Is General Motors holding back with the Chevrolet Volt?

Chevy Volt redesignedGeneral Motors Corp. has been championing the next-generation 2016 Chevrolet Volt that’s scheduled to debut at the Detroit auto show in January. “You’ll see improvements all the way across, from technology to design,” Tim Mahoney, GM’s chief marketing officer for Global Chevrolet, told reporters last week. “Detroit seems like the right place to do that.”

GM is holding back on information – it will be “good value,” but no details have been released on what it will cost, if the battery pack can deliver longer range than its current 38 miles, and what these technology and design improvement will look like. Automotive News reported that it will have a third seat in the rear and will feature a downsized, 1.0L, three-cylinder engine compared to its current 1.4L, four-cylinder engine.

If I were present at the Management Briefing Seminar in Traverse City, Mich., I may have mustered the courage to ask Mahoney two questions:

  1. How many Volts does GM plan to build and deliver this year and next?
  2. How committed is GM and Chevrolet to marketing the Volt through corporate advertising and supporting and encouraging its dealer network?

Mahoney also said that GM considers the Volt “not a mass-market” vehicle any longer. I would ask another question: When has it ever been one? When the plug-in hybrid was introduced in late 2010, former GM CEO Dan Akerson thought the automaker would produce 60,000 Volts in 2012. The reality has been that GM has only built and sold about 65,000 units in nearly four years.

GM has been proud to build the best-selling plug-in hybrid in the US, but it potentially could have been much higher in sales volume. It was competing neck-to-neck with the Nissan Leaf, but the Leaf left the Volt in the dust several months ago.

To my colleagues at GM and Chevrolet, here are a few points to consider:

  • You have passionate, loyal fans out there – many of them Volt owners and some of them looking forward to owning their first. Mahoney mentioned that GM plans on doing it, including on social media. What about on TV commercials during sporting events? Ride and drives and event sponsorships also make much sense. The Chevrolet brand is popular with many Americans, and experiential testimony from Volt users could be a tipping point for car shoppers.
  • If you’re able to extend the range on a charge, why not get on the stump and hawk that point? Volt drivers many times have been amazed how many miles they’ve traveled on battery only and what the actual extended range could be if driven correctly. Their testimonials would help, and emphasizing that benefit in ads would do so, too.
  • Consider building more of them and getting them out to more dealer lots around the country. Like other EVs, sales have been heavy in just a few markets. There is interest in other markets, though it would need more advertising and showing the product. That’s where the Chevrolet brand image would come in handy – GM considers the Volt to be a “halo” in its Chevrolet marketing and that could be exploited much more. If the price is coming down, and with incentives for buyers and good leasing deals, that would help. As for production, GM has been happy enough to see cost-saving results in Volt assembly at its Hamtramck plant that it decided to invest $121 million more there late last year. You’ve got best practices in place – why not assemble and deliver more Volts?
  • Promote the EV charger options owners have. Last year, Bosch unveiled a new $450 Level 2 charger, which is the preferred charger for the Volt. It’s cheaper and simpler to set up and use than other chargers have been. That’s a key stumbling block for car shoppers.  They’d be impressed if the charging station were more affordable; and if dealers could get them assistance on having the charging stations installed at their homes.
  • Show off the technology.  GM’s Voltec powertrain has been strong enough to move beyond the Volt to the Cadillac ELR. Volt owners are finding that the Volt’s electronic and cooling systems are working well – they’re experiencing lack of range degradation. It also helps that the Volt emerged from its NHTSA-investigated lithium-ion battery fires a few years ago, while Tesla Motors still faces questions about the fire-proof safety of its li-ion battery pack.
  • Speaking of safety, the Insurance Institute for Highway Safety gave the 2014 Volt a Top Safety+ rating. That followed a crash test on a dozen small cars including the Volt along with the Nissan Juke, Mini Cooper Countryman, and the Ford C-Max Hybrid; the Volt was the only model to receive the institute’s coveted safety rating.

Cadillac ELR and BMW i8 Olympics TV commercials – How good were they?

Cadillace ELR being chargedWhile Super Bowl commercials are infamous for being the most expensive and most watched TV spots in the world, there might be a better media outlet for marketing new cars: the Olympics. While many of the commercials featured Olympic athletes skiing and skating by, there were two that gave a lot of time to luxury extended range electric vehicles: the 2014 Cadillac ELR and the 2015 BMW i8. And they were shown a lot more times than the single viewing you get on the Super Bowl (although the Olympics only happen every four years, or two years if you count the staggered schedule with summer and winter games). As for these Olympic TV commercials, my question would be:  How good were they for marketing the cars?

The Cadillac ELR commercial plays off the competitive edge the US takes to the Olympics, and the upscale lifestyle lived by those driving the ELR – which is in direct competition with Tesla Model S and BMW i Series. “You work hard, create your own luck, and you’ve got to believe anything is possible,” well-recognized TV and movie actor Neal McDonough says as he unplugs his Cadillac ELR and takes off for the office. Americans don’t take the month of August off, like Europeans do, for vacation. “Because we’re crazy, driven, hard-working believers, that’s why.” Those other countries might think Americans are nuts, but we’ve had the Wright Brothers, Bill Gates, Les Paul, and Muhammad Ali – and we landed on the moon first, he says.

While it’s watchable and humorous, it spends very little time onscreen with the plug-in coupe, which is a very lush and impressive car to experience visually and hands on; one would think the car should make up most of the commercial’s focus and not just a few seconds at the end. Yet the commercial is more about style and social commentary than marketing the Cadillac ELR. The production schedule for the ELR is limited and there were only 41 units sold in the US in January; but that’s more than the BMW i Series sold in the US – it’s still very early for the BMW i3 and i8.

I think the BMW commercial gets a little bit closer to hitting the mark. The “Hello Future” ad features a voice over from Arthur C. Clarke’s 1964 BBC presentation. The famous science fiction novelist (with 2001: A Space Odyssey among his books) says, “The only thing we can be sure of about the future is that it will be absolutely fantastic. So, if what I say now seems to you to be very reasonable, then I will have failed completely. Only if what I tell you appears absolutely unbelievable have we any chance of visualizing the future as it really will happen.”

Near the end of the commercial, the BMW i8 appears in the dark and then takes shape, with its raising “butterfly doors” (reminiscent of the upcoming Tesla Model X and its raising “falcon doors”). This car will sell for $136,000 and is supposed to have the same performance as a BMW 335i. So, the audience will be very limited, too. Leasing will be necessary – the price will come down but it’s still very steep. The Cadillac ELR starts at about $75,000 and is more competitive with the Tesla Model S, but it’s also limited in its audience size.

For automakers to turn profits on EVs, it has to be worth the investment and reach a level of scale that makes it competitive with some of their ICE models. These niched luxury extended range cars aren’t going in that direction; they do raise consumer interest in the new alternative powertrain, but they’re too pricy to assist in widespread adoption of EVs. They get federal tax and state incentives, but the price is still very high – even with good lease packages. There’s some public opinion out there that EVs are just a toy for a very small percentage of wealthy Americans, which can get in the way of mainstream acceptance.