Tag Archives: General Motors

If GM Volt is in such low demand why is it so hard for people to get one?

By now most people who follow green technology developments know that GM has temporarily suspended production of its Volt plug-in hybrid.  Specifically, production will be shut down for five weeks so that GM can “align production with demand.” A post-crash-test battery fire with the Volt last year (which was overblown, but nonetheless probably turned off many consumers) and the vehicle’s high price have been cited as main reasons for slower-than-expected sales and the resulting production re-alignment.

As Lacey Plache, chief economist for the auto information site Edmunds.com said, “The fact that GM is now facing an oversupply of Volts suggests that consumer demand is just not that strong for these vehicle.” Electric-vehicle haters have eaten up the news, and are actively blogging away about how the Volt is a failure.

Gimme a break.

The biggest mistake here is that GM — and Nissan for that matter — was far too aggressive with its sales projections. The Volt’s success, given its initial price point, was always going to be limited to early adopters during its first few years of availability. It’s doing no worse than the Toyota Prius did during its first couple of years in the U.S. market, and the Prius had the advantage of already being available in Japan three years earlier.

So no, the Volt is not a market failure or a failure of technology. The temporary production stoppage is a problem with GM and its inability out of the gate to manage consumer (and market) expectations.

But what really boggles the mind about this story is the claim that there’s not enough demand to meet supply. Anton Wahlman of The Street seems to be confused about this as well. He writes that the average number of Volts at dealerships is quite low (often just two) compared to other vehicle models, and this appears to be the case across the United States — New York City, Washington, D.C., and San Francisco included.

Oh, and Canada as well. I received an e-mail today from Milfred Hammerbacher, CEO and president of solar panel maker and installer Canadian Solar Solutions. The Toyota Prius he has driven for many years is getting old and he explained that he was interested in replacing the Prius with a Volt. He inquired about availability at his local dealership in Waterloo, Ontario, and was told he’d have to wait 18 months to get the car! They told him demand in Canada is quite strong.

“If truly the market is hot in Canada, why can’t they figure out how to ship these cars into Canada?” Hammerbacher asked. “It doesn’t make any sense.” But the solar executive isn’t willing to wait 18 months. “I’ve gone ahead and ordered a new Prius.”

I relayed this story to a spokesperson at GM Canada and this was the response I got: “He should not have been told he would have to wait 18 months. If he placed an order today we would expect the Volt to be delivered in mid-summer.”

That works out to early August — so about six months.

Okay, fine, even if that dealership in Waterloo had the wrong information, why does a customer have to wait six months? That’s how long you’d wait to get an MRI scan in Ontario. Perhaps long wait times is part of GM’s problem, at least in the Canadian market. But given the limited inventory that appears in U.S. dealerships as well, it would seem GM’s problem isn’t necessarily poor demand as much as an inability to deliver a product when a customer wants it — i.e. as soon as possible.

Forced to wait, perhaps potential purchasers are opting for something else.

ABB and GM team up to study after-Volt battery uses

For at least a couple of years now there’s been talk about what to do with battery packs after they’ve served their useful life, say, 10 years, in an electric car. The reason being that the batteries, while they may lose their punch after a decade of use in a car, still have useful storage capacity that collectively can be used for other applications: i.e. storing renewable energy like wind and solar; helping manage grid load; offering back-up power supply for remote communities; and allowing industrial/commercial users to play arbitrage with time-of-use pricing by storing power when it’s cheap and dispatching it went it’s expensive. Today ABB, the world’s largest supplier of power grid systems, announced a partnership with General Motors that will seek to study these “after-Volt” market uses for batteries. “The Volt’s battery will have significant capacity to store electrical energy, even after its automotive life,” said Micky Bly, GM’s executive director of electrical systems, hybrids, electric vehicles and batteries. “That’s why we’re joining forces with ABB to find ways to enable the Volt batteries to provide environmental benefits that stretch far beyond the highway.”

It’s the kind of collaboration that Gil Forer, global cleantech leader at Ernst & Young, urged during an executive roundtable held in Montreal last week. “Forging creative partnerships and business models will be critical for sustainable, long-term success,” he said. This was echoed by his colleague Mike Hanley, who heads up Ernst & Young’s global automotive group. He said there’s a big EV transition underway, but “to facilitate this transition the traditional automotive industry, new automotive market entrants, utilities, regulators and government agencies must collaborate effectively to take advantage of the opportunities and to make the entire consumer experience seamless.”

They offered some interesting numbers: in 2010 we’ll see the mass-market introduction of the Chevy Volt and Nissan Leaf, and the introduction of China’s largest EV charging station. Between 2010 and 2013 they expect to see more than a dozen battery-electric vehicles hit the market from incumbents such as Ford, Mitsubishi and Renault and new entrants including Tesla, BYD and Coda Automotive.

For the latest research on plug-in vehicle sales forecasts to 2015, click here. For a look at what researchers in California are doing with afterlife batteries, click here.

Sarwant Singh, vice-president of Frost and Sullivan’s automotive practice, forecasts that by 2020 hybrid and purely electric vehicles will account for seven to 12 per cent of all cars produced globally. Who would supply the market? He figures there will be 47 different automakers with electric models by 2015 and that models on the market will total about 75. What’s stunning is that 35 of those models, or 47 per cent, are expected to come from Chinese manufacturers. Singh has a great presentation here that gives a detailed overview of the market. It’s a year old now but still very relevant.