Chevy Volt Update for June 8, 2011

As regular readers know, I’ve been following the convoluted path of the Chevy Volt since before the first car rolled off a diesel-powered transporter (there’s irony for you) onto a dealer display floor. My original intention was merely to point out the less-than-stunning reality of the Volt’s “revolutionary” technology compared to the ever-changing claims of GM and the Volt’s many fans. As time has passed, all of the usual elements of governmental corruption and cronyism have attached to the story, and it has taken on something of a zombie-like life of its own.

Even though real world experience with the Volt has confirmed the limitations and potential problems many have identified, the Volt continues to be sold, albeit in limited numbers. It is not at all unusual for a major American manufacturer to produce a car that sells poorly, but never before has such a car come with such obvious limitations and at such a high MSRP ($41,000). In the usual workings of the marketplace, automotive turkeys die a quick and merciful death, but what is the lifespan of a vehicle born of environmentalist fantasies and political pandering? That remains to be seen.

For those curious about my past posts, merely type in “Chevy Volt” in the site search feature of the site and you’ll find what you seek. You might also want to visit:

(1) My recent Pajamas Media article on the Volt and its political entanglements (here).

(2) An article by Ed Morrissey (here) that touches on many of the issues I’ve already raised, but adds some new facts.

(3) An article on the Green Auto Blog (here) with generally bad—but perfectly predictable—news about electric vehicles in general.

WHAT’S NEW:

A growing number of GM dealers are selling Volts with only 100 or fewer miles on the odometer as “used” cars. In some cases, they’re reducing the purchase price a few thousand dollars, but reliable reports indicate that the “used” Volts still have that distinctive new car smell. What’s going on?

Simple. Remember the $7500 government rebate available to the proud owners of electric cars, the rebate that reduces the purchase price of a Volt to a mere $33,500? It appears that some dealers, stuck with a car that is not fast moving in any sense of the term, are claiming the rebate for themselves, thus making far more profit on Volts than would be normally possible.

It’s likely that the green cache’ has worn off the Volt and virtually no one is willing to buy one for the premium prices—reportedly up to $65,000!—that some canny dealers charged when the cars first began appearing in even more limited numbers on showroom floors. Apparently environmental virtue and bragging rights have limitations. Regardless of the unicorn horn and fairy dust assumptions of DC politicians and their GM allies, auto dealerships have to pay strict attention to the financial bottom line, and with windfall profits no longer possible, are taking advantage of a car that is never going to be a significant money maker for them while the taking is good.

So how are those sales going? In January, GM sold 321 Volts. That’s 321 in the entire nation. If they were sold in every state—they aren’t—that would be six vehicles per state (Bonus Fact: In Mr. Obama’s America of at least 57 states, that’s 5.6). In February, GM sold 281. In January, Nissan sold 87 of its all-electric Leaf, a number that plummeted, so to speak, to only 67 in February. GM has apparently not published more recent sales numbers. It is unlikely that such reluctance is due to booming sales. If you’ve never actually seen a Volt or Leaf in the wild, now you know why.

I’ve written on the difficulties inherent in the Volt’s lithium-ion battery, but for a quick review, here are most of the salient issues:

(1) Average battery life is currently unknown, but likely will be shorter than the 8-10 years claimed by GM. Paradoxically, the more frequently rechargeable batteries are charged, the shorter the life span. They cannot be perpetually recharged. GM is currently quoting battery replacement costs of some $8000 and is promising a full replacement warranty for about the same period to the original owner. Therein lies the next, likely insurmountable, problem.

(2) What happens when Volts begin to appear on the used car market? I mean the real used car market. Who is going to knowingly buy a car that might need a more or less immediate battery replacement that is more expensive than the car is worth? Can used car dealers possibly lower their prices enough to overcome this problem? The alternative is to charge far more for a used Volt than for comparable cars in its class, which also makes it unlikely that anyone will buy such a high-priced used vehicle only to have to throw $8000 to $10,000 more into a battery.

(3) Volt batteries produce sufficient current to seriously injure or kill inexperienced or unwary mechanics or first responders who lack the knowledge or specialized tools to deal with them.

(4) Lithium-ion batteries contain substances that must be kept apart. If allowed to combine though as much as a pinhole, they have the immediate and unfortunate tendency to burst into flame or even explode. Such explosions are apparently a low-order affair as explosions go, but would certainly rival the worst bad hair day in sheer bummer factor.

(5) The batteries pose unique mining, manufacturing, disposal and recycling problems.

(6) Most of the world’s Lithium supplies (some 85%) are in China, Bolivia and Chile. Large flake graphite is also a necessary component, and China is in control of some 80% of that market. China is not exactly our pal, and Mr. Obama is allowing and even embracing Islamist and Marxist incursions in our hemisphere. If that’s not bad enough, the Argonne National Laboratory thinks that there may not be enough Lithium in the world for manufacturing car batteries by 2050, and substantial shortages much sooner. So much for the brave, green Lithium-ion powered automotive future and all of the green jobs it will save or create.

(7) Real-world all-battery range under real-world driving conditions is turning out to be about 25 miles, substantially reduced from GM’s original 50 mile, then 40 mile, hype.

The news does not get better. According to a USA Today-Gallup poll, 57% of Americans will not buy an electric car under any circumstance. Though 12% might consider it if gas rises above $5 per gallon and 9% if gas rises above $8 per gallon as Mr. Chu and Mr. Obama have so fervently hoped.

All of this is, of course, inevitable. Building a car with no clear buyer demographic, with no real advantage over vehicles costing half its price, a vehicle that will depend on a non-existent charging infrastructure (Quickly: name a single EV charging station near you) is not exactly a recipe for economic success. But then again, considering the totality of Mr. Obama’s economic acumen and execution, it is amazing GM has sold any. Apparently hope and change are still not a replacement for an understanding of market forces obtainable in any non-Marxist college economics 101 survey class. There may be hope for change after all.