In Defense of… the Chevrolet Volt. Ish.

Critics of Chevrolet's upcoming plug-in gas-electric hybrid Volt fail to realize one thing: it doesn't matter if the car isn't perfect. It doesn't even matter if the Volt fails to achieve ANY of its much-hyped metrics: price, range or reliability. It's what happens AFTER GM's Hail Mary is released that counts. If GM can keep plugging away (so to speak) on the Volt, they could, eventually, offer a genuine competitor to the the all-conquering Toyota Prius. One need only look at the fiddly roof still blighting the once red-hot Pontiac Solstice to know the odds of this happening are not high. Or, alternatively, contemplate GM's new product development history vs. the genesis of the Prius.

Back in the late 1980s and early 1990s, academics investigated why Japanese companies in general, and Japanese auto companies in specific, were doing so well. A key finding: while American companies tended to think the choice was between a breakthrough, “leapfrogging” product and more of the same, Japanese companies often pursued a “rapid inch-up” strategy. With the latter, you get a reasonably good product at a viable price to market, learn from the process, then follow up with an improved (if still not perfect) product. Lather, rinse, repeat.

Companies seeking a "moon shot" breakthrough are much more likely to get discouraged, ball up the entire effort, and start over from scratch. They miss the basic rule: companies that aim for and achieve a series of base hits with innovative products often end-up outscoring those that alternate between swinging for the fences and sitting it out.

Japanese companies have had a further advantage: a significant number of Japanese "early adopters." These consumers are willing to buy bleeding edge technology for its own sake. They’ll pay well over the odds for an imperfect innovation– as long as it’s more advanced than any available alternative. That goes double if the new technology can be conspicuously consumed. Lest we forget, the Prius was originally developed for Japan, not for Hollywood.

Are these purchasing decisions rational? In isolation and in strictly financial terms, no. But when people buy a new technology, it gives the manufacturer the learning experience and financial means to launch continuous improvements and, eventually, benefit from economy of scale. The rest of us eventually get an improved, less expensive iteration. So, in the long run, these initially expensive decisions make a lot of sense.

Remember all of the arguments against digital cameras? The same process of slow growth leading to a mass market tipping point applied to the Prius– and could well apply to ALL hybrids. Is the Prius perfect? No. Does offer leading-edge technology at a price many people can afford? Yes, as we approach the third generation, it does.

This is a critical point. Toyota isn’t ready to say, “mission accomplished.” The next Prius, with slightly improved everything, will arrive next year. No doubt work has already begun on its fourth generation replacement.

Compare the Prius' slow and steady march to GM’s failed sprints. Time and time again, they’ve created a car they thought would leapfrog the competition. When it didn’t meet expectations, they cut off investment, often abandoning the model name. GM didn’t learn from the Corvair-Vega-Cavalier-Saturn (or the less ambitious Cobalt). Each time, they failed to quickly follow up with incrementally improved versions until they got the product right. (The exception that proves the rule: the Chevrolet Corvette.)

Seeking a breakthrough, GM spent a billion dollars to develop the all-electric EV1 (while serving pushrods to the masses). When the EV1 failed to set the world on fire, GM crushed it. Despite the looming Toyota Prius, lost U.S. market share and anti-SUV grumblings, there was no EV2.

True, GM does have its “dual-mode hybrid.” Though technically superior to the system in the current Prius, it was introduced in GM’s most outmoded package-—a large, live-axled, body-on-frame SUV. The enormous cost differential would not be insurmountable to early adopters. But what are the chances of buyers of large conventional SUVs fitting that description? Predictably, GM hybrid SUV sales have been dismal.

There will soon be a dual-mode Saturn VUE. The “dual-mode” variant will look much like regular VUEs, and the costly system could send its price deep into the thirties. But it could work. The key question: will GM continue to iterate even if sales remain low— or will they abandon the dual-mode system entirely when the Volt's E-Flex architecture appears? No points for answering that question.

The plug-in Chevy Volt is, indeed, GM's best hope in this most recent technological arms race. It will come in a distinctive wrapper (we think). It will seat four (unlike the EV1). On the downside, it's increasingly clear– thanks to Car Czar Bob Lutz' shrug at a recent test of a Volt mule– that GM's Hail Mary won't be cheap. Again, so what? The more important factor: does GM have the will (and financial ability) to learn from the experience and persevere through the inevitable setbacks to continuously improve upon the initial effort and bring the costs down?

We shall see. Meanwhile, critics of both the Prius and the Volt don’t get it. They knock the vehicles for failing to meet their expectations for a paradigm shift. By so doing, the naysayers delay the very things they claim to want.

Fantastic products rarely emerge from the lab fully-formed, like Athena from Zeus' head. And if everyone waited for perfect products, and criticized anyone who didn’t do likewise, we’d still be riding horses. The best possible products evolve over time when persistent visionary companies team up with technophilic consumers to engage in continuous innovation. At which point the naysayers say, “Now it’s good enough for me,” without the slightest sense of hypocrisy.