Personal Log #837
October 10, 2017 - October 16, 2017
Last Updated: Sat. 10/21/2017
page #836 page #838 BOOK INDEX
Acceptance. It's finally beginning to happen: "This news is like the death of a good friend. Pretty hard to take, but we all could see the handwriting on the wall." The reality of Volt's sales struggle leading to its demise was foretold. Accepting that wasn't easy though. Wow! The enthusiasts fought me with everything they could. It didn't work though... since I wasn't the enemy, nor was I the customer. They knew mainstream consumers should have been the target, but didn't want to accept a niche status. It didn't matter anyway. This is why I kept mentioning the showroom floor. To attract potential customers there, the dealer would have already had to buy into the idea. The dealer's purchase of inventory to sell is what made them the true buyer. Not understanding the actual business is why these engineers fighting me were doomed. They were fighting the wrong battle... and only now see the losses. It's too bad. Of course, Toyota will gladly enjoy the spoils. No more market confusion is a huge barrier removed. Yeah! This is what I had to say about it: Who is the market for Volt? I asked that question literally hundreds of times, trying to get it through to this group that those here are not at all representative of what's needed. GM catered to enthusiasts to prove the technology. It was a good audience, very receptive, very vocal. Unfortunately, moving on to that stage beyond early adopter is easy to misunderstand. Mainstream consumers are very different. Requirements were not correct. Sales didn't materialize as a result. Gen-2 should have had a very different configuration to make it appeal to such a different audience. This is where the hate emanated for Toyota. They targeted mainstream consumers from the start, skipping the "early adopter" stage with the plug-in Prius… since the technology was essentially proven already by the hybrid. Instead, a mid-cycle rollout to just 15 states was used to study the target market closer. It worked too. We see Prius Prime much closer aligned to ordinary customer appeal. Who cares about enthusiasts at this stage? Faster & Further isn’t a strong selling point... as gen-2 Volt has clearly confirmed.
He's just making stuff at this point. What do you do when
someone is so desperate they turn dishonest? His lack of understanding
basic business principle combined with a desperate need not to be proven
wrong is a recipe for endless posts. He just keeps attacking me.
It's bizarre. Everyone else sees what's going on. You'd think
he'd back down at some point. My next step is to make it personal.
That's how you let everyone else know they are not part of it. You
don't want to accidently make the situation any bigger. State the
situation with the hopes of ending it, then move on:
That isn't at all what I've been saying. You're making up stuff yet again. Fortunately, it is a great confirmation of status... more feedback I couldn't get from any other source.
The tax-credits are only for the sake of introduction, that 1% market you're still so hung up on. To exceed that, the technology must not have a dependency on subsidies. This is why the design has to be profitable. This is also why it must sell in high-volume.
As for Toyota losing money on each, there is nothing to support such a wild claim and an large collection of evidence to the contrary. In fact, even some here have repeatedly stated Toyota went "cheap" by leveraging the regular Prius to make Prime. That's exactly how profit is achieved.
With respect to not understanding either economics or accounting, that's your problem. There's no reason I have to even bother explaining why sales must grow to that mainstream minimum, especially after 7 years of Volt's struggle to grow. It's a basic business principle for the sale of a sustaining product.
Shutdown. We're seeing an inventory pile up again. The slowdown of Volt sales has become so bad, there's a 4-month supply now available. Production will be reduced next week, then after a month of that, shutdown entirely for a month. Imagine that with Prime? Right now, my dealer only has 1 in stock. What a drastic difference! Think about who the customer for Volt actually is. It's the dealers, not mainstream consumers. GM must make their vehicle enticing enough to dealers to order them. If they are difficult to sell, the dealer won't. What consume limited lot space with a car that will sit there for months... especially if it's a challenge to get salespeople interested in showing it. What's the incentive? Selling an expensive car returning a very small profit means a very small commission. Why bother? Think about all the extra work it requires to explain charging. The larger battery-pack doesn't share the simplicity of Prime. Rather than 5.5 hours using 120-volts, which is no big deal overnight, Volt takes 13 hours. Do you really think a salesperson wants to bring up the purchase & installation of a 240-volt charger? Needless to say, the shutdown of production is no surprise. In fact, it was very predictable. Volt is a small hatchback. GM likes to build SUVs. GM customers like to buy SUVs. GM dealers like to sell SUVs.
