Personal Log #704
April 18, 2015 - April 30, 2015
Last Updated: Sun. 7/26/2015
page #703 page #705 BOOK INDEX
Question, Insult, Greenwash. Yesterday's post went over well, with one exception. There were several constructive posts. I was pleased how things have changed over the past few months. The change of stance with GM has really influenced that group's approach with respect to responses. The "vastly superior" nonsense is long gone. Getting over that major barrier is a huge improvement. Rather than blindly praising with a one-size-fits-all mindset, we're getting more of that team effort instead. From the very beginning, it was a quest from me to find allies. That's why the local EV group we have here works so well. They don't care what automaker you favor, all they desire is the spreading of electrification. In other words, they openly acknowledge & champion the problems of business & consumer. Focus on engineering alone is not a problem... for them. As for the daily blog, there was one individual who was wrong to such a degree, he developed a hate. I became his scapegoat. So, when I posted today after such a long absence, his response was to question, insult, then greenwash. The question was simply re-asking the same thing he already had an answer to. That's a typical trolling technique, to provoke an online debate. I didn't bite. His next bait was to insult me. It was another effort to provoke. I didn't bite on that either. Finally, it was a greenwash attempt, by misleading about Toyota. He gets really irritated when I focus entirely on GM and point out the production & showroom concerns. When someone else mentioned Prius, that was the opportunity he had been looking for... with, of course, the hope I'd bite. It bet it was especially irritating for him, since that other post was about Toyota's importance for profitability & affordability. Anywho, this was his response: "GM has chosen a different path to Faith: Early cross-pollination with the rest of it's line. Prius continued to be Prius for most of it's run (at least one attempt was made to spread the tech, but the Hybrid Highlander failed miserably). Perhaps Toyota doesn’t have enough faith in it’s own HSD, where the rest of the line is concerned." Knowing he intentionally excluded the hybrid Camry was quite amusing. The 39,515 sales here last year is the reason why. Even without a tax-credit or MPG being competitive with the very latest offerings, it still sells better than Volt. He didn't make any mention of the hybrid RAV4 coming this Fall either. That totally contradicts his claim. So what if the large SUV with a 3,500-pound towing-capacity doesn't sell in large volume. What about all the Lexus hybrids? For that matter, what about the hybrid Avalon? The hybrid minivan offered in Japan (called Estima) was pointed out to him countless times too. Needless to say, he was rather desperate for attention. I didn't bother. With the attitude of that daily blog changing to constructive discussion, there's no place for vengeance from failures of the past. It's over. Learn from those mistakes and move on with the rest of us. Geez!
More On Pricing. Today's topic on that daily blog was
about next-gen Volt sales. Price immediately came up as the factor of
great importance. I couldn't resist chiming in. It had been
weeks since they heard from me. So, the time had come to find out
firsthand how much change had taken place with that group. Here's what
I posted: Ask yourself what has changed over the past 5 years. That "nicely
under $30,000" price goal without tax-credit was set back then for the same
reason it holds true still. To become mainstream, it must be able to compete
with other mainstream vehicles. That means selling in high-volume without
subsidy at a profit. We know that Malibu, Impala, Cruze, and Equinox
are very appealing to GM customers. On the showroom floor, they draw
attention. Volt's price is a major deterrent. The hope was that
battery cost would drop significantly prior to Gen-2 being rolled out.
50-mile capacity makes it difficult to compete. So, without even considering
any other sales factor, that in itself presents a big challenge.
Those other choices GM dealers offer wasn't taken seriously with Gen-1. Focus was
diverted entirely on other automaker offerings instead. It's clear
now that mistake won't be repeated; however, that doesn't make the matter
any easier to deal with. In fact, sales numbers show the "backfire" effect
will become a big concern. Not capitalizing on the opportunity right away
makes it even more difficult to overcome later. That makes the
question of debut price for Gen-2 a matter of great importance. It sets a
precedence for the generation, informing us of the approach to come.
Think about what happens when the tax-credit ends and how price-drops later
on affect resale value.
Missing The Point. We found out today that production of the current generation of Prius PHV will end in June. That's no surprise. Most model-year production ends around that time anyway. What made this announcement stand out was it came directly from Toyota Marketing. From time to time, they tell us something by posting on the big Prius forum. We get information the same day as dealers as a result, firsthand. That's really cool. In addition to that tidbit, we were also told they are looking forward to sharing details with us about the next generation. That's really exciting! Those newer to PHV discussion lack detail and often don't have the background needed to understand intent. That makes sense, but you still have to somehow deal with their claims. For example, we had this as a result of the announcement: "It's just a compliance car." Most of the rest of us no that's not the case; however, it is easy to see how that assumption can be made. I simply responded with: Call it what you want. After all, it was a mid-cycle release in a highly volatile market. So, looking back is messy anyway. The point was to collect data from well informed consumers to strengthen the next-gen rollout.
