Personal Log #932
April 3, 2019 - April 7, 2019
Last Updated: Sun. 5/12/2019
page #931 page #933 BOOK INDEX
Osborne Effect. Most discussions don't take the bigger picture into consideration. Arguments are worse, forcing the scope to just a single vehicle within a specific span of time. There is some change though. The recent stir from tax-credit loss is breaking the grip on narratives. We don't get much for answers though... not even speculation anymore. The fallout is rather obvious. So, I just keep posting information to keep everyone aware of the situation and asking about what comes next: Volt was an expensive compact hatchback. With Trax, Equinox, Blazer, and Traverse all starting at prices under $30K, there was simply no possibility of overlap for GM post tax-credit availability. They would remain mutually exclusive. Any announcement of a plug-in hybrid SUV though, even at a more expensive price, would get their customers to take notice. They are willing to pay extra for the pointlessly large vehicle. They would delay their purchase for that choice. Sales would drop in the meantime. At least with Toyota, they are already offering a 219 hp SUV hybrid that delivers 40 MPG. Build up of its reputation, combined with the proven reliability of what the "Prime" model of Prius is establishing, makes the choice of a plug-in model much easier to accommodate. It's not a profound redesign like an EV requires. Toyota's design only requires the addition of a one-way along with an increase of battery-capacity and the plug itself. That's it. Having a clear path to the future is vital. Detriment of the Osborne effect is something to take very seriously. How will the other legacy automakers, like GM, handle that situation?
Disagree. I found the response to my post rather amusing. He disagreed. That's all I got, a contradictory stance without anything else. That total absence of any substance made my reply quite simple: You cannot disagree without stating a position of your own. A statement of "continually improving" doesn't actually tell us anything. Being vague about what you expect to happen leaves a massive gap of uncertainty. Toyota sells over 10 million new vehicles every year.
Omission Misleading. We've seen this before, lumping everything into all one category: "Hybrids are losing share to BEVs..." I remember having to argue "not the same" countless times about hybrids, but that was more of a technical/operational topic. In this case, it's whether or not the hybrid has a plug... which makes a profound difference. Yet, that is blown off as inconsequential. Grrr. Not wanting to listen is bad enough. But this forced narrative is frustrating. I made that clear by posting information to show everyone else his intent to mislead: Omitting the category of plug-in hybrids create a perception that doesn't reflect the actual market. In other words, it endorses the narrative of polarization. In reality, the PHEV is a great bridge to EV that will co-exist for many, many years to come. In fact, we're seeing strong growth potential for them. Those commuting to work in a Prius Prime enjoy the full EV experience. So what if the engine gets used from time to time. A technology which dramatically reduces oil consumption without disruption to consumer or business is a win-win outcome right away. The fact that it also sets the stage for more EV later is an extra win. It's ironic how some portray "disruption" as the desired state right now without taking into consideration the negative impact that would have to the current market. We don't want to encourage that by sending the message of it being the desired immediate state. Rapid transition away from traditional vehicles won't happen if EV is the only choice available.
Some Perspective. This new chapter we have just begun requires reminders that the past is the past. Some are treating the "game" as if nothing has changed. It's the drawing a conclusion problem. They don't want to start over with findings, even though so much is now different. That's why knowing audience is so important. Toyota's newest hybrid offerings are now targeted at the same consumers as in the past. So, treating them that way isn't constructive. In fact, it could be considered misleading if you try. I provided some information to hopefully enlighten those who actually take the time to consider it: Look at the sales of RAV4 hybrid and Corolla hybrid for some perspective. Toyota simply sells them with a brief mention that a hybrid model is also available. The subtle approach is working well too, just enough to point out there's another choice offered. The meaning & reputation of "hybrid" from Toyota is so well established, the idea of inducing fear or uncertainty doesn't hold much... if any... merit anymore. It's become so ubiquitous, Toyota will be able to quietly phaseout their traditional models without disruption to their true customers... dealers who stock & sale that inventory. In other words, look beyond the misconceptions fading away, toward the plan to get the entire fleet electrified in some manner. Hybrids like RAV4 and Corolla are key to making that happen. Reaching mainstream consumers is far more difficult than the early-adopter (tax-credit dependent) market most are still focusing on.
