7 ms·

G.M.’s Electric Lemon

26 points by zafka 16y ago

jswinghammer 16y ago
Given that G.M. destroyed their first electric car of this decade why would anyone trust them to build a new one but somehow better the second time around? I've never heard of a company purposefully destroying capital in the way G.M. did. This has to be collectively the stupidest corporation in America right now. The Volt will likely fail because of its massive price and less than optimal features. Why would you buy one over a Prius anyway? At least with the Prius you'd be getting a quality car made by a quality company. I have no idea why people are buying cars made by G.M. these days between the poor quality history and getting bailed out I have no interest in doing business with them.
- antidaily 16y ago
  To be fair, American taxpayers have been subsidizing the Toyota Prius for years too. Why the Volt costs so much is beyond me - the technologies should be reasonably mature by now. But GM has to head in this direction. They can't just build shitty SUVs and crossovers.
  - barake 16y ago
    Why is the totally electric Nissan Leaf only $32,780? Under ideal conditions it can get 130+ miles to a charge [1] implying it uses better and/or more batteries than the Volt. The trim and finish must be much better on the Volt considering how expensive batteries are and how relatively cheap gasoline engines are. Or am I missing something here? 1: http://reviews.cnet.com/8301-13746_7-20008319-48.html http://reviews.cnet.com/8301-13746_7-20008319-48.html
    - dtegart 16y ago
      The Volt website does seem to imply that it comes well speced. Navigation and 30gb music storage seem to be standard. By comparison a similar speced Camry hybrid is between 30-33k
    - krschultz 16y ago
      It doesn't have the gasoline engine. First off, gasoline engines are not as cheap as you think they are in automobile configuration. There is a big difference between what you buy for a lawn mower and what they put in the Volt. Plus you have a lot more arrangement issues related to stuffing more crap into the same sized box. It takes a lot of man hours to design and build something like that.
- adolph 16y ago
  How can you say that they are the stupidest? They pulled off a massive tax-payer bailout, screwed their investors, stayed out of jail and are lining up a new round of investors. They may not be the best at making cars, but the company's mastery of the American financial and political process is second to none.
  - ndimopoulos 16y ago
    And unfortunately the taxpayers are the ones that are paying due to this mastery. I do not understand why everyone is getting hyped up about this. What is the purpose of the electric car? The low/no emissions or the high MPG? If you ask people you will find out that almost all of them will say the MPG since that is the reason that has a monetary impact. I recall when I was in England I had a Renault Clio Diesel with 1.5 liter engine. That car would give me 66 mpg on the highway and around 50-55 mpg in the city. That was back in 2003 and it cost brand new 9,000 GBP (less than $15,000). That car was small, comfortable and fun to drive. It did what it was supposed to and more. Why do we see then a $41,000 price tag on a vehicle that cannot give us 66 mpg and that will be subsidized by the government (i.e. we will all pay for every car sold whether we like it or not). Great!
- ergo98 16y ago
  You really managed to fit it all in there. >Given that G.M. destroyed their first electric car of this decade why would anyone trust them to build a new one Because they had the experience of building an electric car, knowing it wasn't viable, and going back to the drawing board until the technology was refined? >I've never heard of a company purposefully destroying capital in the way G.M. did. That's because your analysis of it is hipster, populist garbage. Sorry to be impolite about it, but the whole "who killed the electric car" movement is populated by people proud of their ignorance. >The Volt will likely fail because of its massive price Since when did $41K (really $33.5) get classed as a "massive price"? That is an absolutely typical mid-level sedan price, and apparently the volt is fairly well equipped. >At least with the Prius you'd be getting a quality car made by a quality company. The number of problems with the Prius have been legendary. Toyota's quality lead over GM has shrunk to almost a rounding error, yet we'll forever hear the "angry at GM guy" railing his 1980s argument.
  - barkingcat 16y ago
    I think the problem was that they didn't learn anything from that experience. It was undermined by internal political processes, and the party line for most of the 2000's was that GM was never going to build hybrid cars because the GM execs decided batteries didn't appeal to their egos. It's got nothing to do with profitability, viability, maturity of technology, etc. I mean, GM built, marketed, and invested millions into some of the MOST unviable cars out there you can find. At one point, almost every single car they sold was at a loss - they were paying people to drive them off the lots. You can't get more "unviable" than that. And I don't think the argument is "who killed the electric car" - the real story is "who killed GM" - the entire company is an exercise in producing a black hole for money, not in manufacturing or car making.
