Why Chevrolet's "Big Month" for The Volt Means Less Than They'd Like You To Think
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This article was published in collaboration with GlobalPossibilities.org.
The press releases would have had you believe that champagne corks were popping at RenCen, also known as Renaissance Center in Detroit, General Motors' World Headquarters. The Chevrolet Volt, that modern marvel of American automotive know-how, was the best-selling electric vehicle in the U.S. in August. Not only that, it was an all-time record for Volt sales. 2,831 Volts found new homes last month...more than tripling sales of the Toyota Prius Plug-In (1,047 units sold), thrashing the all-electric Nissan Leaf (685 sold), the Ford Focus Electric, which sold 34, and the Honda Fit EV, which sold...um...nine.
Let's look at those Volt numbers. 2,831 copies in one month, almost a 1,000-unit jump over the July sales figure, which was also trumpeted as a victory. Year-to-date, it's outselling the Corvette (a moral victory for those of the Green persuasion and those secure about their sexuality) and GM claims it is on target to sell 20,000 Volts in calendar 2012 (total sold as of August 31: 13,497).
And despite all this, Chevy has shut down Volt production for the month of September to "match supply to demand".
Trouble is, the original sales projection for the Volt was 60,000 per year. After a while, Chevy scaled that back to 45,000...and now, it's cause for excitement that they might sell 20,000 (one-third the initial number, less than half the "adjusted projection") this year.
In the real world, that's called bad news. And when they're not crafting press releases, I guarantee you that the gang at RenCen are fully aware of that, because, according to industry analysts polled by Reuters, they lose as much as $49,000 on every single Chevy Volt. It's an expensive car to build...$89,000 per car, according to those analysts. And even with loss leader pricing ($39,145 base price before options, tax and delivery charges) and a $7,500 tax credit, it's an expensive car to buy (figuring in the tax credit, the one I drove for a week recently ended up at $35,530...and there were option boxes left unchecked on that one). Worse, it's virtually certain the past two months of hot sales numbers were goosed by sweetheart lease deals, as cheap as $5,050 for two years. That leaves someone holding the bag for $83,950.
For those not familiar with the Volt beyond gushing from greenies who believe it's the car of the future now or frothing at the mouth from FOX News, which claims each Volt sold costs U.S. taxpayers hundreds of thousands of dollars, here's the scoop: It's a large-ish compact sedan, somewhere between the Chevy Cruze and Chevy Malibu. Cruzes start at $16,800 and get up to 28 MPG in the city and 42 MPG on the highway. Malibus begin at $22,390 and get up to 25 city/37 highway.
The Volt? We've talked about the $39,145 MSRP (triple the price of the Cruze, not quite double the Malibu)...the mileage thing is trickier. The Volt isn't a pure EV (electric vehicle), nor is it a traditional hybrid where the gas and electric motors trade off according to which is more efficient for that moment. With the Volt, you plug it in and charge it up. You'll get a range of 35 miles of pure electric power (which can vary depending on how heavy your foot is, driving conditions and use of power accessories). If you drive less than the range before you charge it again, you're golden...you've used no gas and created no emissions from the tailpipe. Chevy and the Environmental Protection Agency have agreed that this is the equivalent of a combined city/highway estimate of 93 MPG.
But exceed that range, and the car becomes a solely gasoline-powered vehicle until it is charged again. And the EPA combined city/highway estimate in that mode is 37 MPG. Better than the Malibu, within the margin of error for the same estimates of the Cruze.
Now, even if you end up driving 379 miles between charges (the estimated range of the total package), you're still getting the first 35 miles (give or take) of it done gasoline and emissions-free. But after that, you're no cleaner or greener than a lot of compact cars costing tens of thousands less. That's what's limiting Volt sales: You can be almost as environmentally conscious for one hell of a lot less. Greenpeace and The Sierra Club could get nice donations from the difference, if you're so inclined.
