Personal Log #816
June 14, 2017 - June 18, 2017
Last Updated: Sat. 10/21/2017
page #815 page #817 BOOK INDEX
No Growth. He saw the opportunity to twist my words.
It was a push to spin intent and misplace context to a point I hadn't
expected. Rather than just ignore with the hope all mention will
vanish, it was this provoke: "So the Prime's 25 mile AER is perfect and there
is no need for Toyota to release at vehicle with more?" What a great
setup for me to explain how diminishing returns actually works. I had a
feeling references in the past fell on dear ears due to them no
understanding the concept. Now, I could provide detail. So, I did...
making sure it could not be ignored:
That's not how "diminishing returns" works.
The measure of what you'll get as a result of your investment for that product-cycle shows there is a drop in effectiveness. Spending a lot more for little in return doesn't make sense. That's why study of the numbers is so important. That is also why it is a moving target. Each generation will have a new higher level, especially when it comes to battery advancements. You find a level where more doesn't accomplish much, then stop before exceeding it. Pushed too far, more can actually have a negative impact, causing a loss instead.
Remember that "5,000 per month" goal? Look at annual sales of Volt, excluding 2011 due to rollout and ramp-up inventory limitations:
2012 = 23,461
2013 = 23,094
2014 = 18,805
2015 = 15,393
2016 = 24,739
2017 = 22,049 (annualized using results thru May 2017)
Where's the improvement? You'd think with the growing popularity of plug-in vehicles, there would be a noticeable increase. The design choices for gen-2 of Volt kept MSRP too high. Offering more power & range had the consequence of higher cost without any resulting increase of sales in return. GM's gamble doesn't make sense for this market at this time.
Stating Goals. That's how you avoid trouble. That's also how you gauge lack of progress. Understanding effective measure is very important. Remember the "5,000 per month" sales goal from back when Volt was still being developed? The reason for quite clear. It was the minimum required to have a sustainable seller that was both high-volume and profitable. Maintaining that level meant the goal had been met. It was how the progress of Prius was measured by others... which is how GM ended up adopting it too. Remember the timing of that for Volt? It was to be reached by the end of the second year of sales. When that didn't happen for gen-1, things got ugly. Everyone could see the count fell well short of expectations and all excuses had already been exhausted. Sound familiar? We are approaching that same significant timing milestone with gen-2. Only this time, Toyota already has a strong alternative in the market. Backlash from it is truly bizarre too. Avoidance of any goal that had been stated in the past is so obvious; the enthusiasts of Volt simply declare victory. No facts to that affect are offered. There are only claims of superiority. Denial of the situation is so deep, you know a turning point is about to be reached. That should be easy to see too. Not only is Prius Prime extremely well positioned for mainstream growth, there's also the new EV rollouts to contribute to the progress forward. Both Tesla's Model 3 and Nissan's next-gen Leaf are about to push the market. Both are expected to be affordable for their intended audience. Enthusiasts of Volt avoided answering the question of "Who?" knowing they'd be held accountable later, just like with the sales goal. It's an ugly situation. Not all attempts to move forward are successful. Toyota put a hold on Prius PHV, then ended up stopping it as the changing market showed new priorities. Low MSRP is what the market with this particular timing has placed high importance for. That leaves Volt in a very difficult position. Ironically, that vindicates the "nicely under $30,000" goal for pricing... which has absolutely infuriated enthusiasts. They are very, very upset and the lashing out at me as a result has been quite pronounced. They think having a scapegoat will somehow makes things better. See why I put so much more emphasis on "too little, too slowly" when I saw how stating goals wasn't working?