    - ergo98 16y ago
      >It's got nothing to do with profitability, viability, maturity of technology, etc. So had the rest of the industry moved to electric vehicles, eating GM's lunch? Surely they must have given that GM was in bed with big oil and was turning a blind eye to this great technology. Of course they didn't. Honda and Toyota did some minor initiatives in marginally hybrid vehicles (which they sold at a loss primarily for image, while at the same time ramping up their own mega-SUV land yacht efforts). Everyone else just ignored it. Worse the entire industry didn't even know what "future" was the best future. Hydrogen fuel? Electric? Flex fuels? Was some sort of ultra-capacitor going to come and change the entire industry? The improvements in battery technology over just the past couple of years have been incredible. Everything relies upon battery technology, and the entire worldwide automotive industry is essentially working together on this. GM in no way had it mastered over a decade ago. >At one point, almost every single car they sold was at a loss - they were paying people to drive them off the lots. Any year that any company has a loss you could claim that they "lost money on every single unit sold", but of course that would be facile. GM's trouble centered on a long accumulated pile of debt while they did a worldwide expansion, coupled with massive liabilities to the union in the US.
philwelch 16y ago
And people say TSLA's a bad buy.
masomenos 16y ago
This criticism misses the Volt's unique powertrain configuration. Trips under 40 miles are all on battery power, so the average commuter uses no gas doing their daily business. However, unlike an EV, you can hop in the same car & drive as far as you want, pausing only to fill up the gas tank. So while it is pretty damn expensive, it's not necessarily worse than having one ICE car for long trips & one EV for commuting, especially considering that you'll only need to buy gas for trips over 40 miles. It's not going to hit too many people's sweet spot but there's some real potential.
- lutorm 16y ago
  This is all true, but unfortunately the amount of money spent on gasoline over the lifetime of a normal car doesn't approach the price premium of the Volt unless there is a phenomenal skyrocketing of gas prices.
  - angstrom 16y ago
    Or we shift our oil subsidies to another energy source like solar/wind to supply the electric. We're already paying high gas prices, consumers just don't see it at the pump. Out of sight, out of mind I guess. Government can play a big role in setting the stage for infrastructure by changing the rules when the time is right.
  - MikeCapone 16y ago
    Indeed. But does it have to pay for itself? Nobody buys a car that is above the cheapest model expecting it to pay for itself. A sunroof or bigger engine will never pay for itself, and is usually bought to get some other benefit (sometimes mostly in the mind of the buyer). The same can happen with early PHEVs and EVs. By the time all the early adopters who buy them for the technology or environmental benefits have one, the technology should have improved and price lowered enough so that the cars will be attractive to a larger group.
    - anamax 16y ago
      > But does it have to pay for itself? Nobody buys a car that is above the cheapest model expecting it to pay for itself. A sunroof or bigger engine will never pay for itself, and is usually bought to get some other benefit (sometimes mostly in the mind of the buyer). Bingo. So, what is Volt's corresponding benefit, how much does it cost, and how many people are willing to pay that much for that benefit? > By the time all the early adopters who buy them for the technology or environmental benefits have one, the technology should have improved "should"? If Volt doesn't recover its development costs, how is GM going to pay for improving the technology?
maukdaddy 16y ago
Nor did the government or G.M. decide to sell the Volt at a loss, which, paradoxically, might have been the best hope for making it profitable. Glad this dude isn't running my business.
- _pi 16y ago
  Hey we're losing 20,000 dollars for each car we sell but don't worry we'll make it up on volume!
  - maukdaddy 16y ago
    Not to mention potential anti-trust implications (US) or dumping (international).
coreymull 16y ago
The writer of the piece is also the writer of The Truth About Cars - a notoriously anti-GM blog. The Volt definitely has faults, but it's a brand-spanking-new technology - what do people expect?
- ja30278 16y ago
  That it be better than previous offerings in some measurable way that's valued by the consumer?
  - coreymull 16y ago
    And how is it not? It's a car that, in normal use, will use no gasoline. That's a big deal now, and an even bigger deal if some sort of cap and trade/carbon tax is put into place. But, unlike the Leaf, Tesla and other pure electrics, it is capable of driving long distances because of the gas engine. It's the first electric car without "range anxiety".
