By Edward Niedermeyer
April 1, 2008 - 16,367 views
David Kiley of Business Week (via MSNBC) dives into the CAFE issue, and in the process rounded up a wild-and-woolly collection of quotables from some of the biz' top bosses. The biggest news comes from Chrysler's Jim Press, who claims that that when he was at Toyota "the Japanese government paid for 100% of the development of the battery and hybrid system that went into the Toyota Prius." Although the revelation reeks of Japan Inc. business/government collusion, let's remember that our own government funneled over a billion to U.S. automakers at around the same time through the Partnership For A New Generation of Vehicles. The fact that the American people got little more than three concept cars is hardly the fault of the Japanese government or Toyota. Still, Press' revelation does shed some light on Toyota's current dominance of the hybrid market. Meanwhile, Bob Lutz continues to symbolize America's inability to meet the new demand for efficiency. In the same piece, Lutz unveiled the next generation of "Maximum Sticker Shock" for the forthcoming Chevy Volt: a cool $48k. Get some perspective on that number here.
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POWERED
April 1st, 2008 at 1:48 pm
That $48 k is the Lutz Celebrity version complete with Bob Bobblehead (able to speak out of both sides of mouth and still get it wrong)
April 1st, 2008 at 1:53 pm
The Volt has gone from $30k to $48k in 14 months. At that rate, (up $1280/month) it will be $100k when it arrives (or not) in late 2010.
April 1st, 2008 at 1:58 pm
What we have here is failure to communicate. Some men(Lutz), you just can’t reach.
April 1st, 2008 at 2:09 pm
If those loony new CAFE standards aren’t stopped, the average car in 2020 will be $35,000. Lutz is absolutely correct.
April 1st, 2008 at 2:11 pm
Vaporware. Not that GM can’t do it, but $48k is kinda ridiculous. How many years do you need to own a Volt before it pays for itself in savings? Two decades?
Japan subsidizing its auto industry isn’t a surprise nor is it a big deal to me. Korea does it. The U.S. does it, too. In nearly every facet of industry (aerospace, biotech, take your pick), not just the Automotive one.
Except the difference here appears to be that in this case Toyota actually produced something with the funds. What did Detroit really do with their $billion+?
April 1st, 2008 at 2:21 pm
Why do I care if the Japanese government subsidized the battery development if it lets me buy a real, efficient hybrid *now* at a reasonable price?
If anything, it was money very well spent.
April 1st, 2008 at 2:23 pm
John R,
I would be interested in knowing what governmental subsidies are provided directly for the domestic auto industry’s alernative energy R&D efforts.
April 1st, 2008 at 2:25 pm
@detroit1701:
There is a link provided in the article. Here I’ll repost it.
http://en.wikipedia.org/wiki/PNGV
April 1st, 2008 at 2:27 pm
$48K wow they are moving fast with the price hikes, almost to the $50,000 I said it was going ot cost. I am going to have to revise what I said the Volt would come out for. At this rate it will be right around $60,000, oh I see where our numbers differ, Lutz is adding in profit already and I figured they wouldn’t be able to make a profit on it for years if they wanted it to sell at all. Guess we will be seeing a repeat of the SSR and GTO, charging an assload that people aren’t willing to pay.
Would you fork over $50-60,000 for a hybrid from GM, GM! When you could go and get one for half from Toyota that you know you wont be beta testing. Anyone who buys one an unproven Volt at that price should have their head examined.
April 1st, 2008 at 2:36 pm
Amazingly it appears Detroit came up with some good things from that Billon+ according to the article.
The question is now why didn’t they do anything with what they came up with?
April 1st, 2008 at 2:44 pm
Orian: It’s too late, technology has moved forward. Oil was cheap in the nineties, and the Big Three weren’t interested - too busy selling big SUV’s. THAT is the whole point of what’s happened - Toyota stuck with their hybrid development, and they now have an essentially insurmountable lead.
April 1st, 2008 at 2:50 pm
Who will buy a $48,000 Volt when they can buy a $20,000 Prius? Is that question too obvious?
April 1st, 2008 at 2:50 pm
I realize that. It’s sad that they never moved forward with what they learned and created from this investment. Some of those accomplishments definitely could have helped them had they gone forward with them.
