Better Place founder Agassi: Volt will be a "niche product"
By now many of us around these parts know who Shai Agassi is and what he wants to do. He wants to build a distribution infrastructure of swappable batteries to be used in electric cars with the ultimate goal of making EVs mainstream. The problem is that electric cars remain an expensive proposition. Even with Agassi's approach that would sell the EV without a battery and add on a subscription model for the battery, the up-front cost will remain higher than conventional cars. Nonetheless, in Paris last week Agassi was telling the Wall Street Journal that he doesn't think the Chevy Volt would ever be more than a niche product. He bases that on price of the car, expected to be around $40,000 before any tax incentives.
Agassi thinks that is too high for what would otherwise be a $20,000 vehicle, like the Chevy Cruze on which it's based. As far as he goes, he's right, but he doesn't go far enough. GM and everyone else know that any car that will be mainstream has to have an affordable up-front cost. That's why GM originally wanted a $30,000 price point for the Volt. That's why they went with a smaller battery and range extender. The realities of the battery situation will continue to make longer range electric driving unaffordable for the foreseeable future from a purchase standpoint regardless of whether you take the GM or Better Place approach.
While Agassi's subscription-based software background may make sense for large deep pocketed corporations, for regular people the cost of entry is a much bigger hurdle than the total cost of ownership. If you can't pay the door charge, it doesn't matter if the drinks are free once you get inside. That's why so many people relied on cheap lease deals and nothing down mortgages over the last decade. The current reality of what is happening in the financial markets means that there is a high probability that none of these approaches will prove to be viable anytime soon. Unless a manufacturer can find a way to get that entry cost down and soon, all EVs will likely remain niche products for many more years.
Gallery: 2011 Chevrolet Volt Live Reveal
[Source: Wall Street Journal]
Reader Comments (Page 1 of 2)
GoodCheer 10:42AM (10/09/2008)
Of course one of the operational models for PBP that I have heard espoused is that the car is FREE, and all you pay is the subscription fee. Much like your cell phone. Pick a plan based on how many miles you want, pay a penalty for overages.
I don't like it much. I'd prefer the upfront cost and only buy the energy I use (that way energy consumption is disincentivized more directly)... but you can't complain about the barriers to entry.
Reply
TomWilkinsonatGM 10:47AM (10/09/2008)
I always find these price discussions interesting. The price for a 3-Series BMW starts at $32,700 and quickly goes up from there. Yet last time I checked, hip urban neighborhoods and upper-middle-class suburbs were filthy with 3-Series. So if one assumes that a Volt is at least as cool as a 3-Series (an assumption I am willing to make) then why wouldn't a customer pay more for a Volt than for a similarly sized plain-Jane compact?
Reply
EVan 12:16PM (10/09/2008)
I 100% agree with Mr. Wilkinson.
tankd0g 6:26PM (10/09/2008)
That's quite an assumption. Somehow a science fair experiment from a company that's going to collapse any day down just doesn't have the same alure of a shiny new BMW if you ask me.
luke 6:27PM (10/09/2008)
+1!
jason 11:35AM (10/09/2008)
so? why shouldn't the new breed of electric cars be a niche product? regardless of what gm thinks, i think tesla has it right. new technology always starts out expensive and then decreases in price over time. i guess it's just part of tesla applying the computer model to cars. it may take longer to get down to everyone, but at least it will eventually get there.
i do think easily swappable batteries like pbp is a good thing though too. fwiw.
Reply
Mark Priestap 11:33AM (10/09/2008)
No doubt the car is fantastic to drive but it still suffers from these issues: 1) The exterior design has no personality (looks like the vast majority of other American-made cars made after 1980 (boring) and 2) The chevy logo is ugly in this context... much like the Ford logo. They need a logo that works well for all kinds of vehicles, not just trucks and muscle cars.
Reply
Gary 11:29AM (10/10/2008)
Now people come here to criticize company logos?
gorr 1:51PM (10/09/2008)
I think that gm is heading toward bankrupcy. This car will experiment constant battery degradation from the beginning
and in 2 to 3 years the battery only operation will be 10 miles at half power.
