Personal Log  #896

October 20, 2018  -  October 25, 2018

Last Updated:  Sun. 11/04/2018

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EPA Dismissals.  We just learned that EPA has dismissed 2 advisory panels of outside scientists.  They provided information about smog & repository concerns.  That fear we had about properly addressing pollution related issues is proving to be a very real problem.  There are clearly efforts underway to undermine.  It's really sad when such blatant favoritism for business is put over the well-being of people & planet.  This reminds me of what the administration 18 years ago did.  They just ended a well established green program abruptly under the guise of starting a comprehensive study.  Remember the PNGV program?  They tried to pretend the existing effort had failed and this was a bold new initiative to stimulate progress.  We all knew it was a reset.  We also knew it would be half-hearted.  The vague nature of what is being established as a replacement is a dead giveaway.  We see people taking power who favor business over environment, people who will sacrifice a great deal to protect old-school industry.  It's an effort to hold back progress.  Think about the intentional damage relaxed regulation will cause.  We know how to prevent, but choose not to.  Imagine how future generations will look upon this time.


Facing Reality.  This quote speaks for itself: "So what does GM do now?  They've used up their 200,000 tax-credits that were supposed to help them transition to non-subsidized plug-in cars, but I don't see any future product plans.  The Bolt and Volt are not compelling products without the tax credit, so unless they can cut prices on them and be profitable (doubtful) where are they?"  Seeing such a sentiment pop up from time to time now in discussion threads is encouraging.  Rather than an army of enthusiasts doing everything possible to provide excuses, there's a message coming through expressing concern.  I endlessly posted my own concerns about GM moving so slow, this day would come.  Sadly, it seems as though the momentum forward has actually stopped.  That's what is drawing attention now.  Bolt clearly wasn't competition with Model 3.  So, what is it?  That was supposed to be GM's premiere plug-in product, an offering so impression it was the "range anxiety" solution Volt failed to be.  However, that percieved progress didn't result in strong sales.  In fact, it's rather obvious the loss of that $7,500 incentive will bring an end to the effort as we know it.  I suspect early next year will bring about a reset of sorts... a reality enthusiasts really don't want to face.  The claimed leadership position will be lost.  Starting over is all but inevitable though.  That's why milestones to consider lessons learned are vital.  Skipping them, as enthusiasts did, makes the penalty for trying something different much later a much larger loss to deal with.


Spreading Narratives.  It was called hype, seemingly so far back, you could say "once upon a time".  That was obvious.  You hope for a miracle.  It turned into "fake news", where there was on-going effort to decieve using enough apparent material to form a believable story.  When confronted, the story simply changed to something else.  Each time built on assumptions and the knowledge that most people don't apply critical thinking.  Just accepting what you are told at face value, without ever bothering to research, is key.  That eventually fell apart, since you can only change the story so often before people get confused.  Now things are settling back into an approach of spreading narratives, where you just keep telling the same tale repeatedly.  You don't even bothering to provide any substance.  For example: "The hybrid is going to be phased out, and it's sad that Toyota is going to be dragged kicking and screaming into the future."  Sadly, I run into claims like that often.  There's nothing at all provided to so support it.  There's just a mantra repeated over and over.  I keep my reply simple with:  Toyota already produces electric-motors, controllers & chargers, battery-packs, and a rather impressive heat-pump.  They are setting the stage for large-scale customer acceptance of plug-in vehicles, as well as refining their production & software along the way.


Looking Ahead.  I shared some wisdom:  Knowing there will be a mid-cycle refresh of the regular Prius and that tax-credit phaseouts will shake up the market, it is reasonable to wonder if something could change for the 2019 Prime.  Late November is the LA auto show.  That is likely when we'll either find out or get a teaser.  My guess it will be the latter with a full reveal in Early January for the Detroit auto show.  Think about the positioning of GM with respect to plug-in hybrid choices.  The expected 50% drop for their tax-credits in April and how much of a struggle sales have been anyway, it makes sense that Toyota has simply been laying in wait.  After all, we saw them do the very same thing already.  We witnessed the quiet of gen-1 plug-in Prius, with lots of spin during that supply halt that was just plain wrong.  Why compete when it will only serve to confuse potential customers, especially when you can focus on refines (production, design, cost, etc.) in the meantime?


