Featured 2016 Chevy Volt Attack Ads target LEAF, Prius!

How “real” was the initial Volt Gen 1 price when it came out? That is to say, like any new green vehicle, there is a waiting list of those willing to pay premium prices to be first users and not wait ½ year or more for prices to come down.

Also, it’s hard to say what a vehicle “true cost” is at that stage. One can argue that few cars make money at the get-go as it will take some time to recoup R/D costs.

The Volt Gen 1 could have initially sold at $30k or $35k at a significant loss. Also, they could have sold the first few thousand for $45k+ and some buyers would have eventually paid that (albeit with even slower initial sales). But how more “real” would an initial $30k be than $45k or inbetween?

Fuzzy numbers?

 

Depends on how you price. GM lost money on variable costs in the first year, but you need to guestimate how much it will lose in the generation, then price to deciding on how much you are willing to lose. Clearly now gm can make money on variable cost.

First year 2011, they didn't cover variable costs, then these went down. If you include R&D costs you get silly high levels of loss.

I'm not feeling you. FIrst year had a negative cash burn. If you were to sell more and lower the price further, you increase cash burn. When you are coming out of bankrupcy, creating higher cash burns is not a good thing. The government wanted to sell their stock, not have gm issue more to create a market.

Definitely if you had say $500M to burn you could sell 40,000/year at a loss of $6500 each for two years until the price of batteries went down (2013), you couldn't really get to 100,000/year by lowering the price that much. This was one of Lutz and wagoners tricks, to price things under costs to keep volume high enough to keep the dealerships going. Post bankrupcy there were fewer dealers, and much less of a reason to bleed cash.

 

So why $41K, why not $46k for the first batch? There would have been some, but fewer, first users to pay this.

My point is, not convinced the initial $41k reflects industry standard pricing for a new vehicle. This situation may be specific to GM, bankruptcy, the recession, others...? But it is important if one is to say the price dropped $10k or $7k or $xk.

I suspect a company with deeper pockets, such as Toyota, would have subsidized the costs more heavily in the beginning, but this is only conjecture. However, if the case, the Volt price would have "fallen" much less.

 

I'd believe the gm ballpark number of $10,000. It makes sense given what we have learned about battery costs initially and today, along with design changes.

As to what it really costs, I assume only GM knows. I would need to know the variable costs and demand curves to decide if gm did a good job pricing the thing. With options it could go over $46K.

Nissan initially lost a lot more per leaf than gm did per volt, but I don't know if that helped them. They still wrote off a great deal of battery plant. Planning for today's volume and building less fixed manufacturing would have helped them. Still they had enough money to eat the loss. GM did not.

Not much of a conjecture. Toyota did decide to lose a lot more per car on the prius, but not on the prius phv. Nissan chose to lose more on their strategic leaf, but given hindsight, they should have started lower volume higher price, then lowered it as battery costs fell.

The sucess story of this generation is tesla, that provided high content at a high price and a slow ramp. Tesla will sell more plug-ins than gm next year. Nissan/Renault will still lead in volume, but tesla will likely lead in sales dollars and profit margin.

 

Since the point is to replace traditional production with new tech, the topic of cost-reduction percent is a red herring. If the new price doesn't attract buyers, mission not accomplished.

Sales are the measure of progress... fewer traditional and more new tech.

In other words, we're seeing the pattern repeat. What's different this time?

 

I think that is your mission, and perhaps Teslas.
GM, VW, Toyota, Honda, appear to want to just sell cars. That means selling some alternately fueled cars, but none of them sell a majority, and no one is going to pass up a juicy SUV profit to try and sell a plug-in.

One word - Tesla
That is the reason Lutz said he pushed the volt. Its the reason Ghosn pushed the leaf. They understand that if traditional car companies don't fill the desires, then an upstart might.

Tesla will only sell about 50,000 plug-in vehicles this year, but it has helped push and inspire over 1 Million world wide. This is much faster than hybrids, and world wide plug-in sales are still increasing fast.

 

If the new model car patterns follow the past, the Volt should have a very nice run Oct-Jan and then taper down. If the 2016 Prius shows up in January, it will also start a 3-4 month sales burst. But there is speculation the 2016 Prius won't show up until March for a Mar-May run. Then there is the Malibu hybrid.

Looks like May or June would be a very nice time to read a 'Smackdown' article.

Bob Wilson

 

You sir, are a man of great faith!

If you follow that cost reduction curve, their battery system will be next to free in a few years!

 

As I said about $150/kwh in 2025, or about $4000 less on a 18kwh than today.

No faith needed. In 2008 toyota and gm both said what they thought batteries would cost in 2010 when the volt and prius phv were supposed to launch. GM around $700/kwh seemed to be correct. That would have been $11,200 on the first packs, now they are about $4450, it does appear that they brought the ballance of the car down anouther $5000, but again we don't know for sure but $7000 seems low, and the difference would be in profit margin, which although thin, should get bigger as battery costs go down, or they may lower the price.

 

So let's flesh this out.

What do you calculate the cost of the battery/EV system was in the 2010 Volt, what do you think it is now (2010 cost - $10k), and what do you think it will be in another 5 years?

