At the Washington Post, Charles Lane wrote an informative article on March 5th. In that article, Lane brought up a great many of the points I’ve been making in the 18 months or so I’ve been writing on electric vehicles, and particularly, the Volt. It’s good—and amusing–to see the Mainstream Media, with their unlimited resources and multiple layers of fact checkers and editors, finally trying to catch up to my scruffy little blog. As a brisk appetizer in anticipation of our main course, let’s review some of Lane’s points:
* Three days after Mr. Obama’s hubristic promise to buy a Volt as soon as he leaves office, GM announced that it would suspend Volt production for five weeks—it now looks like that suspension will be even longer—to more closely match supply with demand. Translation: Volts aren’t selling.
* Mr. Obama’s goal of one million EV’s and pseudo hybrids on the road by 2012 isn’t looking terribly doable. GM fell 2300 short of its 10,000 Volt 2011 sales target, and since it can’t get dealers to take Volts in any number (and in some cases, not at all), the 2012 goal of 45,000 is looking far more like marketing hype than reality.
* Battery maker A123 Systems is apparently on the steep downward path to bankruptcy, hot on the heels of Solyandra and other Obama Administration greenie favorites receiving massive infusions of taxpayer cash. A significant part of this failure is that A123 has been building faulty batteries which recently caused embarrassing failures in another Obama favorite, Fisker, which builds very pricey and almost never seen on the street—AKA: the real world–EVs.
* Progressives are ignoring science while claiming that conservatives do the same thing. There are good reasons why gasoline is an effective fuel and why battery driven vehicles simply can’t compete on their own merits, even when given massive government subsidies and when the government tries to drive up the price of gasoline. According to an Edmunds.com analysis, it would take nine years of Volt driving for the fuel savings to offset the higher purchase price when compared to a 42 MPG Chevy Cruze, the platform upon which the Volt is based. The average new car buyer keeps their vehicle an average of only five years.
Lane ends with a particularly telling observation:
Instead, Big Government and Big Business have focused on the Volt, the Fisker Karma or the Tesla Roadster, none of which is remotely affordable for the “99 percent” of Americans. And yet in his 2013 budget, Obama proposes to boost the tax credit for electric vehicle buyers to $10,000.
What’s ‘progressive’ about that, I’ll never understand.
Indeed, Mr. Lane. And now for your reading pleasure, a round up of what has been happening in the EV world since my last EV article.
ITEM: So Let It Be Written; So Let It Be Done! In early March, Mr. Obama gave one of his rare (hee, hee, hee!) speeches wherein he praised—drum roll please, Maestro—his brilliance in coming up with his policies! Mr. Obama said automakers were working hard to fulfill his vision of a CAFE average of 55 MPG by 2025, which would double current CAFE requirements.
That means folks will be able to fill up every two weeks instead of every week, saving the typical family more than $8,000 at the pump over time,’ he said. ‘That’s a big deal, especially as families are yet again feeling the pinch from rising gas prices.
Of course, Mr. Obama reiterated that there was nothing at all he could do about high and continually rising gas prices.
Actually, what it means is that millions of American’s won’t be able to afford new cars (estimates are that Obama’s new mileage demands will add from $3000 to $5000 to the MSRP of every new car) and gas prices will be so high many won’t be able to fill up at all, which is precisely what he and his greenie compatriots want. Rep. Doc Hastings (R-WA State) had things in better perspective:
The president, who campaigned on a promise to address rising gas prices, now talks as if they’re largely beyond his control.
Quite right, Rep. Hastings; quite right.
ITEM: “Chevrolet Volt named 2012 European Car of the Year!” So goes the Fox News headline of March 5, 2012. In Europe, the Volt is called the Opel or Vauxhall “Ampera.” GM has recently called the Volt a “loss leader.” Who could have guessed that it would also be the industry irony leader? On the plus side, the Volt was Motor Trend’s car of the year (as I noted, so was the Chevy Vega, one of the all time great automotive debacles), the 2011 North American car of the year and the World Green car of the year. I’ll admit I’d never heard of that one; I wonder if they made it up for the Volt?
And in a Panglossian display of hopeless optimism, Opel/Vauxhall CEO Karl-Friedrich Stracke said: ‘
This encourages us further to continue our leadership role in the area of e-mobility.
