Instead of showing that "federal investigation of three fires that occurred after Volt crash tests lowered demand for the Chevy Volt" a recent report instead shows interest in the Volt has fallen due to its price.
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A number of news reports are circulating a claim, credited to CNW Market Research, that "federal investigation of three fires that occurred after Volt crash tests lowered demand for the [Chevy Volt]." This claim seemed counter to the fact that Chevy Volt sales grew significantly even after revelation of the fire condition in that car. While it would seem likely that fire risk in the Chevy Volt would cause lowered demand, we learned that media reports mischaracterized the CNW report, thanks to CNW's Art Spinella we have the actual report they'd sent to their subscribers. The CNW report is an informative critique of the market position of both the Chevy Volt and Nissan Leaf, and interestingly concludes that interest in the Chevy Volt has declined not due to fire risk but due to its cost.
The CNW report shows a dramatic decrease in interest for the Chevy Volt, and a nearly stable interest for the Nissan Leaf, between March 2011 and December 2011. The reasons for that decrease are more complex than the NHTSA investigation causing the lowered interest, because of factors like the Chevy Volt price being out of reach for most consumers. In fact one of the sub-headings in CNW's report is "Fire concerns; Price dominates" leading a section talking about how there is "little doubt that concerns about accidents and fires play a role in these views [of decreased interest]" and that while a third of those interviewed by CNW cited fire concerns as "key reasons for not considering either the Volt or Leaf" that "when push comes to shove, the real issue is price".
CNW's report assessed consumer sentiment of both the Chevy Volt and Nissan Leaf in March and December 2011. The latter date is important because it is after revelation of the Chevy Volt battery fire and subsequent NHTSA investigation.
The data shows consumers generally like the styling of both the Chevy Volt and Nissan Leaf, rating the Volt style higher than the style of the Nissan Leaf. Between March and December 2011 the ranking for style of both vehicles did not change appreciably.
As for the likelihood of interviewees to buy either a Chevy Volt or Nissan Leaf, CNW reported a marked decrease in interest in the Chevy Volt, and a fairly steady interest in the Nissan Leaf.
On the Chevy Volt, the "General Consumers" and "New Intenders" were overwhelmingly unlikely to buy the Volt anyway, and this did not change between March and December 2011. In the "1st Adopters" and "EV Enthusiasts" groups there was a dramatic decrease in interest. For example the number of EV Enthusiasts "very unlikely" to buy a Chevy Volt increased from 6.1% in March 2011 to 35.4% in December 2011.
On the Nissan Leaf however the interest remained almost unchanged from March to December. Again the "General Consumers" and "New Intenders" were overwhelmingly unlikely to buy the Leaf. However for the "1st Adopters" and "EV Enthusiasts" interest in the Nissan Leaf remained strong with majorities reporting they're "likely" or "very likely" to buy a Leaf.
Now let's turn to Chevy Volt's price, since CNW's analysis says that is the predominant concern.
On the Chevy Volt the report shows consumers rating of the price fell strongly between March and December 2011. The "General Consumers" were pretty negative on the Volt price in March and and even more negative in December. By contrast the EV Enthusiasts and 1st Adopters had a fairly positive opinion of the Volt's price. In all cases the ranking of the Volt price fell between March and December 2011, meaning that by December opinion of the Volts price fell, in some cases sharply.
On the Nissan Leaf the ranking of price was more positive and also remained steady between March and December 2011. The General Consumers ranked price of the Leaf as 6.2 on the 10 point scale, with both EV Enthusiasts and 1st Adopters ranking the Leaf's price in the neighborhood of 8-9, on the 10 point scale. In all cases the ranking of the Leaf price held steady or decreased only slightly between March and December 2011.
CNW's report goes on to describe a financial difficulty perceived by potential customers. Their interviewees see the Volt and the Leaf as "second cars", meaning that many interviewees thought a gasoline powered vehicle would be required for most driving. Paying a premium price for a limited-use car is understandably attractive only if your needs fit into the usable range of the car. However in the case of the Volt, because its gasoline engine/generator gives extended range, a Volt owner can use it as their primary vehicle, and that potential Volt buyers aren't accurately understanding its capability.
Clearly this negative downturn of interest in the Volt is not good news for prospective future sales of that car. However it is still curious when put side-by-side with the strong growth in Chevy Volt sales in November and December. What will really count is which direction sales take over the coming months, not just for the Volt but the other electrified cars coming on the market. Primarily the cars are coming in priced similarly to the Chevy Volt, and since prospective buyers are shown here to be understandably price sensitive, we have to wonder if the price issue will affect the other electrified cars as well?
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Price is exactly the issue I
Price is exactly the issue I have been trying to make these past few weeks. But green-minded heads are so stuck in electrons that they forget we are dealing with people here, and their capability to afford these great technologies requires jobs and good-paying jobs at that.
