Personal Log  #668

May 5, 2014  -  May 9, 2014

Last Updated: Tues. 5/27/2014

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Greenwashing.  It still happens.  Some of it is quite intentional.  Some of it comes from people unknowingly spreading misinformation.  All you can do is address it directly when it emerges, like today:  Let's not overlook the greenwashing campaign which PiP is having to deal with.  A small group of individuals are working hard to make people not see the differences between the plug-in and regular model.  They're doing it by misleading about how "blending" actually works.  For the regular Prius, it means combining gas & electricity in an optimized way.  The end result is higher MPG, even without ever plugging in.  For the plug-in Prius, it also means combining gas & electricity in an optimized way.  It result is also higher MPG.  The catch is, plug-supplied electricity is taken advantage of.  Those attempting to greenwash hope you won't seek out any detail, wanting you to assume it works exactly like the regular model. It doesn't.  What actually happens is the battery provides much more electricity.  Since people assume that means greater distance in EV, it's easy to get them to think there's no benefit when not in EV-mode.  In other words, the hope is people will believe the plug-in only delivers 49 MPG on the highway.  It doesn't.  That "more electricity" is really a greater draw-rate.  In other words, the electric-motor works more and the engine works less in the plug-in model while on the highway.  That's easy to confirm too.  At 65 mph, which requires the engine to run, you'll see the system maintaining 100 MPG... a value clearly much higher than what the regular model delivers.  So what if that "blending" means less electric-only driving.  It still means more MPG, by reducing the impact of engine warm-up and increasing efficiency at high-speeds.


Lithium.  The absurd arguments certain enthusiasts continue to make about the cost of Volt's battery pack makes you wonder why it is even worth the bother to respond... until you see their influence elsewhere.  The claim has been that the entire purchase price is now down to $2,700.  That conclusion was drawn by looking up parts information from a supplier.  The diagram shows the entire assembly for the pack, so they've been assuming battery cells are included.  There's nothing whatever to confirm that.  In fact, it's pretty easy to see that's it just the outer case... hence this being absurd.  Yet, they are absolutely convinced.  Pointing out the price of lithium batteries per kilowatt (currently $650) and the 16.5 kilowatt capacity should be enough to show their conclusion is quite incorrect.  Yet, they don't budge.  It's bizarre how they choose to only see what they want.  The cost of the lithium component alone is somewhere around $10,000.  Add to that the assembly components, you've got the price we've been discussing since rollout.  Drastic reductions have not happened, no matter how hard they hope for it.  This is why Toyota's design isn't anywhere near as dependence on batteries.  They figured out how to squeeze out higher efficiency with a much smaller pack... knowing cost would remain a major issue for years to come.  A bit angry by having to deal with such nonsense, my post was:  $650/kWh speaks for itself.  Toyota worked extremely hard to deliver something cost-competitive.  By sharing their already profitable platform, they are well prepared to take advantage of lithium prices dropping.


Rumors.  I find it remarkable how some people simply dismiss.  They'll see something, label it as a rumor, then move on.  No importance is given to the supposed facts being spread.  They don't consider them to have any influence.  They couldn't be more wrong.  Whether something is correct or not doesn't mean it won't have an impact.  People react to misinformation all the time in other venues.  Why is it so easy to ignore that reality online?  Whatever the case, I watch the situation play out routinely.  You can point out the problem and the consequences without anyone caring.  They let it happen anyway.  That's baffling.  But denial like that shouldn't be surprising, since it is so abundant.  Oh well.  All you can do is point that out:  It's GM playing the game.  They work the internet, taking advantage of the hype which emerges from their ambiguous releases.  It allows them their flexibility.  Whether the information is accurate or not doesn't matter, the idea becomes real when there is an endorsement for it.  That all feeds upon it self, having a direct impact on other automakers.  In other words, asking me to stop is just shooting the messenger.  You can avoid participation elsewhere and just dismiss content lacking credibility, but that won't prevent the activity itself from continuing.  Rumors have a very strong influence, especially when it comes to spreading greenwash material.  Do we really want to just sit back and let it happen... or worse, not even bother to address it?


