Personal Log  #913

January 7, 2019  -  January 11, 2019

Last Updated:  Sun. 2/24/2019

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Goodbye.  There was an article just published as an epitaph for Volt.  It was an interesting history... a narrative... since it exluded so many important details.  I found the title ironically fitting: "The perfect car for a future that never was."  Due to the fact that so many vital bits of information were omitted, the "never" part was quite fitting.  Their version of history started in 2006, back when Prius was king and its purpose was all about saving gas.  Huh?  No mention whatsoever was made about the primary goal of Prius: significant reduction of emissions.  Excluding that entirely meant the rest of the article had no merit.  Purpose was either not understood or the writer simply didn't care.  I continued reading despite that.  Sure enough, Volt was presented as a clean-slate solution.  It was supposed built as a "hack" by adding a "complex motor-generator" and a "big hole for the battery was cut from the middle of an existing compact car platform".  No mention whatsoever was made about how GM was already aggressively attempting to compete with Prius by rolling out their Two-Mode system.  They pretended none of that took place and Voltec emerged at that moment from scratch, rather than the true history of it being the next step in Two-Mode evolution.  So, of course, the plug-in prototype wasn't included.  They just pretended that never existed.  That gave the impression GM did more in a shorter amount of time and there were no other projects that failed along the way.  Ugh.  From there, comparisons focused on Tesla.  That, of course, completely ignored both Model S and Model X.  The writer portrayed the situation as if Volt's only competition was the Roadster.  And you guessed it, there wasn't a peep about Leaf.  The pressure put on GM by Nissan was never part of this narrative.  For that matter, neither was the plug-in hybrid model of Prius.  It was very much a greenwash article.  To exclude so much information, there's no possible way to consider that journalism.  It was basically just a fluff piece to make mourners feel better.  Stuff like that how history repeats.  Some people choose to rewrite history to make them feel better.  That choice to ignore certain realities is why mistakes get repeated.  Ugh.


Unintended Consequences.  Sometimes, even the most sincere of efforts can result in unforeseen outcomes... which unfortunately, can be really bad.  That is what we are witnessing now with that collapse of enthusiasm here.  January 1st brought a naive sense of celebration.  People were absolutely delighted with the success Tesla had ushered in... until they started to notice that was only the first major milestone of what is looking to be a very long & difficult race.  Losing the tax-credits is a very problem to have to deal with.  The lowest priced Model 3 is now $44,000 and that's not all that well loaded.  It's still really nice, but that's far too expensive to even remotely be considered competition with anything middle-market would be purchasing in high-volume.  Looking at the legacy automaker who was supposedly the great leader of the new age of electrification, we find Volt... a plug-in that became such a subtle symbol of smug, it is only now that the consequences promoting the "it's worth it" approach are getting attention... very negative attention.  That emphasis on range & power being absolutely necessary has soured our market.  Automakers simply aren't seeing it as worth it, ironically, to try to sell here.  Why bother when the bar has been set so high?  The markets it China & Europe are far more receptive to balance choices than the audience here in the United States.  We get giant guzzlers, while the rest of the world is getting targetted for realistic plug-ins.  Fortunately, the model of Prius Prime here is basically the same as Prius PHV everywhere else.  So, we'll still get shipments of limited inventory.  But for now, there really isn't anyone knocking.  It's sad.  That obsession for more is pushing growth opportunity to other places.  We are no longer the premiere market.  They were horribly wrong about the "too little, too slowly" concern raised 10 years ago.  Very close to an entire decade passed without them figuring out how to adapt.  Their choice to stay true, absolute refusing to change under any circumstances, had dire consequences.  The enthusiasts certainly didn't intend to kill the very thing they most wanted to succeed, but's exactly what they did.  Ugh.


