Personal Log  #695

January 6, 2015  -  January 12, 2015

 Last Updated: Tues. 6/27/2017

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Underwhelming.  That's the best way to describe the overall response.  Of course, with a generation improvement, that would be the anticipated outcome... since incremental is the proper expectation.  The problem was, both enthusiast & supporter were hoping for a major redesign.  They essentially wanted a complete redesign.  Since the first-generation of Volt was written off as an "early adopter" rollout, rather than the "game changer" it had been promoted, that made sense.  In other words, they had convinced themselves this wouldn't happen.  Well, it did.  The second-generation will likely be trapped as a vehicle not for the masses.  With the long-term future hope of $275 per kWh for the battery, cost will still be uncompetitive.  Nissan will continue to push for a less expensive platform... no engine, no liquid cooling.  And with Leaf using up tax-credit money at a faster rate, there's obviously going to be pressure building on Volt.  In the meantime, Toyota hasn't played its hand yet.  Those cards they are holding continue to remain unknown.  What we do know though is the audience for Prius.  It's the masses.  That's why keeping battery-capacity small and battery-cooling air is what PHV has pursued.  It's how to keep competitive, without dependency on tax-credit money.  We know that the typical consumer will be thrilled with modest EV.  That's just basic automotive study.  You can see examples of the trickle-down effect from a wide variety of vehicle technologies of the decades.  This isn't anything new.  Don't let the enthusiasts convince you of that.  Do your own homework.  See how components now considered ordinary had their start.  Look at what happened to those technologies as they were adopted by the masses.  Then, think about this particular instance of being underwhelmed.  What should they have expected?


Niche.  Now we know.  I got a kick out of reading this particular comment: "This can still be an excellent commuter car & occasional small family car for many people.  It occupies a unique and important niche for a 50 mile EV roundtrip commuter car (plus range extender) that only requires overnight charging or a 100 mile EV roundtrip commuter (plus range extender) with workplace charging.  That's a very large niche."  It's among the very first damage-control posts on the big Prius forum about the new Volt.  When expectations aren't met, posts like that are what happens.  Hey, at least they are being sincere.  That's a huge improvement over some of the nonsense we had to deal with in the past.  This was my remark to that:  The hope was this generation would become the one to take on ordinary competition, winning people over on showroom floors and dealer lots. Watching traditional vehicle sales absolutely crush the plug-in segment is obviously unappealing for everyone involved.  A win anywhere from any automaker is what's needed. We need something for the masses.  I'm glad Toyota has always remained true to their pursuit of affordability.  The Original Prius strived to keep costs in check, rolled out with an attractive sticker-price right from the start. When the Classic, Iconic, and +2010 all rolled out, the temptation to shift priority was avoided.  The power & capacity increases were modest as a tradeoff to keeping it affordable.  Toyota obviously could have delivered more.  The hybrid Camry clearly demonstrated more power was easily available.  So, we've been led to believe GM would keep performance (speed, power, capacity) as is and instead focus heavily on cost-reduction instead.  True, everyone likes more EV range, but we've seen how effective blending can be.  Why not taken advantage of the hybrid system?  That way, a competitive model with more leg & head room in back could also be offered.  This design approach doesn't address the reality of traditional vehicle sales.  What do you think the MSRP will actually be?


OMG!  The reveal happened.  The following details stirred far more than even I imagined:  "The front-wheel-drive compact hatchback's new 1.5-liter Ecotec generator now runs on regular gas instead of needing premium, and combined fuel efficiency on gas is expected to be 41 mpg – up from 37 mpg for the present Volt."  and  "...with rear legroom increased by 0.6 inches and rear headroom decreased by 0.2 inches."  and  "Its new top speed is 98 mph and while the battery is charged the gas engine does not come on even if the accelerator is pressed to the floor. This differentiates it from every other plug-in hybrid and makes it its own unique type of vehicle."  and  "Its new 0-60 time is quicker by a half second at 8.4 seconds estimated, and the 0-30 time has been cut by 30 percent to 2.6 seconds."  I posted the following on the big Prius forum in response to such revelations:  Even without knowing MSRP yet, it's clear that the audience didn't shift.  Offering 1.3 inches less legroom in back is a big letdown. We saw lots of posts just last week saying people were hoping the headroom in back would increase; instead, it shrunk a tiny bit. As for the performance increase, why? We certainly weren't hearing anything related to the current model under-performing. In fact, we've had to deal with quite a bit of gloating over the years about how quick & powerful the system already was. What do those same people have to say about the new one?  With what was just revealed, it's going to be a difficult argument claiming the next-generation was designed to appeal to ordinary consumers, those who would have just purchased some other GM car.


