In Marketing Volt, GM Uses "It's a Real Car" Defense, Potentially Hurting Rest of Plug-in Industry

· · 4 years ago

The comparison is inevitable: Nissan LEAF versus Chevrolet Volt. As the only two mass market plug-in cars available for the first two years of the coming global wave of plug-in releases, the companies have found themselves locked in what seems to be a rather reluctant marketing battle—waging a delicate war of words as they try to woo customers.

But has GM gone too far with their most recent claims that, compared to the competition, the Volt is a "real car"—as Joel Ewanick, GM’s new vice president for North American marketing said at a Volt reception prior to Plugin 2010? By making those claims, and essentially saying that a pure battery electric is not a real car, is GM shooting the whole plug-in movement in the feet?

At this point the two companies have certainly come to parity on many items. We now know that you can lease both cars for virtually the same price and terms ($350 per month for three years), and they will come with the same battery warranty (8 years/100,000 miles). But even given the parity on these issues there is one glaring difference that GM is trying very hard to play down: the Volt's base retail price, at $41,000, is roughly $8,000 more than the Nissan LEAF's $32,780.

A logical initial reaction to the huge price differential is that GM essentially thinks the extended range capability of the Volt is worth $8,000, but when I asked Tony Posawatz, GM's Vehicle Line Director for the Volt, about that at a dinner prior to Plugin 2010, he said that wasn't the case. According to Posawatz, the Volt offers loads of other upgraded features and is a larger vehicle with more cargo space than the LEAF, so the $8,000 difference is about more than just the extended range capability.

But the LEAF also comes with most of the standard "upgraded" features that the Volt does, and, arguably is a more practical car for cargo and passenger space. The Volt still has all the emissions equipment under the car and GM had to get creative with where to place the battery, hence it fills up the spot between the two rear seats, making the Volt a four-seat-only car. The LEAF has ample room for four large adults and could fit 5 in a pinch, or two adults and three kids easily. Also, the rear seats of the LEAF provide plenty of head and legroom for tall people, whereas the Volt's rear headroom, although it's a larger car, is not as good.

So given the above realities facing consumers, it seems GM knows they've got a fight on their hands—because $8,000 is a pretty penny to pay for what essentially amounts to an onboard engine and generator combo. As a result the marketing message coming from GM has become clear: our car can do everything you're used to doing with the car you have now and all the other plug-in competition (just Nissan for now) have cars that can't and, therefore, aren't real cars. To GM, this appears to be the only marketing message they've come up with to justify the $8,000 difference.

But it just doesn't sit right with those of us that think all plug-in vehicles are equally as "real." In fact, with a marketing message like that coming out of one of the largest auto manufacturers on the planet, it risks doing harm to the whole lot of pure battery electrics. Having driven the Nissan LEAF twice now, I can assure you it is a real car. It may not be able be the Swiss army knife that you expect your combustion engined car to be, but in the end no car is going to be for everyone. For instance, let's say I'm a farmer. I drive a pickup and no other vehicle will do what I need it to do, so I don't buy a Camaro. Does that mean the Camaro isn't a real car? No, clearly not.

So, has GM missed the mark on this marketing message? Is it a strategy of short term gain but long term harm... even to GM? As of this point, GM has started to build the news up about how they are also working on battery electric vehicles, so in the future they too will be hurt by selling the image that pure battery electrics aren't real cars. The ultimate strategy is unclear, but as of now it's a complete head scratcher to me. Nissan has always stayed away from directly commenting on their competition in this way... and in the brave new world of plug-in vehicles that certainly now seems like the wiser strategy.

Comments

· · 4 years ago

Great article, Nick. It is pretty sad to see GM stooping to this. Of course GM also said not too long ago that "real Americans" don't want EVs or hybrids, and here we are. What we really want for green transportation (according to press releases from a few years back) is Fuel Cell cars. Yet here we have the gasoline/electric Volt. It does appear that to GM "real car" means "gasoline car" doesn't it?

Marketing is what it is. Sucks that it has to be this way.

· · 4 years ago

I have noticed that also and I cringe when I hear them say it. It's obviously meant to disparage the LEAF by comparison and send out the message that you can rely on the Volt, but not the LEAF.