ccc3 16y ago
This article is bullshit. His main line of argument is the same criticism that's consistently leveled at Tesla: that it's too expensive to be a big seller. This is obvious. Batteries are still in their early days as the primary energy source in cars. Early technology is expensive (The original macintosh cost $5000, inflation adjusted). The obvious point of the Volt program was to develop technology and infrastructure for the future, not just to produce the first generation Volt. It's certainly fair to debate GM's efficiency in building electric vehicle capabilities, but the author of this article doesn't ever seriously acknowledge that GM has ambitions beyond just the first generation Volt. A few smaller arguments I have: For starters, G.M.’s vision turned into a car that costs $41,000 before relevant tax breaks Bob Lutz said that the Volt would cost around $40,000 when he was on letterman a year ago, so the price shouldn't be a surprise to anyone who follows the industry. But as I already argued, we're in the early days of electric vehicles. Just like in the early days of personal computers, these cars will be bought by enthusiasts. As we've seen with every other new technology in history, price will come down over time. And instead of the sleek coupe of 2007, it looks suspiciously similar to a Toyota Prius It's a little difficult to take an automotive pundit seriously when he complains about a production model not looking like the concept. Frustrating as it may be, production models almost never look like the concept. This is nothing new. And the reason it looks like a Prius is physics. It turns out that there is an optimal shape for reducing aerodynamic drag, so cars that are built with fuel efficiency as a primary design goal will all be roughly the same shape. This also should not be a surprise to anyone who follows the auto industry. It also requires premium gasoline So what. It shouldn't use much of it anyway. For most owners this will not contribute significantly to the cost of running the vehicle. seats only four people(the battery runs down the center of the car, preventing a rear bench) I'm guessing most of the target market won't care about this. This is also the type of compromise that has to be made in early technology. has less head and leg room than the $17,000 Chevrolet Cruze So does a Lamborghini. People buying a Volt are not likely to be considering how much interior volume they get per dollar. No wonder the Volt’s main competition, the Nissan Leaf, forgoes the additional combustion engine — and ends up costing $8,000 less as a result. It also forgoes the ability to go on a road trip. Best case the leaf will have to recharge for 30 min every 80 miles. GM was trying to build something that could fully replace gas-only vehicles, Nissan wasn't. So the future of General Motors (and the $50 billion taxpayer investment in it) now depends on a vehicle that costs $41,000 but offers the performance and interior space of a $15,000 economy car The author should be embarrassed of making this statement. GM is a massive company who's business units range from car parts to medium-duty commercial trucks. The Volt is just one, albeit highly visible, program. Yet G.M. seemingly has no plan for turning its low-volume “eco-flagship” into a mass-market icon like the Prius A quote from Bob Lutz: "The Volt technology is very exciting, but costs will have to come down before it can become generalized, and U.S. fuel prices will have to rise to world levels, meaning $5 or $6 per gallon," That seems to suggest that the plan is to develop the technology until prices can be brought down and fuel prices go up (a bit of a gamble, but it seems likely that fuel costs will increase eventually). and some significant portion of the $14 billion loan G.M. got in 2008 for “retooling” its plants By putting the word retooling in quotes he seems to be suggesting that GM wasn't retooling their plants. If that's his argument, he should state it directly and give a source. There's no shortage of legitimate reasons to criticize GM, but calling the Volt a failure before it's even been released is nothing but pointless speculation.
samatman 16y ago
The Volt is an aspirational automobile, much like the Prius but with an added scoop of patriotism. This is a powerful formula, and if the car is halfway reasonable GM is going to be selling a lot of them. Others have said this part but it bears repeating: a car with a battery system and a gasoline-burning electrical generator is a very different beast from a hybrid or a pure electric. It's no surprise that it's more expensive, nor does the price seem unreasonable, considering that a) it can cover most people's daily commute with zero gasoline and b) it can then be filled up and driven across the country.
- samatman 16y ago
  Also: great name. I wonder when there will be an american electric auto that isn't named after an early scientist in the field? I'm expecting an Amp sooner rather than later...

