Personal Log  #620

May 6, 2013  -  May 12, 2013

Last Updated: Sun. 5/12/2013

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Facing Reality.  Middle-Market consumers don't have money available to purchase a Tesla.  If they did, the automotive industry wouldn't face such a big struggle to make high-efficiency technology affordable.  This is why the example of Prius is so often discussed.  Toyota's effort to deliver a plug-in hybrid using only 4.4 kWh of battery met the objective.  Going from 35 to 75 MPG, driving the standard annual distance of 15,000 miles, you'd use 229 gallons less of gas.  At $3.89 per gallon, that's $891.  Using my own real-world data, including recharging losses, that comes to about $206 worth of electricity at 0.12 per kWh.  The difference is roughly $685 per year.  That easily covers the goal making the system cost-competitive with traditional vehicles.  As price drops for lithium battery-packs and the price rises for gas, the appeal of 35 MPG fades.  GM is now painfully aware of how important that affordability aspect of a vehicle really is.  They thought the thrill of EV driving alone would compel mainstream buyers to spend more.  That didn't happen.  The sacrifices made for range & power weren't enough.  Even the explanation of savings hasn't worked.  There's quite a challenge being faced and we are stuck waiting several more years for the next attempt to attract the masses.  In the meantime, people are just purchasing 35 MPG vehicles with the intent of driving them for the next decade.  This is what the "too little, too slowly" concern was all about.  The "we'll find a way to lower costs later" approach is clearly not working.  The design must address cost right from the start, initially rolling out with an affordable configuration, leaving the opportunity for capacity increase later when prices drop.


Up To The Chore.  Remember that saga a decade ago?  There was a debate on a single thread that went on and on and on.  It was the status quo (anti-hybrid) fighting Prius, attempting to prove it wasn't up to the chore.  After nearly 2 years of failing to do so, the moderator finally declared that it was.  The same type of thing has been going on for Volt; however, it's proving not to be.  After years of excuses, the most important factor still hasn't materialized.  Sales are just stumbling along.  Without consumer support, what's the point?  The goal of replacing traditional production with the new technology hasn't been achieved.  The annual quantities were not met.  Volt is really the second-generation design of Two-Mode.  Looking closely at the system, it's pretty easy to see how GM took what they learned from the first and implemented improvements.  Admitting that was painful for enthusiasts, since it meant confessing that the effort to compete has actually been going on for a very long time.  But now that details of the next Volt are emerging, it's quite evident the design is really third-generation Two-Mode.  In other words, there's another redesign on the way.  GM will take what this rollout taught and use it to deliver a system better matched to market need.  Volt wasn't up to the chore.  This is why no matter what is said about GM's own product-line and the gap they are attempting to address, Prius is always brought up as a rebuttal by Volt enthusiasts.  When nothing is even said about Toyota, that success is mentioned anyway.  It's quite an endorsement for having reached the mainstream... overwhelming proof that subsequent versions from GM will be aligned to middle-market priorities.  The current attempt to entice & convince didn't work.  Too few were willing to pay the premium to satisfy want; instead, there will be a shift to focus on need.  It's about dang time.


Smug.  Some never learn, holding firm with their perspective.  As a result, the same missteps are repeated over and over again.  Thankfully, there are very few of such individuals now.  Here's one, who made this comment yesterday about Toyota: "Their pathetic attempt at a PHEV, that only gets minuscule EV miles, is pointless."  Calling the choice of limiting battery-capacity to an affordable size that tells us the product-gap GM has will continue to remain unfilled.  This particular Volt owner simply doesn't care though.  Those adjectives make that overwhelmingly clear.  You don't say "pathetic" and "minuscule" and "pointless" without being smug.  They are meant to insult & belittle.  Using them is no surprise.  Car enthusiasts magazines wouldn't be caught dead endorsing a family sedan back in the days when Prius was first rolled out.  All of them, the entire category, was looked upon with the same smug.  They simply weren't interested in middle-market vehicles.  This is why Volt is so difficult to promote.  They treat it as a niche but want it to be mainstream.  That's a direct conflict.  Those enthusiasts are their own worst enemy.  Endorsements much come from ordinary vehicle buyers instead.  That's why I provide so much real-world data, complete with logs, photos, and video.  Seeing all that, people can decide for themselves if my driving resembles their own.  They can make judgment without any influencing adjectives.  It's only those who are desperate that choose to disparage in such a way.


