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Will GM's 2011 Chevy Volt Evolve Or Become A Costly Dead End?

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2011 Chevrolet Volt

2011 Chevrolet Volt

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While the 2011 Chevy Volt will find its way to between 10,000 and 15,000 U.S. buyers, that's far from enough volume to make any car a production success--or to make it profitable.

Most mainstream car models must sell 100,000 or more units a year to produce black ink.

So to achieve a return on its investment in the innovative range-extended electric car, the General either has to raise Volt production substantially, develop other models to use the Voltec powertrain, or both.

Huge attention, low volume

The 2011 Volt has brought GM great attention and many awards, but this year its production and sales amount to only 5 to 7 percent of what mainstream models like the Cruze and Malibu achieve.

2011 Chevrolet Volt Production Line

2011 Chevrolet Volt Production Line

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More than a decade ago, General Motors got very good initial press and then scathing criticism for the final handling of their earlier experimental electric car, the two-seat all-electric EV1.

While the lessees loved the EV1, the General ultimately chose not to extend the leases on the cars--and then it recalled and crushed all the EV1s, bringing enormous bad press.

This left many diehard electric vehicle fans highly distrustful of GM's intentions for the current Chevrolet Volt, though the site of Volts steadily rolling off the Detroit-Hamtramck assembly line and into showrooms may have quieted at least some of its critics.

Shared parts

The limited numbers of 2011 Chevy Volts now being built are flying off dealer lots, even at full sticker price (or above).

But for GM to make money from its huge investment in new technology, both production and sales volume may need to rise to 150,000 units per year. And doing that soon isn't as simple as it sounds.

General Motors has cut some cost on Volt development by using portions of the understructure and hidden parts from other compact models in their lineup, including the 2011 Chevy Cruze and several European Opel models.

More models?

2011 Chevrolet Volt MPV5 concept, Unveiled at 2010 Beijing Motor Show

2011 Chevrolet Volt MPV5 concept, Unveiled at 2010 Beijing Motor Show

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But the best way to distribute the significant power train development costs associated with the Voltec engineering is to share that powertrain across several models.

Some time ago, GM showed the the Chevrolet Volt MPV5 crossover concept at the Beijing Auto Show, though small crossovers traditionally haven't been popular in the U.S. market.

Earlier, production plans for a 2009 concept also based on the Volt drivetrain, the Cadillac Converj, were cancelled.

Upcoming Amp?

Thus far, the General has not revealed much in the way of new models that use the sophisticated engineering of its Voltec technology.

Cadillac Converj Concept

Cadillac Converj Concept

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One beacon of hope is that GM has registered the model name "Chevy Amp"--which certainly sounds like it could be a Volt relative.

That car did not appear at January's Detroit Auto Show, as rumored, but it may still be waiting in the wings.

Without higher production volumes and cost-sharing across several other models, owners and electric-car advocates worry that the promise of the 2011 Volt could end up as just another GM dead end.

GM, are you listening?

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Comments (11)
  1. This story seems quite dated and not really up to date with the facts.

    Sad.
     
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  2. @Jeff: Always happy to correct any facts that are wrong. Feel free to contact us if you have a lengthy critique (john -at- highgearmedia -dot- com) or toss in a one-liner here in the Comments.
     
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  3. I guess I agree. In December you had an article saying that production was going to 45k and that production was limited to 60k due to batteries. Recent reports now say production for 2012 will be 60k. I guess I'm impressed that Chevy can in two years, with a completely new powertrain, go from none to the second best selling hybrid in the country and sell it at a price close to double what others are charging.

    Will they recoup their money in the first generation? Not likely but did Toyota? They are probably making more per car than anyone else which is probably a good business model. Also the halo effect has got to be worth something.
     
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  4. This can't be good news.
     
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  5. Much to do about nothing. GM laid out its slow, measured production plans long ago and has followed them, although it has increased the production volumes beyond the original plans.

    Sure, everyone wants them to produce more sooner. As a Volt owner, I understand why. But to rush the car would be a mistake. Any defect would be pounced upon by the many eager Volt-bashers. The reason surveyed Volt owners are either "satisfied" or "very satisfied" with this car is it is not like GM cars of the past. This car is superbly engineered and well executed. Delivering that quality in mass production levels takes planning and patience. They are doing it right.

    You'll start seeing a lot more Volts on the road toward the last quarter of 2011.
     
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  6. is the nissan leaf a dead end of range?
     
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  7. From what I have seen at auto shows, e.g. Tokyo 2009, Nissan has a wide range of applications for their EV technology. Renault-Nissan is already making major introductions of other EV platforms in Europe, so they can and are distributing their development costs widely.
     
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  8. Now that I reflect a bit longer, Nissan is already on version 2.0 of an Infiniti version of the Leaf platform, as an example of direct extension.
     
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  9. also the renault twizy?
     
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  10. My hunch is that the Volt will be a costly dead-end too, though it's probably too early for articles like this in the absence of new facts that warrant the suspicion of imminent market failure. After all initial production was always going to be low and it's only when ramping it up is postponed indefinitely that you will know that the concept has failed. However the double drivetrain (and therefore extremely high part count) concept will make it very expensive to build which makes it hard to offer it at a price that could generate the massive sales numbers required to make it profitable.
     
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  11. My crucial concern is GM's silence on any other applications of this drivetrain. "Economy of scale" is crucial for any mass market product, and getting out "only" 45,000 cars using this technology makes for a very expensive niche product in the auto industry.
     
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