GM calls Volt 'moonshot' a success, sales fall in 2014
General Motors Co., fresh out of a tough bankruptcy and mostly known for its trucks and SUVs, wanted to change its image in late 2010 when its Chevrolet Volt, a first-of-its kind plug-in hybrid electric car, hit the road.
While the Volt created a new classification of electric car — aimed to quell range anxiety with its backup gasoline engine — it has faced speed bumps among a wary public. GM will reveal the second-generation Volt on Monday, the first press preview day of the North American International Auto Show in Detroit.
Some critics say the Volt hasn't been a success because sales never reached expectations set by former CEO Dan Akerson: He wanted production to hit 60,000 a year by 2012 and GM at one point set a sales goal of 45,000 in 2012. Total U.S. sales since its debut have surpassed 73,000, but 2014 sales of 18,805 fell 18.6 percent from the year before, according to figures released Monday. The all-electric Nissan Leaf, meanwhile, sold 30,200 last year in the U.S., up 33.6 percent from 2013.
GM executives and auto insiders says the Volt has done many things not only for company and Chevrolet brand, but for the industry. They cite new technology, capability and jobs that undoubtedly make it a success.
"It was our version of a moonshot," said Jon Lauckner, now GM's chief technology officer, who came up with the concept for the range-extended electric Volt.
"It showed just the innovation prowess of our company and of the creativity, and beyond that, the ability to deliver something, the ability to deliver that innovation and deliver it in a way that's not a science project," added Pam Fletcher, GM's executive chief engineer of electrified vehicles, in a recent interview. "This is a car that's on the road that carries the same warranty as every other car we've ever produced."
Fletcher said the first-generation Volt had two goals: to meet a late 2010 launch and provide about 40 miles of electric range before a gasoline engine seamlessly kicked on to provide more than 300 additional miles of range. Environmental Protection Agency testing put it a bit lower, at 38 miles. Fletcher said GM approved plans to build a next-generation Volt in late 2011 or early 2012. The mission was to keep the recipe, but improve it and use customer feedback to guide changes.
On Sunday in Las Vegas, ahead of the Consumer Electronics Show, Chevrolet gave journalists and guests a surprise sneak peek at the front exterior of the next-generation Volt. The car has a more athletic, premium and mainstream look than the current Volt.
Fletcher said the new Volt also will have a greater range and more power, plus a more convenient and easily accessible charge cord bin, a charge status indicator to let customers know how fully charged the battery is, and a heated steering wheel. Analysts expect to see a fifth seat in the second-generation Volt; the car is expected to go on sale in the second half of the year.
The Volt has brought new, highly educated customers with high household incomes to GM and Chevy. The company said more than 79 percent have college degrees and household income tops $122,000. Nearly three-quarters of Volt owners are trading in cars that are from non-GM brands, the most popular being the Toyota Prius. The Volt also has increased customer loyalty for Chevrolet, as the Volt has been atop the J.D. Power U.S. Automotive Performance, Execution and Layout study as a compact car winner and Consumer Reports' list for overall owner satisfaction.
And for the auto industry, creation of the Volt led to development of new battery technology and a supply base of lithium-ion battery cell providers now used by other automakers.
But the first-generation car for GM also likely wasn't profitable and pricing around $40,000 kept some people away from dealerships. GM in 2013 cut the price by $5,000 to boost sales.
Fletcher said GM does not talk about specific product profitability.
"How do you put value on those 70 percent conquest customers (those who previously drove other brands) and how do we value the customer enthusiasm we have around this car?" Fletcher asked. "All of that stacks on top of the accounting, finances. The value to the company is tremendous on so many fronts."
Some analysts say the Volt's sales suffered somewhat based on timing. The Volt also was used as a "political punching bag" following the industry bailout and a fire in a crash-tested Volt was the subject of a congressional hearing in early 2012. The Volt also did not initially qualify for carpool lane status in California, the state that now accounts for 40 percent of Volt sales.
"It would have been really successful if it did not come out when it did," said Dave Sullivan, manager of product analysis for AutoPacific. "There were a lot of distractions and it never caught on like it was intended to."
The next-generation Volt will begin production this year at GM's Detroit-Hamtramck Assembly Plant. Gas prices have fallen significantly over the past few months and now are less than $2 a gallon in Metro Detroit. Fletcher said low gas prices will influence purchase decisions for some buyers.
"We clearly see alternative propulsion as a big part of the future," she said. "And the future starts now for us. We've already started playing that game. We're not going to jump in and out of this based on the fluctuation (of gas prices).
"We would never predict gas prices would be at this point, but we may never predict they'll be at $5 a gallon two years from now. We're committed, we've got a plan, we're going to stick with our plan."
Fletcher said GM and the auto industry have work to do to communicate with consumers about electrification and how it can meet their everyday needs without compromise. Expect to see the marketing messaging for the new Volt centered around comforts for drivers such as the 1,000 miles between fill-ups that Volt customers average.
Lauckner said GM is already "thinking about" a third-generation Volt.
Sullivan hopes the Volt's electric range will hit near 65 miles in the second generation, but he thinks it will come in around 58 miles; that would be good enough to get the car on more drivers' shopping lists, he said. But if it comes in lower than 50 miles, "it's going to really not wow anybody," Sullivan said.
GM isn't commenting on price for the Volt 2.0, but Sullivan said the price needs to drop below $30,000 for more sales. The Volt 2.0's success also will depend on government incentives and carpool lane access in California, Sullivan said.
Jonathan Segal, a San Diego architect, was one of the first to buy the Volt in San Diego. He said he bought the car because of its electric capability and because it was an American innovation. His car was totaled in a 2013 crash, but he plans to buy another Volt once the next generation is available.
"I hope it that continues to represent a different sort of futuristic car, visually as well as mechanically," Segal said, adding his only wish for the new Volt is "more miles before we hit the gas."