Some have hoped the revised Chevrolet Volt’s sales would break through a glass ceiling this year, but with 2016 nearing the halfway point, indicators are it will be fortunate to exceed the original Volt’s best sales year in 2012.
The first-generation extended-range electric Volt was launched late 2010 for model year 2011 and sold just 7,671 units during a protracted rollout. Its peak sales in 2012 amounted to 23,461 units. In 2013, sales were flat with 23,094 units; in 2014 they dropped to 18,805 units, and in 2015 as word of the pending second-generation Volt spread, sales were just 15,393.
Flash forward to today. The second-generation Volt is here in all its anticipated glory. It is altogether improved, and there’s been half a decade for the general public to have gotten the memo on the Volt’s value to them.
That said, Michigan-based automotive analyst Alan Baum projects 23,000 units for this year, and so far he is basically on the money.
From January though May 2016, Chevrolet reported 7,871 U.S. sales. Contrast that with sales through May 2012, when the first-generation Volt documented 7,057 U.S. sales. That’s just 814 more sales spread over five months, or a mere 11-percent increase over how it did four years ago.
The new Volt is now already into the 2017 model year. It had been first revealed in January 2015 and last fall Chevrolet chose again a staged rollout to 11 states following California’s zero-emission rules.
Considering pent up demand, just in those states last fall it did relatively well with sales in the 2,000 range per month, plus or minus a bit.
National rollout began early this year, and historically low January plug-in sales did not disappoint with only 996 Volts sold. In February 1,126 were delivered. From March forward, Volt sales revived to last fall’s levels hovering within 100 units of 1,900 monthly sales.
In response to how the Volt is doing however, Chevrolet Communication representative Fred Ligouri accentuated the positive.
“Volt sales are up 79 percent for CY 2016 versus the same time period in 2015,” said Ligouri. “That’s great momentum and we’re still in launch phase for the all-new Volt. Both existing and new Chevrolet customers are taking note of the 2017 Volt and visiting our strong network of Chevrolet dealerships to see it for themselves.”
The best month in the Volt’s history was August 2013 when it sold 3,351 units, but if things don’t change, it will not do that again this year, and Baum projects just 21,000 Volt sales for 2017, representing a decline.
The year 2012 was as pivotal for the Volt as it was for the country as a whole. In fact, the Volt’s reputation was caught up in this nation’s politics, and experienced collateral damage by Republican campaigners attempting to smear Barack Obama’s policies.
A fire following a side-impact crash test in 2011 by the National Highway Transportation Safety Administration (NHTSA) also did nothing to help its public perception. The feds had the bright idea to park a Volt with a ruptured battery without discharging it, and more than a week later some crystallized coolant caused a short, and a smoldering fire. This plus false reports of potentially explosive li-ion batteries added to concerns about the battery dependent, taxpayer-dollar supported car.
With all this ammo, a cottage industry of screed artists and self-appointed guardians of the truth made a sport of bashing the Volt. It was enough that former GM CEO Dan Akerson decried its treatment as a “political punching bag.”
Countering all the flak was a small but outspoken retinue of raving fans plus a laundry list of awards for the Volt’s new technology poised to lead America into an emerging industry, wean the country from its “addiction to oil,” and more.
Four years later, a car that once offered 35 miles all-electric range is now rated for 53 miles. The 2016 model also runs on regular gas instead of premium, gets better mpg, opened up the back seat theoretically for a fifth passenger, and is altogether better.
It’s again prompting a wave of positive reviews and acknowledgements but the status quo has not changed on that bottom-line measurement of success: sales.
So What’s The Problem?
Analyzing a macro-sized phenomenon can at best look at several factors that play into the whole picture.
The knee-jerk answer from the mainstream media may be the Volt is a victim of unexpectedly low gas prices, or it still costs too much at $35,000. These do likely play a part, but the $7,500 federal tax credit can make a Volt net within Toyota Prius territory, and gas prices may not matter as much as some think.
In sit-down interviews with General Motors, we’ve heard its top marketers and engineers say fuel prices are less of an issue for Volt owners because the goal in day to day driving is not to use gas at all. Further, for “green cars,” other intangible psychographic factors come into play, and in a word, Baum cites branding.
“They have failed to establish the Volt as a ‘brand name’ for PHEVs,” observes Baum. “Toyota has done that with the Prius for hybrids. Toyota has taken advantage of its branding to have products in a variety of mini-segments with the c, v, PHV/Prime. The Volt has not done that presumably because the hybrid technology is a more significant strategy for Toyota in its corporate positioning than the PHEV/BEV technology is to GM.”