Frustrated GM Investors.  There's a lot of attention growing for GM.  The reason is simple.  A comprehensive third-quarter financial report is about to be release and the prospect doesn't look good.  It's much like the lead up to bankruptcy a decade ago.  Profit depended heavily upon large Pickups & SUVs.  Investors want sedans to be phased out entirely to help keep that revenue stream flowing.  This time, there aren't serious retirement losses at stack though.  Instead, it is the reality that neither Volt nor Bolt captured customer's interest.  Both were major resource drains that didn't result in new revenue.  Not deploying the technology into a mainstream vehicle shoppers would be drawn to was a colossal mistake.  The stock value for shares here and for the division in China, which had been flat, are now both down.  There is the uncertainty of GM in Korea as well.  Authorities are questioning whether or not GM's 10-year committment as part of that division's bailout early this year will hold.  Needless to say, pressure is building for the CEO to be replaced.  It seems like a narrative, something I would make up... especially since the timing of the tax-credit phaseout is drawing so near.  But anyone who has been watching closely for the past few years would recognize my push for GM to take a next step forward.  Volt's gen-2 upgrade was a step in the wrong direction, delivering more for enthusiasts and even less for GM's own shoppers.  Bolt has just been a confusing mess; it changed the message for "range anxiety" and was supposedly designed to compete directly against Tesla's Model 3.  Needless to say, sales of both are well under expectation.  Sound familiar?  Remember the timing & circumstances of Two-Mode's death?  There was a genuine concern about "too little, too slowly".  The situation now confirms there was valid reason for it.  To all those who attacked me for pushing for an actual change to the status quo, rather than appealing to early-adopters, you now have frustrated investors to deal with.


Rhetoric Spin.  It has actually been awhile since someone tried to stir the pot: "Toyota has dragged it's feet all along the way."  That was to be expected though, on a dicussion thread about the challenges GM is about to face.  I don't let that opportunity for me to point out observations of my own on the topic.  So, I did:  That's just rhetoric spin.  Anyone taking the time to actually look at the technology Toyota has delivered, they would see a remarkably efficient & affordable design.  Their approach of rolling out first to hybrids is a very effective means of establishing high-volume production to take advantage of economy-of-scale benefit... which is absolutely vital for a successful paradigm shift.  The upcoming next-gen RAV4 hybrid is another big step forward.  Like with Camry hybrid, we are witnessing great potential for vehicles larger and more powerful than Prius to capture sales from a very large audience.  So what if a model without a plug isn't available yet? Motor & Invertor production is well underway.  Real-World rollout of their heat-pump and carbon-fiber tech is taking place too.  Let's not forget the lithium battery-cells being used either.  In other words, the claim of "dragging" actually reveals Toyota's electrification effort to reach mainstream buyers without tax-credit help is well underway.

10-21-2018 Serious Discussion.  Today's topic about the problems GM is about to face sure is stirring the pot.  I jumped back in almost immediately, responding to a post starting with: "As soon as one of the Legacies gets serious about US EVs, the whole house of cards will come down..."  It was followed by a vague statement that didn't actually say anything.  There was no next-step suggestion provided.  You know, I won't settle for that:

What does "serious" actually mean?  Think about the situation from a mass-market perspective.  How do mainstream consumers shop?

From a dealer perspective, that means the vehicles with a plug must be cost-competitive to the traditional offering.  GM's approach with both Volt and Bolt have been disastrous in that regard.  Neither supports a profitable approach and neither even resembles anything in their current product-line.  What loyal GM customer would be interested?  Seeing such strong demand for the highly profitable SUVs that GM dealers carry, it's easy to recognize the lack of interest.

Salespeople face an even greater challenge.  Should the dealer decide to push plug-in choices, what incentive is there for a change sales approach?  A fast & large commission from a traditional SUV is far more appealing than making an effort to educate a consumer about how to upgrade their garage for plugging in.  That's a major challenge to address without even talking about the vehicle itself.

Think about how much easier the transition could be getting customers who already own a plug-in hybrid charged with an ordinary 120-volt outlet to consider the upgrade to an EV with a 240-volt charger.  In other words, expecting a jump directly to EV for masses is not a "serious" approach... especially when you consider cost & production restraints.  17 million new vehicles in the United States alone are purchased every year.


Osborne Effect.  It was interesting to read a detailed post about GM's predicament, explaining how they were now facing innovator's dilemma.  Anyone unfamiliar with the what that means would have easily accepted what had been attempted to be explained.  I knew that was quite wrong.  To be that situation, it would be a struggle of how to improve Volt to attract a wide audience.  GM had listened to enthusiasts, reulting in even more of a niche.  So, that does sound right.  But GM has pretty much abandoned Volt entirely.  There is no effort to delivern something with those characteristics for mainstream buyers; instead, GM must basically start over.  See the problem?  They have the tech already.  So, that isn't the challenge being faced.  It's the impact the next offering will have on GM's own current market.  It could be profoundly negative... since the choice itself would likely be very positive.  This is called the Obsborne effect.  Look it up.  The name came from a real-world "oops!" in the business world that had disasterous results.  Knowing that, I replied:  No, that isn't the case. It was with Volt though, but that is the past.  The situation now is different.  The moment GM announces a plug-in hybrid SUV, sales of the traditional model will stall.  It's known as the "Osborne Effect".

