Personal Log #510
April 9, 2011 - April 15, 2011
Last Updated: Sun. 4/17/2011
page #509 page #511 BOOK INDEX
$109.66 Per Barrel. The price of oil dropped a
little last week and has been steadily rising ever since. Driving
season hasn't started yet. The national average for gas is
$3.83 per gallon now. The expectation for a $4 average is quite
realistic at this point. It's above that in several major markets
already. How will this influence driving & purchase habits?
There isn't any talk of $5 gas. Everyone knows $4 is the threshold for
change. We saw the affect it had last time, when it was only a
temporary situation. This time the expectation is for drops to be
temporary, where $4 becomes the norm instead. Considering how long a
vehicle lasts, it would be naive to hope for less over the years to come.
Does that mean significant hybrid growth or simply the shift from SUV
guzzling to compact-car guzzling? After all, combined MPG in the low
30's is not what we should be calling "efficient".
Thermal Efficiency. The question of "what's next?" gets asked on a regular basis. How could Toyota make the next Prius even better? Some ideas are obvious, like weight reduction. Others aren't so obvious. In fact, some are quite hidden and rarely appreciated. The biggest problem for a hybrid that strives to keep the engine off as much as possible is what to do about emissions when the system is cold? Think about those few brief seconds when the plug-in model Prius uses the engine to provide a more efficient means of power during acceleration. Heck, that same situation applies to the cordless model too. How do you heat up the emissions system quickly, especially when trying to avoid losing so much of the energy through the tailpipe? How can that better be retained? How can more heat be created with less fuel? How can it be done without increasing cost or risking reliability? There are many design issues to address. But to our delight, progress continues to be made. With the first Prius engine, thermal efficiency was 37%. The new engine in the 2010 bumped it to 38%. Two new concepts currently being tested have yielded 42.4% and 43.7% for thermal efficiency. The first was accomplished by lengthening the piston stroke and altering the intake-port & ignition-system along with friction reduction. The second was much the same, but uses lean-burn turbo-charging rather than direct-injection. The target is 45% for the next generation. The result will be even higher MPG whenever the engine is run. Gotta like that.
History Repeating. It's happening again, just like we
saw with Two-Mode. Expectations were set for rollout. Then as
rollout approached, focus shifted over to the next generation design.
In other words, it was an attempt to draw attention away from the
shortcomings being discovered. That was followed by disappointing
sales numbers, well under expectations. With Volt now available in the
highest demand markets, we are hearing about dealer stock ready for
immediate purchase. No wait list? How can that be? Many of
us feel the high price is to blame, the priority we stressed as most
important and got ridiculed for our trouble. Two-Mode definitely had a
price problem. Why bother when other far less expensive choices are
available? Who decided price shouldn't be a high priority? What
was the reasoning behind the decision to accept lower engine efficiency in
favor of power instead? Will consumer accept such a long delay before
an improved version is rolled out? How will marketing be handled in
the meantime? What if the improvements still don't meet competitive or
Calculating Value. How will consumers decide what to purchase among the variety of choices that will be available next year? The circumstances of owning a pure EV requires careful consideration based on range much more so than price. Cordless hybrids are fairly straight forward, nothing very complicated about determining their value, since MPG is relatively consistent. Plug-In hybrids are an entirely different matter though. Of course, the Volt enthusiasts still continue to compare to traditional vehicles rather than other plug-in hybrids. If you routinely drive either very short distances or very long ones, it's easier to see the cost-benefit of the PHV over Volt. Compared to a plug-in based upon the ASSIST hybrid design rather than FULL, that's going to be confusing. Too many variables complicate matters. The same is true for PHV and Volt when daily-driving is within the median. So how will consumers decide? Do you think they'll crunch numbers? There isn't a generalized basis for calculating efficiency. The demands of work & home vary too much. What criteria must be satisfied to result in high-volume purchases?