I'm all for EVs; they just need to get competitive based on the TOTAL ownership cost, not just the cost of plugging into the utility company. And while first adopters are helping the green cause, the lease cost even after taxpayer subsidy says they can afford it without my help.
My Volt is actually
My Volt is actually competitively priced when all costs of operation are considered. My fuel costs are $250/month lower than my previous car (2006 Cadillac CTS) when both gas and electricity are factored in; oil changes every 2 years instead of every 2-3 months (23,000 miles/year), brakes that may never need service due to regenerative braking, transmission service (WHAT transmission??)...nevermind.
The obvious misconception is that another car is needed if you drive a Volt. The Volt is definitely cheaper than the leaf if you drive more than the Leaf range can accommodate. I drove from St. Louis to Columbia, MO in the Volt. The Leaf would have died and been on the side of the road around Kingdom City (or sooner) about 40 miles shy of my destination. a second car would be needed for that kind of trip in a Leaf. The range for a full tank of gas plus electric charge in a leaf is about the same as the range of a full tank in the CTS. the difference is that the CTS tank was twice the size! Around town, however, the range is very different. I drove my Volt 2050 miles before adding 8.3 gallons of gas. (that included the Columbia trip). Without the trip, I would still be driving on my first full tank of gas. The CTS would have burned >110 gallons of gas in the same distance I have gone in the car (2340 miles).
People need to crunch the numbers and see what their true operating costs are. the tax benefit is a nice added benefit to help people get over the initial sticker shock, but this car is on a par with a CTS from its amenities to its drivability (actually a nicer ride than my 2006 CTS) so its cost is definitely out of line. When the sales numbers increase, economies of scale will bring the price down just like any new technology.
Typical Volt owner... "It's
Typical Volt owner... "It's not expensive!" when they compare it to expensive cars.
The real competition is not some gas-sucking Cadillac, it's the Prius and the Volt does NOT win, economically, against the Prius, even when you factor in the $7500 gift from your fellow taxpayers.
I totally agree with C
I totally agree with C Harnett. I favor the Volt technology, but there is too much comparison to BMWs and Infinittis as benchmarks. My own benchmark was the Chevy Cruze for my wife's next car, and economics based on TOTAL cost favored the Cruze. And the latest data shows the Volt productionb may be shut down for a while if things do not pick up by June.
The Volt and Cruze are not
The Volt and Cruze are not the same car. They may be built on the same platform but they are not the same. The platform is also shared by the Cobalt, HHR, and Orlando. It is also used in the former Pontiac G4, G5, and Pursuit, Buick Verrano and Excelle, Saturn Ion and Astra, Opel Astra and Zafira, and Daewoo Lacetti. Also, the economics may favor the Cruze if only held for short period of time (I don't know how often you trade cars) but the 100,000 mile comparison does not (my typical trade interval) I agree that my wife's driving pattern does not favor the Volt over her current car (2007 Prius) because her Prius, purchased in April 2007, only has 37,500 miles on it. In the same period of time I have driven 110,000 miles. She could make use of an all electric vehicle, though, because she almost NEVER drives over 75 miles in a day. For that she could take the Volt when needed.
You neglect to mention that
You neglect to mention that the Prius also had tax "gifts" as it was getting a foothold, and that car's profit exits the country. Until you have driven both (I have) you do not have a right to comment. My wife has a Prius. The thing is an econobox. The Volt is an upscale car that SHOULD be compared to a Cadillac CTS because it is in the same class of car.
Gasoline still relies on foreign oil. Electricity does not. All Volt/Ampera vehicles are produced in the US for domestic use and export. That equates to AMERICAN jobs and both active (exports) and passive (less oil imports) help with the trade deficit. (BTW: the cars sell for a lot more in other countries)
You wrote, "The Volt is an
You wrote, "The Volt is an upscale car that SHOULD be compared to a Cadillac CTS because it is in the same class of car."
Having worked in the GM studio as well as engineering, the Volt is no CTS, not even close. Tech different, yes; but far from carrying capacity and luxury. And, for the record, that Cruze is a new platform, larger than the Cobalt that it replaced.
Furthermore, a $400-$450 per month lease for a Volt is above breakeven compared to a Cruze plus gasoline cost IN TERMS OF TOTAL COST. And that's the point. The breakeven benchmark has to be defined as a car the masses can afford; for example, a Cruze plus gasoline costs, not a Cadillac CTS plus gasoline. Besides, the basis for all the tapayer subsidies says the Volt is SUPPOSED to be a technology targeted for the masses. So it should be priced so the masses can afford it. If not, then it is not ready for the masses. Technologically yes, economically barely.
And if a person can afford a Cadillac CTS, then why the hell am I subsidizing it with my taxes?