Toyota vs Tesla. The mighty GM has fallen so fast,
it's like dieselgate was to VW. All of sudden, no one cares what
happens to GM. It will be interesting to see what attention Ford gets
in the meantime, since they won't have anything to actually purchase for
awhile. Their new offerings are 2020 models. Toyota on the other
hand is aggressively working to get their hybrid fleet in place. I
rarely mention Avalon hybrid & Highlander hybrid or any of the Lexus
hybrids. Already having them in place means focus on the premiere 5
offerings is realistic. That long-term goal of offering the choice
across their product-line is progressing well. That schedule played
out nicely. So, it should be undeniable Toyota carefully plans out
their moves well in advance. That's a fantastic example of preparing
the stage for significant change. Anywho, there are some well known
antagonists who strongly disagree... which made the topic of Toyota verses
Tesla an irresistible draw. I posted the following right away, quite
curious how it will be responded to:
Comparing Toyota to Tesla doesn't really tell us much. One is a well funded start-up that made the tax-credit opportunity an impressive means of gaining an audience. The other is a legacy seller required to take a dramatically different path & timeline to get to the same destination. Think about how an entire fleet can be converted, offering a wide range of choices.
Comparing Toyota to GM is far more telling and clearly the constructive means of judging that market they share. Toyota watched GM squander their tax-credits, wasting precious opportunity in conquest rather than focusing on their own customers. That resulted in a disastrous dependency on government subsidy. Volt died as a result without a successor established.
It simply makes no sense for Toyota to not put a lot of effort toward diversification while they wait for the market to settle. So, that's exactly what they are doing. RAV4 hybrid, Corolla hybrid, Camry hybrid, C-HR hybrid are all well positioned for plug augmentation. Each can undergo that upgrade and still be profitable. Isn't that the point?
Doing It Right. There's a lot of rhetoric still being
stirred. Expiration of tax-credits for GM resulted in the disaster
predicted an entire decade ago. There was a dependence on subsidies to
such a degree, the technology could not survive without. And sure
enough, that's exactly what happened with Volt. That concern for "too
little, too slowly" was dead on. The situation wasn't taken
seriously. All those hostile responses, attacking the massager
relentlessly, become a collator waste. Now, it's time to finally
address the problem. Some are trying. I chimed in today with:
More Ramblings. This was a collection of thoughts I ended up posting in one of those recent discussions about PHEV: In terms of appealing to both the wallet of consumers and the inventory of dealers, much lower MSRP is key. That vital purchase-priority is how automakers will be able to reach beyond the early-adopter stage (tax-credits available) to achieve sustainable high-volume sales for a profit. Toyota has that aspect nailed. Transitioning from Prius from no plug to plug would inevitably cause a disturbance in demand. The important part is that it's happening, not the means it took to get there. Keep the goal in mind. Toyota is pushing to electrify without causing chaos for their dealers.
Ramblings About PHEV. Discussions of plug-in hybrids are rapidly growing. Despite limited availability of Prius Prime still, it's a sales leader in the category. That's getting attention of everyone. More are looking at the technology as something to co-exist with EV. That narrative from Volt enthusiasts... which is now easy to see as a damage-control effort... was that PHEV was only a bridge to be abandoned as quickly as possible. It's the their way of explaining GM losses. So much was gambled upon a niche offering somehow becoming a strong seller. It never made any sense. Although that helped to prove the technology viable, the approach itself was terrible. More finally see that. It's a bittersweet reality though. Hope was put upon cost falling far faster than it actually did. Hope was also put on the belief that an automaker staunchly endorsing SUV growth would somehow embrace a compact hatchback without sacrificing either of their premiere sport cars.... Camaro or Corvette. It never made any sense. Volt was doomed from the start... hence "vaporware" concerns. That lack of desire to truly commit made the lofty goals difficult to accept. So now, after all that time wasted and so much intentional diversion, we are finally getting so proper attention. Phew! That was a painful journey.
