President Obama has averted the Bush-Cheney depression, and given the US auto industry a fighting chance. Needless to say, that isn’t the narrative either conservatives or the status quo media want to push right now.
But it’s hard to attack the auto industry directly, especially since it is doing much better than anyone could have expected given overall economic conditions. And so we have that bastion of the status quo media, the Politico, giving Rush Limbaugh a whole story on his “Obama Motors” spiel and nonsense like this, “Limbaugh said the Volt, as well as other hybrid automobiles “” such as the Toyota Prius, which sells for roughly $30,000 “” are nothing more than an expensive way to promote the environmentalist agenda.”
In fact, plug-in hybrids are not merely a core climate solution, but electricity is the only alternative fuel that can lead to energy independence. The world’s top energy economist from the traditionally staid and conservative International Energy Agency warned last year of impending peak oil: “We have to leave oil before oil leaves us.” It is PHEV and EV — or bust!
And so the only hope for the US auto industry in the medium term and beyond is more fuel-efficient cars, which, thankfully, the administration understands (see “White House rolls out details of fuel economy, emissions standard “” The biggest step the U.S. government has ever taken to cut CO2“).
But you’d never know that from the Politico or Limbaugh. Indeed, Limbaugh wants this Administration to fail so badly that, the Politico notes, he’s willing to do his part to help GM fail:
Limbaugh told listeners that his radio program last year canceled an advertising campaign with General Motors because he “knew this was coming.”
Good for you, Rush. Hey, why not just discourage companies from hiring people, since that would only help Obama in the end.
But Limbaugh is hardly the only voice criticizing the Volt.
Edward Niedermeyer, the editor of the Web site The Truth About Cars, was given a whole op-ed in the NYT to rail against “G.M.’s Electric Lemon,” which aside from its many other non-virtues (see below), absurdly suggests the fate of the whole company rests on this one car: “the future of General Motors (and the $50 billion taxpayer investment in it) now depends on a vehicle that costs $41,000 but offers the performance and interior space of a $15,000 economy car.” Not. And he ends by saying, “If G.M. were honest, it would market the car as a personal donation for, and vote of confidence in, the auto bailout.”
Needless to say, there is no mention of the price of gasoline, the vehicle fueling or operating cost, or the inevitable return to $4 and higher gas.
The NYT’s Green Blog notes:
Erich Merkle, an auto analyst and president of Autoconomy, said that environmentally motivated consumers “should have no problem with that kind of upcharge “” it’s insignificant over and above the cost of a Chevrolet Cruze if you think it’s helping keep our planet clean.”
… [David Champion, director of automobile testing for Consumer Reports] said that G.M. had built the Volt around a selling price of about $40,000. “At that price, will they recoup their considerable development costs in the near future? No. But are they going to sell it at a price that pays back what it costs to make each car plus some of those development costs? Yes.”
Miss Electric takes on the flawed analysis more fully in her post, “Chevy Volt: Sweetly Priced for Many Americans, Not for Poor Journalists“:
The Chevy Volt’s long-awaited price tag was finally unveiled this week – $33,500 to purchase (after the $7500 federal tax credit) or $350/month to lease (with $2500 down). Despite what underpaid journalists have reported this week in regards to the Volt being “too expensive,” this is a sweet price for many Americans.The main reason why the media is wrong when it comes to characterizing the Volt price is their reference of comparison. According to Edmunds.com, other sedans in that price range do not come close to offering any of the features or efficiency that the Volt has to offer. Sedans in the $35-$40,000 price range include base models of the 2010 Buick Lucerne, 2010 Cadillac CTS, 2010 Acura TL or TSX, or the 2010 BMW 3 Series. Typical gas mileage of these models is between 18 and 25 mpg.The Chevy Volt, by comparison, has a much lower overall total cost of ownership as a result of its 40-mile all-electric range and gas-sipping extended range mode. It also comes standard with a new energy-efficient Bose sound system and five years of OnStar service free-of-charge. For consumers in in the market for a hyper-efficient, stylish sedan with a rockin sound system and the most technologically advanced propulsion system in the world, they cannot go wrong with $33,500 sticker price.
Another faulty Volt comparison is with the Nissan Leaf. While the Nissan Leaf is priced at $25,280 (after the federal tax rebate), they belong to two different vehicle categories with distinct electric drive systems. They will have an entirely different consumer base altogether. For those looking for an economy urban commuter car, similar to a Honda Fit or a Nissan Sentra, the Leaf would be an ideal vehicle with its 100-mile all-electric range. Any respectable journalist would not compare the price of an urban commuter car with that of a relatively luxurious sedan”¦so the Leaf vs. Volt price debate is completely irrelevant.
To better communicate the Volt value to the public, it would be highly advantageous to spoon-feed this information directly to the media. For example, when justifying the 40-mile all-electric range, GM included the statistic that this is suitable for “75% of each American driver’s daily commute.” When discussing the price, it is absolutely necessary to say something about the target market for this car, their purchase power, and how they will benefit from the overall lower operating costs.
It is critical to foresee all possible media perceptions of information before it is shared. Having been present at the Chevy Volt Press Dinner at Plug-In 2010 the evening before the price was publicly released, I learned something very crucial. Journalists are excited about plug-in cars, but they are not market researchers. When not given accurate market research information, they will manufacture it. This is dangerous, since we know that the media plays a key role in shaping public perception.
GM and the Chevy Volt team have worked hard to create the technological masterpiece that is the Volt. So have all the other plug-in vehicle manufacturers in this space. Rather than let the media get hung up on faulty comparisons, let’s create compelling and resonant stories that communicate the real value of a plug-in future.
For a good discussion of how the Volt shapes up as a car, Paul Scott, consultant for electric vehicles and renewable energy industries, has a post, “Chevy VOLT: Prius Killer!”
For another take on the car, see Slate‘s “The Volt Jolt; Electric cars like Chevy’s new Volt are too expensive today, but they won’t be for long.” See also TPM’s, “The Chevy Volt: Now For The Good News.”
Interestingly, the ill-informed status quo media missed a chance to point out what I consider to be the biggest actual flaw in the Volt design. As I’ve said many times, a 40-mile all-electric range (AER) is probably too much. The optimal design is a car with 20 mile AER — or less (see “CMU study suggests GM has wildly oversized the batteries in the Chevy Volt plug-in hybrid“).
So GM probably could have cut the battery size in half and maybe lopped $5000 to $7000 off the sticker price — and ultimately as much as $10,000 as batteries (and experience with the technology) improves.
I have little doubt that over the next several years as the price of gasoline goes up and the price of batteries goes down, that many companies will be successful with plugs-ins and pure EVs. GM may even be one of them. I suspect, however, they are at greater risk from a competitor like Toyota [including China] with a plug-in that has a much lower AER than they are from there being insufficient consumer interest in cars that can run on very little gasoline.