EV up & down, seasonal effect.  How many threads have you encountered over the WINTER complaining about EV range dropping?  Only a handful of owners last year had the opportunity to experience the climb SPRING brings.  As a result, there was a lot of frustration from many and very little real-world data to work with.  To make matters worse, Prius PHV is a plug-in hybrid, not an EV.  So when we'd try to get MPG information from a new owner absolutely convinced there was something wrong with their car, they'd get defensive saying we weren't taking their range concerns seriously.  Now, we have the real-world data available.  My own EV estimate & range has increased as a result of the seasons changing. Winter literally ended just last week (bad snow storms).  Spring has sprung here.  The last 3 days, the estimate has risen from 11.3 to 11.6 to 12.1 miles.  The resulting range has increased as well.  Not as consistently matched, but range is well above the 9 miles of EV that I experienced during Winter.  The previous three days have been 14.7 and 14.2 and 14.1 miles.  Spring has clearly ushered in much better results.  It makes me wonder how those who had complained will now respond.  Getting an endorsement from them would be great.  We need owners who closely observed the seasonal effect.


Monthly Stir.  This time, it was drawn out.  Bad monthly sales results stir lots of online debate.  We got the usual flurry of excuses from Volt supporters attempting to draw parallels to early Prius history.  You know how it goes.  They only sight the bits of history they like and dismiss anything you attempt to remind them of.  That keeps the posts flying for awhile, then activity abruptly ends.  The inclusion of what's now being referred to as the "$10,000 price drop" got far more attention than it deserved.  There was nothing of any substance.  It was just like in the past when claims of "nicely under $30,000" were gleefully tossed around.  Not having anything to support that goal actually being achieved should be worrisome; instead, they celebrate.  The hope for 50 MPG and a 40-mile range were looked forward to the same way.  It's the "over promise, under deliver" playing out again, right before our eyes.  Yet, they don't see it.  They believe it's all quite realistic and those saying otherwise are just attempting to undermine that success.  Factors like cost are simply dismissed.  Examples of the past are considered unpatriotic.  The attitude is quite troubling.  Lessons of prior shortcomings were clearly not learned.  Rather than setting reasonable expectations, it's the same old hype all over again.  Unfortunately, the monthly stir makes it even worse.  Ahhh!  Here we go again.


Television Commercials.  The advertising of C-Max is getting annoying.  It's not the fact that there's always a comparison to the v model of Prius.  In fact, that's quite welcome.  Having Ford indirectly point out that Toyota has more than one Prius size available is nice.  The trouble comes from "47 MPG Combined" message.  Knowing how much of a stretch that is, the pending lawsuit, and the misleading EPA numbers in general, you'd hope they wouldn't put emphasis that.  Setting more realistic expectations is better for everyone.  Heck, they could even just safely claim the MPG is better than Prius v.  But to flaunt the value like that, it could do more harm than good.  After all, such mismatches are why the 2008 revisions were introduced in the first place.  Unfortunately, the measurement adjustments didn't go far enough.  Besides the high-speed and stop & slow driving conditions not matching real-world well, the fuel used for testing is pure gasoline.  Very few use that anymore.  Almost everyone is using E10 now.  So no matter what you do, your results will always be lower.  As a basis of comparison, the numbers still work.  But consumers are using them for that; they believe those big numbers represent an expectation... even though the smaller numbers and the including explanation clearly state they should not be.  So, it's easy to imagine how little information is actually conveyed from a 30-second television commercial.  Of course, that is the nature of promoting a product.  Marketing doesn't usually have much educational value.  It's used to draw attention.


Priority Change, reality.  It came crashing down yesterday.  They didn't want to address goals.  They didn't want to discuss need.  They didn't want to face reality.  We're returning back to the days of unsubstantiated hope, where being realistic wasn't required.  GM will somehow deliver a significantly less expensive Volt without any decontenting.  As if by magic, the current problems will be solved and the other automakers won't be able to match.  Bring up the fact that the competition was actually GM's own traditional vehicles infuriated.  Their anger was quite clear.  The challenge of actual change was simply too much; instead, they chose to stick with bragging rights.  It's an unfortunate position.  Rather than supporting the automaker by making the tough decisions easier, they played the smug card.  Predicting how that will play out is trivial.  We've seen this very same situation unfold several times now.  The signs are obvious.  Yet, they don't see them.  Priority change is a sign of weakness, an admission of failure.  The decision is to just hope for the best.


