GM slashes price of Chevrolet Volt to boost stalling sales

[robertlane]

GM slashes price of Chevrolet Volt to boost stalling sales
 
Brent Snavely / Free Press

 

 
Volt sales declined 4.3% in May to 1,607 while industry sales increased 8.2%. Through the first five months of this year, Volt trails both the much more expensive Tesla Model S and the smaller, less-expensive Nissan Leaf.

At one time, GM expected to be building between 60,000 and 100,000 Volts annually, but with sales this year through May of 7,157, that goal has been reassessed.

 

READ MORE HERE

Edited June 11, 2013 at 12:50 AM by robertlane

[jsamp]

Any bets on whether Ford will follow suit with the Fusion or C-Max energi?  Those are selling at a far lower rate than the Volts. (3,221 combined this year through May)

[Kiros]

Any bets on whether Ford will follow suit with the Fusion or C-Max energi?  Those are selling at a far lower rate than the Volts. (3,221 combined this year through May)

 

The Fusion Energi didn't start hitting dealerships in any real numbers until March/April I believe. 

[jsamp]

The Fusion Energi didn't start hitting dealerships in any real numbers until March/April I believe. 

 

True, however the C-Max has been out since October, and they each seem to be leveling off at ~450 units per month.  If you've got one of the best offerings out there, you should be selling more, assuming you are priced right.

[timf]

I don't think Ford is really looking to sell the Energi models in huge volumes.  Unlike the Volt which is the only use for the platform (at least until the ELR is available), the Energi is merely an extension of Ford's existing hybrid technology.  It's provided as an option for people who want even better fuel economy or reduced reliance on gasoline, plus it gives Ford additional credit in states with strict emission requirements like California.  The cost of development was likely a fraction of what Voltec cost, and I have to believe they are priced so Ford is not losing money on them like GM does with the Volt.  That's part of the reason why there are some tradeoffs such as a smaller battery capacity and intrusions on cargo space.  Ford seems committed to continued development of electrified vehicles, and as more people come to understand the technology and it is further refined, take rates will increase without the need for huge incentives.

[jsamp]

Good points Tim, however they ARE losing $ on each if they don't sell enough.  They spent all that money tooling up the battery, custom trunk parts, the charging port, etc.  You have to sell enough of them to ammortize the tooling, as well as get the part price down on volume.  That's what Chevy was getting hounded for on the Volt early on.  They have sold enough now that the ammortization is fading away and they are not "losing" on each sale.  Ford id going to have to sell a bunch more to reach that point.

[Energized]

Any bets on whether Ford will follow suit with the Fusion or C-Max energi?  Those are selling at a far lower rate than the Volts. (3,221 combined this year through May)

 

No, I don't think Ford will follow GM's path because they don't have to.  Ford isn't backed into a corner like GM is with the Volt.  

 

GM badly misjudged sales of the Volt and built an assembly plan and supply chain based on those unrealistic volumes.   As a result GM is committed to suppliers to buy a minimum level of unique hardware and batteries, despite what the natural sales level of the Volt is.   GM's production rate for the Volt is and always has been greater than the sales level for the vehicle. 

 

GM is basically 'forced' by the economics of things to build a minimum number of Volts.  That minimum number is higher than what the market demands, so GM is forced to offer huge discounts to move the product. 

 

This is Economics 101 and the same scenario that drove GM into bankruptcy with a taxpayer bailout and government ownership.

[Energized]

Good points Tim, however they ARE losing $ on each if they don't sell enough.  They spent all that money tooling up the battery, custom trunk parts, the charging port, etc.  You have to sell enough of them to ammortize the tooling, as well as get the part price down on volume.  That's what Chevy was getting hounded for on the Volt early on.  They have sold enough now that the ammortization is fading away and they are not "losing" on each sale.  Ford id going to have to sell a bunch more to reach that point.

 

What Ford did with the Energi is a scaled up Fusion Hybrid.  The Fusion Energi shares the basic architecture and much of the major hardware like the eCVT with the Hybrid Fusion, C-Max, and Lincoln MKZ hybrid.  The Energi battery is a basically a larger version of the hybrid battery.  The 3.3KW charger and fender plug are common items in the EV world, the wall chargepoint is nothing unique.

 

By spreading these costs across multiple model lines, and by building these models on the same production line as the gasoline models,  Ford is getting the scale they need to keep the costs reasonable.  These are two major failings on GM's part with respect to the Volt.

 

If you compare the combined sales of the Fusion Energi, Fusion Hybrid, C-Max, C-Max Energi, and Lincoln MKZ Hybrid, and compare it to the Volt, you can see how the economics are clearly in Ford's favor.

[jeff_h]

<removed> - dupe post of the above

Edited June 29, 2013 at 05:02 PM by jeff_h

[jsamp]

No doubt Ford did it much smarter than GM when it comes to plug-in strategy.  They still need to sell enough to justify the added expense of the Plug-in development and tooling, and no, those are not insignificant.  You don't just "put in a larger battery".  You have to build molds and other tooling for the different parts, in addition to the development costs (Ford spent over 5 years developing their plug-in technology).

[jsamp]

Lo and behold, Ford was offering up to $3500 on Energi before July 1 and now it is $3000.  While not as much of a discount as GM's $4000 on the Volt, it is pretty close.

