If you build it, some might come.
President Obama recently reminded General Motors' stockholders, all 311 million of us, that he's calling the shots at America's largest automaker, when he told an audience in Cannon Falls, Minnesota, that freedom to market was the price for the bailout: "If we are going to help you [GM], then you have also got to change your ways." And then he stated the ways: electric cars, and isn't it great that jillions of taxpayer dollars are being thrown at battery manufacturers?
The Government-Industrial Complex (GIC) is at it again, picking energy technologies. Its track record is atrocious. Highly subsidized solar is in eclipse, as demonstrated by the recent bankruptcy of Evergreen Solar in Massachusetts. Try as it might, it can't make wind energy a big player, largely because people hate it. And how much money has it lavished on Ethanol? This year we will burn up more corn than we will use as a feedstock, which has (and should have) appalled the world.
Nevermind that no one has figured out how to produce a comfortable electric car at an affordable (non-subsidized) price that has enough range to be practical for the most of us. And so GM's answer is the Chevrolet Volt, which doesn't suffer from range limitation because of its internal combustion engine, which works both as a generator and prime mover as the charge in 400 pounds of lithium ion batteries depletes.
Carrying a $41,000 base MSRP and a $7,500 tax break, the Volt is either going to be the biggest bust since the Edsel, or a niche car with very modest sales. It is not, repeat, not the wave of the future. It's just too impractical for a large number of everyday drivers.
Cynics are springing handstands over the paltry sales of 125 units last month. GM responds that supply was very short because they had to retool the Hamtramck, Michigan Volt-a-drome so that it could amp production up to 5000 per month, with the expectation of 60,000 to be produced next year (15,000 for overseas delivery).
GM cites large numbers on waiting lists, but CNW Marketing Research, an Oregon firm, recently reported a substantial drop in the number of technological "first adopters" and people identified as electric vehicle enthusiasts saying they are in the Volt market.
There is, however, some information out there that may reconcile these claims.
Today, you will find 775 Volts on sale at Cars.com and about 475 at Autotrader. Calls to dealers around the country revealed that most of these are "in transit", or are demonstrators that will become available for sale in coming weeks or months. Those "in transit" have real serial numbers, so they are probably the first ones to come out of the newly reopened Hamtramck plant.
But -- and this is a big but -- there does seem to be a fair number of real ones for sale in Texas, where it appears that about 75% of the online ads are for real cars, and in California. These are where the most Volts were shipped to begin with, which means that the market indeed does saturate fairly quickly.
All of this is probably the case because very few people have $45,000 to throw at the car (that's the average price online), and the Volt only makes financial sense as a commuter car if used for less than about 50 miles per day. That assumes the real battery-only range of the car will average around 35 miles—a figure the EPA uses. Warning: you will get less when it is very cold or hot.
Outside of that electric range, the Volt gets significantly worse gas mileage than a host of cars costing a lot less. Recently, Consumer Reports stated that the average mpg with the internal combustion engine on was a mere 29. Factor in that GM recommends high-test gas, and the effective mileage is down to 27. This will never sell a lot of Volts, especially as mpgs are increasing in conventional vehicles, but that's the price of lugging around 400 pounds of batteries and multiple electric motors. Put another way, unless it is only used as a short-range commuter, the Volt will never meet the Obama Administration's fuel economy standard of 54.5mpg in 2025.
Watch the Volt sales figures carefully to see how many Joe Blows are buying, rather than members of the GIC. Jeff Immelt, CEO of GE and the head of Obama's Economic Advisory Panel, has agreed to purchase 12,000. New York City just committed to 70, and only Obama knows how many are going to be purchased by the rest of the federal government. For what it's worth, I have yet to see one privately owned Volt on the streets of Northwest Washington, where Priuses are as common as million-dollar homes stuffed with socialists. In fact, the only one that I have seen belongs to Verizon, another active member of the GIC.
The purchase of Volt fleets by cash-strapped cities is a particular outrage. Besides the fact that Volts require 8-ish hours of downtime to charge from a conventional plug, the difference in price between one and a normal Crown Victoria cruiser is much greater than the difference between a Crown Vic and a Cadillac. Any mayor would be pilloried if he bought Caddies, but Volts are apparently OK. Uh, where's the media on this one?
GM's CEO Dan Akerson has famously stated that the Volt "could be the future of GM". Those of us with a stake in GM, and that's all of us, should hope that the operative word is "could" -- and that Akerson's statement was just political dues required for GIC membership, where the Volt is the flagship.