Priority Change, analogy.  I really enjoyed reading: "This reminds me of the shop that added toppings to their hamburgers at no cost. It still was a lousy hamburger!  I prefer steak, even if it cost more.  Same for the Volt against the pip.  Toyota added a plug to the prius but it is still a lousy car!"  References like that often backfire.  In this case, it most definitely did.  All along, my point has been that mainstream consumers are ordinary people who don't have the same purchase criteria as enthusiasts, who are willing to pay much more for their vehicle.  Of course, my drive to the coffeeshop today without any EV available, delivered 62 MPG.  On the way back, it was 64 MPG.  My overall average for the day, recharging at home at work and driving a total of 51 miles, was 114 MPG.  I could have pointed out how un-lousy all that was, but didn't bother.  Instead, I responded with this:  Thanks for the analogy.  It perfectly fits the situation.  Most of GM customers only buy hamburgers.  They aren't going to purchase a steak, no matter how delicious it is.  Why Volt supporters still don't accept that is baffling.  Fortunately, GM seems to have recognized the priority difference and will be adjusting their menu accordingly.  Enjoy your steak.  The rest of us will be eating hamburgers, with plenty of money left over for fries, a frosty drink, and dessert.


Priority Change, attention.  The other reason GM is getting so much attention today is that all of the eAssist cars built before December 2012 were just recalled.  That's 38,197 of their second-generation BAS hybrid... a good reason to distract with talk of the second-generation Volt instead.  Oddly, if it puts the design on the right track and changes priority to actually be something for the mainstream, that type of greenwashing is acceptable.  After all, no supporter wants to admit having made a fundamental escape.  Providing them with an avenue of escape is a sensible.  They switch focus to the future by allowing current problems to pass with argument.  It does make you wonder how far the system changes will go.  GM is not afraid to rename a technology to make it appear to be new.  That's misleading, but most consumers only focus on details in present anyway.  The point is to get the automaker back on track.  And though a terrible approach, it could still work.


Priority Change, response.  Hearing today that our government will finally be selling back the remaining 300 million shares of GM stock (at a substantial loss), it was worthwhile to poke the bear.  I responded to this: "Why do you suppose these guys come here and go through this schtick?"  The Volt owner's distaste for Prius is blatant, referring to it as the "P-word", that his effort to prevent discussions about it actually causes people to do exactly the opposite.  I used it as an opportunity to post:  Since we answer that question on a regular basis, why keep asking? Notice that the following has absolutely nothing to do with the "P-word", yet it was treated as if it did: "Wasn't the market for Volt those who would otherwise purchase a GM car like Malibu, Impala, or Cruze?"  We know the answer to that too.  The first generation Volt was intended to become a mainstream vehicle.  That's why annual production capacity of 60,000 was discussed so often and the ability to ramp up to 120,000 mentioned.  Now well into year 3 of production, that hope has been abandoned in favor of a second generation Volt reconfigured to attract the buyers it intended to reach originally.  Do we care that the "too little, too slowly" concern came true?  Not really, unless the next offering doesn't meet the needs of middle-market either.  Not understanding the reason why reinforces the posting, until the true problem is finally acknowledged.  GM is competing with itself.  That should be overwhelming clear at this point.  Strong interest in their traditional offerings is pushing Volt out of the minds of consumers.  They see it at the dealer as a curiosity, then end up buying a GM car instead.


Priority Change, exposed.  Remember the "Who is the market for Volt?" question?  The outcome to asking that question yet again (Google shows I already did 43 times on that website) was a link clearly stating it is Leaf, Prius, Prius PHV, and Fusion hybrid.  That seemed rather odd.  Normally, nothing of substance ever results.  Checking the publication-date, it was obvious what had happened.  GM's strategy isn't the same anymore.  All that vague "game changer" spin had caused a new plan to finally emerge.  Originally, we were led to believe Volt was the future of the automotive industry, that the first-generation model would take the market by storm... easily achieving the 60,000 annual sales rate by the end of the second year of sales.  Since that obviously wasn't going to happen, and apparently not even feeling confident about the 45,000 revision either, focus was directed outwardly at the direct competition instead.  Notice how shortsighted that was.  The plug-in hybrids from Ford weren't even mentioned.  Tesla was outright dismissed too.  I got a kick out of how the new plan was exposed.  It was intended as a rebuttal.  I used to confirm priorities changed.


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