April 1st, 2008 at 3:05 pm
Screw the Vaperware Volt.
Just dust off the plans for the old Saturn EV1 and put it back into production. The 50-70mi of range with the Ni-MH batteries is more than enough for most folks to go about their daily business.
A $25k electric car NOW is worth far more than a $50-60k electric Edsel at some point in the future.
April 1st, 2008 at 3:13 pm
It seems quite easy for the Japanese Government and the Japanese people to support providing economic aide to their companies because their companies do appear to operate with clearly defined established GOALS that they manage to achive and BRING TO MARKET SUCCESSFULLY.
Hey stuff like this does lead to JOBS (high paying)and a successful economy.
Think about it, in the last 30 years Toyota has continously done wonders with whatever economic aide the Japanese government has provided to them. In the same time period our domestic automakers have squandered BILLIONS upon BILLIONS of hard earned dollars on acquistions and projects that have amounted to squawt!
Back in the 1980s Ford and GM did not need any government assistance. They had a shitload of cash in the bank. THEY were the target that Toyota was aiming at. They used to be the giants that other needed help to compete with.
We all know the rest of the story.
IRONY: IF the Doemstics spent all of there R&D cash on making the BEST SUVs in the world and Japan adn Co. spent their R&D cash developing hybrids and other efficient modern cars how come Toyota and Nissan are capable of ALSO making totally competitive SUVs today?
April 1st, 2008 at 3:22 pm
It doesn’t actually say that they’ll charge $48,000 for it. It is basically saying that (like the expensive two-mode hybrid system), GM will probably have to eat some of the cost of the car to keep its price at a point that consumers won’t run away from.
There is no way they’ll try to sell the Volt for $48k. My prediction: $39,995, but with some sort of government incentives.
Still, you can buy a hell of a lot of gas for the price difference between a $25k Prius and a $35k Volt.
April 1st, 2008 at 3:23 pm
RedStapler: Impossible. The EV-1 cost GM over $80k eack to produce, back then (about $100k in today’s money). Plus, it wasn’t anywhere near capable of meeting todays’ much more stringent safety standards.
April 1st, 2008 at 3:34 pm
Even with 35k for the Volt, if it comes with that built in Chevy quality then it will flop. The Pruis would be cheaper, has a very nice interior and all the luxury features that those buyers want. Can Chevy provide even 10k more product?
April 1st, 2008 at 3:47 pm
It’s three months, not fourteen.
Now Lutz envisions selling hundreds of thousands of Volts a year, probably priced below $30,000. Detroit’s horsepower jockey insists the Volt will be his crowning achievement—and his swan song. “This is like JFK’s call for the moon shot,” he says. “I want to stick around to see the Volt come to market. Then I’ll pack it in around 80.” And ride off into the sunset on electric power.
http://www.newsweek.com/id/81580
April 1st, 2008 at 3:50 pm
$48k? Tell me that is an April 1st type value…
Otherwise GM will continue to be a laughingstock.
It looks like GM is taking the worse predictions of that Toyota President who expressed skepticism and making him look like an optimist.
Next Volt great news: Battery warranty and cost? I bet 6 year warranty with $20k replacement cost to consumers.
SNAFU at GM.
April 1st, 2008 at 3:59 pm
The Volt is an attractive concept, far more practical than the hybrid choices which I think will, in the future, turn out to be band aids but when you get into that price range there are some very tempting choices out there!
April 1st, 2008 at 4:07 pm
Why so much money? Take an existing desirable small car from the Opel lineup, federalize it and throw existing EV-1 technology at it. Include a very small gas engine (650cc motorcycle engine tuned for torque) to run a big alternator.
Why so much cash for this thing?
Well for one it is a unique body… Unique interior… Maybe it has a unique chassis…
I figure they’ll build it, sell 2000 of them and pronounce it a failure and complain that Americans just don’t want a plug-in hybrid (while mumbling “at those prices”). Wait a year or two and some Asian car company will release the same basic idea at a more reasonable price and sell hundreds of thousands recieving much acclaim.
April 1st, 2008 at 4:12 pm
Not surprizing that Japan WANTS to see their domestic automakers succeed. I wonder what the total bill was?
