G.M.’s Electric Lemon

New York Times ^ | July 29, 2010 | EDWARD NIEDERMEYER

[Hojczyk]

GENERAL MOTORS introduced America to the Chevrolet Volt at the 2007 Detroit Auto Show as a low-slung concept car that would someday be the future of motorized transportation.

[stephenjohnbanker]

Why buy a 41,000 Lexus, when you can buy a 41,000 Malibu?

I ax you??

[gulfcoast6]

THIS is one reason oil drilling is leaving the gulf. Need I say more???

[MozarkDawg]

[alecqss]

Not Malibu - Chevy Obummer.

[I see my hands]

Anyone driving or being driven in one of these is a thief and should be held accountable.

[Tzimisce]

Well they just need a law requiring Americans to buy them.....

[GonzoGOP]

I got into a fight with a EV supporter on another thread yesterday. So I ran the numbers and this is what I came up with.

The question must stand, Is the Chevy Volt economically viable without the use of force and coercion. And if you need to use taxpayer money you are in fact using force and coercion. Don’t believe me, try not paying your taxes. IRS shows up with guns, throws you in jail and takes your stuff. See, force and coercion.

You need a car for a commute to and from work. You use a different car for long trips. This is the ideal environment for the Volt as it gains the most benefit when operating on battery alone. Without the use of taxpayer money the Volt costs $41,000. You could buy the volt or a Mazda M6 with a high mileage four cylinder engine. For $19,470. Now if you buy the Volt you will need to put a 220 outlet in your garage. So that mean hiring an electrician to put in the 220 outlet and a new electrical box, since most don’t have a spare 220 line and breaker available. I got a quote and it will be around $960 bucks. A lot less if you can do it yourself as it was the cost of the electrician and helper that ran the cost up that high. So the starting drive away cost (absent taxes) is 41,960 for the Volt and 19,470 for the M6. The Mazda starts out 22,490 ahead before the first mile is driven.

Now once you start driving the Chevy is supposed to come into its own. According to a 2010 ABC news poll the average commute is 16 miles one way. So our hypothetical average commuter drives 32 miles per day. Well within the 40 mile electric only range on the Volt. The volt takes 8 kilowatt hours of electricity to drive that 40 miles so the rate works out to a nice even 5 miles/kwh. The Volt will use 6.4 kwh to drive 32 miles. This assumes no loss of electricity in the charging process. That is of course against the second law of thermodynamics, but since when do liberals and environmentalists worry about laws. The Mazda gets 20 city and 29 highway. Call the commute half and half and it gets 24.5 mpg average. The M6 uses 1.306 gallons of fuel per day. Here in Illinois gas costs $2.84 per gallon and off peak residential electricity .0795 per kwh. So the variable cost per day is around $3.71 for the M6 and $0.51 for the Volt. (I rounded to the penny). This looks good for the volt, but not so fast. Remember the comparison stipulated that the car is used only for commuting. So there are only 260 commuting days in a year, not 365. So the Volt saves $834.44 per year.

Now comes the killer. Not engineering fundamentals, but accounting fundamentals. TIME VALUE OF MONEY. That 22,490 saved when buying the M6 doesn’t go into a can in the back yard. If it goes into a CD with a 1.49% APY it earns $335.10 interest the first year. Since the amount available to invest goes down every year due to gas expenses the interest earnings drop each year. However unlike the gas savings, that only take place 260 days a year, interest takes place 365 days a year. Figuring in the time value of money drastically changes the payback time.

Now the Chevy’s $10,000 battery has a warrantee for 10 years and Chevy says it will need to be replaced at least one during that ten year period. With a cost that high lets just assume that if the Volt hasn’t broken even by year 10 it never will due to the cost of battery replacement. For the numbers give above the cost breakdown is as follows.

Year	Balance	Fuel Savings	Interest	Total
1	(22,490.00)	834.44	(335.10)	(21,990.66)
2	(21,990.66)	834.44	(327.66)	(21,483.88)
3	(21,483.88)	834.44	(320.11)	(20,969.55)
4	(20,969.55)	834.44	(312.45)	(20,447.56)
5	(20,447.56)	834.44	(304.67)	(19,917.79)
6	(19,917.79)	834.44	(296.78)	(19,380.13)
7	(19,380.13)	834.44	(288.76)	(18,834.45)
8	(18,834.45)	834.44	(280.63)	(18,280.65)
9	(18,280.65)	834.44	(272.38)	(17,718.59)
10	(17,718.59)	834.44	(264.01)	(17,148.16)

At the end of ten years I am still $17,148.16 better off buying the M6 than I am buying the Volt. But you say what if gas prices go up. Of course electricity prices are likely to go up as well, but lets say that the gas price goes up to $8.00 per gallon and electricity doesn’t change at all for the next ten years. Youi would be $1,649 better off buying the Volt, assuming that you don’t get into an accident or trade in the car before then. Rather a big if.