Halo Vehicle. With so many still chanting "drill baby drill", getting serious about oil dependency and preserving our environment is a tremendous challenge. To make matters worse, the awards are helping to reinforce the trophy-mentality. Prius didn't become popular that way. It was from consumer endorsements. Everyday people embraced the hybrid. That "halo" effect was really just remark by the GM after they came to realize their "stop gap" campaign didn't work. In other words, they claimed the success of Toyota came from the image Prius portrayed rather than purchases of Prius itself. And still believing that, the approach to Volt was formulated. It wouldn't have to be anything beyond a niche to improve the reputation of the automaker. Mainstream sales could come later... thus the problem now. The intense resistance to Prius comes from the fear of losing attention. Image is the idea of being better, not necessarily offering what a consumer actually needs.
Purpose. We are finally getting a consistent answer to that long-time question of who for Volt. The market is EV enthusiasts, not mainstream consumers as hyped prior to rollout. Next question is what. I've asked about purpose, pointing out the business criteria. It fell on deaf ears. None of the audiences discussing Volt wants to address the topic. It's simply deferred to the second generation currently under development. Waiting 4 more years for the solution promised to be available already seems all but certain now. They still belittle Prius, yet refuse to acknowledge the purpose it serves. A recent review of the PHV model called it a "value-added version", pointing out the benefits of offering a plug while still being affordable. Clearly, that is not what the current Volt will achieve. It's purpose now just appears to be an early-adopter platform to build a reputation for helping middle-market consider their second generation purchase. In other words, this is why they so easily dismiss sales. Delay of high-volume production is not an issue with a purpose like that.
Need & Awards. Volt is accumulating them. Of course, there really isn't much competition this year... since only new offerings are eligible. But from an engineering point of view, there isn't any reason it shouldn't earn some anyway. The catch is the reason why. Supposedly, Volt is the first ever "EREV" vehicle... even though that definition still remains quite ambiguous. It's the same old semantics spin we've seen in the past with other technologies. They are showing the same trophy-mentality we've worried about for years too. Remember the purity marketing? Rather than address business criteria, focus is entirely on the engineer perspective. GM delivered what they wanted to sell, not what was actually needed. Sales will suffer as a result. Enthusiasts don't care though. They simply re-declare this as an "early adopter" stage rather than stick with the "game changer" it was promised to be. I just point out the need for business-sustaining profit by delivering the best balance of performance for a target cost.
Playing The Game. It's sad when you read this: "GM
keeps the competition happy with product and strategy leaks." It
was posted on the big GM forum on a thread claiming development of the
second-generation Volt is on track. This is the same nonsense we heard
before. Consumers hear something so ambiguous, it allows their
assumptions to run wild... leading to hype with a complete disconnect from
reality. That exclusion of detail has been trouble in the past.
In fact, we are dealing with some of the disenchantment now. The most
obvious is the abrupt change of website ownership for that Volt daily blog.
Talking about a dramatic sudden change as a result of learning about missing detail. Anywho, I responded with this:
Not really. Even being vague doesn't overcome the OPUD reputation anymore. We have several examples of that from Volt now.
The bigger concern is "too little, too slowly". Goals intended for 2010 are
now waiting for the next-gen model. $4 gas is already here. Even if
consumers don't buy from a competitor, they'll still buy something to
replace their guzzler.
In other words, opportunity for Volt will be lost to sales of Cruze &
PHV Reports. It's too bad more of them aren't readily available. Fortunately, the latest data shared was from cold weather driving. The temperature was 22°F, which is warm compared to what I routinely encounter during Winter in Minnesota, but nonetheless is still a very good representation of Fall & Spring here and what many call Winter elsewhere. His overall average after 3 trips, for a total of 142.9 miles, came to an observed result of 62 MPG. That's remarkable for cold season efficiency! The first drive was 10.2 miles of errand running around town. Only once did the engine start up and only briefly for hard acceleration. The second drive was 104 miles, with 2 of them in EV and the rest on the highway at 70 MPH. The third drive was 28.7 miles, which delivered an unexpected 14.3 miles worth of gas-free driving. Given reports like that and the hope for a price mainstream consumers can embrace, the potential for high-volume sales quickly still stand. Gotta like that.
