes more sense in a variety of driving situations.  If your commute is short, you don’t get full value of the Volt’s 40 mile EV range.  If your commute is very long or you often take the car out of town, the Volt’s mediocre extended range fuel economy hurts the comparison.  If you want 5 passenger capability, you’re out of luck.

      The Prius is said, by Toyota, to be about as profitable as any other $22.8K car.  They are actually motivated to sell as many as they can.  We’re not sure if the same is true for the Volt and GM.

      The Volt is not a bad idea but the execution probably leaves a few things to be desired and it’s way beyond the price curve for anything but a fanatic.  As noted above, by Praxis, battery prices probably aren’t going to decrease all that much during Volt Gen 1′s lifetime.

      I don’t think the Volt is a bad idea but building a vehicle to suit Maximum Bob’s egomania is not a good substitute for proper marketing.

    • 0 avatar
      PeteMoran

      @ KixStart
       
      The Volt is not a bad idea but the execution probably leaves a few things to be desired and it’s way beyond the price curve for anything but a fanatic.
       
      I agree. The Volt is nothing more than HSD with the locations of the ICE and main electric motor swapped, and a big new laptop battery. Maybe Toyota should sue them.
       
      It boggles the mind how it took so long or cost so much to develop. Maybe there’s a dumped drive train or three in there somewhere.

  • avatar

    that would be shocking

  • avatar
    mad scientist

    I wonder how long the Volt batteries would last here in Boston, both moving the darned car and keeping one’s ass warm during this ridiculous deep-freeze.

    • 0 avatar
      HoldenSSVSE

      The Volt’s batteries are “climate controlled” with a system to help maintain the temperature, just like Tesla, Prius, Escape, etc. etc.  A Leaf is air cooled only – of what I understand the only EV mass produced out there like that (the Fiat is also climate controlled); its range would have been devestated in todays cold in the northeast corridor.  The Volt has already been tested in extreme cold, including by the media and the range was in the very high 20s to low 30′s running the heat etc. etc. before the gas engine came on.

    • 0 avatar
      mcs

      Our Prius, which usually averages 50+ mpg, was only managing about 20 this morning. The real problem with the Boston area is the prevalence of on-street parking. Ground zero for potential Volt buyers is Cambridge MA and the vast majority of parking there is on the street. No place to plug them in. Forget about charging stations because they’d get destroyed and/or buried by the snow plows.

  • avatar
    tallnikita

    A more poingnant question should be, who sells more next year, Saab of all of its car models, or GM Volt.  bwahahahahahaha!

  • avatar
    HoldenSSVSE

    Say what you want right now for the short term, there is one thing that is clear.  The General was very careful with the Volt launch.  Deliveries are rolling, production is up along with interest and there are a ton of trophies to add to the case.

    The Leaf is basically on hold now and the number delivered globally can almost be counted on your fingers and toes.  Nissan is now saying “production delays” could stretch delivery out eight months.  What was a hiccup is now turning into a PR quagmire in an attempt to “one up” marketing departments.  However, when we go, “where’s the beat,” at least in the last couple of months the answer is clear.

    I think the 2013 target production numbers have five key gating factors:

    1) Price of gasoline – this seems like a safe bet
    2) Economy of scale and/or engineering improvements causing either battery capacity increases (allowing for less cells and a cheaper pack) or lower cost production – potentially a safe bet
    3) Can suppliers meet demand to even produce that many (the answer today is not just no, but Hell no)
    4) Wll consumers care – yet to be seen – but the Volt is well received – but press awards <> sales
    5) Where is the competition.  Will the Tesla S make production and will the $49K model be a viable competitor, what about the Ford Focus, the RAV-4 electric, Fiat 500, improvements on the Leaf, and a long list of other potential contenders.  Will we see a market where 500K electric vehicles could be sold in North America by 2013 to support all these models and sales goals projections? This is the big wild card

    Most important, GM hasn’t even said they are going after the 120K number, it’s all speculation.

  • avatar
    KixStart

    Akerson: “We want to stay sharply focused on technology. We don’t want to be caught flat-footed as we were in 2008.”

    And in 1973.  And in 1978.  And in…

    If you can sell the Cruze at a profit and ramp production rapidly to meet increased demand, Dan, you should be OK.  If you can’t… well… the Volt is not going to save you.  High gas prices will hurt the economy and sharply restrict the number of people who have $33K to buy a Volt.

  • avatar
    Mike999

    I think you’re all forgetting:
    1) The Volt has a turbine smooth feel of an electric motor.
    2) the Volt is the Return of GM to Electric Autos, this isn’t just an EV or Hybrid, this is the first model year, Not just a car, a collector’s item.
    3) The Volt is the Future, and can free you from Arab Oil ( for the most part ).  Also the plug helps protect you from fuel shortages.  Interesting that the EIA is failing to warn of possible fuel shortages.
     
     

    • 0 avatar
      wgmleslie

      It might be able to free you from Arab Oil, but only if the US power grid can handle hundreds of thousands of cars charging each night.
      I have yet to see anyone provide a good load analysis.  (I can only imagine what would happen during a heat wave.)

