Personal Log  #731

February 7, 2016  -  February 18, 2016

Last Updated: Sat. 3/26/2016

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Lousy Job.  At times, it can be quite interesting to learn about other perspectives people have.  Most often, they judge actions based on only recent history.  Without background, it's easy to draw a different conclusion.  Much of this comes about from thinking short term.  It's the way our particular society works.  So, it makes sense that the market responds according.  It's why Toyota commonly gets misunderstood.  They take a different approach.  Reading this today was no suprise: "Again, Toyota did a lousy job of advertising and communicating their vision for the car."  Seeing that point of view doesn't take much.  Seeing another, or even acknowledging there could be another, is a different story.  Though, I tried to point that out:  The intent was to remain flexible, not revealing a mass-market plan until the initial data-collection phase completed.  Since it was a mid-cycle rollout and the other plug-in offerings were facing unexpected barriers, it didn't make good business sense to commit yet.  They chose to watch & learn about the emerging market.  Waiting until gen-2 is still looks to be a wise move.  That delay (lousy job) should make things easier in the long term.  Toyota can start fresh, rather than have to backpedal as with certain others.


No Response.  It wasn't worth the effort: "Part of the reason hybrids and plug-in hybrids are so hard to sell is people think they are buying 2 cars instead of one….thus they are paying more up front to buy it and also have all the maintenance of a pure electric plus a gas car."  We endured years of Volt promotion which, ironically, emphasized the 2 car perspective.  We got countless endorsements telling us the vehicle was an EV with a full hybrid system as a back following depletion of the plug-supplied electricity.  The short-sightedness of that perspective never ceases to amaze me.  It was an effort that ultimately highlighted the fact that Volt was the worst of boh worlds.  The range was too small to compete with an actual EV and the engine efficiency was too low to compete with hybrids.  Ultimately, that is where some of the hate for Prius PHV came from.  Even though it had a much smaller battery-pack, the EV range was impressive amount of electricity it had available.  The resulting MPG afterward was obviously a strong point too.  Since the smaller capacity was an effort to keep the system affordable and to not sacrifice cargo or seating-space, the augmentation was often looked upon as the best of both worlds.  That polarity contributed to most of the online conflicts... in the past.  Now, the hypocrisy of acknowledging that self-deprecating stance has quieted most.  It's a sign of progress.  That meant no reason to bother with a response.  Yeah!


Cost.  Discussions are getting interesting.  Barriers of the past, which prevented constructive posts, are gone.  It's quite a different venue for posting now.  I especially liked reading this: "What I don't get...if the Chevy Volt early gen-1 was able to do 35 miles with a smaller body, why couldn't the PiP 2nd gen do at least that?"  The reason why was simple.  It was an honest question.  In the past, that same sentence wouldn't have been taken as sincere.  That's typically because the attitude was to undermine.  Things have changed.  Hopefully, response to what I contribute will too:  We'd all like a vehicle with a plug that's actually affordable. Rolling out a vehicle to the masses that's dependent upon a $7,500 tax-credit isn't a good business choice.  Once that subsidy is gone (each automaker gets 200,000 before phaseout begins), the challenge to grow sales and be profitable becomes even more difficult.  GM is taking quite a gamble, especially with remaining credits available being divided between Volt & Bolt.  Toyota held off and will strive to deliver something capable of standing on its own.  That means larger quantity with lower cost.  So, keeping the battery at a size reasonable enough to compete with other high-volume sellers is a big deal.  Remember, the competition is vehicles on the same showroom floor, not those offered from other automakers.  Keep in mind, Toyota sold 2,499,313 vehicles here in the United States last year.  GM sold 3,082,366.  That puts some perspective on just how few 200,000 really is.


Kia Niro.  Crossover competition is what Kia (parent company Hyundai) is hoping for.  Their upcoming Niro hybrid is supposedly targeted directly at Prius.  It's really a small SUV with basic styling.  Clearly, we have arrived at the end of a trend.  Though appealing to consumers right at this very moment, it already looks dated.  It will blend in well with many SUVs already on the road.  That's the point.  You'll be getting supposedly 50 MPG discreetly.  The approach is interesting.  People are resistant to change.  This won't stir any attention.  It's not ugly.  It's not pretty.  It simply doesn't draw attention.  You're buying technology that offers reduced emissions & consumption, and that's it.  With the advent of uniqueness being a draw, the situation is a matter of timing.  Maybe consumers will jump on the opportunity with this as both a bridge to the future and a monument to the past.  Personally, I couldn't imagine wanting something so plain.  It looks quite ordinary.  But then again, that's all some people want.  They have desire to own a vehicle that's expressive.  That's ok.  It's just not me.  Variety is important.  Having a hybrid option for them to choose is great.