According to the U.S. Department of Transportation the average person sells or trades in their car in 4.5 years and 41,000 miles. Since this is a commute only car it is going to hit the years way before the miles. How high would gas have to get, without any increase in electricity prices for the Volt to make economic sense in 4 years. A whopping $24.00 per gallon. So unless you expect to see $24.00 a gallon gas at the pump by next year the volt will make as much economic sense as a Ferrari. Both may be engineerign triumphs but you buy them for status, not for economic value.

Year	Balance	Fuel Savings	Interest	Total
1	(22,490.00)	8,039.94	(335.10)	(14,785.16)
2	(14,785.16)	8,039.94	(220.30)	(6,965.51)
3	(6,965.51)	8,039.	(103.79)	970.64
4	970.64	8,039.94	14.46	9,025.05

[Nip]

The most important thing to remember about “concept cars” displayed at auto shows - they are one off, hand made products that have no relationship to the production models that are actually built, displayed, sold, and driven. In short a dream verses reality.

A dream verses reality.

perhaps that is why BHOI is pushing it so hard.

[DCBryan1]

Hell, buy a loaded VW Jetta TDI off a 1 or 2 year lease, pocket the 25,000 difference, buy a municipal bond that pays monthly, and use that for your gas prices.

[Secret Agent Man]

THe Obama Volt should be renamed the Obama Short Circuit. Hell 40 miles on a charge that requires charging 8 hours overnight.

The transformers in the average neighborhood are not going to take charging overnight. They are generally undersized and the power companies depend on lower usages at night so they can cool down. With cars charging overnight these things will never get cool and will overheat and break down.

[goseminoles]

Good breakdown. Thanks.

[equalitybeforethelaw]

Plug a butt ugly Hyundai into this calculation and you will save even more. Hell, you probably could own 2 Hyundais and still have money to deposit versus the bolt.

[kevao]

The only people who can afford a car this expensive are the very people Obama plans to tax into oblivion.

[NavyCanDo]

I heard a Chevy Dealer salesman from the NE who wanted to remain anonymous called a radio show, and he said this car is far from being ready to be sold. He says there are still way too many problems with it, mainly the batteries and the back-up gas engine. He predicted recalls on this like you have never seen before.
He also says there is so far NO interest from the walk-in public. Yet – they have a quota handed down from the government on how many of these they have to sale, and if they don’t their dealership is in jeopardy.

[GonzoGOP]

Don't forget the other costs like having to run a 220 circuit into your garage. Also you still have a IC engine in addition to a generator, electric motors, and electrical control components. The more parts, the more maintenance. Even if it is covered under warranty, and who knows if GM will be around to honor their 10 year warranty on the $10,000 battery, you still have time lost while you take it in to be worked on.

I'm not against EV or Hybrid vehicles in principle or for technical purposes. I just think that for now they are not cost justified.

[Menehune56]

Wow, hard to believe an article this critical of the Obama regime was published in the NY Times. The cartoon showing the taxpayer money used to produce the Volt is very damning.

[Boiler Plate]

EPA is going to issue new “Lemon Law” regulations that will require everyone to buy an Obama Motors Electric Lemon (aka the Volt).

[Humble Servant]

Thanks for all the work!

[Lexington Green]

... what if we won’t eat the dog food?

[rlmorel]

Great analysis, GonzoGOP...did you do that your yourself? If so, excellent job, if not, thanks for posting it for us.

I think the point that secret agent man is equally important, but liberals just pooh pooh it, because they view the outlet of their house as the source of electricity in the same way many of us view the supermarket as the source of our steak.

secret agent man, do you know of any links to information where this kind of analysis of existing infrastructure has been performed?

I can already hear liberals moaning about the “unexpected” increase in blackouts and brownouts due to the “unexpected” stress on energy infrastructure.

[douginthearmy]

Volt shmolt. I will never buy a government motors vehicle of any flavor. This is pure fascist corporatism. GM may be a US based company but it has become UNAMERICAN.

[agere_contra]

Stealing that for my tagline, thanks!

[Noob1999]

That’s good work Gonzo.

But let’s continue on:

The Mazda gas engine propels the car up hills, down hills and on level ground, so the engine output requirementss are always changing. Downhill, the car is probably getting 60 miles a gallon; on the level, maybe 40 MPG; while working uphill, maybe 20mpg, which all averages out to the overall 29mpg highway.

