July 10, 2011

Chevy Volt Update for 07-11-11

As regular readers know, I’ve been following the misfortunes of the Chevy Volt and its relatives for some time now. Anyone interested in my writings on the Volt should simply enter “Chevy Volt” in the search feature of the CY site. You’ll find every article and mention there.

Of particular interest to you might be my analysis on real world costs of the Volt in an April 26 post (here). In that post, I compared, among other things, the difference in cost between a Volt and a well-equipped 40 MPG Ford Fiesta and found that if the Volt managed a real world MPG average of 120 (electric and gasoline), it would take a minimum of 14 years to make up the difference in initial cost between the vehicles in fuel savings. Actually, it would be more like 19 years, which of course means that for probably 99% of the public, buying a Volt would save nothing at all over a conventional, far more useful vehicle. It would almost certainly leave most owners deeply in the hole overall.

Now come Ed Morrissey at Hot Air with an article titled: “Hey, let’s spend millions to save $116,000!” In that article (here), Morrissey speaks of the Federal Government in San Diego, which is planning to buy 101 Chevy Volts and ten Nissan Leafs for federal employees. Of course, they’ll have to buy and install the necessary charging infrastructure too. I noted the cozy relationship between GE—which builds EV charging stations—and the Obama Administration in my April 21 PJM article on the Volt (here). As the title suggests, the “experiment” is a major boondoggle and will cost the taxpayers a great deal of money while saving nothing at all. It’s a progressive dream two-fer! By all means, revisit my articles and Morrisey’s as well.

What’s new is another New York Times puff piece on the Volt (here) by Joe Nocera. Published on June 25, it has all of the objectivity and insightful analysis we have come to expect from the Gray Lady. Actually, Nocera does make some reasonable assertions, such as this:

“Carlos Ghosn, the flamboyant chief executive of Nissan, has made a different kind of bet, placing his chips — billions of them — on the $32,780 Leaf, which has a 24-kilowatt battery pack that can get 73 miles to the charge. Mr. Ghosn is said to believe that range anxiety is overblown, and that once people become accustomed to an electric car, 73 miles per charge won’t be an issue. Well, maybe in Europe and Japan, but most analysts I spoke to think he’s likely to get his head handed to him in America, and I tend to agree.”

I tend to agree as well, particularly when much of America is nothing at all like the coasts or major cities, and a daily work commute often exceeds 73 miles. Keep in mind that the 73 miles about which Mr. Ghosn is so proud is a maximum obtained under absolutely ideal conditions. Real world mileage is probably closer to 50, and with the kind of driving most people do, likely less.

Mr. Nocera observes that people like to drive only proven technologies—indeed true—but makes a leap of faith:

“Which is also why the Volt is such an appealing alternative — “the right answer for right now,” said Michelle Krebs, a senior analyst with the automotive Web site It gives people a taste of the electric car experience without sacrificing any of the things we expect in a gas-powered car.”

With its limited range and ridiculously long charging times, the Volt does indeed give “a taste of the electric car experience,” but it most certainly does require many sacrifices. Particularly under electric power, the heater is reportedly very weak, interesting in that the entire car—in battery mode—is also very weak in cold climates. And the gasoline engine provides no better—likely worse—mileage than comparable compacts achieve but also requires premium fuel.

Nocera notes that one of Chevy’s primary goals was a 40-mile range, which the Volt achieves (sort of, maybe, sometimes), however it requires compromises:

“The battery can’t be under the hood because a combustion engine is still there. So G.M. had to eliminate the middle seat in the back to make space for the big T-shaped battery the Volt required. Its small body… had to be made more aerodynamic because that was the only way to hit the 40 mile-per-charge mark.”

Unfortunately, real world experience is yielding all-electric range more like 25 miles because people insist on using such luxuries as headlights, taillights, turn signals, the radio, air-conditioning and any and every other electric function in a car which, in the Volt, quickly and dramatically drains the battery. Engaging in such foolishness as actually carrying passengers or cargo only makes things worse. Nocera did hit the mark with this observation:

“And for a car intended for the mass market, it’s awfully expensive. The Volt retails for around $41,000; from what I hear, that’s pretty much what it costs to build. G.M.’s profits on this first iteration of the Volt, in other words, are essentially zero. Though there is currently a $7,500 tax credit on electric car purchases… it won’t last forever. Consumer Reports has advised readers to avoid the Volt because it costs too much. G.M. badly needs battery technology to keep improving, both so that it can lower the cost of its electric cars, and begin making Volt-like vehicles in other sizes and shapes, including wagons and S.U.V.’s that will attract families. That’s the only way it will finally reach the mass market.”