Range Minimum.  There are a handful of people, unfortunately all old-school Volt enthusiasts, who still push the belief that Prius PHV delivers only a 6-mile EV range.  The refusal to accept video-evidence and to acknowledge battery-capacity just boggles the mind.  What's the point?  Well finally, we got this: "But now all that seems mute because..."  That's the looking-forward attitude we've been hoping for, but the unconstructive nature of it rubs me the wrong way.  How will range be measured if capacity is unacceptable?  The highly misleading nature of the hard-acceleration at the 6-mile mark is quite arbitrary.  It just as easily could have been at 5 miles or 7 miles or 2 miles.  I chose to respond with:  The actual reason is that "range" estimates hurt the industry.  We saw everything from disappointment to greenwashing.  When owners found out the impact heater use had, there was some backpedaling.  It was made worse by discovering an automaker's estimates didn't correctly reflect results from standardized testing.  Then to sour appeal even further, there were a few who intentionally misled by exploiting misunderstandings of terminology.  That's why stating capacity in terms of KWH of electricity available is far more informative than miles that could possibly be driven under the right circumstances.


Placing Blame.  Ugh.  Change isn't easy.  A mindset for such a long duration is difficult to overcome.  Today, it was: "If your football team is down 55-0 in the 4th qtr. and you call in a new assistant coach – does that mean if you lose the game, it's that assistant coach's fault?"  We need to focus on next steps... look forward.  Asking who is at fault is looking backward.  Here's my take:  Considering who is to blame is the wrong question.  Remember, just about everyone from both management & development had left the Volt project prior to it being rolled out.  For that matter, many of the outspoken supporters vanished shortly afterward too.  Placing blame is pointless.  Listening to the message, on the other hand, is quite valuable.  Things change anyway.  What was learned from prior decisions?   Look at the quandary of how to promote gen-2 Volt.  Promoting a vehicle means focusing on strengths & unique qualities.  The selling-point of Volt is said to be the 53-mile EV range.  If you emphasize that too much by drawing focus the system only needing the engine 10% of the time, people will start questioning the worth of having such a large gas-engine & gas-tank.  No one cares who made that size decision.  It happened long ago.  All we should ask is why that was chosen and if continuing on that way is best?  After all, Prius PHV was mocked relentlessly for having a small battery-pack.  The claim was it being wasteful carrying around so much extra weight for something not used often.  Now, the tables have turned.  What do you suggest for next steps?  Shouldn't it be to juggle around the players on the team, rather than look for yet another coach?  So what if the first game is lost.  What about the next?


The Catch.  I had fun with this one: "GM will not lose much on the 2017 Chevy Bolt EV, as long as the Bolt EV gets sufficient national marketing, and the dealers cooperate with their own marketing, salesperson motivation, and customer test drives.  People will not buy the Bolt EV or any new GM vehicle if there isn’t any news or promotion about it."  (followed by)  "So, if GM pulls out all the stops and markets the Chevy Bolt EV as it should..."  It's a disaster in the making, just like we saw 5 years ago.  What can you say?  I posted:  The catch is, GM must make a solid commitment right out the gate.  Without an ample supply available, the rest won't simply happen.  In other words, that's how they get dealers to cooperate and salespeople motivated.  Seeing the inventory at a level capable of on-going sales is what drives the business.  This is why that measurement of "mainstream" sales was deemed so important and continues to a source of irritation for some.  Contracts with suppliers to guarantee inventory all the way through is what helps to drive down costs.  It's risky though, especially since those Bolt sales will take away from Volt tax-credit opportunity.  All automakers face commitment issues like that.  With the gen-4 Prius hatchback such an improvement over the previous generation, Toyota is faced with the dilemma of whether or not to upgrade the wagon model.  Is the production effort worth it... especially in a market where gas here is just $1.44 per gallon?  We've been seeing sales of small SUVs climb.  That loss of interest in MPG presents challenges for even a small hybrid SUV.  That's why the gen-4 Prius took on such a standout look.  Performance improvements alone aren't enough with such fickle buyers.  We know gas prices will remain low for the next few of years still.  We know the tax-credits will get used around mid-cycle for both Bolt & Volt.  We know other automakers will stir the market in unpredictable ways.  Difficult choices must be made.  What should GM do?


Niche Market.  The spin from some EV supporters is that hybrids never amounted to anything.  We see that routinely.  For example, this conclusion: " must keep this in mind, HEV is still a tiny fraction of Toyota line-up and is much less profitable than ICE cars for Toyota."  Just like any other greenwashing attempt, being vague is key.  Do everything you can to avoid detail.  I know that all too well.  Providing actual numbers brings the argument to a screeching halt.  That's exactly what I did.   It did indeed achieve that outcome too:  10% isn't exactly tiny, especially when you look at the actual quantity.  The question is, how profitable must hybrids be?  Keep in mind that the gen-4 just introduced reduced production cost a little more.  Here are the counts for 2015...  United States sales = 452,152 hybrid of 2,499,313 total is 18.1%.  Europe sales = 208,464 hybrid of 873,844 total is 23.9%.  Japan Aqua (Prius C) = 215,525.  Japan Prius (regular) = 127,403.  Japan other hybrids = 50,000 (estimated).  Worldwide = 10,150,000 sales total gives an estimated 10.4% hybrid.