The Volt engine will be working all the time, after the initial 40 miles, as the small engine will be spinning the large generator, probably at a constant speed in the maximum torque sweet spot. Thus, this engine will be under constant load, like always going uphill. Comparatively, gas mpg will suck, and under constant load the engine will wear itself out much earlier than the Mazda engine.

So, after your ten year ownership period, the new buyer will need to buy a new set of batteries for $8-10 grand; will be buying a car whose engine is probably worn-out, will not get the $7,500 tax credit. How will the used car market price such a heavily depreciated worn-out pile of steel??

[bmwcyle]

See upper tables.

[Red Badger]

If you do the math with a DIESEL, it’s even better!....................

[Secret Agent Man]

You can ask someone that deals with power distribution in your local energy monopoly. It is common knowledge in the field (I worked at a power company for several years) that they undersize transformers for neighborhoods with the expectation (historical data based) the night usage rates are always lower than daytime, and it gives the transformers time to cool down (plus generally temps are lower at night). Charging electric cars are going to mess this up and will not give the units proper cool-down times when they are charging 8 hours at night.

Nobody in the administration has a clue but they will blame the evil utility companies because they’ve put in undersized transformers on purpose and now they are failing customers because power company “x” wnated to do things on the cheap. They escape blame and get to finger point at another private company that perhaps they need to start regulating more carefully.

[Spokane]

The Voltwagon reminds me of the Volkswagon "Peoples Car" story.

http://people.westminstercollege.edu/staff/bknorr/html/history2.htm

[AlaskaErik]

Plug a butt ugly Hyundai into this calculation and you will save even more. Hell, you probably could own 2 Hyundais and still have money to deposit versus the bolt.

Have you seen the 2011 Hyundai Sonata? Pretty classy looking car.

[Parley Baer]

Rush said the Volt requires high octane gasoline.

[jetson]

They should rename it the GEEK because that is who will buy the thing.

[Secret Agent Man]

They already ave a really excellent idea they’ve done on some buses.

Each wheel is an electric motor. The shaft is fixed, the outer casing of the motor moves and is the rim of each tire. They powered the whole damn thing with a 5 kilowatt generator. Excellent mileage, excellent pollution compared to the regular bus. Very quiet compared to regular bus. Lots less complex systems, less weight to move around.

Could do this in cars and get great mileage.

[GonzoGOP]

Great analysis, GonzoGOP...did you do that your yourself?

Yep, spent a few hours on the intranet looking up numbers and putting together a spreadsheet that let me change variables. The guy really got under my skin. Lost of name calling and claiming that since he had two engineering degrees he knew better then everyone else and that anyone who didn't fall down and worship at the alter of the Volt was an idiot. Even called Rush an idiot.

When he made the engineer comment for about the fourth or fifth time I remembered, Hey I have an MBA, perhaps I should argue from my training not from his. So i gave him every technical point he demanded, and then looked at is as a simple investment evaluation. And what do you know even under technical (didn't look at charger waste and maintenance), environmental (didn't look at EV degradation in cold and snow), political (gas price goes up, electricity doesn't and interest rates stay low) and social (commute only and < 40 miles) circumstances completely favorable to the Volt it still didn't make economic sense.

[antiRepublicrat]

In talking with the environmentalists, it helps to safe-side, as you’ve done. You give all these ridiculous compensations and still come out on top. One more place you should safe-side though is commuting days per year. You’ll also likely use such a car for local errands and shopping, so it will be used probably over 300 days per year.

You still come out on top though.

[chris_bdba]

Hey look it’s the electric Gremlin!

[FourPeas]

Spoken like our Dear Leader.

[USFRIENDINVICTORIA]

Overall, you have done a great job of analysis.

I completely agree with your first point, regarding the subsidies. If there were no subsidies involved; then this would be just another free-market decision. I.e. no one else’s business, but the buyer and seller. However, it is subsidized — so, all taxpayers do have a right to be critical.

However, you've assumed that the Volt is comparable to a Mazda M6. If the Volt is actually comparable to a more expensive car, then the gap would be narrowed. Do we actually know whether the Volt is comparable to the M6, or if it's actually more comparable to a near-luxury car?

Similarly, the article compares the Volt to the Nissan Leaf. We know that the Volt is superior to the Leaf — because it offers unlimited range, which means that it isn't restricted to commuter use.

From the perspective of GM, there are a couple of important consideration, which may make the Volt viable. (Although, we can't assume rationality on the part of GM, so long as it remains “Government Motors”.)

First, there's the real possibility of a declining cost curve. Think of the first year's sales of a mere 10,000 units as an extended road-testing phase. Road testing paid for by the consumer.