 

He answered that in the post immediately preceding yours.
As for the future, that is never a sure thing. However, battery prices have historically dropped 7%-9% a year. So in five years, at that rate, another 40% drop is not unreasonable.

 

No, he didn't. The post asked to "calculate the cost of the battery/EV system" at 0, 5, and 10 years.

We have been discussing the price drop of the Volt, not simply the battery packs. He says it's $10k to date. Yet in the preceding post he talks mostly about the battery packs. That's only part of the cost of the PHEV side of the vehicle. There is some hand waving about magically the car gaining ~$5k in non-battery cost savings: "it does appear that they brought the ballance of the car down anouther $5000".

Again, that's not science or data.

Fixating on the battery cost alone is part of the problem here. The rest of the system does not drop at such a fast rate.

Follow a cost extinction curve for the PHEV component side, and this doesn't work either.

 

IIRC there was some de-contenting by moving some standard items to optional.

I've said it before and I'll say it (yet) again, I'm a firm believer that once the credits disappear prices will fall accordingly. Manufacturers (all) bump up the MSRP to factor in the credit. I saw this with the EVSE credit which has expired and prices as if by magic fell accordingly; some of that was also by economy of scale due to more buyers which is the point.

 

You asked what the battery costs were 5 years ago, now, and 5 years in the future.
He answered 2 of 3 and then you immediately asked again??

The battery pack is the highest cost item in the car, so addressing the costs of the pack can tell us a lot.
We also have a good amount of information about those costs.
As he is not an accountant at GM, he is basis his estimates based on available information.

If you want scientific data, I suggest you as the manufacturer and not forum posters.

 

Please read the post again. This is still repeating inaccurate information that was never stated. Again, I said "What do you calculate the cost of the battery/EV system was in the 2010 Volt, what do you think it is now (2010 cost - $10k), and what do you think it will be in another 5 years?"

I purposefully did not say "battery costs" that I am ascribed to having said by you. That is only a part of the EV system. 0 of 3 questions were answered.

Let's not turn the tables. He made the claim of $10k cost savings. Half of this he takes on faith but says it's not on faith.

He also just said "That would have been $11,200 on the first packs, now they are about $4450." If you are both correct, there will be much smaller further improvements in the cost of the Volt.

 

Who are you taking about?

Basically, anyone who participates in online discussions is a fan.

Ordinary consumers are those who remain anonymous everywhere except at the dealership.

 

Anyone that thought that the volt would be hugely sucessful in its first year is a fan boy. That is who you were quoting. I'm not sure why you
A) Knew they were wrong (yes we all did)
B) Keep pretending it was the majority opinon.

GM was pretty clear it wasn't going to sell big in its first year, so was the bankrupcy court, businessweek, Wall Street Journal, etc.

I see some of that same fan boyism on the mirai. Toyota, WSJ, Bussinessweek, etc are all telling you that it won't really sell very many until a next generation, maybe 50 years, if at all. Still I see things like mirai will kill tesla, etc. Some really bad cheerleading from some big toyota employees (bob carter, Uchyamada) make redicuoulsly optimistic statements, then a day later someone from toyota says no it will only be 5000-10,000 a year, whih recently has become the even more realistic 3000/year in 2017 and maybe, and I repeat maybe if lots of things go right 30,000 in 2020. That optimistic scenario for toyota fuel cells (yes probably multiple models in 2020 if they sell that many)is the disapointing level of volt/ampera in 2012. IMHO the volt sold about half as much as the optimist, four times more than the pessimists, and of course fell far short of the fan boys. NOw of course you won't hear the fan boys say that.

OK how about the toyota fuel cell

41,700 fcv - 2015-2020 Toyota official forecast - I label optimistic
15,000 fcv - 2015-2020 pesimist (redesign delayed, so simply update in 2020 with a cheaper fuel cell) and 3000/year

110,000 fcv 2015-2020 - fan boy estimate same as gen I prius for similar time period.

Don't judge by the fan boy estimates.

 

You clearly haven't been reading my posts. The so-called fans stated mainstream volume by the end of year-2. That was for third year sales, not first. When that fell apart, they (the majority online) shifted expectations to first year sales of gen-2 instead.

Notice how everyone continues to evade the "who" question each time it is asked. (Many choose to change the subject by shifting focus over to fuel-cells as a distraction.) That's confirmation of Volt remaining a niche, not having any strong purchase trait to appeal to ordinary shoppers at the dealership.

Are we really going to watch Volt flounder for another few years, struggling to draw in sales from anyone other than fans?

btw, note how successful Toyota has been at getting people to consider the purchase of a Prius at the dealership. Many ordinary people have taken the plunge. No conquest there... just a simple shift from traditional to hybrid. And that's without a massive tax-credit incentive too.

 

Your question of "who" has always been an odd one. It is very vague.
Many people have given you their opinions.

Perhaps you could clarify by answering the same question for "who" the Mirai is targeted at?

How many "ordinary" people bought the first gen Prius?
Again, you are comparing a car with over 15 years of history to one with 5.

EVs will reach a larger market share in a shorter period of time than hybrids did. Why? Because they appeal to a wider base of the market than hybrids do.

 

i guess if volt sales take off, gm can look back at their negative attack ads as the reason for success.