Indeed. That’s $33,500 for a compact car with the kind of limitations that belie Nocera’s assertion of no sacrifice required. Again, compared with a great many conventional vehicles, the Volt offers no savings whatever in fuel or any other way regardless of how long it is owned. Factor in the $8000-$10,000 cost of a replacement battery (no one really knows how long the original battery will last), and the Volt makes even less economic sense than no economic sense, which is quite an accomplishment for GM as it struggles toward once again becoming a world-leading, profitable company while simultaneously dragging an enormous union chain and anchor.

But I’m afraid Mr. Nocera is missing the technological point. The only reason the Volt is as economical as it is—and it’s not economical at all when purchase price is considered—is its relative lack of mass and its aerodynamic shape. Try to upscale the concept into a station wagon or SUV and battery range will inevitably diminish below 25 miles. In order to have anything approaching reasonable acceleration and driving flexibility, it will have to have a substantially larger and more powerful gas engine which will get even worse mileage, presumably on premium fuel. Add more people and cargo than the current Volt is capable of carrying—which is rather the point of a station wagon or SUV--and every negative factor is increased. Only miraculous, impossible to predict leaps in technology could possibly make even the Volt commercially viable, to say nothing of larger, less aerodynamic vehicles based on the same concept.

Mr. Nocera observes that the Volt has “a better chance of success than anything else on the market.” He also believes that:

“Though the Volt has its share of flaws, it is unquestionably a good car. More to the point, as I discovered when I drove it, the Volt makes sense for the economic and cultural moment we’re in now. The psychological grip it held me in, the smugness I felt as I drove past gas stations, the way it implicitly encouraged me to stick with battery power as much as I could — others are going to feel that as well. Somewhat to my surprise, I actually felt a pang of enviro-guilt when I gave the car back and returned to my gas-guzzling ways. Mr. Farah told me that Volt owners often drove 1,000 miles or more before they needed to buy gasoline. I believe it. It has extremely high word-of-mouth potential.”

Mr. Nocera seems to have forgotten what he wrote only a few paragraphs earlier. The Volt absolutely does not make sense for the current economic moment. He wrote that the MSRP of $41,000 allows GM no profit at all, and as I’ve observed, not only does it have only a 25 mile range, it requires premium fuel and it’s impossible to recoup any savings from its combined electric/gas function compared with common conventional vehicles. But then again, perhaps Mr. Nocera is privy to magical Obamanomics reality of which I am simply too simple to understand.

He did hit on the Volt’s primary appeal: Cultural snobbery. He’s right: it’s all about “the psychological grip,” “…the smugness I felt as I drove past gas stations,” and even “…a pang of enviro-guilt when I gave the car back and returned to my gas-guzzling ways.” Poor Mr. Nocera! Couldn’t he just take Mr. Obama’s advise and get a car that gets better gas mileage? To be fair, some people—people with plenty of money—will no doubt buy the Volt simply for its novelty value or merely as a technological curiosity, but if we’re talking about a practical car for the public for the reasons the public needs a car, the Volt simply doesn’t qualify. Any station wagon or SUV built on the Volt platform with the current level of technology would be—if such a thing was possible—even worse.

Mr. Nocera concludes:

“The second thing it convinced me of is that the electric car is no longer some environmental pipe dream. Several years ago, I drove the Tesla, and though it was a wonderful experience, its high price and limited utility did not give me confidence that electric cars were ready for prime time. The Volt has made a believer out of me. At this moment of maximum uncertainty about how the future will play out, the Volt is comforting in its combination of new technology and old. Eventually, we’ll have batteries that can get 300 miles per charge, and an infrastructure solution that will replace gas stations. Eventually.

In the meantime, we’ve got the Volt. It’s a start.”