· · 4 years ago

Also remember that the 100+ mile rage of the EV1 was "not enough range for American drivers," according to GM during the dismantling of the program. Yet the Volt's 40 mile EV range means that "most people will never burn gasoline in the Volt." Scratch your head on that one!

Clearly the EV range of the Volt is going to make more American drivers happy than the EV range of the Leaf. And the Volt has the gasoline generator cushion to assure more "real ness" even though it will just be extra weight (uh... and cost, and hassle) for most drivers.

Bahh. Marketing.

· · 4 years ago

Too bad we are all shareholders in Government Motors. In my opinion, that was one bailout we didn't need. At this point, while I hope for success for both the Volt and the LEAF, I think that Nissan's simpler, battery-only approach will do better in the market. Paying an extra $8,000+ and losing one seat just wouldn't cut it for my family.

· · 4 years ago

Abasile:
But you get a "real car" for your extra 8k!

· · 4 years ago

Nick,
I agree with you -- as I usually do. I don't know if you ever read my stuff, but I wrote a column on the same issue urging Volt and LEAF fans to stop jabbing at one another and recognize that they need to be on the same, pro-plug-in team. It's at -->
http://solarchargeddriving.com/editors-blog/on-evs-a-phevs/410-hey-leaf-and-volt-fans-were-on-the-same-team-.html

Here's the full quote from Ewanick, in case some of you haven't seen the whole thing (from the NYT blog):

“It’s a real car — it just happens to be electric,” Joel Ewanick, G.M.’s vice president for North America marketing, said at a dinner Monday night at the Plug-In 2010 conference in San Jose, Calif. “This car is designed for the majority of Americans. This is a car that the average person can drive on a daily basis. It’s not something that’s a unique little niche vehicle.”

· Samie (not verified) · 4 years ago

The extra components in the Volt, compared to the Leaf naturally adds more costs when comparing both vehicles. Toyota will have a greater impact on the plug-in market than GM. Why? If they follow Nissan in producing a pure EV Prius the plug-in market will accelerate however if Toyota follows GM in producing an extended range or traditional plug-in hybrid, the market will be slower to evolve, speaking in the short-term.

What I want to see is if we can get 200mi per charge out of the next gen. Leaf & if we have the infrastructure to charge up the battery in less than 5 minutes (eg. for road trips). Also where will the Leaf fit in price say if they can reduce the price to compete with the Ford Hybrid Fusion or even the current Prius that is without the $7,500 subsidy.

Does history repeat itself? I think so, and maybe the new GM is not so new as it repeats some of the same conservative hybrid strategies/PR blunders from the past.

· Anonymous (not verified) · 4 years ago

Enough about the LEAF and the VOLT - Ford has the right approach with a suite of electrified vehicles.

· George Parrott (not verified) · 4 years ago

First, I think you meant to write "$350 per month lease" and not "$250" as in your core post...Second, yes the Volt has the additional technology of the gas engine, BUT it has much LESS in terms of expensive battery pack, so the actual costs appear to be closer to EQUAL. GM is once again, obfuscating the situation to try and sell us LESS FOR MORE in many ways...

Third, another BIG potential turn-off in Volt buyer contact is likely to be Chevrolet dealer sales practice. I have now contacted 3-4 regional dealers in the Sacramento area and ALL are not actually yet taking orders with any CONFIRMED pricing (July 30) since they are waiting to set "market adjustment" pricing or in other words "markup before sales pricing." YIKES ! I am hearing mumbles from a couple of the dealers of up to $3500 "adjustment" and even as much as $10k !!!! I don't know about others, but I will WALK AWAY from anything other than at most MSRP, even on this technology, since with options the base price seems to be approaching $43,500 and GM's certification process has caused the VOLT to miss any of the California incentive rebate $$$$ which the LEAF does qualify for. I was/am trying to get both the Volt and the Leaf in my garage by the end of the year to replace a Prius and a Camry Hybrid, but I will NOT pay a penny markup on the Volt.

· Steven (not verified) · 4 years ago

The competition-bashing was 'unnecessary'. Nissan has made what in my opinion are at least two design mistakes:
1- the custom charging station. The ability to plug in to the nearest 110 in a pinch would have gone far to remove some of the anxiety of the LEAF's electric-only mode.
2- the shortcuts (lack of?) in the battery cooling system. Having to face the possibility of shucking out large sums of money for part of a battery and do without a car every couple of years isn't an appealing prospect. I really hope Plug-in will do an in-depth analysis of the LEAF's warranty when the specifics are announced.