26 points by zafka 16y ago

Given that G.M. destroyed their first electric car of this decade why would anyone trust them to build a new one but somehow better the second time around? I've never heard of a company purposefully destroying capital in the way G.M. did. This has to be collectively the stupidest corporation in America right now. The Volt will likely fail because of its massive price and less than optimal features. Why would you buy one over a Prius anyway? At least with the Prius you'd be getting a quality car made by a quality company. I have no idea why people are buying cars made by G.M. these days between the poor quality history and getting bailed out I have no interest in doing business with them.

antidaily 16y ago
To be fair, American taxpayers have been subsidizing the Toyota Prius for years too. Why the Volt costs so much is beyond me - the technologies should be reasonably mature by now. But GM has to head in this direction. They can't just build shitty SUVs and crossovers.
- barake 16y ago
  Why is the totally electric Nissan Leaf only $32,780? Under ideal conditions it can get 130+ miles to a charge [1] implying it uses better and/or more batteries than the Volt. The trim and finish must be much better on the Volt considering how expensive batteries are and how relatively cheap gasoline engines are. Or am I missing something here? 1: http://reviews.cnet.com/8301-13746_7-20008319-48.html http://reviews.cnet.com/8301-13746_7-20008319-48.html
  - dtegart 16y ago
    The Volt website does seem to imply that it comes well speced. Navigation and 30gb music storage seem to be standard. By comparison a similar speced Camry hybrid is between 30-33k
  - krschultz 16y ago
    It doesn't have the gasoline engine. First off, gasoline engines are not as cheap as you think they are in automobile configuration. There is a big difference between what you buy for a lawn mower and what they put in the Volt. Plus you have a lot more arrangement issues related to stuffing more crap into the same sized box. It takes a lot of man hours to design and build something like that.
adolph 16y ago
How can you say that they are the stupidest? They pulled off a massive tax-payer bailout, screwed their investors, stayed out of jail and are lining up a new round of investors. They may not be the best at making cars, but the company's mastery of the American financial and political process is second to none.
- ndimopoulos 16y ago
  And unfortunately the taxpayers are the ones that are paying due to this mastery. I do not understand why everyone is getting hyped up about this. What is the purpose of the electric car? The low/no emissions or the high MPG? If you ask people you will find out that almost all of them will say the MPG since that is the reason that has a monetary impact. I recall when I was in England I had a Renault Clio Diesel with 1.5 liter engine. That car would give me 66 mpg on the highway and around 50-55 mpg in the city. That was back in 2003 and it cost brand new 9,000 GBP (less than $15,000). That car was small, comfortable and fun to drive. It did what it was supposed to and more. Why do we see then a $41,000 price tag on a vehicle that cannot give us 66 mpg and that will be subsidized by the government (i.e. we will all pay for every car sold whether we like it or not). Great!
ergo98 16y ago
You really managed to fit it all in there. >Given that G.M. destroyed their first electric car of this decade why would anyone trust them to build a new one Because they had the experience of building an electric car, knowing it wasn't viable, and going back to the drawing board until the technology was refined? >I've never heard of a company purposefully destroying capital in the way G.M. did. That's because your analysis of it is hipster, populist garbage. Sorry to be impolite about it, but the whole "who killed the electric car" movement is populated by people proud of their ignorance. >The Volt will likely fail because of its massive price Since when did $41K (really $33.5) get classed as a "massive price"? That is an absolutely typical mid-level sedan price, and apparently the volt is fairly well equipped. >At least with the Prius you'd be getting a quality car made by a quality company. The number of problems with the Prius have been legendary. Toyota's quality lead over GM has shrunk to almost a rounding error, yet we'll forever hear the "angry at GM guy" railing his 1980s argument.
- barkingcat 16y ago
  I think the problem was that they didn't learn anything from that experience. It was undermined by internal political processes, and the party line for most of the 2000's was that GM was never going to build hybrid cars because the GM execs decided batteries didn't appeal to their egos. It's got nothing to do with profitability, viability, maturity of technology, etc. I mean, GM built, marketed, and invested millions into some of the MOST unviable cars out there you can find. At one point, almost every single car they sold was at a loss - they were paying people to drive them off the lots. You can't get more "unviable" than that. And I don't think the argument is "who killed the electric car" - the real story is "who killed GM" - the entire company is an exercise in producing a black hole for money, not in manufacturing or car making.
  - ergo98 16y ago
    >It's got nothing to do with profitability, viability, maturity of technology, etc. So had the rest of the industry moved to electric vehicles, eating GM's lunch? Surely they must have given that GM was in bed with big oil and was turning a blind eye to this great technology. Of course they didn't. Honda and Toyota did some minor initiatives in marginally hybrid vehicles (which they sold at a loss primarily for image, while at the same time ramping up their own mega-SUV land yacht efforts). Everyone else just ignored it. Worse the entire industry didn't even know what "future" was the best future. Hydrogen fuel? Electric? Flex fuels? Was some sort of ultra-capacitor going to come and change the entire industry? The improvements in battery technology over just the past couple of years have been incredible. Everything relies upon battery technology, and the entire worldwide automotive industry is essentially working together on this. GM in no way had it mastered over a decade ago. >At one point, almost every single car they sold was at a loss - they were paying people to drive them off the lots. Any year that any company has a loss you could claim that they "lost money on every single unit sold", but of course that would be facile. GM's trouble centered on a long accumulated pile of debt while they did a worldwide expansion, coupled with massive liabilities to the union in the US.