Again, I wonder if Mr. Nocera is suffering from short-term memory loss. His own arguments indicate that the Volt is indeed “some environmental pipe dream.” It is not a practical car. It is, at best, making no profit for GM at all. The technology still has not caught up to the hope of a viable electric car, which can fully and satisfactorily replace conventional vehicles, there is no electric car infrastructure and the Volt isn’t comforting to anyone with a grip on reality.

Will we have batteries that can get 300 miles per charge? Considering we’re stretching the current state of technology to manage 40, and considering that cold will drain the power of any battery, that seems like a very optimistic idea in a distinctly hopenchangey (all rhetoric, no substance) way.

As Mr. Nocera said: “In the meantime, we’ve got the Volt.” It’s a start in the same way that the EV-1 and the Edsel were a start. When Mr. Obama is out of office, and when the US government no longer owns part of GM—if GM survives at all—the owners of the corporation, if they are remotely rational, will do away with any product that is not producing a reasonable profit. The Volt will be number one with a bullet on that list.

Posted by MikeM at July 10, 2011 09:39 PM

I drove by half a dozen gas stations this morning without needing to stop so that's not unique to an electric car. More telling is that I was able to drive by possibly thousands of electrical outlets without any need to tell myself how smart and clever a gasoline powered car is.

Posted by: STW at July 11, 2011 10:46 AM

Mr. Nocera is not only incapable of seeing that the king is naked, but that the king suffers from micropenis syndrome as well.

Posted by: Alan Kellogg at July 11, 2011 01:01 PM

I drive about 50K miles/year, so fuel economy is important to me. Most lower-end hybrids cost about $10K more than the same non-hybrid car. Even with the claimed fuel saving and the amount of driving I do, I would never make up that $10K difference during the life of the car. Not to mention other expenses, like replacing the battery after 8 years, or sooner, based on my driving needs.

So, I fully agree with your assessment of the cost/benefit of the Volt. It won't save anyone money, but it might permit some with more money than brains to pat themselves on the back. So, is it about the planet or about your ego?

I'm all for being environmentally friendly. I just object to it costing more to exercise that option, and it invariably does. Why should I pay more for less?

Posted by: Marty at July 11, 2011 01:12 PM

Saw the first one for me last week. It was broken down on the side of the road.

I think that really says it all.

Posted by: Phelps at July 12, 2011 01:54 PM

If this nation wasn't so retarded we'd be embracing high efficiency diesel cars similar to the various tdi vw models that are around. Those vehicles get somewhere in the range of 40 mpg no sweat, and have plenty of power and low end torque for normal road driving.

Instead we're overly focused on emissions instead (and often at the expense of) efficiency. Diesel based hybrids are another way to go.

What the heck benefit is an electric supposed to have on greenhouse gasses, even if you do believe in AGW? I mean all your doing is pushing emissions off somewhere else.

Its just a huge, expensive shell game that gives the appearance of doing something when your actually doing the opposite.

Posted by: cyr at July 13, 2011 10:42 PM

The problem with this comparison is that you are comparing apples and oranges. Or diamonds and pebbles. After 10 years of driving a BMW 500 series and loving it, I recently had a ride in a Chevy Volt -- which costs about $10,000 less than the BMW. Frankly I was overawed, and could not believe this car was being manufactured by Chevrolet. I have ordered one. I am sure the BMW too would suffer greatly in a cost comparison with a Ford Fiesta. But some things in life are worth paying for. The BMW was worth every penny. There was not a single time I got behind the wheel in the last ten years and was not happy I bought this car. And I am sure I will feel the same about the Volt. But if your driving tastes and budget fit a Fiesta, more power to you. Probably a used Yugo would be an even more appropriate choice.

Posted by: Bill at July 16, 2011 05:56 PM

Dear Bill:

Thanks for your comment! I care not what anyone else drives; they're free to buy what pleases them. This is one of the great things about America. What I am concerned about is the choices made by a company in which I am--through no choice of my own--part owner. In that case, I expect that company to build cars that make a profit. The Volt does not and will not, unless the government so regulates and mandates the free enterprise system that it will no longer be free and none of us will have the choice to buy whichever vehicle pleases us. I suspect that the Volt is part of the vanguard of that Socialist revolution.