· · 4 years ago

@George
Thanks! Silly mistake and hasty proofreading on my way to a meeting yesterday. It's been corrected.

@Steven
While I understand your concerns, you'll be happy to know that neither of them are worth worrying about:
1-The LEAF does come (for free) with what Nissan is calling an "opportunity charging cable." This is a 25 foot cable with a regular 110V plug on one end and the standard J-1772 plug on the other. This will allow you to trickle charge the LEAF anywhere you have access to regular household outlets.
2-The battery warranty is 8 years or 100,000 miles. This addresses two concerns: 1) if the battery does conk out for some reason they'll replace or recondition it at no charge to you, 2) it indicates they are extremely confident that their lack of a cooling system will not affect the vehicle to any appreciable level during the first 8 years.

· · 4 years ago

@Christof
Thanks for the compliment! Looks like we have similar viewpoints. I was at that same dinner that the NYT blogger was at, so I didn't feel the need to quote his article b/c I have it on tape myself :)

· · 4 years ago

Nick,
Thank you very much for the good article.
I do agree with you that GM gone too far with their most recent claims that, compared to the competition, the Volt is a "real car".
Both Volt and LEAF are "real cars", Volt just has a bigger driving range.
Each car take a different niche. Each car is needed in its own way. This statement is totally uncalled for - it undermines EV movement of which Volt is the part.

I am very disappointed with this statement :( and I hope that GM will publicly apologize for it!

· Steven (not verified) · 4 years ago

Thanks for the information Nick! You should charge Nissan for disseminating stuff that ought to be in their marketing literature!

· Jerry W. Saveriano (not verified) · 4 years ago

Nick, good take on GM's bad attitude. The damage will be to GM not the EV industry. These Detroit guys are have not learned their lessons about building cars that people don't want. And now with political hacks and union bosses having greater influence things will only get worse.

Yesterday I posted comparing the Volt vs the LEAF approaches to next gen cars. Below are a couple of excerpts the full article: http://sandacom.wordpress.com/

What a Re-Volting Development!
First off, let me make a a disclaimer. I was one of the first people to reserve a place to buy a Nissan LEAF. I think the car is solid, well designed and a good value, when the Fed/State rebates are included on the car and home charging station. See a number of posts, including a video, we’ve done here at Innovational Musings on the LEAF.

I grew-up a GM car fan in the 50s & 60s, one of my first cars was a used 1961 powder blue Impala convertible, very sweet. Much later I got to work with a number of the U.S. automakers in the 1980s as a robotics consultant. I was dismayed by the arrogance displayed by their people on walnut row and the factory floor. This was a period when they were having their clocks cleaned by aggressive Japanese competitors...

The Volt has a significant 240 mile range advantage over the LEAF and could be used for a single car family. But the Volt is a hybrid and more complex than the LEAF and has a smaller interior. I also suspect that all the chaos at GM is going to make it tough for them to deliver this car on time without inherent new tech problems. I like Nissan’s reasonable approach to the development and deployment of the LEAF and believe they have a good chance to deliver a reliable car that lives up to its promise.

I also think that Brad had good points about GM's dubious lease plans for the Volt.
One of the ways that GM hopes to overcome the high cost of the Volt is with “creative subprime leasing options” (Have we no memory?). CNN Money reports. “General Motors is paying $3.5 billion in cash to buy subprime auto lender AmeriCredit, a move that will once again give the automaker its own finance arm. It is the first major acquisition for GM since it emerged from bankruptcy a year ago with the help of a $50 billion bailout by U.S. taxpayers.”

· TrasKY (not verified) · 4 years ago

God, lighten up, ladies. It's a marketing campaign. GM is trying to sell some cars. If they sell Volts then the EV industry will be helped. Plenty of people will have the ability to test drive all available vehicles and make up their own minds about which plug-in method works best for them.