Rush Gamble.  The immediate payoff failed miserably with Volt.  You'd think that experience would be observed & applied elsewhere.  Not with this crowd.  Instead, we still get some of this: "People can't buy what ain't available."  Even with good intent, the knowledge of good business is elusive.  So much focus on engineering in past has left many without that perspective.  In other words, they think it's ok to take the next step without having to plan any further ahead.  They assume it will just naturally work out if the vehicle design was well thought out.  Disregard for the market (not understanding their audience) comes with great penalty.  Yet, that isn't even addressed.  The need to have several plans in play to lay down ground work (a solid foundation for whatever may happen) isn't important to them.  They see no need to establish many options to build upon.  It so disappointing.  Upset is inevitable.  Yet, some don't even see the risk being taken when not having anything else available to respond with.  Oh well.  It's not like they weren't warned:  Toyota offers other choices.  They diversified, allowing the ability to react to the market.  Consumers still have something to buy.  With the next generation, Toyota will simply just pick up where they left off.  Consumers who were aware of the previous will see the improvements.  Consumers who will see a plug-in Prius for the first time will be impressed with how well it matches their purchase priorities.  GM did not take that same approach.  They bet the farm on a single offering, hence such bad fallout with and so much backpedaling.  There is nothing for consumers to purchase in the meantime and Volt will undergo a number of modifications, both design & operational.  Effort to re-educate will be required having a model so different from the previous.  It's a messy situation Toyota was able to avoid.  Think about the business.  On-Going profit is needed.  Having alternatives is a very big deal.  There's only so much risk an automaker can take.  Is the rush gamble worth it?


Suggestions.  It turned out to be worthwhile.  The discussion did take a turn in the right direction.  I wonder how long it will last though.  Patience is far from a virtue with this crowd.  Understanding the value of waiting is not in their interest.  Things are still thought of as now or never, one extreme or the other with nothing in between.  I find that ironic.  Since so much of the Volt rhetoric comes from us being told to be patient, the same comment for Prius falls on deaf ears.  Some call that hypocritical.  I take it as not having the proper background to interpret the market.  So, my post went as follows:  I'll certainly agree with that.  They most definitely would benefit.  But yet again, this isn't an either/or issue.  It's not a matter of if, it is when.  Waiting will provide a much higher payoff.  Look at how limited-market research has provided a massive payoff in the past.  Most people have no clue that there were 20 of the 1999 Prius (Gen-0, commonly referred to as the "Original" model) provided to ordinary consumers an entire year before the rollout of the upgrade we got in the United States.  The feedback they provided was priceless.  Some of their suggestions were implemented right away... in what we now call the "Classic" model.  Prior to the rollout of PHV, the same thing happened.  There were a total of 300 circulated around the world for consumer feedback.  Toyota took those suggestions and implemented them right away too.  We got the upgrade, not the first.  Seeing how crazy the plug-in market is, especially having witnessed so much fallout with Volt, the decision to stay within the initial 15 states is proving to be a wise one.  What's your next question?  I'm really enjoying this discussion.


More Information.  Sometimes, you have to wonder if arguments come about due to lack of information.  Not having all the facts causes people to draw incorrect conclusions.  So, it should go without saying that their decisions along the way will be misled too.  When you bring that point up, some people take notice, others dismiss.  I'm curious if this will stir any type of constructive reaction:  Neither Toyota nor Ford bet the farm on plugging in.  The portrayal of "not getting it right" is getting old.  They both offer a viable hybrid platform with much opportunity.  Nissan took the chance on a single offering, but made great strides for it to be affordable.  GM risked it all, gambling that an expensive choice would somehow be competitive.  That didn't work, which is why we have had to deal with such a massive amount of rhetoric.  We all knew how incredibly difficult the market would be to penetrate.  But since Toyota successfully diversified Prius, expanding into smaller & larger models, it became a target.  We see how little there is to gain from expanding PHV rollout.  We also see the benefit of figuring out how to penetrate deeper into existing markets, rather than spreading limited inventory thinner.  Remember how effective it was limiting inventory with the Classic model?  Most people don't. In fact, they believe demand was low... since those hoping to undermine never mention the limited supply.  It's easy to foresee the same thing playing out again with the next generation PHV... especially with so many damage-control efforts at play with a certain plug-in which took the one-size-fits-all approach.  Having participated in the hybrid market for over 14 years, it's easy to see the big picture.  For those who don't realize far more is at play than just the information provided in current threads, I don't have a good suggestion, other than just asking them to share what they see.  There's no way to know what part of the picture they are missing.  The past has taught me that their misunderstanding will clear up as they stumble across more information.