Another example of branding is Tesla which just pushed Lexus out of the world’s top 10 most valuable brand list. Tesla has an undiluted message and sells its $67,000-$160,000 products in higher numbers than GM’s $35,000-$45,000 car. While people do buy the Model S or X to save gas, these are not poor folk trying to save a buck on their monthly bills.
Summing things, GM has yet to hit stride in creating excitement for its relative bargain of a car that is nonetheless high tech, well-engineered, has a good track record, and can run gas-free for average daily trips.
“They tried mass marketing in a variety of ways and it did not work well.” said Baum. “So they have gone to targeted marketing via social media, reaching out to groups interested in the vehicle or segment,”
GM also has sent mixed messages. HybridCars.com broke a story in early 2014 that Chevrolet had quietly ceased advertising the Volt outside of California and tech fairs where it said people could comprehend and appreciate the Volt.
Today Chevrolet is also finding its way as it seeks to motivate a dealer network of independent third-party franchises.
“Approximately two-thirds of our Chevrolet dealers are licensed to sell Volts, and their staff receive special training to communicate the benefits of the EV lifestyle, while having the experience and expertise to assist with all other aspects of the sales experience,” said Ligouri. “We welcome all customers in the market for any new car to our Chevrolet dealerships to see and learn more about the all-new Volt.”
At these dealers however, salespeople are not typically compensated for what may be a much more complicated sale. Although Chevrolet has dedicated dealers, a litany of anecdotes has trailed shoppers telling of salespeople steering them toward other models when they came in for a Volt, or not knowing much about it.
But while GM has heard from dismayed plug-in fans for being somehow under-committed, a phenomenon transcending the Volt is widespread lack of consumer comprehension and awareness. A survey in May by Consumers Union and the Union of Concerned Scientists found more than four out of 10 drivers (42 percent) in the Northeastern U.S. were unaware that plug-in electrified cars were even offered for sale by major automakers such as Ford, GM, or Nissan. Even in California, more than one-third (34 percent) did not know major automakers sold plug-in cars.
Not to be underestimated therefore is the plug-in car value proposition has fallen on deaf ears – and not just by many of the people charged with selling them, but also those who might buy them.
A tacit admission of this was by Chrysler, which is releasing the world’s first plug-in hybrid minivan, but calling it only the “Pacifica Hybrid,” because plug-in hybrids are deemed too confusing.
Factor this with myriad reports that can smear the facts against plug-in cars, and numerous other issues, and you have a veritable invisibility factor that’s been documented by consumer awareness surveys over the past five years.
It is an awkward spot Chevrolet is thus in, and while critical voices have offered from their armchairs how GM can fix the situation – or alleged conspiracy theories that it does not want to sell the Volt, uncertain issues not entirely in its control do remain.
For his part, Baum suggests GM is not willfully sabotaging its own sales for reasons such as preserving federal tax credits for the upcoming 2017 Bolt EV, or because the Volt is unprofitable as some have alleged.
GM has said the Volt is now in much better position, and the company would like to sell them, it has said, while not pinning a hard estimate on what is possible. The last time it did that in 2011 it was stung when it missed targets, so while Elon Musk is wiling to call 500,000 sales for 2018, any specific Volt sales projection is now verboten for GM.
But that does not mean it does not care, or is not committed.
“The Volt and Bolt are important to GM to show that they are technical leaders and they have been successful,” Baum said. “This is also part of the message to the technical and financial community that GM is an advanced player in PHEVs and BEVs. But the connection to customers is different and less easy to manage.”
To get the word out now, GM is doing more marketing, has said it is rethinking its strategy. Old school gee-whiz TV spots just never got through to the American public in a significant way, though the record shows GM tried many times over.
“As noted they have not been consistent in their mass marketing for the Volt and consumers do not understand the capabilities of the vehicle,” said Baum. “Nissan has had similar issues with the Leaf with the polar bear commercial followed by more general marketing. However, Nissan has made more of an effort with their dealers to reward them for the effort required to sell the Leaf.
“Establishing the Malibu and Cruze has been critical for GM and they have been successful at those tasks – albeit more difficult now as small cars have been a tougher sell,” Baum continued. “This is far more important to GM (domestically and globally) than sales of the Volt.”
Nor is there a supply problem for the car built in Detroit. There have been months where there were shortages in California and sales struggled, but that is less of an issue now than in the past.
“They could produce far more (true of Bolt and Volt) but it is a chicken and egg situation. Until the marketing improves, the sales will not, nor will production,” said Baum. “When they have increased production, they had to increase incentives which did not meet their goals.”
In short, wheels turn slowly. The Volt is the best selling plug-in gas-electric car, has been on the market the longest, and the only one to receive a full redesign.
Its critical EV range is nearly double the next-nearest competitor, and supporters yet hope that as the car itself has improved, sales will also.