10-21-2018 Cannibalize ICE Sales.  The topic of ICE (Internal Combustion Engine, better known as "traditional" vehicles) replacement is finally getting some proper attention.  Most of the plug-in enthusiasts simply didn't care when the tax-credit was available.  But now that it is about to trigger phaseout for GM, there's a state of panic growing.  Taking about vindication for my "too little, too slowly" concern over the years.  I predicted this very dilemma ages ago.  But instead of getting constructive feedback, I got attacked... over and over and over again.  Thankfully, my thousands of blog entries serve as proof of the level of resistance people have to change.  So many techniques & excuses for not dealing with problems and taking responsibility...  Ugh.  Anywho, today's discussion topic really hit that mark.  It focused specifically on GM.  I jumped in with one of the first comments posting:

It's as simple as asking how our children will look back at this.  You had the technology; yet, you chose to not make an effort to actually use it to change the status quo.

That has been GM's problem even before the plug.  They had Two-Mode, then abandoned it.  They had Volt, but roll out the tech to any of their ordinary offerings.  Loyal GM customers looking to replace their old GM vehicle with a new GM vehicle simply had no choice.  After all those years of supposedly being market leader, you still cannot purchase a green model of a traditional vehicle from GM.  Their SUVs should have taken on the plug-in Two-Mode design a whole decade ago. Remember the prototype plug-in Saturn Vue?

Seeing GM move on to Bolt is a head-scratcher.  Are they going to abandon plug-in hybrids entirely, completely contradicting their own "range anxiety" approach they pushed for all those years?  If so, when can we expect a competitively affordable version of one of GM's traditional vehicles as a EV model?

Toyota is often claimed to be an industry laggard, but their path to electrification is clear.  Prius already offers a plug.  Corolla hybrid will next year as a plug-in hybrid.  A model of CH-R hybrid as an EV is expected to follow.  There are new generations RAV4 and Highlander hybrids on the way.  Camry & Avalon hybrids are now available and competitive with their traditional counterpart.  There is even a rumor of a new CUV hybrid on the way.  All that is most definitely an effort to change the status quo.

Legacy automakers have the enormous problem of getting their dealers to embrace change.  If they aren't interested in stocking green inventory, there's no way for shoppers to actually make a purchase.  Cannibalizing ICE sales is much easier taking a smaller step to the plug by offering something compelling with a battery-pack first.

Watch what happens with GM over the next few months.  Their tax-credit opportunity wasn't used to change behavior of their own dealers & customers.  It's going to be a painful transition as a result.


Gone.  The biggest of all the antagonists, that one who would always try to get the last word in, is finally gone.  He used every trick in the book to try to get me to stop posting about how GM was missing opportunity.  So much time was wasted on conquest.  Not targeting mainstream consumers made it a futile endeavor.  How could a legacy automaker thrive when none of its traditional offerings had the choice of a plug?  Status quo not changing is a recipe for failure.  None of their vehicles even became greener.  Popular choices, like Equinox & Cruze, instead added a diesel option.  No plug.  Not even a hybrid.  It was a disaster in the making... with the tax-credit phaseout as the undisputal end.  Unless GM would be able to achieve profitable high-volume sales with the potential to be sustainable prior to hitting that point, it would all be over.  Now, we see that is exactly what's happening.  Those 200,000 credits weren't used to actually bring about change on the dealer's showroom floor.  Their loyal customers never showed any interest.  All those years of expressing the "too little, too slowly" concern have been validated.  In fact, it will be precisely 1 decade when the final moment is reached.  That will be the end of March 2019... exactly when the phaseout changes the credit is cut to 50%... and exactly when GM's 18-month pre-annoucement wait limit will be reached.  The assumption is Detriot's auto show in January will bring about that long-overdue change annoucement.  The antagonist abandoned ship already though.  His die-hard effort to protect the reputation of GM ended with the purchase of a Tesla Model 3.  Knowing the absence of tax-credit help would basically kill Volt & Bolt, he gave up.  There's simply no way such small vehicles with such large prices could appeal to GM customers.  We've been watching the GM stockholders get nervous as share prices remain flat and even more dependency on high-profit large vehicles contintues to grow.  There's no path forward.  It's not like Toyota, where the entire product-line at dealers will be offered with a hybrid option.  He's gone now.  He doesn't have to listen to my sensible analysis of business choice.  GM chose poorly.


Charge-Mode Warming.  It's getting cold here (Minnesota) now.  That brought about an idea.  A new use for Charge-Mode came to mind: electricity for warming the cabin.  If you have the engine running in an efficient manner before parking anyway and you'll be coming out to a cold car later, why not?  That new video shows it would only take a few minutes to generate enough electricity for that.  The point of Prius is to significantly reduce emissions & consumption, not to eliminate them entirely.  That's use of electricity is clearly an improvement over what traditional vehicles do... just run the engine while the vehicle is idle.  It's another way of squeezing out efficiency, while at the same time improving the driving experience.  Think about how the smooth & quiet of Stealth-Mode evolved into EV.  We get preconditioning from the plug to warm the cabin anyway.  If that occassionally comes from the gas engine, it's a little bit of an offset.  There's tradeoffs with technology.  Having a flexible system can allow you to optimize.  So, give it a try.


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