Adaptation.  Being well prepared means also having to deal with: "So you admit that Toyota misread the market for plug in hybrids with the PPI?  That they are just in a holding pattern until the next generation becomes available."  It never ceases to amaze me how the spin will emerge.  Sadly though, not only won't people be able to recognize any of this nonsense even happened, they'll actually argue that encounters like this weren't even possible.  They'll look back and say the preparation was obvious, since the actions taken matched need so well.  That's unfortunate, but no surprise.  Being able to adapt is vital.  Those who cannot are simply forgotten.  This was my response:  That's an absolutely fantastic example of not seeing the whole picture.  Thanks!  The either/or mindset is a common problem, especially when it comes to plug-in vehicles.  People assume if it wasn't this, it must have been that.  They don't consider other choices or outcomes, mainly because they aren't even aware of them... hence not having all the information.  In this case, Toyota had addressed a variety of different outcomes and planned a strategy for each.  This is a very, very common practice in the software industry.  You just plain don't know how customers will respond.  That means having to accommodate by building in flexibility.  So, no matter what the outcome ends, you were already prepared for it.  The rhetoric emerges from those who spin that proactive approach as reactive.  Those of us who studied the plan are well aware of the flexibility long ahead of time.  Those who didn't join in until later, typically when some type of undermining effort catches their attention, lack detail to correct assess what's happening.  In other words, since Toyota planned for several different scenarios.  Focus on just one provides a distorted interpretation of what actually happened.  Put another way, knew all of their bets wouldn't win and allowed for adaption along the way.


Big Picture.  More twisting.  Anything that can be done to distract from the reality of Volt sales is to be expected following month-end results.  Today, it was: "What is Toyota's response to the abysmal sales of the PiP?  Do I need to post the #'s for all the Tacomas, Corollas, Camrys that are sold, and have that debate again?"  The desperation to protect reputation is quite astounding sometimes.  But without any alternative available for sale, what else can be done?  I replied with:  It's quite amusing how cherry-picking is used to derive forgiveness for GM.  We all know that Prius PHV isn’t the only high-efficiency offering from Toyota… quite unlike GM.  The plug-in model Prius shares the same platform (including engine, power-split-device, and both motors) with the regular model, which is profitable and selling at twice the mainstream minimum rate here.  In Japan, has been in the top-5 national selling list for many years now.  In fact, selling even better there than the regular model is the smaller model.  There, the larger model features a lithium battery too.  We know the next generation will provide an engine with higher thermal efficiency.  The will boost blended MPG even higher, without adding anything to the cost of the plug-in model.  There will be refinements to the electrical system as well.  It's what you'd expect from a next-generation offering reaching out to capture a larger audience.  Volt requires more than just refinements.  Complaints about legroom and the desire for more seating in back are abundant.  Cost needs to be reduced considerably more too.  With a tax-credit being triple that of Prius PHV, that’s nothing to take lightly.  As for calling sales "abysmal" even though it isn’t available nationwide and numbers are similar to Volt which is, that's rather sad… especially considering the much higher government incentive for Volt.  Say what you want about the competitors.  The rest of us will continue to watch the bigger picture.


Making vs. Selling.  Twists like this are always fun to reply to: "Yep, making the best products is good news for stockholders."  It was more spin from that really smug Volt owner who thinks all vehicles using gas, including Prius, are guzzlers.  The 50 MPG following depletion really irritates the heck out of him.  So, the attitude is really an annoyance to deal with.  Oh well.  Reality seems to be rather effective at times:  Nope, selling the best products is good news for stockholders...  21,752 Cruze;  19,944 Malibu;  13,915 Impala.  Those are the money-makers for GM, returning dividends to stockholders.  Selling small quantities of a vehicle dependent upon a tax-credit wasn't the expectation.  Remember how enthusiasts here shunned any reference to Two-Mode?  Pointing out parallels to it with Volt made some furious and resulted in ardent responses.  Now looking back, we get excuses & dismissals, even though it did indeed play out as predicted.  Having a costly vehicle which couldn't stir many sales was an outcome no one wanted to address.  So, goals were pushed back, delaying those expectations to the next generation instead.  The result sounds reasonable, but it requires agreeing with those who said that would happen all along.  We see how the "range anxiety" campaigning fell apart, that the effort to disparage electric-only vehicles turned into a partnership to recover from an incorrect market belief.  It's quite hypocritical.  But what makes it worse it to pretend that hasn't happened by attempting to conceal it with rhetoric about the plug-in hybrid which remained true to consumer need right from the very start.  Keep saying what you want each time month-end results are published.  That won't change them.  Stockholders see the outcome.  They don't care who supposedly won a debate online.  Sales speak for themselves.


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