    • 0 avatar
      CJinSD

      The people that are going to become otherworldly wealthy via exploiting their neighbors to mine battery materials make Al Qaeda look like Methodists. Give me a few terrorists over the genocides of Africa.

  • avatar
    JMII

    Are people buying Volts or just leasing them? I agree with gslippy, its very hard to justify this kind of money for a 4 door Chevy even if your using NO gas because you work within the Volts electric range.
     
    Quick research on Wikipedia shows it took the Prius 7 years to reach those sales numbers in the US… so I’ll got out on a limb and say no f-ing way the Volt is going to hit 120k in one year.

    • 0 avatar
      dastanley

      so I’ll got out on a limb and say no f-ing way the Volt is going to hit 120k in one year.

      Unless the federal government buys a crap load for their fleets.  Oh yeah, I forgot, our country’s in the hole by almost $14 trillion.

    • 0 avatar
      HoldenSSVSE

      Go back and actually read the story, not just the headline.  The question was for sales in 2013, not 2011 or 2012.  Also the 120K number was not GM’s number, it is pure speculation on TTAC’s part.  GM’s target for 2013 is 60K.

      I can hear the conversations around the water cooler now, “GM says they’re going to sell 120K Volts next year, har, har, har.” (not directed at you personally – the headline is VERY misleading)

      From the story itself…as it appears right now:

      According to Bloomberg, GM has not officially announced the 120k volume goal and may not build that many Volts in 2013 at all

      Bold emphasis added by me

    • 0 avatar
      golden2husky

      Unless the federal government buys a crap load for their fleets.  Oh yeah, I forgot, our country’s in the hole by almost $14 trillion.
       
      Maybe President Obama can trade Volts for Al-Qada terrorists.

  • avatar
    KTS

    If all GM could count on was Northeast and West Coast green stupidity, they’d never make those sales figures… BUT, when the Federal Government mandates Volts for fleet buys, and the Blue State state and local governments join the party the 120K units might become real, certainly 60K is attainable, plus motor pools might be the most effective recharging methodology.
    For the general public, recharging is an issue.  Where’s it going to come from?  Will employers provide outlets in company parking structures?  What will the cost be for recharging, and who will pay for it?  Note that for all practical purposes commuter employee recharging will be conducted in the day, the most expensive time for electricity, and that’s no small issue in a place with blistering hot summers, like L-A, or Houston, or Phoenix, or Philly for that matter.
    If utilities supply recharging juice at friendly rates, won’t non-EV taxpayers be subsidizing their green mates, and is that sustainable politically?
    Finally, where’s all this electricity coming from?  With states and cities now mandating X percentage of wind and solar, and coal-fired plants under environmental challenge, and new nuclear plants unplanned and unbuilt, only natural gas is potentially the carbon resource of the future.  )Oops, carbon, I just said a dirty word didn’t ?)  Count on one thing, electricity is going to be very, very expensive.

    • 0 avatar
      mad scientist

      I’m no fan of GM or the Volt, however, your attitude is no different than that of the wise men who said that air travel would never be possible, that the ordinary citizen  would never have use for a home computer, or that a hybrid car would never sell.  Record players will never be replaced by CD’s, CD’s will never be replaced by mp3′s, blah, blah, blah.
      It’s early in the game, and like it or not, oil isn’t getting any more plentiful, especially with the exploding Chinese market slurping it up.  Drill all you want, it’s a limited resource.
      Electric cars use emerging technology that is still in its infancy; in the meantime, chemists & engineers are already working on new materials to replace the old-fashioned metals in today’s motors and the rare earths used to produce batteries. The technocrats that embrace change and progress will bring about the inevitable developments needed to produce better electric vehicles that will eventually become mainstream. Lots of problems still to fix, but if we don’t want to become a 3rd-world nation then we have to lead the way.
      Alternate energy sources are the future, and the only real stupidity is being spewed by the “green deniers”.

    • 0 avatar
      tallnikita

      <<Record players will never be replaced by CD’s, CD’s will never be replaced by mp3′s, blah, blah, blah.>>
      Actually, those who like to listen good sound step back to CDs from mp3 reduction, and more discriminating ones are paying $1K for turntables.
      mp3s are are cheaper to own than CDs, but Volt is more expensive than a car at half its price.  and herein lies the breakdown in your logic.
      but this America, and our Government will again bailout the shortsighted and the plainly dumb.

    • 0 avatar
      FleetofWheel

      KTS did not say that EVs won’t become a primary means of auto transport but was talking about the near term obstacles of GM selling 120K vehicles.
       
      So no need to paint him as being against fire, ice cream and running water.
       
      You ought to check out some of the exaggerated claims of green screamers such strategic metals being depleted by the 1970s, the population bomb exploding before 2000, climate change[nee warming, nee cooling] and so on.

  • avatar
    mr_min

    Keep in mind that GM have announced that Volt will be introduced in other markets in RHD in 2012.
    So those sales number are not just driven by US volumes.