Reply
GoodCheer 3:05PM (10/09/2008)
Geez, what a shame. If only the powertrain engineers at GM and the whole companies dedicated to developing batteries knew that, they could have pulled the plug months ago and saved themselves SOOOO much hassle.
tankd0g 6:26PM (10/09/2008)
GoodCher: You mean like they knew about gas tank fires, faulty odometers and cracking plastic intake manifolds? Why the HELL do you people suddenly think GM found religion with the Volt project? GM will sell you a piece of shit and call it cherry pie and never stop smiling until the tail lights disappear. This is not opinion, this is FACT.
why not the LS2LS7? 9:15PM (10/09/2008)
Gas tank fires was Ford. I don't know what you mean by cracking intake manifolds, do you mean the manifold gaskets/bosses on 3.4L V6s? I don't know about faulty odometers at all.
Somehow you missed the Acura 3.2 TL-S auto transmission failures and Camry V6s sludging up.
It's almost as if you're just expressing a hate for GM more than any actual facts. Oh wait, you are.
RSR 9:25AM (10/10/2008)
tankd0g,
Faulty odometer was Honda, which settled to extend the warranty. And Toyota had more recall than GM two years or so ago.
Now that's the fact.
If it wasn't your opinion, it was your lie.
smartone 2:02PM (10/09/2008)
I remember them saying the same thing about Prius
there were tons of articles saying with gas currently at 3 dollars a gallon the cost of owning a Prius didn't make sense
the Volt is n't just a car but a new drive train that will be deployed thru out GM cars which will reduce the cost
Reply
tankd0g 6:26PM (10/09/2008)
Ah. no. with gas at $2 a gallon the Prius didn't make sense, that's why the government had to offer rebates to get anyone to look at it. Now, with gas at $3.50, the Volt doesn't make sense, even with and obscene rebate from the government. $40,000 for a car marketed to people who only drive 40 miles a day? Someone SERIOUSLY thought this was going to fly?
why not the LS2LS7? 9:17PM (10/09/2008)
The $40K figure is made up by you and others who want to hate on the car and promulgated by the same people. GM never said any such thing.
I know several people who bought Priuses before the rebates started. There are some people who care about how much gas they burn, beyond just the cost. Yes, they represent a niche market, but they are a market.
Shipey 7:34AM (10/10/2008)
"Now, with gas at $3.50, the Volt doesn't make sense, even with and obscene rebate from the government. $40,000 for a car marketed to people who only drive 40 miles a day? Someone SERIOUSLY thought this was going to fly?"
Seriously man, what did GM do to you during your childhood to scar you so badly?
Even if the car does carry a $40K sticker, it's already got $7500 in incentives on the hood from the GOV. That brings it down to $32.5K before any GM or dealer incentives. That's not bad at all for this level of whiz-bang tech, not to mention the efficiency of the vehicle itself.
And who said anything about people only driving 40 miles per day? Unless you are totally missing the concept, you know that isn't how it will work. At all. Besides, even if it was electric only, for 80%+ of the general populace that will get them through two full days of no-gas commutes without a recharge. I could probably squeeze out three days.
I know a handful of people who are salivating at the thought of this car, and they're not even into cars.
Things have changed. Caddilacs are awesome. Saturns are awesome. Chevy will very shortly become awesome with the arrival of the Volt, Cruze, Camaro, Beat, and Orlando. (I predict we're getting both...) Buick is getting better, and so is Pontiac, though they both need some work. The new Buick spy shots are looking very good. The G8 kicks ass.
The truth is, it's a different GM. It's going to take some time for folks to accept it, but it's happening... no matter how much you insist it isn't.
Matt Lenart 2:27PM (10/09/2008)
the concept body was cool looking... now it looks more and more like an Acura TL w/ a shortened back.
RAV4 EV anyone? how much did those 10 year old batteries degrade until now?.... maybe 20-30% max at around 100,000 miles still getting around 90 miles/charge. its downright puzzling why no one is using these tried, tested and true EV-95 NiMH batteries or making them even better.... PUZZLING.
Reply
tankd0g 6:26PM (10/09/2008)
Toyota is.
Matthijs 7:11PM (10/09/2008)
It isn't that Puzzling: www.ev1.org/chevron.htm