[jeff_h]

Lo and behold, Ford was offering up to $3500 on Energi before July 1 and now it is $3000.  While not as much of a discount as GM's $4000 on the Volt, it is pretty close.

 

I hadn't heard those numbers so I went to the Ford web site, yes there are good incentives for those in CA but is not everywhere, as it's just $1,000 for my zip in VA. 

 

But you're right, even though the number appear to vary by region, the heavy incentives are pretty close.

[Russael]

It's also most likely to make room for 2014's... they're doing some really good deals to move inventory out of the way for the new model year, which is already up on Ford's website.  I don't believe the reason for the incentives is for stalling sales.

 

My brother is in the market for a new car (unfortunately, I can't motivate him in to any electric anything).  He's set on a Ford Focus hatchback with nothing on it (SE model with no options).  They're doing 3k off of those right now in Michigan.

[Earthdog]

As noted earlier in a post. The big difference here is Ford did not design the Fusion to be an EV. They took an ICE and added EV and this is clearly demonstrated by choosing parallel drive systems. The issue that Chevy has is the huge expense in the RD with our (Tax Payer Dollars) because they opted for a new design completely. Chevy is clearly learning as the Spark is ICE and an EV coming based on the same model. Toyota who share the technology with Ford is what drove the decision to not create a new platform but to simply expand. 

 

EV is not going away the sales numbers growing at a steady clip of 35% over 2012. The issue is charging stations and the DOE has ramped up Blink to fulfill its contract free charging units . In the case of Georgia Blink is slated to install 500 additional commercial charging stations FREE (Equipment) by end of 2013. The DOE is certainly trying to help the chicken and egg issue of EV's. 

[Energized]

No doubt Ford did it much smarter than GM when it comes to plug-in strategy.  They still need to sell enough to justify the added expense of the Plug-in development and tooling, and no, those are not insignificant.  You don't just "put in a larger battery".  You have to build molds and other tooling for the different parts, in addition to the development costs (Ford spent over 5 years developing their plug-in technology).

 

What different parts are you referring to?

 

Ford's Plug-Ins use the same architecture as the regular Hybrids and they both share many of the same parts with the obvious difference being the battery.

 

The video linked below and this excerpt describes what I was saying, which is that Ford "is the only manufacturer – the only one out there – that actually uses the same components for the motors, the power electronics, the cables and the controllers between our hybrid and our plug-in hybrid.”

 

Using the same architecture and the same parts for both Hybrid and Plug In Hybrid models means the development costs are spread over a greater number of vehicles. Ford recently reported they're working to increase hybrid production for 2014 since demand has outstripped supply. That's a good position to be in rather than the position GM finds itself in with the Volt.

 

 

 

 

 

 

 

http://social.ford.com/our-articles/cuvs/c-max/ford-social-answers-your-questions-about-hybrid-vehicles/

 

"But with advanced batteries and new technology comes additional cost. With all of these fancy new parts and expensive electronics, how does Ford prevent sticker shock? 

 

According to Nancy, “To help make this as affordable as possible at Ford, we’re the only manufacturer – the only one out there – that actually uses the same components for the motors, the power electronics, the cables and the controllers between our hybrid and our plug-in hybrid.”

[jsamp]

What different parts are you referring to?

 

Mainly the battery, including the trunk parts that had to change to accommodate the battery.  But also the charge port (not just the plug, but the cables, door and lighting).  I was under the impression that the charge controller was different for the wall plug, but that may not be the case according to the video.

 

Yes, Ford shares the parts across the ICE, Hybrid and Plug-in versions as well as across the Fusion and C-Max platforms.  There is definitely a benefit there.

 

 

"But with advanced batteries and new technology comes additional cost. With all of these fancy new parts and expensive electronics, how does Ford prevent sticker shock? 

 

 

They didn't.  

 

Ford recently reported they're working to increase hybrid production for 2014 since demand has outstripped supply. 

 

Hybrid demand may be outstripping supply, but Energi's aren't.  390 Fusion Energi sold in June. vs 3K Hybrids and 20K ICE versions.

[Energized]

Mainly the battery, including the trunk parts that had to change to accommodate the battery.  But also the charge port (not just the plug, but the cables, door and lighting).  I was under the impression that the charge controller was different for the wall plug, but that may not be the case according to the video.

 

Yes, Ford shares the parts across the ICE, Hybrid and Plug-in versions as well as across the Fusion and C-Max platforms.  There is definitely a benefit there.

 

 

 

What trunk parts had to change?  The battery occupies space that was normally air.  Even the rear seat still folds down.

 

 

A large development cost for the SAE standard plug and connector?  That's an off the shelf item produced by suppliers. http://en.wikipedia.org/wiki/SAE_J1772

 

A large development cost for the plastic charge door?    The charge door was 'developed' 2 years earlier for the Focus BEV.

Edited July 9, 2013 at 11:51 PM by Energized

[Energized]

 

 

 

Hybrid demand may be outstripping supply, but Energi's aren't.  390 Fusion Energi sold in June. vs 3K Hybrids and 20K ICE versions.

 

The Fusion Energi is selling at a rate greater than the "10% of hybrid model" rate they were projecting.