It Worked.  What an interesting conclusion.  He recognized that I would never give up.  I complimented him for having the strength to survive all that.  We can now make an effort together, combining resources and perspectives to finally make some progress.  One individual wasn't happy.  You're not supposed to become friends with a former foe.  Attempts to lash out failed.  No one cared.  It's his loss.  Support for Volt has moved on the second generation.  What happened in the first simply doesn't matter anymore.  We all know several goals weren't met.  The point was acknowledgement.  Without any type of acceptance, there's no way to take the next step.  Who knew it would take so darn long?  Oh well.  Being able to move on feels great.  It's too bad so much effort was wasted.  But then again, that was rather predictable.  And what does it matter anyway?  Failure is an option.  You can't win them all.  Learning what worked and want didn't is the point.  Having to try again is just part of the life.  It's unfortunate that certain mistakes cost so much, especially when parts could have been avoided.  At least it's over... with of all things, a reconciliation.  Cool.


New Perspective.  The feeling is great when you can look at a situation from the other side.  The fighting is over.  Yeah!  I finally have the ally which I sought for all those years ago.  This was today's post:  Gen-2 Volt ushers in a new perspective.  Gas prices have plummeted, but so has battery cost.  Audience has widened, no more early adopters.  Competition has emerged, namely Bolt.  It's a changed market.  The worries (and greenwashing) of lithium fires has vanished.  Impact of heater use in winter is well understood.  New awareness of emissions (diesel cheats) has been raised.  The situation is quite different from years back.  Hybrids, Plug-In Hybrids, Electric-Only, each with its own take on how clean & efficient travel should be achieved makes understanding them a challenge.  That all have battery & motor use in common though, which allows us to finally establish cross-automaker bonds.  2016 will introduce several more next-gen upgrades.  That should make things easier.  The catch is we must all make an effort to convey the new information.  Don't let outdated data obscure the effort.  Those next steps are worth it.  We're all in it together now.

2-07-2016 The Challenge.  A former foe has accepted my effort to become a friend.  We are trying to find some common ground.  This my latest exchange in that effort:

Nice summary and good question.  The past is what it is.  Our focus is now 2016.

GM just delivered gen-2 Volt.  How should it be marketed?  Having an engine was a strong draw in the past, since it eliminated concern of range-anxiety.  But with next-gen EV choices targeting 200-miles, that will become a much harder sell.  A range of 53 miles simply doesn't compare.  It does top other upcoming plug-in hybrids though.

Hyundai, Ford, Toyota, Mitsubishi, Honda, and Chrysler all see the appeal of 25-30 miles for plug-in hybrid range.  Ask yourself: Why? People will still get an EV experience, but MPG high values will likely be the draw.  Price has proven a major deterrent.  Will consumers care if the engine runs from time to time if they can buy something competitively affordable?

Toyota has an advantage in place with respect to reaching affordability.  The regular model of Prius brings about economies-of-scale benefit.  Motors, controllers, and battery-cells all see cost-reduction as a result of high-volume production.  The plug-in model will benefit as a result.

Toyota also has an advantage with respect to reputation.  The hybrid system is known for its reliability.  The hybrid system is also known for uninspired performance... until this evening's Super Bowl commercials.  Toyota is taking advantage of Prius past to point out how much the newest generation has improved, emphasizing this upgrade changes how people will think of Prius.

Perhaps that is what GM should do... find something to revitalize Volt.  What is the strength now to point out?  Maybe range is the selling point.  Oddly, offering the most capacity may not have a negative impact on other plug-in hybrids.  It could serve as an endorsement for the category.

What do you think?


The Real Question.  I was asked this: "The real question is, what do we expect can be done beyond what has been done?"  It was a new twist on addressing goals.  I was happy to contribute thoughts to that:  Don't expect.  Suggest.  There's growing worry of the inevitable tax-credit expiration, right in the middle of Volt's product-cycle.  Yet, notice how no one wants to actually address that?  It's a sign of trouble on the way.  We need to push for a solution.  Don't let the opportunity now slip away.  An example from Prius history is the improvement to the ride quality.  It wasn't necessary for the audience Toyota had targeted.  So, focus was put on diversification instead.  We got a smaller and a larger model of Prius, along with a plug-in.  We just got a small SUV as well.  But with gen-4 Prius, the hope is increasing appeal to draw in a wider group of consumers.  Stiffening the body by 60%, giving it much better suspension in the rear, lowering the center-of-gravity, and adding quite a bit of sound insulation will go a long way toward helping to achieve that.  Those were all suggestions from current customers.  Look at what people made discouraging remarks about.  Would changing any of them draw in new customers?  Ask want people commonly seek out when shopping for a vehicle.  What doesn't Volt offer?  Consider the rest of the market.  Think about what sells well.  Why haven't we got a small SUV variant?


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