Silence.  That old daily blog for Volt has grown silent.  The parent website keeps publishing new topics, but there are no comments being posted anymore.  Quite literally everyone has abandoned it... even those nasty few antagonists who hung on to the bitter end.  Volt is dead.  They all knew it was in a death spiral 11 months ago when things horribly fell apart.  There just wasn't a new daily topic anymore.  The moderators had vanished and the homepage wasn't automatically updating correctly anymore.  Yet, there was a futile effort to spread hope.  Even though GM had abandoned everything that Volt was meant to represent as a "range anxiety" solution by choosing to deliver Bolt instead, they pushed on.  It made no sense.  With the end of tax-credits approaching anyway, what was the point?  Volt was far too expensive to compete with anything, especially with the limited head & leg room.  Having a fake middle seat doesn't matter when the other dimensions come up short. Who were they expecting to fool?  They kept on with their attacks though.  It was bizarre to witness.  I was collecting a treasure trove of information about innovator's dilemma, watching mistake upon mistake compound the situation.  It was a failure on an unbelievable scale.  They just didn't want to give up under any circumstance.  Pride kept making it worse and worse.  Sound familiar?  It was this incredible real-world drama playing out.  How would it end?  Would they see it coming?  Or was it a situation of suddenly realizing your all alone.  Every single person who had fought the good battles with you disappeared, one by one, until they were all gone.  The last sentence in the last blog entry mentioning the doomed plug-in hybrid was this: "Tax credit goes away and so does Volt."  That sums up what happened, in addition to pointing out what had been predicted many, many years ago.  Unless Volt was able to achieve a MSRP that was nicely under $30,000 prior to the tax-credit hitting phaseout, there was no chance at all of it being able to survive.  $33,520 after 2 generations and 8 years of availability is far too expensive to compete directly with traditional vehicles.  It should have been $5,000 less by now to stand a chance.  That's why Toyota set their price-point for Prime even lower.  It was absolutely critical to deliver something affordable.  Enthusiast opinions didn't matter.  It was interest from mainstream consumers.  They would play a vital role in effort to change the status quo.  No token vehicle can achieve that.  Only high-volume sales bring about true change.  Those nasty trouble makers are well aware of that not too.  Their silence says it all.


Staging.  Read through discussions.  Many threads will reveal the same pattern: lack of foresight.  That's a real problem.  Not setting expectations is like building a house in the middle of nowhere.  Will there be others nearby later?  Will there be a park and stores?  Will there be water, natural gas, electricity, and sewage?  What about roads connecting it to the road of the area?  Its purpose remains a complete mystery without some type of context like that.  Heck, just breaking ground doesn't even inform you about what the house itself will be like.  That's the way we see much of the industry now.  GM is obviously a major problem still.  But so it VW.  How is a series of detail-less vehicle announcements telling us anything useful?  They certainly aren't setting any real expectations that way.  It just feeds hype.  Thankfully, Toyota isn't doing the same, as I routinely point out:  No one knows where the market will go.  In fact, Toyota seems to be the only legacy automaker preparing for the only part that can be predicted... demand surge.  When words gets out that EV have finally hit a price parity with traditional vehicles, a supply problem will emerge.  Dealers without enough EV inventory will have to sell something else.  Since Toyota will have a variety of hybrids and plug-in hybrids to choose from, it won't be too impactful for the dealer.  For legacy automakers attempting to skip those offerings entirely, nothing but traditional vehicles will be available.  What would you rather buy?  Think about resell value.  Think about the price of gas.  Toyota will have already built up a strong reputation for the reliability of their electric drive.  Range plays no role in the assessment of quality.  Those hybrids offer a powerful means of staging the transition to plugs.


Progress.  Sometimes, I slip some exposition into a discussion:  Not understanding how easily adapted Toyota's hybrid system is to include a plug is why so many posts here are filled with supposed conspiracy & doom.  That's really unfortunate.  Know your audience.  To make Prius into Prius Prime, a one-way clutch was added.  That allowed the gas-engine to disengage entirely and the secondary motor to switch from being a generator to providing extra propulsion power.  It's an elegantly simple (and cost effective) approach that will be implemented for Corolla hybrid later this year for the market in China.  Perhaps following that, we'll get the same upgrade here for RAV4 hybrid.  This approach is an effective means of drawing dealer interest, an easy option to stock with small risk and decent margins.  What other automaker has such a wide-reaching plan set for phasing out traditional vehicles very quickly with little disruption to both employees & customers?  Meanwhile, do we really want to turn a blind-eye toward other automakers who offer just token quantities and limited choices?  Think about 2018 sales for Toyota.  How many of those 10.4 million worldwide were hybrids?  Think about the 9% penetration in North America climbing to 15% in just 2 years.  How many more is that? Preventing that many new traditional vehicles from being purchased is a major step forward.  It makes including a plug on the next purchase much easier too.  So basically, customers won't ever see the conspiracy & doom stirred here by enthusiasts.  It will just be a natural progression away from guzzlers.


Challenges.  You should wonder how closely people pay attention, especially upon reading this: "Tesla set the bar higher this year, but what do they plan for next year, will they stick with 5,000 M3 a week or will they surpass that?  By how much and how fast?"  I suspect the circumstances of what's actually taking place and the factors involved are being overlooked.  Most people never mention the possible impact the loss of subsidies could have.  It's as though they assume that financial boost really didn't make any difference, despite overwhelming evidence to the contrary.  Oh well.  All you can do is point out the challenges that still remain:  Tesla had a $7,500 tax-credit and pretty much zero competition.  At some point, all the low hanging fruit will be gone.  Getting MSRP down without profit loss is the most urgent concern.  That's why Model Y is on the way.  Market saturation is a problem, even the other factors aren't an influence.  This is why Toyota is steering clear of such issues, choosing to deal with those challenges prior to exposure.