That's Reality. The ironic nature of this
posts left me beside myself:
"The reality is, in a market that only has a 1% share of the entire auto
sector, GM is the sales leader. You need to compare plug-in sales
among their peers to gauge success." This antagonist has
been harassing Toyota with claims that they are stuck in an innovator's
dilemma situation; yet, he's forcing that very perspective to make GM appear to
have the upper hand. My definition of leadership requires breaking out
beyond the 1%. He's doing everything possible to ignore the 99%.
That's overwhelming confirmation of being stuck. When someone says we
need to consider the forest and you insist only the tree directly in view is
all that matters, that's a big red flag. You've become the problem.
He still doesn't see it though. So, I climbed up on the soapbox:
Volt gen-1 was highly specialized, targeting enthusiasts directly... the 1%. Gen-2 wasn't able to overcome that barrier. Rather than reach a larger market, it is remains trapped within a very small group of potential buyers. In other words, it's an innovator's dilemma situation.
Struggling to move beyond initial audience is a difficult problem to address. Toyota recognized the situation, which is why their gen-1 model was not rolled out beyond the initial 15 states and stopped production well over a year before revealing to gen-2. Figuring out how to configure a plug-in vehicle to appeal to a wide consumer base became meant patience. Change took time.
Signs of success from that gen-2 are emerging already. Beside the forecast of 50,000 to be sold the first year in 3 major markets, there's disapproval from enthusiasts. They don't like how it draws ordinary customer interest for ordinary customer reasons. Rather than a focus on faster & further, there's a nice balance of purchase priorities.
The other 99% don't need your approval... or even your opinion. Wanting to purchase a Toyota means an indifference to whatever GM is doing anyway. Those loyal customers are looking to replace their aging Camry, Corolla, Prius, or Scion with a new car. Prime will become a serious consideration for that audience.
Audience. We're getting back to basics. When a newbie posts this, you've got confirmation of that next chapter being well underway: "I think you're fighting a losing battle. You should drive the Volt and find out how much better it is over the Prius..." He had no idea I have and was not impressed. The reason why is simple, my criteria for "better" is much different. Mine is a close reflection of what mainstream buyers see as a priority. How could he not see that? It's another example of the "other reasons" problem. Obsession with faster & further blinds them from see the obvious. You'd think with so many years of struggling to grow sales based on that approach, they'd finally figure out what wrong. But then again, even though the enthusiast mindset is shared, the experience is not. This is how mistakes are repeated. Again, oh well: Convincing enthusiasts that ordinary consumers are not interested in paying a premium for "better" is a losing battle, but they do a great job of validating that point. 7 years of sales failed to attract GM's own showroom shoppers. Conquest wasn't enough. That's why they've moved on, from Volt to Bolt. That list represents aspects of Volt not addressed which that bigger audience would find of interest. It's a matter of growing sales now, not appealing to early adopters.
Other Reasons. Trying to see from the perspective of an antagonist is odd. There is nothing else beyond just faster & further. From their point of view, what else is needed? They simply don't see the value in other vehicle traits or features or even price. Remember how with hybrids there was no value given to reduction of smog-related emissions? That was annoying. But to dismiss so much more, that's entirely different. It's all about being "vastly superior" still. That's really sad. At least they don't actually say "vastly superior" anymore. In the past, the smug really was that blatant. Toning it down is good, but in no way an improvement when it comes to sales growth. In fact, accepting the decline of Volt demand is far from a reality. That means there is very real potential for mistakes to be repeated, yet again. Oh well. I keep focusing on strengths. That's how you draw interest. This is how I handled the situation today: Think about all the plug-in shows I participate in with other owners of other types a battery vehicles. Do you honestly believe those checking out the cars are focused that much on acceleration and handling? Answer is no. Instead they ask about the very things I listed... the other reasons to buy a vehicle.
Behind. Spin about Toyota being far behind is the only recourse available to those still trying to portray GM as being far ahead. With the fallout of Volt becoming so difficult to conceal at this point, that makes sense. What else could they say? So, we get this: "However, Toyota will be so far behind they will need to go to full third-party supply or buy drive trains from a competitor." Reading that brings a huge sense of relief. Those few antagonists have nothing left, certainly no enthusiasm for Volt. It's too bad things came to this. Hope of diversity fell apart. Too much was sacrificed for faster & further. Oh well. I'll keep pointing out what Toyota did right and ask questions: Huh? RAV4-EV and Mirai already have electric-only drive trains produced by Toyota. Prime reuses much of that technology, including the high-end EV stuff… like the vapor-injected heat-pump. Camry hybrid delivers the latest & greatest for their higher horsepower affordable electric-motor. And the lithium cells are being used in a variety of hybrids now. What is missing?