· TrasKY (not verified) · 4 years ago

@Jerry S.
Yeah, that's the price GM came up with. In order to compete, they set the lease price equal to that of the Leaf. They need to get these cars on the road and are going to take a loss at the beginning no matter how you look at it. If they lower the sales price, the Chevy's bottom line will suffer this year. If they lease the cars at the same rate as the Leaf, then the loss is postponed for 3 years AND will be booked as an actual loss by GMAC financing, as opposed to simply lower revenue for Chevy. Pricing the car high and leasing it low is their way of moving them out the door and handling the financials. Plenty of people will prefer the Volt's EREV approach and they will sell cars. I know all the EV fan boys at this site want to rag on US auto makers as much as possible but try and maintain some semblance of objectivity and live in a reality based community.

By the way, the problem with sub-prime mortgages wasn't exactly the loans themselves, although they some individuals did get in over their heads, but the bundling of those loans into derivatives and credit default swaps. As long as GM isn't leasing cars to folks that can't afford them and then bundling those lease into complicated and opaque financial products I think the country will be OK. People without 800 credit scores still need cars and they shouldn't all have to pay cash.

· · 4 years ago

TrasKY,

While your viewpoints are welcome, there's no need to get offensive.

· TrasKY (not verified) · 4 years ago

@ Nick. Sorry. What was it? Saying "ladies?" Sorry for the snark. It was an over-reaction to the general snark I sense about GM. I have never been a fan of GM but they are trying to remake their corporate culture and we kind of own them now and we should be rooting for them. Also, I just don't get the weight of your argument, which reminded of how upset people got whenever Hillary Clinton said anything negative about Obama during the democratic primaries. But I will try and express my opinions with more respect.

· Marco (not verified) · 4 years ago

i like the styling of the volt, wouldn't buy or lease one though.

in the end whatever new technology any manufacturer develops works as a catalyst for other manufacturers technologies.

as far as GM's claims that the volt is a "real car" as opposed to the Leaf, based on the Leaf's estimated 100 mile range, and consumer "range anxiety", i can't imagine anyone staying inside a volt for a 100+ mile trip.

i own a chevy Tracker (i know it's actually a suzuki GV) which i love 'cause it's cheap to own, easy to park, can go off road, and has turned very reliable (at least for me, 100k miles in 11 years and no major repairs other than 4th gear at 60k miles and new bushings at 80k), the seats aren't very comfortable, but this doesn't matter much on the daily 3-4 mile drive from home to work then back, or even on the 45 mile drives on weekends, now, staying in that thing, which is about as wide inside, and has about as much legroom (but tons more headroom) as the Volt, for anything over 60 miles is the equivalent of walking into a moshpit at a slayer concert just days after undergoing kidney surgery.

the Leaf on the other hand, is roughly the size of the Versa, slightly larger i believe, so a 60 to 100 mile ride wouldn't be as bad as it would probably be in the Volt.

both cars will probably stay in urban areas, doing under 60 mile runs at a time, and will be, as almost everybody has pointed out, more fashion statements than cost savings for most people.

i'm glad to see both global companies gambling on new technologies, i think if GM put that much trust in their "electric-first" vehicle, they couldda gone with an even smaller and more efficient ICE (something from GM-Daewoo) to power the generator. I see Nissan as closer to coming up with smaller/lighter/less expensive batteries in the next few years, than GM, which makes the Leaf a better option in my opinion.

· DanDetroit (not verified) · 4 years ago

The Volt actually is a "real" car compared to the Leaf, which is hardly more than a toy:
-The Volt is a brand new, refined, high quality vehicle that can be driven cross country simply by refilling the gas tank, while it will still accomodate 78% of American's daily commute on inexpensive plug-in electric power.
-The Leaf is an existing car converted to electric power that can not be driven more than 49 miles from home and will require 8 hours to recharge after only 100 miles maximum on its best day.

A few folks may be content with the Leaf's hard constraint of 100 miles before an 8 hour recharge is necessary, but anyone who would EVER like to drive to a neighboring city would be out of luck!

This fundamental advantage of the Volt's range extending gas engine will make the Leaf an also ran in the electric car race.

· DanDetroit (not verified) · 4 years ago

btw- if you accept the rigors of riding in a Chevy Tracker, you will be elated at the comfort and refinement of the Volt!