Even here there’s something new to learn: they’re not just electric vehicles, now it’s “e-mobility!” Fox noted:
General Motors originally planned to sell 60,000 Volts and Amperas worldwide in 2012, but after a string of bad publicity stemming largely from a lower than expected electric range rating from the EPA and a well-publicized fire following crash testing that prompted the automaker to voluntarily re-engineer the car to address the issue, sales have yet to take off. Only 1,626 cars were sold in the first two months of this year and will halt production of the car from March 19th to April 23rd in order to bring supply closer to current demand.
On the economic front, the Volt is selling so well, GM has dropped the monthly lease rate from $399 to $350 for 39 months. Wait a minute: if a product is in high demand, doesn’t that usually drive prices up? What’s that? Oh right: Obamanomics. GM North America President Mark Ruess–that kidder–said:
This technology is here to stay, we have all kinds of people who want to copy it and go after it. We are not re-evaluating anything…The only question here is what the rate of sales will be.
That’s a good question Mr. Ruess, a good question indeed.
ITEM: Volts Are Selling Like—Well, Like, Well, OK, They’re Not…GM has announced that it is suspending Volt production for at least another week. Sales numbers haven’t been good in 2012. GM sold only 603 in January and 1,023 in February. However, according to GM something over 2000 have been sold in March. That means GM will have to sell at least 4597 Volts per month for the rest of the year to make its 2012 sales goal.
Consider, however, that GE has recently announced the purchase of a large number of Volts, and the federal government is apparently also buying them in undisclosed quantities. GM has not provided information on who was buying the 2000+ vehicles in the March uptick, but it would not be unreasonable to assume that GM is getting a bit of help from GE and the feds. Consider too that at the end of February, GM had 6,319 newly assembled Volts on hand, which is nearly its entire 2011 sales. No wonder “about 1,300 workers at the factory [that assembles Volts] have been idled.”
Things aren’t much better for Nissan. It’s truly electric Leaf sold only 676 in January and 478 in February, despite being about $5000 cheaper than the Volt before the federal tax credit.
ITEM: THE PRIUS HEATS UP: According to Green Auto Blog, the Toyota Prius C hybrid continues to outsell the Volt and Leaf. Toyota sold 140,928 copies of the popular hybrid in 2011 and hopes for 220,000 this year.
The first three days the Prius C (a smaller, less costly and more efficient version of the original Prius) was on sale, Toyota moved around 8,400 vehicles, which is more than Chevy and Nissan sold combined in all of February.
So let’s see: An affordable, high mileage, flexible and useful conventional vehicle without range limitations sells, and grotesquely expensive, range limited vehicles using not-ready-for-prime-time technology don’t. Whoda thunk it?
ITEM: The Birthing Pains Of The Volt: Edward Neidermeyer produced a fine article at The Truth About Cars outlining the Volt’s history and its inherent difficulties. A sample:
It’s important to remember that the Volt was controversial as a car practically from the moment GM announced (and then began changing) production plans, becoming even more so when the production version emerged looking nothing like the concept. But it wasn’t until President Obama’s auto task force concluded that the Volt seemed doomed to lose money, and yet made no effort to suspend its development as a condition for the bailout, that a car-guy controversy began to morph into a mainstream political issue.
At that point, most of the car’s fundamental controversies were well known, namely its price, size, elusive efficiency rating, and competition. Well before the car was launched, it was not difficult to predict its challenges on the market, even without the added headwinds of ideological objections (which should have been mitigated by the fact that they were actually calling for government intervention in GM’s product plans while decrying the same). But GM’s relentless hype, combined with Obama’s regular rhetorical references to the Volt, fueled the furor. Then, just two months after Volt sales began trickle in, Obama’s Department of Energy released a still-unrepudiated document, claiming that 505,000 Volts would be sold in the US by 2015 (including 120,000 this year). By making the Volt’s unrealistic sales goals the centerpiece of a plan to put a million plug-in-vehicles on the road, the Obama Administration cemented the Volt’s political cross-branding.
It’s an article worth reading. Among Neidermeyer’s most salient points is that the Volt was on its way to production prior to Mr. Obama’s involvement.
Mr. Obama, acting to protect tax dollars, certainly could have stopped the Volt–he didn’t shrink from strong arming bankers, the insurance industry, the pharmaceutical industry and many others–however, it’s now clear that there was no way Mr. Obama and his minions would allow GM to stop Volt production no matter how few vehicles were sold or how much the taxpayer had to subsidize GM or prospective buyers. The Volt isn’t a product that meets consumer needs while providing profit for its manufacturer so much as an environmentalist article of faith that like Progressivism itself, can never fail. The Volt isn’t working because there isn’t sufficient infrastructure to support it, and there isn’t sufficient infrastructure because there aren’t sufficient EV’s, and if people were only smart enough to see how smart Mr. Obama and his chosen bureaucrats are and could only realize that they know what’s good for them far better than said people, they’d get down on their knees and thank Mr. Obama for the Volt, and around and around we go.