Hybrids. Speaking of denial, this particular comment caught my eye: "I can't see any way but down for Toyota sales if they carry on like this." It's that one-size-fits-all mentality having transform to a narrative passed along so well, most have completely lost perspective. The technology used for hybrids has become so well proven, it is dismissed as obsolete. That's an interesting place to be when you realize that's confirmation of having arrived at a mature status. It works well... so well, it isn't given any thought anymore. That's great! The advance of combustion engines reaching that point took how long? Remember how unreliable they were in your youth? Look at how that approach become so well accepted, we think nothing of using the technology. It's everywhere and works remarkably well. That's exactly where Toyota strived to get hybrids. Unfortunately, the rest of the industry wasn't able get to the same point... hence the absence of royalties now. The lifting of that aspect of a patent means opportunity for those interested. Not everyone will want to embrace that level of diversity though. Simply offering Traditional and EV choices may be a logistical challenge maxing out their resources. The idea of hybrid or plug-in hybrid models added to the mix is simply too much for those unable to take on that much variety... so, they dismiss it as realistic. That presents serious challenge for legacy adaptation to a world necessitating change. Taking a major step all at once means taking on a whole lot of risk, something automakers will find very difficult for their dealers to accept. That's a very real problem. Seeing hybrids bridge the gap was a realistic solution many automakers decided to avoid. Not embracing the obvious next step could have serious consequences. How will they address the fear? I pointed out the situation by asking a loaded question: The one-solution-only narrative from those afraid to address diversity is falling apart. Show us proof that people beyond the group-think here actually care. It simply makes no sense to not offer a variety of choices. When you see a truck commercial, do you really believe that automaker is sending a message that is all they care about?
Denial. Sure enough, someone stated exactly what I had just blogged: "I still can't believe that GM has had this technology for a DECADE and is going to let Ford beat them to market? Crazy." I knew that would happened, but wondered how long it would take. Turns out, things can happen very fast. All those claims of leadership have fallen apart and the dogs barking suddenly gone. That vanish effect is remarkable. When trying to be constructive, you get attacked relentlessly from those blinded by hope. It goes on for was seems an eternity. Day after day, the endorse a technology with questionable potential. Nothing ever happens though. You express out "too little, too slowly" concern and get attacked for your trouble. Then one day, those in deep denial just vanish. Not a single Volt enthusiast from that nasty daily blog can be found anymore. It's almost surreal. Their absence isn't the slightest bit missed though. Ford is capitalizing on that predicted outcome. Reaction to their announcements have been very well received. News like that is a very, very welcome change.
Expected Announcements. Just like Toyota, we see that Ford was waiting for GM to fall before making any type of statement. It makes sense. Why risk getting pulled into what could be a massive wake from that sinking ship? I didn't realize the wait would be so brief for expected announcements. My anticipation was subdued, a sense of patience strengthened by the knowledge change was inevitable. The industry was an entity with a chronic impediment about to become just a really bad memory. Sure enough, it happened. Today brought about a reveal of the upcoming new hybrids we've known about for quite awhile, but never had any detail. There was only a sense that Ford was working on big change. That is indeed the case. We learned there will be an all new Escape (known as "Kuga" in Europe) which will be offered in mild, full, and plug-in hybrid models. That's exciting news. The plug-in battery-pack is expected to deliver 50 km (31 miles) of EV range from it's 14.4 kWh capacity. Not much else was revealed, though the addition of charge-mode was nice to hear about. Ford is finally making its move... or at least announcing production intentions. It's far more than the nothing we have heard from GM. To think, the technology in Volt could have been rolled out years ago to Equinox or Trax. Instead, there was just a lot of barking. Ugh.