Volt Birth Watch 175: California Dreaming

We had been hearing for some time now that GM planned to roll out its Volt EV in limited numbers and select markets, and it comes as no surprise to hear that the first such select market will be California. The Golden State is a hotbed of support for electric vehicles and, not coincidentally, one of the more affluent car markets in the world. A number of firms, from Coda to Honda have selected California as a test-bed for their high-efficiency but not-yet-ready-for-prime-time products. In California, GM is partnering with three public utility companies, and will spend some $30m of DOE-administered stimulus money to slow-roll the Volt into reality. According to GM’s release:

As part of the research and demonstration program, Chevrolet will deliver more than 100 Volts to program participants to use in their fleets for two years. Chevrolet will also utilize OnStar telematics technology to collect vehicle performance data and driver feedback that will be reported to the DOE and used to improve customers’ experiences with the new technology.

So how many Volts will actually be for sale in California, outside of the publicly funded data-collection program? “In the first few months we will be producing 4000 to 5000 Volts,” Bob Lutz said yesterday. “In the first full year we will make eight to ten thousand… We are going to ramp it up slowly because it is all uncharted terrain for all of us once we start turning out (battery) packs in very high rates.” Another challenge presented by the ramp-up to planned production levels of 50k-60k units per year is developing competency at building electric motors, since the first generation’s motor comes from a supplier…. which helps explain the Volt’s estimated $40k price tag.

No doubt the earliest Volts will sell, as Californians tend to be highly risk-tolerant, especially when it comes to limited-volume tech toys. The real news here is that GM believes it needs two years of research post-launch to “improve customers’ experiences with the new technology.” The Volt’s extremely limited availability in 2010/2011 will help prop up the Volt’s obscene price point, but there’s also a real chance of bad PR coming out of customer experiences.

And the longer-term question is also unclear. Lutz believes the EV/Plug-In/EREV market will hit 250,000 to 300,000 units per year in five years, and according to GM-Volt.com, he says “they will mostly be our products.” Given the products on the horizon, it seems unlikely that demand for these cars (which seem to have a price floor at around $35k) will really move at those volumes, let alone that the Volt will dominate the segment… especially if Lutz is worried about battery production levels of 50-60k units per year.