ITEM: Bold New GM/Peugeot Alliance! Well, sort of anyway…Ed Morrissey at Hot Air tells us that in early March, GM—which has yet to pay back the billions of taxpayer dollars it borrowed—sunk over $400 million—a 7% ownership stake–into Peugeot, a French car maker that has never had more than a boutique presence in the US. Morrissey noted:
Peugeot can undoubtedly use the cash. Last year, Peugeot’s auto making division lost $123 million. And on March 1 – just a day after the deal with GM was announced – Moody’s downgraded Peugeot’s credit rating to junk status with a negative outlook, citing “severe deterioration” of its finances.
In other words, General Motors essentially just dumped more than $400 million of taxpayer assets on junk bonds.
But there must be an upside? GM couldn’t be that financially inept? Yes it could:
An analysis by auto industry consultants IHS said it is ‘somewhat baffling that GM is willing to get involved in an alliance that it frankly does not need for size or complexity, while still avoiding any public plan to rationalise its European production, cut costs, or deal with labour rates.’
And did our allies, the French, return the favor? They didn’t? I’m shocked, shocked! Quick, call Captain Louis Renault! Morrissey wrote:
ABC’s Jonathan Karl notes that while GM bought a big stake in Peugeot, the Peugeot family had an opportunity to buy a stake in GM. They passed on that ‘opportunity,’ which just proves that the Peugeot family is smarter than GM.
Smarter indeed. When even the French are fiscally smarter than you, well, I’ll let you, gentle readers, fill in the rest.
ITEM: The Volt is Selling Sooooo Well…the President wants to raise the current $7500 tax credit to $10,000! Tina Korbe at Hot Air reports that on March 8th (my birthday! How did Mr. Obama know?) Mr. Obama unveiled yet another bold initiative to run up an already mind-boggling national debt:
In a speech before the Daimler Trucks North America manufacturing plant in Charlotte, N.C. today, the president delivered his answer to rising gas prices: He wants to increase the $7,500 tax credit for alternative-energy vehicles to $10,000, earmark $1 billion to reward cities that provide infrastructure for such vehicles, earmark an additional $650 million for a research program to increase the range and decrease the price of the vehicles, and repeal $4 billion of tax incentives for oil and gas companies.
Wait a minute! Mr. Obama wants to throw away an additional $2500 on every EV, give away a billion dollars to any city that installs infrastructure—charging stations which will enrich his ally, GE—and spend another $650 million for more EV research, while cutting $4 billion in tax incentives to oil producers which will drive up the cost of all manner of fuels even more?! Why would he want to do that? Korbe continues:
Why? Here is a telltale paragraph from The New York Times:
The credit’s enhanced value would bring the purchase price of alternative-energy vehicles more in line with conventional models, supporters say. Partly because of the vehicles’ costs, sales have been a problem. General Motors announced last week that it was suspending production for five weeks of the Chevrolet Volt, a plug-in hybrid that Mr. Obama has promoted in the past. On Wednesday, he did not mention his goal of having one million electric vehicles on the nation’s roads in 2015.
Hey! If the Volt is such a world-beater, such advanced technology everybody wants, why do we not only have to subsidize it, but economically punish the producers of oil? What’s that? Re-read the beginning of this article? Oh…right…
ITEM: So First They Spontaneously Combust…And now the 120 volt charging cables provided with each Volt have to be replaced. What’s up?
GM’s Randy Fox told AutoblogGreen that all 2011 model year and most of the 2012 model year Volts will get the updated cords. The new version has a thicker AC plug cord (the short end of the charge unit, from the charger to the wall) and a new design that relieves some strain points on the longer end of the unit, the side with the J1772 connector.
Fox said that the new cords are not related to the overheating problems we heard about last year. Instead, some Volt customers returned their units for replacement last fall, and GM engineers saw the update as something that could be done to ‘enhance the customer experience.’ In the cases where overheating was reported, Fox said, GM found most of them were caused by a worn or damaged AC wall outlet. Fox would not disclose how much this replacement program would cost GM, but extra 120V cords cost between $360 and up.
Ah! So this is being done—at a cost of around four million taxpayer dollars—merely to “enhance the customer experience.” Reuters was a bit more forthcoming on GM’s true motives:
The move comes after several Volt owners posted complaints in online forums about their charge cables overheating and, in some cases, partially melting, but GM spokesperson Randall Fox said that the move isn’t a safety issue.