Dishonest Spin. It's annoying when the very message you've been conveying for years gets parroted back. But when they are dishonest and it is easy to prove that's what they are doing, you have to wonder: "We've been telling you for years about 200+ mpg, and you never got it! Instead, you stayed with your 47 mpg hybrid. Now somehow, just because you can get that in a Toyota, it's incredible!" Where the heck did that 47 MPG come from? I have been posting about diminishing returns and the upcoming next-gen PHV for years. There are countless posts I could refer back to. How could anyone believe they wouldn't get called out for such false claims? Oh well. That does provide me with the opportunity to point out some history: M's campaign to promote "230 MPG" had such a huge backlash, enthusiasts of Volt did everything they possibly could to distance themselves from MPG references. In fact, the fallout is how that "gallons saved" advertising came about. Focus shifted to EV purity instead. Mid-Cycle rollout of Prius PHV focused on MPG boosting. The resulting average was around 75 MPG and there was a clear expectation that the first full-cycle offering would increase battery capacity, which would result in more power being available. 20 km was the original offering. It was large enough to differentiate the plug-in model Prius from the regular model without making the price too terribly expensive. Unfortunately, lithium cost hadn't come down fast enough and there was a clear problem developing with the acceptance of plug-in vehicles in general. Double the capacity was the expectation for that next-gen rollout. Turns out, 40 km is exactly what got delivered. The bigger battery did indeed bring about more power too. It was now realistic to offer an affordable choice, something able to compete directly against traditional vehicles. Spinning of history won't change any of that outcome, nor will it support the claim of 200+ MPG. There is nothing from GM able to compete directly with traditional vehicles either. The faster & further obsession has made the choice of Volt too expense. Prime makes more sense.
Growth. Reading post after post of attacks from Volt owners on Prime has been overwhelming evidence of change. Prior to the recent sales growth, there were attempts on many fronts. They'd attempt to undermine any way they could. Now, it's just claiming Prime's acceleration is too slow and electric-only range is too short. Exactly as anticipated, the mindset of "faster & further" has become the theme. Returning to the trophy-mentality problem confirms they have nothing left. Phew! What a massive waste. All those tax-credits squandered on conquest. When leases expired, many Volt owners moved on to something else with a plug. The status quo remains intact. What was the point? Remember that huge anti-Prius campaign back when gen-2 sales raced past mainstream minimum? Annual totals exceeded 100,000 here in the United States, without any tax-credit. Volt hasn't come even remotely close to that, with a very generous federal subsidy. Much needed growth hasn't happened. The enthusiasts were so wrong about cost, complexity, and timing... It is so much of a mess, the fact that Prime has emerged from the ashes is amazing... and they can't stand it... hence all the attacks. Having to endure all that was quite a challenge. What was learned from this experience has proven priceless though. That was my point.
What's your point? Every possible avenue of
opportunity has been completely exploited. They've run out of excuses.
Prime sales are tapping into the potential Volt strived to achieve, but
wasn't ever targeted for that... which made this so appropriate in response
to be asked that question...
To ask this question: What's the point?
Failure to achieve mainstream sales volume, despite the gen-2 upgrade, has pushed Volt even further into a niche. Denial of the inability to draw interest from GM's own loyal customers went on for years with gen-1. We are witnessing the same problem repeat with gen-2. Notice how GM has shifted focus over to Bolt and enthusiasts of Volt are back to saying the same old things they did back when gen-1 sales struggling to grow?
The goal has been to replace traditional vehicles. No amount of spin or excuses will change the fact that needed growth has not happened. Believing that the act of belittling Prime will somehow help Volt is disillusioned. Not understanding the appeal of Prius has always been a fundamental problem for Volt enthusiasts. They attempt to apply the criteria they find important to the purchase decision, never coming to realize that mainstream consumers have very different priorities.
Toyota knows the EV experience delivered by Prime combined with a nice balance of features and the affordable price will draw interest from their own loyal customers. They'll achieve growth by appealing to a variety of buyers, their own shoppers looking for an upgrade to replace their aging Toyota. Some will be owners of older hybrids. Some will be new to hybrid consideration. That's the point of Prime.
Growth is not about conquest. Growth is not about delivering the most distance or power. Growth comes from offering something better, an improvement upon choices of the past.
Wrong Question. I found this annoying: "The best way for a potential buyer to answer this question is to take test drives." It meant the audience is still not understood. Ugh. Oh well, it's not like I haven't pointed out the importance of "who" countless times... and will continue to: The question only applies to those who cross shop. There is a large chunk of the population who don't. They shop within a brand. So, the comparison is a moot point. That's how Prime really shines. Toyota configured it to not only appeal to those looking to replace their aging Prius, but also those considering a Camry or Corolla. That's why the standout features... like the array of headlights, the large touch-screen, and the dual-wave glass are exclusive to Prime. That is also why there isn't a middle seat. Being unlike the other choices with a "step up" appeal, yet not compromising on price, is key. $27,100 for a MSRP of the base, with safety options that Volt doesn't include, gives it great potential. There is no dependency on tax-credit subsidies. It is carefully configured to compete with the true competition... traditional cars choices, not other brands.
