Since late April, headlines in the Automotive industry have been buzzing about electric car manufacturers. In two weeks time, we have learned more about Federal subsidies, price incentives and corporate strategies than 99 years of fossil burners could ever have taught us.
REDUCING AND RE-VOLTING
At a conference last week in California, Dan Akerson, CEO of General Motors, revealed that the company’s goal was to lop $7- to $10-grand off the price of Chevy’s next generation Volt —before subsidies—less than the current car’s base price. A company dropping the price of a car is shocking. Moreover, dropping the price of a car with new technology, especially after halting production for a few months, leaves me flabbergasted. GM is probably hedging its bets so that won’t happen again. If that statement wasn’t surprising enough, his next one will floor you: “…it will be profitable…” This seems far-fetched in light of the fact that the Volt hasn’t been profitable thus far.
“GM has sold approximately 26,500 Volts so far, and we’re losing money on every one of them,” Akerson said, adding that the cost reductions will be made without “de-contenting” the vehicle. The base price of the 2013 Volt is $39,995; reducing that by $10,000 would put the Volt right in line with competitors like the Nissan Leaf ($32,670), the Toyota Prius plug-in hybrid ($32,795), and the Ford C-Max Energi ($33,745).
GM has been stingy with the details on the next-gen Volt, which we understand will arrive within a year or 18 months, but Akerson did indicate it would be lighter than the current model. Currently, the battery pack alone accounts for about 400 pounds of the Volt’s 3755-pound weight.
Despite these circus barker announcements, it is refreshing to hear that GM has a pretty clear direction for the Volt. GM has been stingy with the details on the next-gen Volt, but the next-generation car, according to Akerson, will be competitively priced.
C-O-D-A IS NOW D.O.A
In other news, CODA, the company that produced what looked like 1992 Toyotas and sold them as 2013 electric cars, filed for bankruptcy on May 1st in order to make itself attractive for sale, which should be a done deal in the next month to 45 days. CODA failed because they didn’t have a good product to accompany their good idea. If Hyundai can have its entry level models offer heated rear seats and bluetooth connectivity wrapped in attractive styling, why would I buy a car that claims new technology but with a design that hearkens back to the George H. Bush era? My deepest sympathies go out to the 100 or so people who purchased one. Maybe the employees can go to Tesla or Detroit Electric with their newly refreshed resumes.
…BUT THERE IS LIFE ELSEWHERE
Speaking of Detroit Electric, seemingly out of the blue (but really a revived nameplate) announced itself in its Detroit headquarters in March, showed the car April 3 to VIPs and some journalists, and said the car will be in production and available in August. Detroit Electric also announced that it will partner with Chinese automaker Geely to co-develop electric cars for China. This deal will help the reborn electric car maker add an experienced partner to its portfolio to help it develop affordable electric car solutions for the world’s largest new car market. Things are busy around the plant these days and drive trains were being assembled as recent as last week.
YOU CAN’T ALWAYS PICK A WINNER
Fisker, a name synonymous with failure in the electric car market, is named here simply because we need to defend them. The company’s implosion should not be seen as an indictment on electric cars but a sign that the U.S. Government is not good at betting on winners in the private sector.
The purpose of the Green Energy Loans was to help industry save the environment. Instead, it became a way to fund chic trinkets for the wealthy 1-percent.
TESLA TRIMMING PRICES?
While we’re talking about that 1-percent, Elon Musk said last week that Tesla Motors will make the Model S resale value guarantee the highest of any premium sedan brand on the market. Tesla also announced that it will provide longer-term loans that considerably reduce monthly payments. Private buyers of the Model S will now pay a monthly rate of $580 and take only gasoline costs into account when calculating deductions. Those who plan to use the car for business purposes can now do so if 70-percent of the miles are driven for business purposes rather than the former rate of 80%. That depreciation benefit further reduces the effective monthly cost of owning a Model S down to $350. Finally, for those who are too impatient to wait for their Tesla to be ordered, according to the company’s website, there are display cars and top-of-the-line 85-kWh 2013 Model S promotional versions available for immediate delivery.
THE STRONGEST LEAF
Clear off the mantle, the Nissan LEAF pure electric vehicle is bringing home another trophy. The Insurance Institute for Highway Safety (IIHS) gave the LEAF its “Top Safety Pick” designation, recognizing the vehicle for excellent performance in four passenger safety tests. In those tests, the LEAF achieved the Institute’s highest rating of “Good” in front, side, rollover and rear crash tests. Nissan LEAF joins Nissan Altima and Infiniti M37/M56 on the list of 2013 Top Safety Picks.
In less than two weeks, the automotive world has been electrified with news from the plug-and-play car market. Okay, now unplug your Prius and let’s get back to some oil burners.
What do you think of the recent news and advancements in the electric car industry?