‘It’s just an effort to offer a more consistent charging experience,’ Fox told Reuters. ‘It’s not a safety recall. It’s more of a customer-satisfaction program.’
So the “more consistent charging experience” is necessary because the old cables have been, you know, like, “partially melting,” which is generally considered a bad thing where large amounts of electric current is involved. But is that all? Let’s return to Green Auto Blog:
Fox added that, since many Volt owners need to contact their Chevrolet dealers to begin scheduling appointments to have additional crash structure enhancements added around the vehicle’s battery packs, they can be given the new cords when they come in for the repair. The additional steel is designed to protect against severe side-impacts. Technicians are also expected to add a new sensor to monitor battery coolant levels. The changes are in response to a National Highway Traffic Safety Administration investigation into unlikely vehicle fires. GM will reportedly continue to sell Volt models without the new structure and sensor, saying neither poses a safety issue.
So when you drop your Volt off for its routine, regular addition of “crash structure enhancements” around the volatile battery pack, and the addition of new battery coolant sensors, we’ll just replace another Volt accessory that can burn down your car and home! Honey, let’s run right out and buy a Volt now! Here’s our chance to commit insurance fraud and burn down the house!
ITEM: Your Tax Dollars At Work! Senator Carl Levin (D-MI) recently bought a Chevy Volt and is trying to pass a bill that would give the Architect of the Capitol the authority to install EV charging stations at around $7000.00 per copy so Sen. Levin can demonstrate to the 93% of American who can’t afford a Volt and/or are too smart to consider buying one, how it should be done. Levin quipped:
Passage of this legislation will be an important statement of leadership from the Senate. It will provide an example to other employers of how they can support both the needs of their employees and our national interest in energy security.
Well of course! It’s all about leadership and national energy security! Providing free charging stations for rich Dems in the Senate is the patriotic thing to do! And as a bonus, it will demonstrate what real Democrat leadership looks like! Haven’t seen any of that for what–three years? Fortunately, Senate Republicans were not amused:
Thursday afternoon, Senate Republicans blocked an attempted unanimous consent vote to hotline the legislation through the Senate.
I guess the Dems will just have to continue to lead from behind.
ITEM: GM Is Upset People Are Being So Mean To The Volt! In a recent NYT article, Joe Nocera explains that the Volt is getting bad press because Conservatives—particularly Fox News–are such meanies who just live to bad mouth brilliant Progressive advancements. An example:
Not to worry, though. With seven months to go before the election, Cavuto and his Fox News brethren will have plenty of opportunities to denigrate an innovative car, employing American technology and creating American jobs, in order to besmirch a president who had nothing to do with it.
It is, after all, what they do.
Regular readers may remember Mr. Nocera as the gentleman who last year wrote a puff piece on the Volt that virtually defines NYT puff pieces. I took Mr. Nocera to task in a recent article titled: The Chevy Volt: Fiscal Lunacy and the New York Times. Still, Nocera forges ahead, noting that Volt supporters are sure the political furor over the Volt will pass after November.
Hmm. After November? When Mr. Obama is defeated and Chevy is forced to deal with economic reality and the Volt goes the way of the Edsel? Or when Mr. Obama is reelected and goes absolutely berserk in imposing his totalitarian vision on America?
In any case, read the Nocera article (and my previous article). It’s a quick and easy primer into the depths of self-delusion. Consumer products that aren’t too expensive, have genuine resale value, obvious utility and that appeal to a substantial demographic need no propagandistic support, or puff pieces in the NYT, but I repeat myself.
FINAL THOUGHTS: This brings us full circle to my last Volt article wherein reader “Andrew” wrote:
It is unrealistic to make the assumption that a ‘tired’ battery that requires replacing in 3 or 4 years time will:
a) Cost the same as it does today
B) That battery technology will not have significantly advanced, probably meaning a superior and lower cost replacement unit will be available.
The bottom line is, the car can save owners a vast amount of money, depending on their usage scenario and their local fuel costs. For my commute, a round trip of 60 miles and with UK fuel prices at over $10 gallon, I save a small fortune every month.
Andrew was responding to my point that the Volt will have little or no resale value on the used car market. Who will buy a used Volt knowing they will have to spend somewhere between $8000 and $10,000 for a new battery pack at any moment?