If you really think Chevy will try to charge $48K for the Volt then you’re just plain crazy. Bob Lutz is stirring the CAFE pot by pointing out that those costs will be passed on to the consumer. Call it scare tactics.
April 1st, 2008 at 4:23 pm
Stein: It’s three months, not fourteen.
No, the Volt was introduced in January of 2007 (NAIAS Detroit). http://www.autobloggreen.com/2007/01/07/detroit-auto-show-its-here-gms-plug-in-hybrid-is-the-chevy-v/
I know it only seems like two months ago, but…
April 1st, 2008 at 4:59 pm
Hi Paul - yes I know when it was introduced. But Lutz hung on to the “below 30k” estimate as long as to the interview with Newsweek in the issue that was on the streets first week of January this year.
Planning is not their forte.
April 1st, 2008 at 5:19 pm
limmin, inflation alone will make the average car $35,000 in 2020.
April 1st, 2008 at 5:21 pm
The Volt has gone from $30k to $48k in 14 months. At that rate, (up $1280/month) it will be $100k when it arrives (or not) in late 2010.
I wouldn’t worry about. Six months after it’s out, the $76,000 factory cash back and 0% financing, bundled with a free GMAC mortgage and a toaster will make it a steal.
April 1st, 2008 at 6:20 pm
$48K Volt with or w/o cash on the hood?
The billions that went to Detroit went to bonus of execs.
April 1st, 2008 at 7:25 pm
Pch101 :
But don’t forget the toaster!
April 1st, 2008 at 7:47 pm
Is there any actual proof of what Jim Press said, or is he just expecting everybody to take his word on it? He works for the competition now, so why would anybody take what he said at face value?
April 1st, 2008 at 9:29 pm
At this rate, price and delivery date are both approaching escape Teslocity.
April 2nd, 2008 at 3:01 am
“The biggest news comes from Chrysler’s Jim Press, who claims that that when he was at Toyota “the Japanese government paid for 100% of the development of the battery and hybrid system that went into the Toyota Prius.”"
So what? The US Goverment via its military subsidiary does the same thing. An since when is sensible Government investment a pejorative?
April 2nd, 2008 at 9:40 am
Haven’t there been a bunch of gov’t grants to the big auto makers to improve their pollution controls and explore alternatives over the years? I can remember a few TVA programs exploring electric vehicles.
What return has the US gov’t gotten for it’s investments?
I think the CA laws requiring a small precentage of the CA fleet to include EVs was a good step forward. Yeah it’s going to be expensive but in the long run it would pay off.
The gov’t has had to mandate most of the big leaps in what we consumers are able to buy from the automakers. It was the gov’t that required pollution controls, seat belts, bumper requirements, lighting requirements, airbag requirements.
At the same time the safety nannies have had to educate the public as to why these features are important to the public. It still took a while. More than once I remember family cutting seatbelts out of their new 1970s cars b/c honestly, who wears these things anyhow?
Seems like if the gov’t or the imports didn’t raise the bar on the big 3 the consumer would still be buying 1963 Galaxie 500s with no pollution controls, no belts and no brakes… VBG!
I think the Asians will once again set the standard for the next generation of automobiles with a round of full EVs with 75 mile range. They’ll likely be the size and style of the Honda Jazz or the Toyota Aygo. Wouldn’t be surprised if GM responds with some hulking monster of a vehicle that also goes 75 miles per charge but lasts half as long and requires twice the electricity to do the job. They would have something to brag about - hauling something that alrge around with batteries but once again they would miss the point of using fewer resources.
Don’t believe me? Compare the Insight, the Prius and what GM has chosen to hybridize - huge SUVs and medium size SUVs. No thanks GM.
April 2nd, 2008 at 10:56 am
The focus for these cars is rapidly shifting away from saving money on gas to buying one to save the planet. All that is left is massive tax subsidies to buy, own, maintain and dispose of these things.
People in other countries have paid 4-10 dollars a gallon for a long time. Maybe we should just suck it all up and deal with the rising cost of transportation.
April 2nd, 2008 at 11:31 am
So Lutz thinks people are going to pay for one Volt what they could buy two Prii for?
Right.