philwelch 16y ago

And people say TSLA's a bad buy.

masomenos 16y ago

This criticism misses the Volt's unique powertrain configuration. Trips under 40 miles are all on battery power, so the average commuter uses no gas doing their daily business. However, unlike an EV, you can hop in the same car & drive as far as you want, pausing only to fill up the gas tank. So while it is pretty damn expensive, it's not necessarily worse than having one ICE car for long trips & one EV for commuting, especially considering that you'll only need to buy gas for trips over 40 miles. It's not going to hit too many people's sweet spot but there's some real potential.

lutorm 16y ago
This is all true, but unfortunately the amount of money spent on gasoline over the lifetime of a normal car doesn't approach the price premium of the Volt unless there is a phenomenal skyrocketing of gas prices.
- angstrom 16y ago
  Or we shift our oil subsidies to another energy source like solar/wind to supply the electric. We're already paying high gas prices, consumers just don't see it at the pump. Out of sight, out of mind I guess. Government can play a big role in setting the stage for infrastructure by changing the rules when the time is right.
- MikeCapone 16y ago
  Indeed. But does it have to pay for itself? Nobody buys a car that is above the cheapest model expecting it to pay for itself. A sunroof or bigger engine will never pay for itself, and is usually bought to get some other benefit (sometimes mostly in the mind of the buyer). The same can happen with early PHEVs and EVs. By the time all the early adopters who buy them for the technology or environmental benefits have one, the technology should have improved and price lowered enough so that the cars will be attractive to a larger group.
  - anamax 16y ago
    > But does it have to pay for itself? Nobody buys a car that is above the cheapest model expecting it to pay for itself. A sunroof or bigger engine will never pay for itself, and is usually bought to get some other benefit (sometimes mostly in the mind of the buyer). Bingo. So, what is Volt's corresponding benefit, how much does it cost, and how many people are willing to pay that much for that benefit? > By the time all the early adopters who buy them for the technology or environmental benefits have one, the technology should have improved "should"? If Volt doesn't recover its development costs, how is GM going to pay for improving the technology?

maukdaddy 16y ago

Nor did the government or G.M. decide to sell the Volt at a loss, which, paradoxically, might have been the best hope for making it profitable. Glad this dude isn't running my business.

_pi 16y ago
Hey we're losing 20,000 dollars for each car we sell but don't worry we'll make it up on volume!
- maukdaddy 16y ago
  Not to mention potential anti-trust implications (US) or dumping (international).

coreymull 16y ago

The writer of the piece is also the writer of The Truth About Cars - a notoriously anti-GM blog. The Volt definitely has faults, but it's a brand-spanking-new technology - what do people expect?

ja30278 16y ago
That it be better than previous offerings in some measurable way that's valued by the consumer?
- coreymull 16y ago
  And how is it not? It's a car that, in normal use, will use no gasoline. That's a big deal now, and an even bigger deal if some sort of cap and trade/carbon tax is put into place. But, unlike the Leaf, Tesla and other pure electrics, it is capable of driving long distances because of the gas engine. It's the first electric car without "range anxiety".