The Wait. It seems to be taking forever. Thankfully, change is near. I look forward to blog entries changing and no longer having to listen to the brainless faster & further arguments. Patience is a fundamental component of Prius, as is with change. It's a matter of understanding when. Like who, knowing the target is vital. They don't. Those senseless posts of rhetoric are void of thought. Though, some of the spin does as least show effort. Unfortunately, it is to undermine, rather than promote change. Oh well, all I can do is point out what the wait is for: Spinning comments is part of the wait. They attempt to draw conclusions prematurely. We have seen a lot of hypocritical behavior and even more superiority declarations lately too. Simply letting them get all of it out of their system so we can move on to constructive discussion is the logic step forward. The article nicely lays out the variety of shopping criteria for someone in the now, without any particular brand preference, someone specifically looking for a plug-in hybrid. That's a very limited audience, as is the current choice of vehicles. One year from now, the market will be quite different. Prime will finally have first-year owners reporting enough real-world data to draw interest (remember the importance of winter driving & heating). Currently, numbers are so few, there is almost nothing to work with. My average for the month right now is at 196 MPG. It’s taking forever just to use up the tank I filled 5 weeks ago.
Repetition. How many times have you heard the nonsense? Thank goodness it is so easy to see change coming. Phew! It is only a matter of time now. They will finally learn the answer to that long time question: Same old spin we've read about for years. Because Volt offers more EV range and more power, it will appeal more to ordinary car buyers. Even with a $7,500 subsidy being offered, that's clearly not working out. We're watching GM shoppers continue to purchase Cruze, Malibu, and Equinox in high numbers while Volt gen-2 is struggling with monthly counts only slightly higher than gen-1... despite much wider acceptance of plug-in vehicles now. Prime is an example of striving to attract those interested in purchasing a Toyota. That audience wanders into the showroom, then takes what they find for a test-drive. It's a simple & informative process. They discover claims of being slow were just automotive rhetoric and the low MSRP finalizes the purchase decision. Loaded with an array of safety options, standard, it's easy to see the effort to deliver a well-balanced vehicle. That is understanding audience. Toyota is working to raise the bar, not to deliver a halo. Prime offers enough to entice those who may otherwise choose a Corolla & Camry. Who is the market for Volt?
Reality. Hearing reports from Prime owners. Seeing reports of Prime sales. Witnessing the shift of attention to Prime. Reality is setting in, bringing the message to antagonists by means I haven't been able to express. Conveying how this change will impact that market hasn't been easy. Understanding how it will react is though. Having been such an active participant in Prius history, recognizing the potential Prime holds is very exciting. I'm really looking forward to it. In the meantime though, there's more message to deliver: Over 200 MPG with the latest tank on my Prime. I have no idea what the actual MPG will end up calculating to. It takes forever to use up the gas. There's still a 1/4 of the tank remaining. It has been over a month. MPG has been pegged at 199.9 the entire time. Do you really think ordinary showroom shoppers at Toyota are going to care if some other plug-in offers more EV miles? That impressively competitive MSRP of just $27,100 makes Prime a serious consideration for someone interested in purchasing a Toyota. GM had it's chance with Volt, but instead just let opportunity pass by. Now gen-2 is struggling with sales growth and it must share the few remaining tax-credits with Bolt. Sales are primarily just conquest type too. GM's own loyal customers simply aren't interested.
Perspective. With the reach of Prime rapidly spreading, it's good to provide a reminder of perspective. That is so easy to forget... especially now with every automaker striving to deliver something with a plug. Getting caught up in a muscle-flexing demonstration happens on a regular basis. Online exchanges make that a common occurrence. The voice of ordinary consumers gets drowned out by the volume of fans loyal to an automaker, unwilling to consider what's best overall in favor of willing a particular battle. Ugh. That's such a waste. Oh well. All you can do is keep providing those reminders: Mainstream consumers don't care what enthusiasts have to say. There's 17 years of Prius history overwhelmingly confirming that. Toyota designed a vehicle for the masses, balancing the configuration with what their own buyers would be willing to pay. Think about what owners of their high-volume profitable vehicles have shown interest in. Camry & Corolla are often labeled as appliances... affordable & reliable.