Are the Chevy Volt or Nissan Leaf flops as some naysayers claim?
An article from 24/7 Wall Street published yesterday on Yahoo Finance lists their picks for the worst product flops of 2011. The list includes some understandable big flops such as Netflix's failed decision to change their business model, and curiously listed the Chevy Volt as one of the flops. Given the number of naysayers (many with apparent political motives) who are railing against the development of electrified cars it's worth taking a look at the reasoning by which they call not only the Chevy Volt, but the Nissan Leaf, flops (or worst).
The 24/7 article makes two claims, the first that "excitement has fizzled" resulting in weak sales, and the second that the car is a safety risk because of battery pack fires. Both of these claims are a factually weak negative spin of the truth.
In the context of discussing Volt sales, Larry Nitz, GM’s executive director for vehicle electrification, is quoted saying “It’s naive to think that the world is going to switch tomorrow to EVs [electric vehicles].” The sales figures are described as "consistently low" and they cite July's 125 Volt sales to bolster this claim.
First off nobody expects there to be a wholesale overnight switch to electric cars, so Nitz was simply telling the truth. If your success criteria electric car adoption were to require they immediately take, say, 30% of new car sales, that would be nothing short of ridiculous. Or, as Nitz said, naive. The Toyota Prius was not an overnight success, instead it took several years before its sales took off. Why should we expect anything different from electric cars?
Second, are the sales actually weak? The truth is total sales for the Volt in 2011 were 6,142 through the end of November. This is shy of their yearly sales goal, but how often do companies make sales goals? July's weak sales were because of factory retooling preventing the manufacture of any Volts. This was widely reported last summer, so one wonders why so many ignore this fact? There were 1,139 Volts sold in November, 1,108 sold in October and 723 sold in September. This pattern of rising sales doesn't look like "fizzled".
Sales of the Nissan Leaf were 8,720 sold through the end of November. They sold 672 in November, 849 in October, and 1,031 in September, which is a pattern of shrinking sales.
If you were to measure electric car sales gains between last year (2010) and this (2011) it would be a tremendous jump. In 2010 the only electric cars sold were a few hundred Tesla Roadsters, a few other specialty cars, and the few Nissan Leaf's and Chevy Volts that were delivered in 2010. In 2011 the total electric car sales in the U.S. will be over 15,000, which would be a huge percentage jump if reported this way.
The second point made in the 24/7 article is described this way: "Adding insult to injury, Chevy Volts are under investigation for fires involving the cars’ lithium-ion batteries." The word "fires" is incorrect as there has been only one fire in a Volt. It had undergone extreme crash testing, and the battery pack took three weeks to catch fire. NHTSA later subjected battery packs to additional testing and managed to get two packs to catch fire, at which point they opened a formal investigation. One can, if you will, inflame this to make these facts look bad but the truth is that NHTSA and the car companies routinely go through safety investigations, and in particular car fires are so routine that they're barely reported in the news. There are 250,000 or more car fires per year with hundreds of deaths. Yet one fire, after crash testing, that took three weeks to catch fire, is portrayed as a death knell for the Chevy Volt by 24/7's report. Really?
Referring back to the sales figures and we see Novembers Chevy Volt sales (1,139) were larger than Octobers (1,031). The battery pack fire was disclosed on November 11, 2011, and one would think if the fire was a large concern for Volt buyers that November's sales would have dropped. Instead they grew.
The Chevy Volt is being portrayed by many as an unpopular car with weak sales. We've already discussed the "weak sales" idea, finding that claim to be "weak" but what about its popularity? The sales figures are growing, in the face of a safety concern. A perusal of Chevy Volt owners forums such as gm-volt.com and the Volt Owners group on Facebook show owners who are routinely proclaiming how much they love this car. A concrete example is the couple hundred Volt owners who signed an open letter to GM earlier this month saying essentially that "GM will get their cars back over their cold dead bodies." (see Chevy Volt owners to GM: We're Keeping our Cars & Keys and Chevrolet Volt Owners Most Satisfied, According to Consumer Reports)
A point many make is to tie the Obama Administration to the Chevy Volt and the Nissan Leaf as if both were invented by Obama's team. The truth is that it takes many years to develop a new car design and manufacturing techniques. The Volt's design work began in 2006, for example, well before Obama was elected. Instead electrified vehicles are largely inevitable in part due to technology advances making electrification more cost effective and practical than it was in previous years. All the automakers foresee tightening emissions and fuel efficiency regulations over the coming years, and are working proactively to improve both these scores, relying on hybrid and electric vehicle technologies in an ever increasing ways. An example is Ford's long-range plans for vehicle electrification, and that, in 2020, 10-25% of Fords new vehicle sales will be electrified vehicles (hybrid, plug-in or full electric). (see Ford showcasing 100 MPGe Ford Focus Electric and other clean vehicle technology)
We're at a beginning point for electrifying the vehicle fleet not only in the U.S. but around the world. Governments and automakers recognize that fuel availability (peak oil) and environmental concerns point to the need to radically increase fuel efficiency and decrease emissions. In the meantime the current electric car program has become politicized with many factually weak attacks on the cars and the program. Was the Volt a flop in 2011? The facts say otherwise.