· · 4 years ago

@Dan Detroit -

You are implying that for the past ten years, my main automobile has been nothing more than a toy. Your range fears are tired indeed. I quite often drive 90-100 miles from home in my "100-mile" EV. We have over 2,000 public chargers in CA right now, and untold thousands more are planned for the coming years. I drive to neighboring towns constantly without a worry.

Feel free to state your opinion, and try to avoid making them sound like fact until you have some experience (or any data whatsoever) to back it up. Thanks.

- Darell
EVnut.com

· · 4 years ago

Darell, It shouldn't surprise you of all people. You have been reading uninformed and misguided comments like this longer than I have. It always seems that the people that know the least about a subject that are the most vocal about it. How many times have you read a comment from someone that has never driven much less owned an EV write about how they are useless and how you can't even drive around the block without the fear of being left stranded.

The overwhelming majority of people that have owned or leased an EV will be quick to point out how the range almost never effects their decision to go to a specific destination. I live in North Jersey and I've taken my 100 mile EV to Pennsylvania, New York City, New York State & Connecticut on separate occasions without the need to recharge during the trip. So comments like "but anyone who would EVER like to drive to a neighboring city would be out of luck!" are just hilarious to me and only further proves how little the writer really knows. I also love when I read Volt supporters that are bashing the LEAF write how you can drive the Volt cross country. True, and that's great for someone that has the need to drive from NY to CA, but I'm taking a plane if I need to go to the left coast so cross country driving really doesn't factor into the equation for me or anyone that I know for that matter. A 100 mile BEV won't work for everyone and the Volt is a great hybrid that will accommodate someone that wants to drive electric but want's the flexibility of driving further on gasoline. However to make statements that say a 100 mile EV is a useless vehicle only proves that the authors comments are really the only useless thing being discussed.

· · 4 years ago

I'll step in to defend DanDetroit but not his information.
If DanDetroit is truly from Detroit (something his opinions support), then he's been bombarded for the past 2 decades about how terrible EVs are and how nobody but Left Coast liberals have any use for them. He has never probably been in or even seen a real EV so he has nothing to go on except the stories from the auto manufacturers and their press. He also likely has a relatively parochial opinion in favor of the American auto manufacturers which run yet have ruined his city and state.
Now, it seems to me that the good, passionate folks like DanDetroit should spend a little more of their free time helping to strengthening the US auto industry and promoting their doing what is right. They should spend less of their time blindly bashing anything that contradicts Detroit's group-think. I think that this would probably serve him and the rest of the world better in the long run.
hmm, maybe I didn't defend him too well but I really did try.

· · 4 years ago

Oh, there's no surprise here! As this forum grows, we'll see more and more ill-informed comments like this, I'm certain. I just couldn't let it go without some sort of response.

· · 4 years ago

Big thanks to Tom M, ex-EV1 driver, and Darell! You guys are the ones with real experience. Thanks for sharing your first-hand knowledge, and also for keeping this forum respectful and cordial--even when others don't share your view. Cheers.

· · 4 years ago

I agree ! I'm New to this subject,but I'm trying to do research,from lots of sources.I have no base to make an educated guess to say one is better than the rest.I enjoy the research so I'am an educated consumer when I make a purchase,so that I'm Happy with it in the future,as all should be.My background is varied,
Aviation,Military,Oil Industry(The one everyone loves to hate)but I too believe in the Tech.,and look forward
to be indep. from foreign sources of Oil ., and one day No Hydrocarbon use.I guess I know a little about a lot of subjects ( and learning More ) but no so called expert in any !

· John (not verified) · 1 year ago

DanDetroit and DarrellDD: You are both correct.

Dan was right by saying "The Volt is a "real car" and the leaf is not."

DarrellDD was right by saying "The Leaf is a "real car" to him.

I live in the midwest where I often take trips to Chicago and St. Louis. Both are roughly 275 miles away. To me the leaf is not a "real car" because I CAN NOT commute to a neighboring large city. I can drive it around town and other than that it's totally useless. Around here a leaf is useless for anything more than a status symbol.

In the West coast where they have charging stations and the only way to tell when you've left town is by a sign, the leaf is a great "real car".. Same goes for the N.E. Coast where large citys are not far apart.

Leaf: Real Car???? Depends on where you live.

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