By all means, buy one if you please and I hope you enjoy it. But my point remains: The Volt makes no economic sense for virtually all of the American public. No car company can remain in business manufacturing a product like that. The question remains: Why is GM manufacturing a car that not only makes no profit, but probably costs it money, and does not have the infrastructure--which is also ridiculously expensive--to make it even remotely viable? It would seem to have nothing to do with free enterprise and individual choice, would it?

Thanks again for reading and for your ideas.

Posted by: Mike Mc at July 17, 2011 12:44 AM

Mike Mc,
You are also part owner in the world -- but you don't seem to object to the fact that its natural resources are being sold off for merely the price for getting them out of the ground (e.g., mining costs, oil, etc.) Imagine trying to run a business which only sells off assets without any thought as to what happens when the stock runs out. The ONLY reason we can drive any gas car down the road for less than the cost of running a Volt is that gas (and most energy resources) are treated this way in the USA. Let's forget if you will about all the other problems this costs us in our society (e.g. wars in the Mid-East and the stranglehold they have over us, pollution and the melting of the polar ice cap). These energy resources are irreplaceable. Once we use them up, they are gone. Lloyd Benson, former Texas Senator (and real Confederate), had the right idea -- all energy resources should be taxed at the cost of replacement. Only then will America be delivered from its current and irresponsible addiction to oil. Much of the rest of the world has figured this out. Amazingly it is China which is taking the lead on this. In a decade or less, we will realize how great the cost to America of our energy irresponsibility has really been. We will not only be buying clothes and TV's from them, but about everything else as well -- if we can afford them with our greatly devalued petro-dollars.

By the way: based on the past 30 years at least I would counter your claim in the header with this. "Modern conservatism seems to be a state of permanent financial and social irresponsibility." And of course blaming liberals for the mess the conservatives have created.

Posted by: Bill at July 17, 2011 02:13 AM

The Texas Senator's should have been spelled as Lloyd Bengsten. Sorry, I momentarily confused him with someone else equally visionary.

Posted by: Bill at July 17, 2011 02:41 AM

Dear Bill:

Ah! Now I understand. I've been making an argument primarily on a non-partisan basis and you, apparently have not. I'm not sure what you mean by the assertion that "natural resources are being sold off for merely the price of getting them out of the ground." If you're suggesting that government ought to be making a profit from oil leases, then we're putting government in direct competition with private industry, picking winners and losers, which is, at best, a perversion of free enterprise. At worst, it's like China, which has adopted those aspects of capitalism necessary to keep it from going the way of the Soviet Union. I don't think we really want to emulate China in any meaningful way--they still murder their citizens who are politically inconvenient--except to the point that their adoption of elements of free enterprise that we used to embrace has fueled their expansion into the modern world.

And conservatism is financially and socially irresponsible? Oh dear. You're not arguing that Barack Obama and the Congressional Dems have been fiscally responsible, are you? Seriously?

Posted by: Mike Mc at July 17, 2011 07:45 AM
You are also part owner in the world

So it does come back around to communism.

Posted by: Phelps at July 17, 2011 02:32 PM
The Texas Senator's should have been spelled as Lloyd Bengsten.

It's Lloyd Bentsen. As a Texan, I knew Lloyd Bentsen, and you're no Lloyd Bentsen.