Vehicle Pricing. The discussion began yesterday. It was an interesting read. What will be the price of the new Volt? Since it was a new platform without any variants, that was always an issue... quite unlike Prius, which was well established and had augment plans all along. In fact, Toyota stated had a upgrade package target price. We knew they were striving for between $3,000 and $5,000. So, that never really stirred any controversy. It was a simple, clear goal. For Volt, we still don't know what the heck the intent is. Being told the first year of the next-gen rollout would be a niche leaves you wondering. Then, hearing about the CT6, you have no idea what to think. As for that discussion, it was on that daily blog, so you can imagine what happened... nothing. The reality of profit need was only addressed by a single person, a strong supporter of Volt (unlike enthusiasts, who sacrifice well-being for the sake of prestige). Here's his entire post: "$29,995 is my guess even though I don't think that will be low enough for the GEN II Volt to be successful. GM may be forced to make this decision strictly due to profitability. If the price is above $30K, GM is sending a clear message the Volt is strictly a "compliance" vehicle." But since that audience still doesn't recognize the importance of cost, even a pricing comment like that from a regular falls on deaf ears. Much like ELR, it's obvious before rollout that formula for high-volume sales isn't there. That vital aspect of appealing to GM's own customers and making profit is not part of Volt's charter. The ugly truth is that business importance cannot be neglected. In the end, that trophy mentality held back progress. Not being able to competitively price a vehicle hurts. Think about how large of a problem there is to come when the tax-credit expires. Sales need to be very strong before that happens.
The Next PHV. We keep hearing rumors. There's a realistic expectation for battery-capacity to increase. From the very beginning, the outlook has been that more will be offered as cost justify. Making the vehicle expensive just for the sake of a big pack isn't how you achieve lots of sales. There's a careful balance. Watching the MPG and MPGe ratings increase from generation to generation makes sense. After all, we've seen efficiency improve with traditional vehicles over the decades, why not with a plug-in hybrid too? Sadly, we may not get details on what the next PHV will offer until a year from now. The regular model will be rolling out in the meantime, and we don't have any detail on it yet either. So, like usual, there's lots of waiting still. Oh well. Each generation has been totally worth the wait.
KNOW YOUR AUDIENCE. For crying out loud. The fighting continues. It's really sad. No matter how much you point out GM's own product-line, all they believe is that it somehow really an effort to endorse Toyota. Some just don't get it and refuse to actually acknowledge what you post. I certainly try and stick with it. Here's the latest attempt: A lot of Volt "hate" came from pointing out sales losses on the showroom floor. We've seen many who's lease expired choose something else afterward too. The response was to focus on conquest sales instead, completely disregarding loyal GM customers lack of interest in GM's premiere vehicle. That obviously isn't a wise long-term plan. That's why the next-gen model look was chosen to make it blend into the GM product-line better. The sacrifices are still too many though. Cost is high. Seating is limited. It continues to exclude a rear-wiper. It doesn't offer adaptive-cruise or LED headlights. How does that make it competitive with the other GM choices? Not offering high-speed recharge keeps it from competing with high-capacity plug-on vehicles too. Appealing to the masses is a major challenge, even when gas is expensive. But now with the gallon so cheap, even more effort is required. Understanding the customer mindset is key.
All The Same. The belief that a single solution will satisfy all need is really getting in the way. People coming from a simplistic background don't see how essential it is to identify who. Doing that reveals multiple markets. You'd think this would be easy. After all, trucks were originally sold to fulfill a need cars could not. But now in the age of commuting with a vehicle capable of far more than just commuting, but never actually using those extra features, it's clear why the problem exists. Frustrated, I posted this and didn't bother with any follow-up: That's called effective greenwashing, when consumers misunderstand or assume intent. In reality, Toyota is against the one-size-fits-all approach. People don't realize there is need for variety. Not everyone uses their vehicle the same way. Diversity is required. The old-school single-choice business-model is no longer effective. This mindset of all-the-same is becoming a really big problem.