    I think that some of the point raised above about competitors are quite relevant.  GM are in a  position to capitalise on being first to market, and if the product quality and execution matches initial impression (Time will tell), then GM could had a hit on its hands.

    Look at the sales success of the Camaro, not bad for a niche vehicle with a styling/execution which doesn’t suit everyone.

  • avatar
    PeteMoran

    I want the tech to succeed, but I’ll eat my (carbon fibre) push bike if they sell that many. Is there another stock sell-off on the horizon?
     
    The Prius plug-in and further hybridisation of mainstreams models will be well under way by then.

  • avatar
    John Horner

    There will be a significant cost reduction achieved with larger volumes. The obvious intent of the government subsidies is to get each company over the early phase learning curve and to a point where they can sell advanced technology vehicles without tax breaks. It worked with the Prius, which used to qualify for a large tax break, but no longer does. The Prius is now a profitable vehicle for Toyota without subsidies.
    I wouldn’t be surprised if GM is able to knock $7k or more costs per unit out of Volt production if it is able to build and sell 120k units per year.
    GM’s biggest challenge will be the competition with Toyota, Nissan, et. al.

  • avatar
    DearS

    More fuel efficient cars are important for the economy to work in the long term. High profit Suvs help now, but that time will be at an end soon enough.

  • avatar
    rdodger

    My friend works at the engine plant in Flint where they build the Volt motor.  To date they have yet to get the engine right.  Apparently they are having lots of problems with building the engine.  The Volt engine is still coming from Austria.  He’s been there over a year and they still can’t get it right.

  • avatar
    panzerfaust

    I find it hard to believe GM will sell 120,000 units of any model, except perhaps pickups, much less be able to build that many Volts.  Thanks to government support, 7k TAX credits, and probably a bit of congressional arm twisting for the many government agencies to be ordering Volt’s as fleet vehicles, they’ll be up to 25k in 2012.  I smell a collosal GM level fail in the making.
    BTW the headline says ‘next year’ the text says 2013.

  • avatar
    Carlson Fan

     The Volt was a terrific first effort by GM. Sure it’s not perfect but that doesn’t make it a collosal fail. If GM doesn’t rest on its laurels, putting as much effort into the gen 2 & 3 Volt as it did with the original, eventually the 120K units a year and profitability will come. Just not in 2012 or 13. 

    Per some of the previous comments, anyone that doesn’t think the Volt is an EV is either your typical TTAC GM hater or walking around with they’re head up their ash. Most likely both!

    • 0 avatar

      Does the Volt require both modes of propulsion to drive the wheels in certain cases? Yes it does, as per GM’s own (eventual, 11th-hour) admission.
       
      That’s a hybrid. That’s a fact. No hatin’ necessary.
       
      P.S. Sorry to see that you think I have my head up my… tree. (Or are you typing with a lisp?)
       
       
       

    • 0 avatar
      panzerfaust

      I looked through the posts and I didn’t see any comments about the Volt not being an EV.  And my comment about the colossal fail was about GM doing a stereotypical failure to understand the market, the consumers and its competition.  The key is of course GM is banking (no pun intended) on government help more than they are on their product. From the article “even if GM is able to ramp up production to fulfill its 120k unit goal by next year, there are no signs yet that the market will support those production levels. After all, GM is essentially banking on the kind of volume-to-price niche that BMW has taken years to cultivate with its 3 Series… which starts at prices slightly below the Volt’s $41k, and still moved fewer than 110k units last year.” 
      The one thing GM does best is rest on their laurels, they’ve been doing it a long time and haven’t stopped even after a government bailout and restructuring.  The Volt is a good first effort, but will it sales increase five times what they’re expected for next year?  That’s a reasonable question and certainly not GM hating.

    • 0 avatar
      KixStart

      Caroson Fan: “The Volt was a terrific first effort by GM.”

      It’s a compact car with a small trunk, mediocre range-extended fuel economy, only 4 seats and it’s $41K.  If it wasn’t for a giant cash gift from Uncle Sam, midwifed by the Michigan Congressional Delegation, it would be almost entirely unsaleable.

  • avatar
    panzerfaust

    PS: 13,000 U.S. consumers have paid deposits on a Nissan Leaf.  Nissan hopes to move 150,000 units a year worldwide. It will cost $26,220.00 after federal rebate, and offers a 100 mile range per charge.  This is the competition GM is up against with the Volt. Like it or not it will also be competing against the Ford Fusion Hybrid, the Camry Hybrid, the Nissan Altima Hybrid simply because of the Volt’s size and the demographic GM hopes to reach.


Back to TopLeave a Reply

You must be logged in to post a comment.

Subscribe without commenting

Recent Comments

New Car Research

Get a Free Dealer Quote

Staff

  • Contributing Writers

  • Jack Baruth, United States
  • Brendan McAleer, Canada
  • Marcelo De Vasconcellos, Brazil
  • Vojta Dobes, Czech Republic
  • Matthias Gasnier, Australia
  • W. Christian 'Mental' Ward, Abu Dhabi
  • Mark Stevenson, Canada
  • Cameron Aubernon, United States
  • J Emerson, United States