New Location.  My data, ever since my first Prius 14 years and 4 months ago, has been consistent.  Having the same driver and same routes made endorsing the technology easy.  It was very clear to see the influences of factors like temperature & traffic.  That's about to change.  In roughly 6 weeks, if all goes well, I'll be moving.  We found a home to settle down in.  The location is fantastic.  There's no need to drive to either of my favorite small lakes to rollerblade around.  All 3 are just a few blocks away, rather than miles.  The one is our favorite to kayak on too.  So, the journey with the Prius to bring them over will be a very short one, perfect for the plug-in.  The location is scenic as well.  Sunsets during this time of year can be spectacular.  It will be quite convenient being able to just back the Prius out of the driveway to capture it with the colors.  I may be able to do the same across the street with sunrises.  In other words, we got really lucky with that particular house.  Being in the right place at the right time has to happen to someone.  Why not us?  Making the situation even more exciting is the fact that this garage should make the installation of a 240-volt charger really easy.  Everything is right there and I believe the input is enough to offer a dedicated high-amp line.  However it plays out, this is a great opportunity.  We have a lot to look forward to.  I feel quite fortunate.


Cheap Gas.  It's really strange watching it drop.  We never imagined prices ever being so low again.  True, it's only temporary and it does put a new twist on boiling the frog.  But even so, this is uncharted territory.  Seeing $2 per gallon along with plug-in vehicles adds an element of the surreal.  The situation makes you wonder what comes next.  How will the EV be marketed?  Getting it thought of as anything but a niche was already challenging.  We cannot talk about the new "normal" when we are back to cheap gas.  This is definitely a head-scratcher.  With the market for trucks already ramping up competitiveness, how will the lower price of gas influence purchase decisions?  For those who actually use their trucks as trucks, it's nice.  For those who want a truck but clearly don't need one, will they jump on the opportunity anyway?  That is how the SUV market got so crazy.  In fact, that's why the small ones are so popular now.  Let's not forget the underlying reason the big ones became so popular in the first place: Profit.  Rather than invest in the future, there was the quest for quarterly-returns for stockholders instead.  That's sad.  Trucks continue to be high-profitable.  Cheap gas will likely help them a lot.


Engineering Triumph.  Based on the information people have been able to glean so far, it appears as though GM did some rather major redesigning to the second-generation system for Volt.  Looking back a Toyota, that really didn't happen for Prius.  The approach was already well thought out for the wide variety of operational conditions the vehicle would have to deal with.  We saw an increase in voltage and an increase in both teeth & carrier count for the PSD.  There was the replacement of the reduction-gear with a second PSD.  The motors could run at a higher RPM than previously too.  It sounds like Volt underwent more significant changes... which begs the question of cost.  The word is that the new system will deliver quite a bit more power.  Why?  Enthusiasts have been gloating for years about how "vastly superior" the performance actually was.  What is the point of adding to that?  It's an engineering triumph we'll hear about to no end, but there wasn't a need for it in the first place.  The system already fulfilled power requires.  Perhaps if that was a side-benefit of the improved depleted efficiency, then it would make sense.  But since that CS-mode expectation isn't anticipated to be a major improvement, there is good reason to question intent.  For that matter, we have to wonder about overall purpose.  Mainstream consumers couldn't care less.  As long as the technology is efficient, reliable, and affordable, details of the engineering are meaningless to them.  Even when it comes to generalized goals, there's no point.  Notice how the enthusiasts changed the goal from delivering a "game changer" to just "proving it could be done"?  We already knew is was possible.  The question was whether or not the cost could be realistic for profitable sales.  The answer to that is an overwhelming no; yet, that aspect of engineering isn't given much... if any... attention.  That's a lose-lose situation.  Both business & consumer losing isn't a triumph.


Major Concern.  The response to that mission accomplish was explosive.  I sat back an watched the posts & voting go wild throughout the day.  Eventually, I ended up posting this later in the evening: "The extreme reaction to asking that is confirmation of having identified a major concern.  Only a few more days until we finally have some answers."  That was it.  Nothing more needed to be said.  I clearly had identified a major concern.  They're so hypocritical, I don't know where to begin.  For years, those enthusiasts were telling us how sales would dramatically increase when the next-generation model was rolled out.  Now, there's a message being sent that it will remain a niche, that the fiercely defending mainstream delay really never was a goal, that the market will experience only minimal growth.  There's no expectation for fuel-efficiency leadership anymore.  Sales of the traditional vehicles will continue to grossly overwhelm Volt.  Wow!  While Toyota strives to deliver a choice that's competitive, GM continue to focus on want instead.  Ugh.