Even if you embrace the improving sales numbers and the possibility that 20,000 of these will be bought this year as a step in the right direction, there's another fact to consider:
These aren't mainstream cars. Nowhere close. GM's figures show the average...average...buyer of a Volt has a household income of $170,000. That's the top one percent plus six.
And the dirty secret? It's selling as well as it does...because it uses gasoline. The best-selling "green cars" do. Toyota has sold 143,297 Prius hybrids (lumping in the standard Prius, Prius V, Prius C and Prius Plug-In) since January....because every single one of them has a gasoline engine to keep the driver from being stranded (the Prius Plug-In differs from the Volt in that when it leaves EV mode, it switches to hybrid rather than purely gasoline power, and gets 50 MPG worst-case as a result).
It's called "range anxiety". Not knowing whether you're going to make it to your destination...or even the next hard-to-find charging station...before the power runs out. And the Nissan Leaf is the poster child. Nissan's early PR suggested it would travel 100 miles on a single charge. The EPA did not agree, and issued an official estimate of 73 miles.
Nissan snickered and built them so that after a full charge, the range indicator shows 83 miles.
The fun is only starting.
I took a Leaf showing 83 miles on a 15-mile errand during lunch hour not too long ago. Babied it. Kept the air conditioning off, windows up, stereo off, drove like there was an egg taped to the accelerator pedal. At the end of those 15 miles, the range indicator read 57. So 15=26.
No problem. I'd made arrangements with the building supervisor for a parking space next to a 120V outlet in the company garage. I'd get six hours worth of charge (not quite enough to get it to full, but giving me a comfortable cushion for the 25 mile drive home that evening). Except. The Leaf kept tripping the circuit breaker. Turned out to be the outlet's fault, not the car, but it meant no charge, and a drive home in rush hour with no more juice than was in the car. 57 minus 25 is 32. But the Leaf showed only a 19 mile range by the time I pulled into my driveway that evening....and it was estimating a 14-hour full recharge on household current. More trouble. I'd just finished a double shift. It was 7PM. I needed to leave for work at 4AM. That's only 9 hours of charging time. I left the next morning showing 55 miles on the range meter, with a 25 mile drive (same as last night, just the other direction). Good news...it wasn't rush hour. Bad news...it wasn't rush hour. What that means is that while there wasn't much unpredictable about 4AM traffic, it also meant running 65 miles per hour on the freeway, which eats the charge quicker than say, 40 or 45. The range meter showed 22 when I got to work. Thankfully, the building supervisor had sent an email. A good outlet had been located and blocked off for the Leaf. The bad news? The Leaf again needed 14 hours on 120V household current, and I was only going to be at work for 8.
The week with the Leaf went pretty much along those lines. Sure, a 240V charger at the house (and another one at the office) would fix all of that (for another $2,000 apiece), cutting charging times in half. But what happens when you've used half the charge, the phone rings and it's one of your kids who needs you now...five miles further than the (optimistic) range indicator tells you the car can go?
The truths are evident:
Purely electric vehicles are dependent upon a charging infrastructure that, at present, we don't have, both in terms of convenient locations and rapid charging. And the average person is going to want a whole lot more range besides.
Cars like the Volt are more appealing to buyers because they remove range anxiety. But they also work if you NEVER charge the car, meaning that the moment a buyer thinks it's too much hassle to charge it, the Volt becomes no better or worse than any other compact that gets a combined 37 MPG in the city and on the highway. There's no oversight on how drivers power their Volts, so the lazy driver gets to keep the tax credit, as well as any state or local incentives such as HOV lane access, even though a discharged Volt is just another gasoline-powered car. The revolution in automotive power ultimately won't matter until everyone is driving revolutionary vehicles. Or at least a significant portion of drivers. But technology costs money. The average car on the American road today is now 11 years old. Until the economy improves, there will be more of a market for a '92 Crown Vic that still runs than for a Volt, Leaf or any EV (Toyota's found the sweet spot both in usability and cost with the Prius). And it's a good bet that 20-year old beast cancels out the ecological benefits of several EVs.
So just how do we get there...and how long do you think it's going to take?