ccc3 16y ago

This article is bullshit. His main line of argument is the same criticism that's consistently leveled at Tesla: that it's too expensive to be a big seller. This is obvious. Batteries are still in their early days as the primary energy source in cars. Early technology is expensive (The original macintosh cost $5000, inflation adjusted). The obvious point of the Volt program was to develop technology and infrastructure for the future, not just to produce the first generation Volt. It's certainly fair to debate GM's efficiency in building electric vehicle capabilities, but the author of this article doesn't ever seriously acknowledge that GM has ambitions beyond just the first generation Volt. A few smaller arguments I have: For starters, G.M.’s vision turned into a car that costs $41,000 before relevant tax breaks Bob Lutz said that the Volt would cost around $40,000 when he was on letterman a year ago, so the price shouldn't be a surprise to anyone who follows the industry. But as I already argued, we're in the early days of electric vehicles. Just like in the early days of personal computers, these cars will be bought by enthusiasts. As we've seen with every other new technology in history, price will come down over time. And instead of the sleek coupe of 2007, it looks suspiciously similar to a Toyota Prius It's a little difficult to take an automotive pundit seriously when he complains about a production model not looking like the concept. Frustrating as it may be, production models almost never look like the concept. This is nothing new. And the reason it looks like a Prius is physics. It turns out that there is an optimal shape for reducing aerodynamic drag, so cars that are built with fuel efficiency as a primary design goal will all be roughly the same shape. This also should not be a surprise to anyone who follows the auto industry. It also requires premium gasoline So what. It shouldn't use much of it anyway. For most owners this will not contribute significantly to the cost of running the vehicle. seats only four people(the battery runs down the center of the car, preventing a rear bench) I'm guessing most of the target market won't care about this. This is also the type of compromise that has to be made in early technology. has less head and leg room than the $17,000 Chevrolet Cruze So does a Lamborghini. People buying a Volt are not likely to be considering how much interior volume they get per dollar. No wonder the Volt’s main competition, the Nissan Leaf, forgoes the additional combustion engine — and ends up costing $8,000 less as a result. It also forgoes the ability to go on a road trip. Best case the leaf will have to recharge for 30 min every 80 miles. GM was trying to build something that could fully replace gas-only vehicles, Nissan wasn't. So the future of General Motors (and the $50 billion taxpayer investment in it) now depends on a vehicle that costs $41,000 but offers the performance and interior space of a $15,000 economy car The author should be embarrassed of making this statement. GM is a massive company who's business units range from car parts to medium-duty commercial trucks. The Volt is just one, albeit highly visible, program. Yet G.M. seemingly has no plan for turning its low-volume “eco-flagship” into a mass-market icon like the Prius A quote from Bob Lutz: "The Volt technology is very exciting, but costs will have to come down before it can become generalized, and U.S. fuel prices will have to rise to world levels, meaning $5 or $6 per gallon," That seems to suggest that the plan is to develop the technology until prices can be brought down and fuel prices go up (a bit of a gamble, but it seems likely that fuel costs will increase eventually). and some significant portion of the $14 billion loan G.M. got in 2008 for “retooling” its plants By putting the word retooling in quotes he seems to be suggesting that GM wasn't retooling their plants. If that's his argument, he should state it directly and give a source. There's no shortage of legitimate reasons to criticize GM, but calling the Volt a failure before it's even been released is nothing but pointless speculation.

samatman 16y ago

The Volt is an aspirational automobile, much like the Prius but with an added scoop of patriotism. This is a powerful formula, and if the car is halfway reasonable GM is going to be selling a lot of them. Others have said this part but it bears repeating: a car with a battery system and a gasoline-burning electrical generator is a very different beast from a hybrid or a pure electric. It's no surprise that it's more expensive, nor does the price seem unreasonable, considering that a) it can cover most people's daily commute with zero gasoline and b) it can then be filled up and driven across the country.

samatman 16y ago
Also: great name. I wonder when there will be an american electric auto that isn't named after an early scientist in the field? I'm expecting an Amp sooner rather than later...