If you worked in a design
If you worked in a design studio, then you should appreciate that new technology takes time to develop, prove and take hold. The tax credit isn't about making it so the masses can afford it. If it was, then there wouldn't be a limit on the number. It is about promoting technological development while allowing the marketplace to determine which technology variants have the most appeal. We really need more of it in this country, to help us get off our addiction to oil. We need to be subsidizing the development of solar, wind, fuel cell, natural gas, and light and highspeed rail, rather than letting every other country leap ahead of us in all these areas. That promotes jobs, revenues, and national security here at home in place of putting our future in the hands of foreign oil producers and inventors. THAT is why we offer tax incentives here.
One problem V, subsidies
One problem V, subsidies should be limited to research and infrastructure that supports everyone not just the purchases of the few who actually have the cash to afford it. It makes a mockery of free market Capitalism. And if you want energy security, then tell the President to bless that pipeline at the Bakken, and support natural gas before it gets sold to China.
Yes, the Prius did get a tax
Yes, the Prius did get a tax benefit but it was a $3500 deduction, which equates to about $1200 or so in support per car, not the $7500 that the Volt enjoys. GM, of course, was also able to take advantage of that but they chose to develop cars that couldn't be sold and didn't gain any traction there.
By the way, I didn't say we shouldn't reduce our gas consumption but offering $7500 in support for an otherwise unsaleable car is not going to achieve anything. Just look at the Volt's 2011 sales and you should be able to figure it out.
Well "C", I have to disagree
Well "C", I have to disagree with your analogy. But then, I currently own both a Prius and a Volt. The Volt doesn't compare to the Prius. The Volt is a much nicer and more solid car all around. Better feel, better drive, better handling, better day in and day out commute economy. I could have bought a similarly priced higher end car, but I prefer the Volt. Oh, and we've only bought 6 gallons of gas so far, and have over 1700 miles on the Volt.
I've driven both. I'd rate
I've driven both. I'd rate the Prius as unexciting but effective. The Volt was unexciting, too, but the price also makes it ineffective.
I fully charge my Volt for
I fully charge my Volt for about 60 cents a day because I get a special rate from the power company for charging at night, 6 cents/kwh
My cost for the 25 mile round trip to work is, therefore, about 50 cents per day.
My Ford Escape hybrid cost about $2.50 and my Acura MDX about $4.50 for the same trip.
Money matters aside, my MDX burned about 750 gallons of gas/ year and the Escape Hybrid about 450 gallons. At current usage rates, my Volt will use about 100-125 gallons/yr (take that Hugo Chavez!).
You are the prototypical
You are the prototypical market for the volt. Owner of three upscale cars with the income to make the initial cost of the volt a secondary concern. In a majority of America you are considered rich. The Volt is affordable to you. It isn't to me. I can't afford a $35,000 car. Most Ameicans can't afford a $35,000 car. It doesn't matter what the gas savings are. I can buy a $20,00 car that gets 30 mpg. The extra $50 a month in gas doesn't come close to the payment on the Volt.
Battery prices will not improve- too many exotic metals in them bench prices will not fall.
If you want to reduce oil imports the drill and build the pipelines.
EVs are not practical- period.
You are absolutely correct
You are absolutely correct that one must be able to afford the initial cost.
However, I bought mine in late 2011 and in early 2012 will recoup $7500 of the cost through my tax credit.
I have , also, already recieved $2500 in electrrical work FREE from the power company upgrading my service to allow rapid charging and a FREE 240 Volt Charger.
I get OnStar free for 3 yrars, worth $750 and save money every day on gas. I will also change the oil every 1-2 yrs, may never need a tuneup, mihght never need a brake job, and am unlikely to ever wear out either the battery or the engine.
The idea that we can drill our way to energy independence is naive. Even if we could do so, when we add in the environmental costs (Gulf of Mexico clean ups, health care from smog, and the costs added to global warming), electrical cars are a bargain.
No one will need to fight and die to protect a supply of oil for my car ever again.
We will be paying the health care and disability costs for current veterans who have done so for the next 80 years. :)
Don't you realize these types
Don't you realize these types of early adaptors are what make any new technology possible? Do you think everyone could afford the first automobile? The first TV? The first CD player? Things always start off expensive and then, as they crank out more of the product, the price drops and all the sudden they are affordable. The Volt is a great automobile, and ideally everyone should hope it succeeds. To want to continue using oil is pretty crazy IMO. Even if it doesn't succeed, if you look at all the electric cars and hybrids coming out, the path is basically set. But I think the Volt is a great car and so does everyone apparently that owns one and Chevy should deserve better treatment for designing such a car. Especially since they've been mostly designing crap the past few decades except for the Corvette.
My personal thanks to David
My personal thanks to David for clarifying the information about our Volt and Leaf studies.
Art Spinella
President
CNW Research
These cars are about
These cars are about disersity, liberty and freedom:
- Freedom to choose your power source
- Diversity of design
- Liberty to try new ecological technologies
Tim - Leaf Owner