Antagonists. These are individuals who intentionally stir trouble. Yesterday's test-drive provoke included: "So much for your mighty Prius". Taunting like that isn't always so blatant, but the intent certainly is. We've seen this behavior countless times before. It occurs after a competing technology is rolled out and it turns out to be uncompetitive. Enthusiasts become antagonists. Telling them apart from someone like a Prius supporter is simple. Does the technology achieve all the required goals? If person focuses on those goals in balance rather than focusing entirely on a certain aspects, odds are they are attempting to be objective. Constructive discussion doesn't come from dismissing a goal. For Volt, the biggest goal disregarded is price. For diesel, it was always emission-rating. For traditional vehicles, it has become city efficiency. Each of the antagonists do what they can to draw attention elsewhere. Often, the easiest way is to simply insult the competition... which we are seeing more and more of now as Prius acceptance continues to expand.
Balance. Few just plain don't want to recognize the choices management & engineers face when it comes to balancing factors of cost & performance. That was all too clear from the "Test drive a Volt and you will agree!" nonsense I had to deal with yesterday. It followed a comment telling me to "stuff it" when I pointed out the game-changing purpose. It's doubtful the message will ever come across, but I continue to try anyway: You're a car enthusiast. Agreeing that your priorities match that of mainstream consumers isn't going to happen. Middle-Market wants a balance of price, size, efficiency, and conveniences, in addition to doing their part to reduce emissions. Performance is one of many criteria and most definitely not on top as many enthusiasts would like. This is why focus has shifted to the second generation. Replacing traditional vehicles takes far more than just heavy emphasis on electric drive.
Disappointment. Reading this makes you wonder about
motive: "...the PHV Prius is gonna disappoint in terms of mpg,
performance and handling, when it is released." Toyota is
shooting for the middle, where high-volume sales come from. We now
know that Volt, the initial model anyway, is aimed at a different audience.
Yet, we have the emergence of antagonists telling a different story.
They draw attention to bragging rights, something those buying Prius
couldn't care less about anyway. After all, with Prius so abundant
now, it's difficult to claim they aren't a mainstream vehicle. Anywho,
I posted this in response on the big Prius forum:
Who is the market for Volt?
I asked that question continuously during the hype and still do now...
because it clearly isn't the same as Prius.
Do they really think middle-market wants electric-only drive under
absolutely every possible condition? Purchase priorities certainly don't
show that. Look at the quantity of Camry & Corolla sold each month. They
offer a nice balance, not heavy emphasis on any particular aspect. They're
practical, affordable, reliable...
Advanced Technology. The day started with that vague reference and went down from there. Volt enthusiasts are the few who still seek bragging rights, a growing difference from Volt supporters who seek constructive dialog. That divide makes things interesting. The balance of motor & engine by Prius is what has made it a strong choice for middle-market. Those consumers have priorities based on need. Endorsements for the current model of Volt focus on want instead. It's why there is such a stir coming from within the GM ranks. It may be why yet another executive from the development team just resigned. It certainly looks like increased disagreement about what the next generation should deliver. That still looks like the reason the founder of that daily blog has vanished. Heck, we didn't even get a clear understanding this morning of what "advanced" actually means. What is its purpose?
Naive Owners. It looks like that's the only way to describe their stance. We've had a couple of them join Volt discussions on the big Prius forum. Each sounds the same. They hadn't paid any attention to the hype prior to rollout. They just wanted to buy a plug-in hybrid, supporting the effort toward electrification. Sadly, that means neither vehicle price nor emissions from the electricity source are a concern to them. In fact, they wonder why we make such a big deal out of both topics. From their point of view, rollout speed is fine and the next generation will deliver the goals GM had supposedly already promised. Market penetration and competition don't seem to be a factor for them either. The worry from this is finding out they detail they don't know about the vehicle they purchased. We've been pointing out operational behavior some were totally unaware of.
$3.89 Now. Seeing that here already was an unpleasant surprise, especially when I had a long driving trip this weekend. Fortunately, when I got to my destination, it was still $3.69. The reality of $4 gas returning is no longer a question of if or when anymore. In fact, it appears as though that inevitable expense could help stimulate the economy. I'm seeing a lot more new sub-compact cars on the road now. Some people are taking the situation seriously. That certainly should make the sales of Prius strong. My trip was a good endorsement for Prius too. Getting 50 MPG with this generation is surprisingly simple. The question which remains is: How will Volt do in this situation? This is a good time to still be in the "early adopter" phase. This was why there was a concern about "too little, too slowly".