Dead? I asked the question: Volt is dead in favor of Bolt? That was met by an obvious act to spin history: "That was the plan, Stan. All along. Volt has been described here and elsewhere as a gateway drug." Knowing there are literally thousands of posts easy to find contradicting that claim, I was a bit taken aback. Knowing there would never be an admission of how hard GM fought against EV on so many fronts, it seems pointless to argue. Remember all that "range anxiety" campaigning? That rhetoric of how superior EREV was to all PHEV and EV offerings was intense. They had been so hostility in the past to defend Volt, it makes total sense how they'd try to distance themselves from that past as much as possible. After all, this is why the supporters vanished. They wanted no part of the terrible things enthusiasts were doing. Now, the enthusiasts don't either. Pretending this was the outcome hoped for all along reveals a different story though... since the actions don't make financial sense at all. So, I provided a brief and difficult to argue reply: That plan was for it to struggle with sales growth in gen-2, then die off mid-cycle as the tax-credit phased out! No.
Cheese Emergency. Gasp! We didn't have any parmesan cheese. Since the grocery store is just a little over a half-mile from the house, I saw no reason not to dash over there with the Prime. After all, the chargers are nice front spots that are usually available. For someone like me, that's easy to understand why. The entire visit, which included parking, plugging in, walking to get the cheese, wait in line at the register, paying for it, then unplugging took a total of 5 minutes and 28 seconds. That was enough to provide 1.7 miles of electricity. In that seemingly short amount of time, I had recharged enough to drive triple the distance required to get home. Just think what could have been possible with the Japan-only option of CHAdeMO charging for Prime. That connection delivers electricity in DC format, rather than AC. It's quite a bit faster as a result. Normal shopping takes 20 to 25 minutes. Imagine how incredibly convenient a visit would be then. After all, most visits won't be an emergency. A simple 10 minute stop for coffee could really make a difference for some people with longer commutes... who would be getting a morning coffee anyway. The grocery store hopes you'll also pick up a donut or something for lunch, as long as you are there. That sounds like a viable business plan to attract plug-in drivers.
New Anger. Whoa! Seeing that the Volt
enthusiasts are now playing a hypocritical game of double-standards and
moving goal-posts, there's quite a bit of new anger to deal with. They
are claiming Toyota was caught totally off guard and without anything
prepared. It's an effort to create a narrative that just plain doesn't
work. Yet, they try anyway by claiming none of the hybrid advancement
contributes to the delivery of an EV. Then in the very next post, we
get a long story of how GM had used their own hybrid technology to deliver an
electric-only vehicle. It's an act of desperation to portray past
history in a different way, knowing evidence to the contrary is so easy to
find. Why in the world would GM work so hard to deliver a
second-generation plug-in hybrid with an expectation of it being replaced
just 2 years later? That makes no sense in itself. Claiming that
was the plan all along for GM, but a long-term strategy from Toyota along a
similar path but without such massive sacrifice, is just so obviously
wrong. Ugh. Oh well. It presented me with an opportunity
to point out the true situation, via reply to a post comparing Equinox to
Prius sales within that crazy thread:
RAV4 >> RAV4 hybrid >> Camry hybrid
Prius >> Prius Prime
Why anyone would compare a SUV to a hatchback? It makes no sense. The natural progression from traditional to hybrid to plug should be obvious. Each model will get an upgrade, though the path may differ though based on market.
C-HR >> CH-R hybrid >> CH-R ev
China will be getting that EV upgrade. Here in the United States, hope is C-HR will get a Prime upgrade to start with. The first EV model for here may be a dedicated electric-only platform, rather than an upgrade.
New Attacks. They were expected. It's an unfortunate reality. The rapid fade away of Volt is stirring new discussion on the other forums. Prime is getting much more attention now. Fortunately, I'm fairly well prepared for it too. Dealing with stuff like this would be a challenge otherwise: "Cherry picked list. Where is all the performance metric? That is right. You ignored it. You started to sound like a Toyota sales person." It was in response to me posting that extensive list of Prime strengths. I know the antagonist was looking for acceleration speed... since that's all I had left out and all that he cared out. The first two items listed were about efficiency. He doesn't count that as "performance" though. He only cares about power... which is why I kept my response to him short. His opinion doesn't matter. He's clearly not representing the interests of mainstream consumers. So, it was just: That's called understanding audience. In this case showroom shoppers.