Remember the Chevrolet Volt?
Congress sure does. In what will surely be must-see TV for fans of high Congressional dudgeon, a panel of the House Oversight and Government Reform Committee plans to hold hearings next week on concerns around the Volt that caught fire days after government crash tests.
Rep. Darrell Issa (R-Calif.) and other Republicans on the panel are probably hoping to paint a story of government ineptitude, or even cover-up, as they probe the months-long gap between the fire and the National Highway Traffic Safety Administration's disclosure of it.
If you were tempted to write this off as partisan grandstanding in an election year, you'd probably be on the right track ... except for this interesting development: General Motors (NYSE: GM ) CEO Dan Akerson has agreed to come to Washington and spend a day testifying on behalf of GM's best-known hybrid.
And that, to my mind -- and full disclosure: I'm a GM shareholder -- brings up a question that probably needed asking a while ago.
Is the Chevy Volt really worth it?
Look, I get that nearly all of the people who've ponied up the roughly $41,000 asking price for Volts really like them. I get that GM swears that just having Volts in their dealerships has brought in lots of new potential customers and helped sell all kinds of other Chevy products. I get that, against all odds and in the teeth of a massive corporate collapse, GM's product-development crew managed to come up with a great car that pioneered a whole new technological approach while delivering on some wild-sounding promises.
The Volt was a major achievement by an unfairly maligned group of people working under impossible conditions. It's a triumph that will be remembered alongside other great milestones from GM's long history. And it's a good car that should serve its owners well.
I get that. I get all that. High marks to all involved. But I also get this:
GM isn't selling very many of them.
Depending on whom you ask and how you count, the effort to develop the Volt and put it into production cost anywhere from $750 million to nearly $4 billion, if you include the various government loans and subsidies that contributed to the effort. And despite all of that R&D, the car still costs so much to build that GM probably isn't making more than a tiny sum on each one, if it's making anything at all.
Even at a price that is way above some of the competition.
The statistic that just kills me
Late in October of last year, the first examples of Toyota's (NYSE: TM ) new Prius v arrived at U.S. dealers. If you haven't seen one, the Prius v is a larger version of Toyota's mainstay hybrid, sort of a station wagon -- but one that gets 44 mpg in the city. Toyota compares it to small SUVs.
It's definitely a niche product, and like many Toyotas in recent months it has been in limited supply. But in just 10 weeks, it sold more examples here (8,399) than Chevy sold Volts (7,671) in all of 2011.
That just kills me. Of course, the Prius v starts at $26,400, so it's a lot more affordable than the Volt. But it's hardly the only challenge the Volt faces. Toyota's regular Prius now comes in a "plug-in" version that you can charge up at home and drive for a while without using any gas at all, giving it Volt-like functionality with simpler, proven technology.
Worse, Ford (NYSE: F ) just leapfrogged the Volt with a purely electric version of its Focus compact, complete with 100-mile range -- and will be bringing its own plug-in hybrid sedan, the cutting-edge Fusion Energi, to market later this year. My guess that it'll be priced in the same neighborhood as the Volt, with similar mileage ratings and range capabilities ... except it'll be roomier, with a nicer interior, and I'll bet that Ford will be making a handsome profit on each example.
I haven't even touched on what Tesla Motors (Nasdaq: TSLA ) will be offering soon: a full-size all-electric luxury sedan at a price point not all that far north of the Volt's MSRP. As special and advanced as the Volt sounded when it was first announced a few years back, it's clear that the market is now catching up -- and may even be passing it by.
So is it time to kill the Volt?
The Volt's a great car, but I can't help wondering whether it has become more of a boondoggle than it's worth. Put simply, it's not making (much) money for GM, and its contribution to GM's corporate image has been decidedly ... mixed, at least recently.
Of course, killing it could unleash a whole new PR nightmare, with the company that famously "killed the electric car" long ago getting called out for killing another one. Dan Akerson has proved himself to be a pragmatic, hard-headed manager in many arenas, but I think it's unlikely that he'll be ending the Volt program anytime soon.
Like it or not, the Volt is almost certainly here to stay. I expect GM to continue to invest in the Volt, to improve its capabilities and efficiency while bringing down the cost, and hopefully the price. When Akerson testifies before Congress next week, I expect that he'll talk up the Volt as a triumph of American ingenuity and manufacturing prowess.
Which it is.
But I still can't shake the feeling that this relationship might not be working out.
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