It’s a whole new world for 2nd-generation Chevy Volt

Michael Wayland
The Detroit News

General Motors Co. has been through five CEOs, a government-backed bankruptcy and a major ignition switch recall scandal since the Chevrolet Volt extended-range plug-in hybrid first debuted as a concept in 2007.

As the second-generation 2017 Volt begins arriving in dealerships nationwide, the Detroit-based automaker is taking a different path to make the new model more successful than the first.

Steve Majoros, director of Chevrolet marketing, cars and crossovers, said GM focused too much on the technical aspects in its introduction of the first-generation Volt, which arrived in December 2010 as a 2011 model: “I think that we focused more on the architecture and the mechanics versus the promise of what Volt delivered, which was a cleaner, more environmentally friendly, more technologically advanced system with electrification at the heart of its propulsion system.”

GM will not announce sales expectations or overly tout the car’s technologies, Majoros said. It will try to be straightforward about the car’s capabilities and the benefits of having an a gasoline engine paired with the electric motor, which helps eliminate the range anxiety that comes with ownership of all-electric cars.

And the company at all costs will attempt to keep the car from becoming a political punching bag associated with fires and nicknames like “Obamamobile” that tarnished the reputation of the original car.

“Fortunately for Chevrolet, that political backlash seems to be non-existent now,” said Eric Ibara, Kelley Blue Book director of residual value consulting. “But this is a technological evolution, and to me it seems to be separate and apart from the politics.”

The original Volt was considered a technological marvel for GM, which was attempting to shed its image as a producer of gas guzzlers. The Volt created a new segment of vehicle that some automakers are just catching up with.

Optimistic sales expectations of 60,000 cars per year announced by then-CEO Dan Akerson never materialized. Some conservatives, including radio host Rush Limbaugh, used the Volt as a tool to mock President Barack Obama’s push for electric cars.

Those issues, combined with a lack of understanding about the car, led to high sales incentives and three years of dwindling sales to roughly 15,400 in 2015. Its best sales year was in 2012 with just shy of 23,500 sold.

Despite the disappointing sales, many consider the Volt to be a success that the company continues to build upon. “GM was able to learn a lot from the program and you’ve seen that development come through to their future products,” said Stephanie Brinley, IHS Automotive senior analyst.

Brinley added that plug-ins have now been in the market for several years, leading to a better understanding by consumers: “There’s still some consumer education to be done but they’re not starting from zero again this time.”

IHS forecasts that GM will sell roughly 41,000 Volts globally in 2018, including about 39,000 in the United States.

Majoros declined to release sales expectations but said the company wouldn’t be launching the car if it didn’t think it would be a success.

“We would not be putting this product out there if we weren’t bullish on it and didn’t feel it was going to make a different for us from a sales share, and dealers and customer standpoint,” he said, adding the company has produced less than 10,000 second-generation Volts at the company’s Detroit-Hamtramck Assembly plant.

The second-generation Volt has a new architecture and a new propulsion system, with a two-motor drive unit that’s paired with a new 1.5-liter, four-cylinder gasoline engine that takes over after the 53-mile electric-only range is spent. (That’s up from an electric-only 38 miles on the 2015 model.)

The car’s range on a full gas tank with a full battery charge is up to 420 miles, a 40-mile increase from the previous version. It’s rated at a combined 42 mpg fuel economy, and a combined 106 mpg equivalent rating.

The company dropped the starting price for the 2017 model to about $34,000 including destination fee — about $1,000 cheaper than the first-generation car despite upgraded technologies and increased range. The revised price is more in line with the average transaction price of the car in 2015, which was just under $35,000 with incentives (excluding government tax credits), according to Kelley Blue Book. That’s down from more than $41,000 in 2012.

The second-generation 2016 version of the Volt went on sale in the fall — but only in 11 targeted states, including the Volt's top market of California. Majoros called it a “targeted distribution strategy” that focused on the original Volt’s best sales areas.

“When gen-one came out, we didn’t know who we were going to sell to, where we were going to sell it,” Majoros said. “It was a big question mark.”

But time has created more questions, including whether a plug-in hybrid vehicle can succeed in a market of low gas prices and surging demand for SUVs.

Plug-in hybrids and all-electric vehicles have some of the worst resale values in the auto industry, according to Kelley Blue Book. For example, a high-end gasoline-powered Chevrolet Impala LTZ that sells for $36,400 today will be worth 37 percent of that after three years. That compares to a Volt LT projected at 30 percent or the Volt Premier at 29 percent.

“The lowest values by segment do occur with the electric vehicle segment,” Ibara said. “But having said that, the pure EVs seem to depreciate the fastest.”

Part of the problem is the amount of incentives on the vehicles, including $7,500 from the federal government that essentially “act as a ceiling on your used car prices,” Ibara said.

Federal and state incentives are in addition to those offered by the automaker. Chevrolet is offering $1,000 cash and other incentives on the 2017 Chevrolet Volt in the initial 11 states the vehicle debuted in, according to

Although incentives are considered detrimental to residual values, the incentives on the Volt are far less than other EVs — and are far less than the $10,000-plus that GM put on the hood during the sell-down of the first generation, Ibara said.

Majoros said the company, which has not released 2017 model-year leasing rates, has “done all of the things” that first-generation buyers wanted Chevy to improve upon for the new car.

“People just want to have a great-looking car with simple, intuitive technologies,” he said. “Volt not only gives everything that what people want in a car, it does it with an innovative propulsion system that is immensely better than the first generation.”