I’m afraid that it is quite realistic to make that assumption. We have to make current purchasing decisions based on what we know rather than on the vague hope that change (doesn’t that sound familiar?) will somehow occur that will dramatically lower the cost of replacement Volt batteries. What we do know is that battery technology has not appreciably changed for a very, very long time and there is no indication that enormous leaps forward are on the horizon. Even if a 50% improvement in battery technology, combined with an equal reduction in cost magically occurs—and that would be an enormous technological leap indeed–a new Volt Battery would still cost between $4000 and $5000, which is plainly insufficient to significantly change the economic dynamics involved.
It is possible that unimaginable advances in science will suddenly break forth, absolutely transforming human possibilities, however, it’s not a bright idea to make purchasing decisions about the most expensive things most people will ever buy apart from their home relying on that kind of hopenchange.
However, Andrew does make a worthwhile point. I’m assuming he lives in the United Kingdom (I e-mailed him to confirm that, but he did not respond) where gas is at the price levels that Mr. Obama and Energy Secretary Chu can only—for the moment–dream of. In that economic environment, if one is wealthy enough to afford a Volt where a conventional high mileage vehicle would cost half as much, and where conditions are optimal for the Volt (temperature, range, etc.) it has the potential to save money on fuel. Andrew directly suggests he owns a Volt and that it saves him substantial money. If so, good for him; I’m glad he’s satisfied with his purchase.
Unfortunately, for most people, the Volt simply costs too much initially and delivers too little flexibility. Most American Volt owners are getting only around 25 miles per charge in real world driving, so one must assume that Andrew’s Volt is delivering better than average range and that he recharges at work so he can have sufficient charge to return home. I’m not aware of any account of a Volt having a single charge 60 mile range or anything close. We have no idea how much electricity is costing Andrew, so we can’t have a truly informed opinion about the real costs involved.
We are left with the same conclusions I reached early in my analyses of the Volt: If you can afford the initial purchase price that is as much as twice that of many comparable, conventional, high mileage vehicles, if you can afford $2000 for a fast charger and whatever it takes for installation, and if you can somehow manage to drive no more than 25 miles before having to recharge, you may save sufficient money on gas to break even in nine years at best. But if that’s you, even GM’s statistics put you in the top 7%–economically—of all American households, which means you’re probably not buying a Volt as a money-saving measure in the first place. That’s a small demographic, not nearly sufficient to support long-term production of a compact car.
And of course, the biggest problem is that GM is partially owned by the taxpayers, and we are subsidizing not only the production of the Volt, but individual purchases. There can be little doubt that this, like so much else, is not a wise use of taxpayer money.
BONUS FEATURE: THE MITSUBISHI i.
I’ve written little about the Nissan Leaf and other electric vehicles. Nissan’s EV is not subsidized by American taxpayers. While it shares many of the inherent problems of the Volt, it will succeed or fail on its merits as a viable automobile. Interestingly, the Leaf’s primary virtue–it’s all electric–makes it a more limited platform that the Volt. Apart from informing people of those inherent problems so they may make wise purchasing decisions, I’ll continue to have relatively little to say about such vehicles.
A new entry in the commercial EV market is Mitsubishi’s “i.” Larry Webster at Popular Mechanics recently wrote about the tiny EV—think a slightly larger version of the Smart car. Even so, the little beastie has a MSRP of $31,975, which is about $4000 less than the Leaf. Webster wrote:
Fully charged on a brisk March morning, the all-electric Mitsubishi i’s range meter estimated that the battery pack had enough energy to travel 56 miles. That’s plenty, I thought, for the several-stop route I planned to a neighboring town and back. But as I pulled out into traffic, I flicked on the heat and watched the range meter recalibrate, dropping the estimated range down to 37. I did a quick mental calibration: A few miles to the first stop, 12 miles on the highway, 12 to return, another five to the next location, and so on. I then had a choice to make: Either shiver in the car or risk getting stranded. I chose the former.
Of course I could have made the ride a more comfortable if I’d used the car’s little remote fob to preheat the interior while it was still plugged in. The trouble is that the little receiver, which has a tiny antenna like something from a 1970′s-era sci-fi movie, isn’t at all clear. I thought I had engaged the pre-heat function, but when I got inside, the interior was the same 30 degrees as the ambient air.
The rest of the story—which is brief and worth your time–is predictable: Indicated range and actual range are two very different things. One’s life must revolve around what the EVs’ charge state will allow them to do, not what they want to do. In that respect, EV owners exist to service their batteries, not the other way around.
That’s not the basis for a winning advertising campaign for a commercially viable car.