Mission Accomplished.  When goals aren't actually met, but you want to call it good enough and move on, you make the declaration of "mission accomplished".  That's the ironic expectation nowadays... which is what the fans of the first-gen Volt have been doing.  Unfortunately, GM's executive chief engineer of electrified vehicles, said the Volt in 2010 had two goals: 40 miles all-electric range and 300 miles in charge sustaining mode.  I wasn't surprised to see it.  Pretending other goals weren't set is nothing new.  Lowering the bar for the upgrade isn't either.  It sets up an environment for mixed expectations, the very thing that caused the original fallout.  Next week's debut certainly will be interesting.  In the meantime, this is what I ended up posting in response to the mission accomplished discussion:  We know there were other goals.  The big ones were getting MSRP below $30,000 and hitting that 60,000 annual milestone.  Neither was achieved with the first-gen Volt. They choose to say "mission accomplished" and move on.  That's fine.  The question now is: Will those same goals apply to the second-gen Volt?  If not, what is the mission?  Watching sales numbers like we saw for December (16,817 Malibu, 17,800 Cruze, 13,088 Impala, 21,298 Equinox, and even Sonic at 5,456) leaves you wondering.  Shouldn't a goal be to attract those customers to Volt?  Shouldn't we have an expectation of seeing Volt included in the list of GM top-sellers?


5,000 Per Month.  Certain individuals really get riled up when sales are discussed.  Well, too bad.  That's the reality of business.  As much as they like to show off trophies, the bills still need to be paid and supposedly, this was to be a high-volume profitable vehicles.  It's a simple equation.  Many need to be produced & sold.  Anywho, I sounded off about that this way:  Notice how the original goal of Volt becoming a top-seller among GM's popular car offerings still isn't being discussed, despite being on the verge of next-gen reveal?  We've been told for years that patiently waiting for this upgraded design would get Volt back on track to becoming the game-changer which had been promised. Fine.  The delay was an admission of not having understood all the market needs & pressures, that the next would address them.  That standard industry sales watermark of 60,000 annual has been in place for well over a decade.  It helps to identify the profit-earners in this time of increased competition.  Big automakers require those high-volume self-sustaining vehicles to survive.  We've been expecting Volt to join in, to fulfill that role.  The purpose of the tax-credit is to accelerate the acceptance process.  So by the time it begins the phase-out process, monthly sales would have reached a rate where less assistance wouldn't have any impact. In other words, sales would be comparable with the other profit-earners.  Not even having reached the watermark at that point of phase-out means struggle ahead.  This is why that "Who?" question continues to be asked.  Lots of buyers are needed to achieve the goal.  Like it or not, gas is cheap and the clock is ticking.  The reveal coming up in just a few days is a really big deal.  There's much at stake.  Ask yourself what's truly necessary for sales to increase significantly, to a minimum of 5,000 per month.


Doing The Math.  One of the supporters of Volt tried to help out the enthusiasts with: "If sales go up to 50,000 Volts sold per year, that would still be 2.5 years of Gen II sales to exhaust the credit.  The full credit wouldn't expire until the beginning of 2018, which is a long time from now.  Plus, then there would be 6 months of sales with a $3,750 credit, and after that 6 months of sales with a credit of $1,875."  My dose of reality was obviously not going to make him happy.  But all the poking now for goals is to make sure expectations are properly set.  If you don't, the spin afterward will get out of control.  Fallout happens from not preventing.  We should have a clear understanding prior to the reveal of Volt next week of what GM is truly attempting to deliver.  And yes, that includes knowing who the audience is.  Do they expect to produce a lot of them?  Will it be profitable enough to compel dealers to stock many and for salespeople to take the time to sell them?  Are they intended to diversify offerings in the few years?  What the heck are they trying to accomplish?  With the limitations of the tax-credit money, that's important to know.  Needless to say, there are many questions.  I responded to that post with:  Gen-2 won't be mainstream either, despite all the hype telling us it would easily hit that mainstream minimum of 60,000 annual?  It is good to be realistic.  Since Nissan will run out of tax-credits earlier, it is quite reasonable to expect them to ramp up competition pressure prior to that happening.  Already, we know that's happening with Tesla.  We can see that plan clearly being formed by both Ford & Toyota too.  Then of course, there's the bitter reality of growing GM sales among their traditional fleet.  Notice the December sales of 16,817 Malibu, 17,800 Cruze, 13,088 Impala, and 21,298 Equinox?  Heck, even the 5,456 Sonic clearly shows that.  The competition will be from all directions.  It's essential that Volt achieve the 5,000 per month prior to tax-credit money being reduced.  Because when that reduction starts, sales will become even more of a challenge.


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