1-07-2019 Niche.  Yup, he regretted the observation comment.  We continued on though: "As for selling to the masses, you can't sell to the masses until you first sell to the niche."  Keeping it constructive, I added: 

What does that actually mean?  How do you view the technology implemented in Prime and Mirai?  Aren't they helping to shake out details of how to produce for the masses?

Dealers won't suddenly embrace a long-range EV offering.  We understand that reality all too well.  That's why Toyota is flushing out traditional vehicles by introducing a wide array of hybrid choices.  They are setting the stage without major disruption to the business.  Why do so many believe the shift to EV must be dramatic?

Think about where Toyota will be 2 to 3 years from now.  When cost has finally comes down to being realistically affordable (priced competitively with traditional choices), Toyota will start dropping traditional production.  Going all hybrid is a clear & painless next step in electrification that carries along the entire fleet.  Heck, Prius could even go plug-in only at that point.  It's an endorsement that sends a powerful message of commitment to change.

Look at how terrible that has gone so far for GM and Nissan; for that matter, consider Ford & BMW too.  VW is still nothing but talk.  And Honda is very small.  None of those large legacy automakers share resemblance to Tesla, so comparisons make no sense.  They will require a different approach.  That's why articles like this are pointless, just hype to draw readers to a publication.

Think about the big picture.  How will each automaker get beyond a single first offering?  Mainstream consumers could easily look at just one choice as a niche.  Keep in mind how GM was never able to successfully spread the technology from Volt into another vehicle in their product-line.  Getting beyond niche is very difficult.  This is why Toyota figured out how to make a variety of compelling hybrid choices prior to tackling the challenge of adding plugs.


Observation.  I know he'll regret saying this: "the way it looks at the present."  He did, so I replied back with that context he chose:  Basing progress on anecdotal observation of what's happening at the moment will give that impression.  But if you do some digging behind the scenes, looking for stuff that won't be easy to see, you'll find Toyota is investing 1.5 trillion yen ($13.9 billion) in its battery business.  So what if fruit of their hidden effort doesn't show up for a few more years still?  Toyota's focus has always been on ordinary shoppers, not those who have lots of disposal income to buy the latest & greatest.  Toyota doesn't seek glory or praise from enthusiasts.  They sell a lot of vehicles each year, over 10 million.  Most are just affordable choices that are so common, not much attention is given.  Selling to the masses is far more difficult than just appealing to a niche, especially when there's a tax-credit to exploit.  We can still have high hopes for Tesla, but we need to be realistic about audience.  Their buyers are profoundly different from those Toyota is targeting.

1-07-2019 LOL Toyota.  Exactly as anticipated, without Volt getting in the way of progress anymore, there's a surge of interest toward Toyota.  Much of it is negative, but that's still better than being ignored.  It gives me a great opportunity to climb up on the soapbox... which I was especially happy to do upon reading "LOL Toyota" as the title of a new thread posted on the big Prius forum.  It was from a well known antagonist.  I followed the link to the article he had made that comment about, then posted:

The writer is just another one of those supposed experts who is really just an observer looking through the lens of the "EV market".  It's quite obvious there's little understanding of how to make true change happen for the masses, especially when Tesla is used as a basis of comparison.

These articles all follow the same format.  They make assumptions based upon early-adopter behavior and figure ordinary shoppers will just naturally follow suit.  Complete disregard for tax-credit influence, family budgets, basic knowledge of charging people lack is common.  They just focus on the technology and believe dealers will magically embrace change quickly.  The writers also naively think there aren't forces working against status quo disruption.

Watch for the lack of a bigger picture.  When there's no reference to the rest of the industry, it's likely just an attack piece targeting a specific vehicle or automaker.  That's actually a clear sign of worry, in this case, that Prius Prime is stirring concern.  The smug title of this topic reinforces that rhetoric of the past too.  When enthusiasts doesn't like the direction genuine change is taking, we see articles like this.

What I specifically look for is the lack of understanding of how the hybrid system actually works.  Antagonists will reveal they are clueless about how Prius Prime operates if you give them the chance to make a fool of themselves.  They end up stepping in their own poo.  Then you can just blow them off as another obsessive enthusiast not actually interested in change for the masses.

Remember, publications will publish articles to draw attention to themselves.  So, seeing an article that stirs primal emotion based on misleading information is, sadly, a common practice.  The hope is the misdirection will result in lots of comments being posted and repeat visits.


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