PHEV Announcement. The confusion from GM about what technology is really under the hood got even more confusing today. That's the best way to move beyond the troubles of the past and join the other automakers though. You obscure to the point where messages from long-ago are simply abandoned. It's quite vindicating to those who opposed to the one-size-fits-all approach. The upcoming Malibu hybrid will supposedly be using technology from Volt, but won't behave like it but also will. The details are self-deprecating. The contradictory nature of what were being told makes enthusiasts who were opposed to what's happening now hypocrites... hence, not bothering. Abandonment makes taking the next step so much easier. We've seen in several times in the past, with Two-Mode being the most prominent example. Those who fought the needs of the masses abruptly changed their stance when the reality of business finally could no be denied. That's what makes the announcement today so important. It represents exactly that. The very thing they fought with hostile vigor is happening. Cadillac CT6 will be offered as a plug-in... not like ELR though... it will be like the Malibu hybrid will battery augmentation instead. In other words, the Volt system has come full circle. Despite all the arguments trying to convince us that Volt was an entirely new approach, we knew all along it was really Two-Mode's next-generation design. Proof even came out later confirming it. This one is really the next. Volt was overkill, making many sacrifices to deliver EV as much as possible. That was a terrible business decision. Consumers weren't interested in the compromises it made. Those of us who suggested the very thing GM is now planning to deliver were attacked relentlessly. I'm so glad I took the time to document those reactions with quotes from those posts of the past. They were wrong, very wrong. Engineering alone will not win over mainstream consumers. If you build it, they won't necessarily buy it. And even with large subsidies, ordinary GM customers weren't interested. They recognized the "too little, too slowly" and purchased a traditional GM car instead. Now, GM is scrambling to rectify the situation. Starting with CT6, they will offer a PHEV. It will be similar to the approach Toyota, Ford, Honda, and Hyundai have already taken. It will be a hybrid with a plug and large battery-pack. In this case, a very large one: 18.4 kWh. That's massive capacity to squeeze into rear of the vehicle. Having an even smaller trunk than Fusion will make things interesting. But then again, a Malibu version of it would likely offer a smaller capacity... making it more affordable than the Cadillac version. After all, with a combined system output of 335 horsepower, the CT6 is far more than what consumers shopping on the showroom floor of GM dealers will looking for. It's all quite a relief. After countless years of insisting a plug-in hybrid was necessary, it's about time that message was finally acknowledged. The announcement today was the long-awaited change we've been hoping to get for many, many years now.
A Few Still Trying. I get a kick out of those who blatantly lie by stating a history which can easily be confirmed as false. That kind of misleading by assumption is common. They simply hope no one will look up the true story. When confronted with the truth, they just change focus. It makes confirming their intent easy. Today, it was: "Perhaps he should be reminded how poorly the Prius sold when first introduced and how many manufacturers are working to build cars of similar concept to the Volt in the next couple of years." Prius had strict inventory limitations and no tax-credit help. Yet, there were long waiting lists anyway. How is that translate to "poor" by any definition? That was back in the day when gas was cheap, there was no concern for oil dependency, and emissions were not even considered a topic of interest... different from so many ways compared to Volt, it's hard to believe that history would even be brought up. As for the "working to build" comment, who? I haven't heard anything at all to that respect. Plug-In hybrids are the interest now. That's what all automakers (except BMW) have embraced as a solution for their emission & efficiency competitiveness. I'm tired of the distortions and trophy-mentality, but there's no benefit in responding to the greenwash attempts. Business need is quite no longer a topic of debate. All automakers must deliver something beyond traditional, period.
Change. It's over. Done. Complete. The chapter of triumph & failure has come to a close. At long last, we can move on. Yeah! What a relief. It's still hard to believe there was so much hate. The emotion stirred from having endorsed an approach that fell well short of expectations is extremely difficult to deal with. Lashing out at those who were correct all along is a nature reaction, one to be expected... to the point of it being necessary to prepare for. It was quite a mess. GM repeated the history of market fallout again. Volt was promoted as a "vastly superior" solution, but wasn't able to deliver the promised sales. To be successful, it needed to become self-sustaining quickly. The goal had been set to for the third year. Sales were to grow to the point where tax-credits would be used up, but it wouldn't matter. That would pave the way for the next-gen offering. Instead, the entire burden was placed on the next-gen. It was to rescue the effort. That didn't work either. Now, the industry is attempting to deal with backlash. Rather than Volt having usher in an efficiency technology for the masses, we are seeing the sales of small traditional cars and SUVs rapidly grow. That's a big step in the wrong direction. Volt burnt bridges along the way too, doing everything it could to tarnish the reputation of competitors. What a mess. Fortunately, to the frustration of some, Toyota was smart to wait for that to pass. We can look forward to the next Prius in a very different market... one not tainted by "over promise, under deliver". The careful balance Toyota strives for with Prius often gets mocked as compromises. In reality, it's a diligent effort to best match the purchase priorities of their customers... hence all the references to showroom floor importance. Remember all those stories in the past of Prius owners being ordinary mainstream consumers who discovered the hybrid while at the dealer? They we won over by the in-person experience. No amount of online hype & misleading can hide the importance of that. Automakers must sell profitable high-volume vehicles. Period. That is not anything a halo can achieve. Thank goodness change is bringing about recognition of that. Phew!