Posted on 02/04/2013 9:39:42 AM PST by jazusamo
January's dismal numbers for Chevy Volt sales may give a clue as to how successful (or not) President Obama will be in reaching his goal of having a million electric vehicles (EVs) on American roads within the next few years, a goal that is increasingly becoming unlikely. It also gives us a glimpse into a bizarre strategy General Motors has had by focusing so strongly on plug-in cars while they lose market share elsewhere. The numbers are in, and GM can proudly say that they are the market leader in an insignificant field with a paltry 1,140 Volts sold in January. The best selling passenger car on the road, the Toyota Camry, sold 31,897 during the month, giving an indication of how illogical GM's misguided focus has been.
GM's lame reasoning for the post-election lows (actually, the lowest since February of 2012) for Volt sales is that consumers pulled sales from January by purchasing in December of 2012 when GM sold a whopping 2,633 Volts. In the scenario GM presents, this means that sales for Volts can be expected to average fewer than 2,000 a month in the absence of money-losing incentives to sell Volts. GM has previously admitted that there is no market for the Volt and that demand was manufactured by incentivizing short term leases that end up costing taxpayers about $10 for every gallon of gas saved by the Volt . These money-losing leases drove about two-thirds of the politically-charged Volt's "sales" leading up to the presidential election and were funded by government-owned Ally Financial.
A recent search for Volt inventory on cars.com reveals that there are over 4,300 new Chevy Volts available for sale nationwide. GM has had a history of blaming low supply for disappointing Volt sales, despite all evidence to the contrary. It is obvious that a lack of demand is the reason for the low sales, not a lack of supply. In fact, GM has repeatedly cut supply as sales of Volts consistently failed to live up to expectations, yet the Obama-appointed management at GM continues its focus on plug-in vehicles, even though the facts show that there is little demand.
GM's plug-in EV focus sees the company now planning for a plug-in version of the Chevy Cruze (the same platform as the Volt), a Cadillac version of the Volt, and the recently unveiled plug-in Chevy Spark. The insane money-losing strategy of building cars that consumers do not seem to want is costing both shareholders and the taxpayers who are funding the technology with billions of dollars. A recent Congressional Budget Office report revealed that the money is not well spent and that taxpayers will pay about $7.5 billion on EV subsidies over the next few years for little benefit.
Critics of the Volt would not really care about the dismal sales if taxpayers were not paying for the folly. If a private sector company foolishly follows a money-losing strategy for ideological reasons, that's their choice. But the Volt was and is funded with taxpayer money. Further, most financing comes from taxpayer-owned Ally Financial, which the Obama Administration has refused to exit while GM is reliant upon the funding. This refusal has been criticized by a government watchdog in a recent report.
There is also a major concern with the dishonesty that GM has exhibited over the potential for the Chevy Volt. The Volt was touted as a "game-changer" for GM as taxpayer money was lobbied for during the company's bailout process. The media pumped GM's hype and expectations were that the Volt would be selling about 20,000 a month by now, not 2,000! When expectations fell far short, GM lied about the reasons for the failure, first blaming low supply and, even more bizarrely, a right wing conspiracy to discredit the car . How unethical is it for a company supported by a Democratic President to make political statements against Republicans and help the benevolent sitting president to win reelection ?
If GM is dishonest about demand and potential for the Chevy Volt, how can they be trusted elsewhere? Why would consumers want to buy cars from a company that has displayed a tendency to allow political motivations to overrule ethics and honesty? Why would shareholders invest in such a company?
It is past time for GM to start being honest about the Chevy Volt. If the true sales potential for the car is a couple of thousand a month, just say so instead of wasting more money trying to manufacture demand and extending the hoax. Most importantly, it is time for the Obama-appointed management to move on and for the government to exit its stake in both GM and Ally Financial. Hopefully, the next generation of leadership at GM can focus on building cars that Americans want with a loyalty towards shareholders; not to politicians.
Mark Modica is an NLPC Associate Fellow.
Well said by Modica, that's exactly right.
Working link:
http://nlpc.org/stories/2013/02/04/analyzing-gm%E2%80%99s-weak-start-2013-chevy-volt-sales
Doesn’t it use the same battery as the Boeing 787?
Every government worker will soon be issued a Volt to use in order to “win”. Best way to get to a million IMHO.
“It also gives us a glimpse into a bizarre strategy General Motors has had by focusing so strongly on plug-in cars while they lose market share elsewhere.”
Now who could be behind that strategy? By the way I saw one the other day.
Per pound, per cost to produce, nothing can compare with gasoline and other petroleum fuels in ability to provide energy.
Forcing the taxpayers to pay for each electric car built is not the solution.
GM is now hooked. GM is now dependent on the FED. If the FED pulls out, GM will have to re-enter bankruptcy within a year (my guess). Their unsubsidized losses are greater than their subsidized gains. Take away the subsidies and I would venture to bet the boat starts to take on water again.
How about that? We have a sighting of this rare breed. :o)
I've seen more coyotes than Chevy Volts in the past year. And I live and work in the city.
They are both classified as lithium ion batteries but they are different types from what I’ve read.
The 787 are cobalt oxide type and most electric vehicles are manganese spinel type.
I’m no electrical engr, I don’t know the difference in them.
The Caddy is very sleek looking, which should help.
Where I live in Southern California, there are a lot of Volts running around. Since I see so many, it seems the Styling of the Car is not keeping up with the Market. The new Hyundai’s and Kia’s make the Volt look like a Pontiac Aztec.
“The new Cadillac, using the Volt Platform, is coming out soon. I assume GM will lump the Sales numbers for both Models together to improve the numbers.”
Anyone else remember how the caddy built on a Chevy Citation chassis destroyed the Caddilac brand for decades?
GM is hooked, just like every other welfare recipient.
Hah! I haven’t seen one on the road yet but I don’t get out much.
I agree that GM could still be in trouble without subsidies and tax credits. The UAW came out smelling like a rose in the bailout, doubtful that will happen again plus the UAW will be much of the reason if another bankruptcy happens.
Yes, I want a car that costs twice as much, goes 1/4 as far, takes 5 hours to fill up, doesn’t have heat or AC(without taking a huge hit to the aforementioned), AND has a battery that may explode and take out my garage and anything else near it. AND the battery, if it survives, costs north of 6 grand and needs to be replaced every 5 years. Yeah, that’s a great idea.
I do. It was as bad as the 8-6-4 / V-8 Engine and the hastily converted Gasoline to Diesel GM 350 Engine.
I also remember the scandal when GM put Oldsmobile and Pontiac Engines in Corvettes. When they got caught, they said there was really no difference because the Engines were assembled in GM Assembly Plants.
Then there was the Pontiac Aztec...
The Cad volt is going to cost a lot more money from what I’ve read. Though GM hasn’t announced a firm price yet the estimates started out a few months back at a base of around $58K and I read one recently of middle to high $60s.
It’s better looking that the Volt and plusher inside but that’s a lot on money.
At the first sign of revolt, 'SWITCH' and nobody can go anywhere.
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