Posted by: Phelps at July 17, 2011 02:34 PM

You guys are living on another planet. Non-partisan? Comnmunism? You are so far to the right everything looks left. Government always picks winners losers -- e.g., oil drilling subsidies, capital gains at 15% for hedge fund managers, private jets tax subsidies, you name it. Exactly how is this letting the market work. All of these of course create jobs, right? -- maybe in China! The only real difference is who benefits. Exactly how have the American people benefited from the trillions or so dollars profit from free trade in the past decade alone -- almost all of which went to the Walmart scions of the world? Or how has it benefited us to stay addicted to oil -- and remain one of the few industrialized (make that formerly industrialized) countries without a public transportation system>? No wonder the poor and unemployed can't find jobs - how would they even get there? Talk about picking losers! And exactly how has free enterprise managed to produce such a crumbling intrastructure or an electrical grid from the last century. Government has indeed for the past 30 years picked the winners, and it is obvious who they are. And it is also obvious who the suckers were. Unless you were one of the really big winners, welcome to the club. And finally on your main point, I contend that government has the responsibility to act in the best interests of all its people -- not just the wealthy few or the dumb. In the matter of energy it has not. It has acted more like a drug dealer whose main job is to keep people addicted to the very thing that is killing them --- in this case oil. And the Saudis are more than willing to help -- notice how they increase production at exactly the moment alternative strategies (the free market if you will) become feasible and cost effective. They aren't stupid - they have a 50 year supply while everyone else is running out. And your `free (not-free-at-all) markets)' are playing right into their hands. Unfortunately for us (maybe that US) other countries aren't this stupid.

Posted by: Bill at July 18, 2011 01:48 PM

Thanks for the correction on the name. As a Mississippian we didn't learn to spell - and especially any names from Texas with more than 4 letters.

Posted by: Bill at July 18, 2011 01:50 PM

Dear Bill:

Uh, you seem to be very angry at someone or something. As I recall, I've treated you and your opinions with respect and have not in any censored or edited them. Wouldn't you agree that's true? This all started as an article about the specific problems a specific car is having in the marketplace and the reasons therefore. If you've been reading this site for any length of time, you know that we have no difficulty taking Republicans to task when they deserve it, and in the current economic mess, there are certainly some who do, as we have been quite willing to acknowledge.

Bill, you seem to be seeing conspiracies where none exist. Oil isn't an addiction, it's an economical, highly useful commodity which has no similarly economical and useful replacement. We are not, in fact, running out of oil, and have larger quantities on our own soil than anywhere else in the world which our technology can now economically recover. Which party is responsible for refusing to allow us to recover that oil? Do you forget Mr. Obama's threat to destroy the coal industry, his desire to make energy prices skyrocket? Do you forget Energy Secretary Stephen Chu's desire to see gasoline prices reach European levels? Gasoline was $1.89 per gallon when Mr. Obama took office with complete control of both houses of Congress. It is now at least $3.55 per gallon and more.

Bill, European countries, socialist countries are now running away from the ruinous policies you seem to embrace. They've had decades of experience with them and now they know better. I don't oppose better, cleaner technologies, but only if they are better, only if they can actually replace other alternatives, only if they actually exist, and only if they don't bankrupt people and the nation. Surely you know that public transportation systems ala Europe aren't possible or practical in America?

The subsidies you decry are in fact attempts by government to stimulate the production of goods (jobs) and commodities necessary for every day life. We can argue about the advisability of any given subsidy, but such things are very different from a Socialist government deciding from whom to take money and to whom to give it, or a government having the power to force people to buy goods or services they don't want or need. This is called, by Mr. Obama and his supporters, "redistributive change." Recall, please, that Mr. Obama doesn't appreciate the Supreme Court's lack of willingness to enforce such change.

The ultimate problem is that if you get what you appear to desire, do you imagine that you--or those politicians you favor--will always be in power? What happens when conservatives are voted into office, as they were during the mid-term elections? Will you be happy for them to have the power you apparently wish Democrats to have? Or perhaps you would prefer that the Dems get the power and keep it by force? Wouldn't the evil Republicans have more luck with using force for such ends? Perhaps we'd all be better off just relying on the Constitution, the rule of law, and free enterprise.

Bill, here at CY we advocate for the Constitution. We'll continue to expose those who would ignore or violate it, in any party. And these posts about the Volt are really a lot more about bad, unprofitable choices than anything else. Yes, they're politically motivated, but we'd be going after whichever party made such boneheaded moves.

And Bill, I hope you last post wasn't an attempt to insult the intelligence of Texans. I happen to live in Texas, the state which through decidedly conservative policies is doing very well during these economic hard times. In fact, so many people and hi-tech businesses are moving here on a daily basis, it's hardly accurate, or humorous, to suggest that Texans are afflicted with low IQS. But in any case, even if that were so, the rest of the nation might wish to be similarly mentally challenged at the moment.

Posted by: Mike Mc at July 18, 2011 10:37 PM