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Last week, Holman W. Jenkins, Jr. got space in the Wall Street Journal to question "whether GM is a genius or a dolt for developing the Volt." Jenkins suggests that gas prices might drop again. If this happens, then GM can say goodbye to consumers who want the Volt, Jenkins says. A big drop in gas prices is unlikely, based on recent trends and predictions, but not impossible. Jenkins' argument is one reason that an artificial floor on fuel prices - through higher gas taxes or a set minimum on oil prices - would secure the industry's investments in green cars. Jenkins is also unimpressed by GM's willingness to lose money on the first Volts, but he does see one strategy where GM "bribe(s) consumers to drive Volts off the lot. That is, if doing so frees GM to build and sell other cars bigger and more powerful than the cars its rivals can afford to build under the CAFE rules."

In the end Jenkins doesn't answer his own question. To be fair, this chapter is far from finished and an answer can't be declared just yet. While we're still a long way from Job 1, I think it's pretty easy to answer that the real dolt move here would be to not try to create a car like the Volt.

[Source: WSJ via BusinessWeek]


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  • 18 Comments
      • 7 Years Ago
      To look at it another way:

      GM lost 38 billion last yr. People arent buying their profitable Gas Hogs anymore and have moved to the more efficient Japanese and European brands. Therefore if they lose an extra billion on the Volt for a few yrs its nothing compared the huge gaping abyss of loss they will continue to suffer as the price of oil skyrockets.
      • 7 Years Ago
      If they can make it work for the price and range that they initially claimed, they'll be geniuses.

      If they pack it up and go back to trying to sell the Tahoe, then they'll be dolts to me. I don't want a Tahoe, and I don't know many people who do.

      Powerful cars are fun -- especially for car enthusiasts... But for people who need an efficient daily-driver, then the Volt would be a wonderful solution.

      If your only criteria when buying a car is the power of the engine, then the Prius or the Volt is not for you! But enthusiasts are only a small part of the market for any necessity.
      • 7 Years Ago
      Toyota sold the Prius at a loss when it first came-out and look what it did for them. Every other car manufacturer is now trying to play "catch-up". I think GM leading the way with a series-hybrid is a definite plus. Sure, oil prices MAY go down, but what are the odds of that? Toyota took the gamble in creating the Prius and it paid-off in spades.
      • 7 Years Ago
      I agree with Tim, negativity sells. What is sad to see is that EV1 enthusiasts fault GM for removing the car from the market when they felt it didn't measure up, and then this guy and other like him, fault GM for taking the bold move to announce a plug-in concept for 2010 production. The Volt will be a game-changer and the response on sites like GM-Volt.com show the widespread support for this technology, not to mention the competitors who have announced their own versions of PHEV technology.
      • 7 Years Ago
      I absolutely agree. Of course consumer demand plays a big role in the development of the EV/alt fuels industry (and perhaps we'll see a bit of a drop in demand of McCain and Hillary keep advocating for the suspension of gas taxes - http://greenhome.huddler.com/forum/thread/289/mccain-and-hillary-suspend-the-federal-gas-tax-obama-don-t?replies=3 - yet another reason I'm against that). But in terms of the future of the car industry, market forces, and the environment....let's sure hope that the Volt doesn't die like the VW TDI Diesel hybrid.
      • 7 Years Ago
      The real dolt was that author, who doesn't seem to recognize how much people resent high and rising fuel prices, nor does he realize how cheap driving on electricity is. Even if gas were to drop back to half the current price, it would still be more than double the cost of driving electric. Even if gas was to drop way back to be competitive with electricity, there would still be plenty of customers buying the volt just to get revenge on the oil companies.

      Snowdog, I understand why you won't consider a plug-in when you don't have a place to plug in. But there are a lot of drivers who can plug in, and want to. Moreover, your figures are a bit skewed, as the price of some LiIon batteries is less than $1 per watthour, (the 53 Kwh Tesla Roadster battery pack was estimated at just over $20K) and the Volt was designed for a 16 Kwh battery pack, not 20 Kwh. Moreover, it appears the great leap forward in battery technology recently started, with ongoing research for new electrode materials that could increase energy density by up to 10 times.
      • 7 Years Ago
      I can't remember the last time the Wall Street Journal said anything remotely intelligent about the auto business. They will really go out on a limb to bash the domestic car companies. As far as I'm concerned they have lost all credibility. They do love to play both angles on hybrids. If a car company doesn't have one then it's all about how they don't care about the environment. If they do, then it becomes about the price of gas and if the car will pay itself off in gas savings. I would like to think there will be more and more people who buy this type of car for environmental and political reasons and not just paying less for gas.
      • 7 Years Ago
      It's my opinion that the author of the WSJ artice can't possibly fathom the number of people looking for a plug-in that meets the needs of the average driver. I think the Volt is a great first step, and the second step is to make the technology avalable in lower priced cars. As usual, it takes a while for new technology to work its way down. Now is the time to start.
      • 7 Years Ago
      A drastic drop in gas prices is unlikely. Although there have been some big oil field discoveries on the news lately, all of these fields require $80+-per-barrel oil to be profitable. The difficulty in accessing the oil resource is the "artificial" floor that cars like the Volt need.

      As for bribing customers to buy the Volt, GM VP Bob Lutz himself has stated that they're willing to sell it at a loss for a while for the sake of improving their image vs. Toyota.
      • 7 Years Ago

      GM is a dolt for having a lead in R&D with the EV1 and squandering it away to develop more fuel inefficient platforms. They should have used their lessons learned to address the EV1's shortcomings (short range, two-seater, high-cost charger) for a longer term solution.
      • 7 Years Ago
      the problems with business is that people who are in it and out of it don-t understand a solid and sound business model.

      If you have a sound model and strong personel then you wont have a loss in the total longevity of the vehicle. It doesnt matter if it loses money NOW as long as it makes money later.


      Short sighted business is the thing that makes wall street be able to make reports on trivial circumstances.

      Gas prices are up or down wont mean much if the Volt is made for a specific and intended consumer group. Once people see cars that cost less to drive, has less to maintain, then it'll catch on regardless of what the CAFE or if it is a short term loss. but GM 's biggest disease is short sightedness.

      Toyota is in the black not just as a whole but with the Prius because they thought of it as a long term product, not somethin you make today and make money today and it's gone tomorrow when it doesn't.
      • 7 Years Ago
      Jenkins is just a journalist fishing for readers and he knows that negativity sells.

      The Volt wears the Chevy bowtie because it is designed to be a mainstream car for the AVERAGE driver from a mainstream brand. This will take mainstream retail pricing.

      GM knows that in order to have the sales volume which will create economies of scale, the first Volts will have to be sold at a loss. They’ve said this over and over again.
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