Second, there's the matter of Corporate Average Fuel Economy (CAFE). GM will be getting big economy credits from the Volt — which will allow GM to manufacture more large “gas hogs”, where the profit margins are good.

[GonzoGOP]

If you do the math with a DIESEL, it’s even better

Actually I did and it was not as big an edge as you would expect. Admittedly I used a Mercedes diesel for the comparison since that is what i found numbers for. The diesels sell at a premium so you have less money earning interest to start with. Lets be honest at less than a dollar a day you aren't going to play with the Volt in terms of day to day variable costs. Especially when just used as a commuter. It is the purchase price, and setup that is the killer. Get the price down within $5 K of a comparable car without using tax credits or gimmicks and it is a world beater. But with a $20 K head start it just can't catch up.

[longtermmemmory]

IOW a disposable car. It will be better to buy a new car than fix it, IF ALLOWED.

40 mile range?!! What idiot approved this fiasco.

[equalitybeforethelaw]

“Have you seen the 2011 Hyundai Sonata? Pretty classy looking car.”

I am captive to my first impression of Hyundais in Korea. All I think of when getting into one is where is the overwhelming stench of garlic? I know this is unfair, but its the truth. They make good cars, but it seems their designers always find a way to introduce a “WTF” moment in their models appearance. I believe its the Tuscon, which is a nice car, but the front end looked weird. Some of them remind of really bad Rambler’s in their body style. Its like they hired the 70s design staff from AMC. Always a little off in one or more aspects. Just sayin.

[Noob1999]

..................They already ave a really excellent idea they’ve done on some buses.

Each wheel is an electric motor.....................

Absolutely! It’s great technology, and it’s coming to the yachting market soon, just like all large ships and trains are diesel/electric.

So why not dump all the heavy expensive batteries that need spewing coal fired powerplants to recharge, and go with a lightweight diesel/electric auto and be done with it?

[GonzoGOP]

However, you've assumed that the Volt is comparable to a Mazda M6. If the Volt is actually comparable to a more expensive car, then the gap would be narrowed. Do we actually know whether the Volt is comparable to the M6, or if it's actually more comparable to a near-luxury car?

I looked at cabin size, wheel base, options, and they were all fairly close. Less HP on the M6 when using the four banger, but the Volt was heavier. Volt would still probably win off the line due to high torque of the electric motors. Not a big issue in a commuter car. If you wanted to do a lot of highway mileage you would need to use the 6 cylinder M6. It costs you another four grand at purchase, but then it would use the higher highway mileage, not the average of highway and city.

[dead]

Quantifying just how much taxpayer money will have been wasted on the hastily developed Volt is no easy feat. Start with the $50 billion bailout (without which none of this would have been necessary), add $240 million in Energy Department grants doled out to G.M. last summer, $150 million in federal money to the Volt’s Korean battery supplier, up to $1.5 billion in tax breaks for purchasers and other consumer incentives, and some significant portion of the $14 billion loan G.M. got in 2008 for “retooling” its plants, and you’ve got some idea of how much taxpayer cash is built into every Volt.

Not as angry and disgusted as it should be, but a fair article at least.

[GonzoGOP]

40 mile range?!! What idiot approved this fiasco.

It is 40 miles on battery. Then the four cylinder IC engine kicks in. But at mile 41 the price per mile suddenly becomes much closer than a car that sells at half the price. If the volt is going to make economic sense it has to be in short commutes. Hydrocarbons are so much more efficient at storing energy than batteries that their higher cost and inefficiency are completely erased by the ability to carry a lot of them with little weight penalty.

[ApplegateRanch]

the night usage rates are always lower than daytime, and it gives the transformers time to cool down (plus generally temps are lower at night). Charging electric cars are going to mess this up and will not give the units proper cool-down times when they are charging 8 hours at night.

Thanks. I have tried and tried to explain to a oujple of Greenie-Libs that "off-peak" will be the NEW "peak" when aa signifigant number of people plug in at night. Not to mention all the 'Smart Metering" transfer of water heating & other heavy appliance loads to "off-peak" hours.

We've seen this before, where when ONE person in a neighborhood does something, it works out great--for THEM; but when several try it, the whole thing breaks down, and usually ends up costing everyone MORE money rather than less.

[Red Badger]

http://www.fueleconomy.gov/Feg/findacar.htm

[Red Badger]

http://www.fueleconomy.gov/feg/diesel.shtml

[Red Badger]

http://www.fueleconomy.gov/feg/diesel.shtml

[gibsosa]

bump to show to libtard

[counterpunch]

The Voltswagen, designed by Herr 0bama himself!