Can Aliens Save the Chevy Volt?

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I took some flak from a few readers for suggesting in January that the Chevy Volt needed "saving."  There never was any real problem with the Volt, these readers said. As one told me, "It's hard to fix a problem that doesn't exist."

From the perspective of these readers, the fire that broke out in the crash-tested Volt was the result of an unrealistic amount of damage, blown out of proportion by overzealous regulators, distorted by a hostile and clueless press … you get the idea. There isn't, they said, any actual safety problem with the Volt, and there probably never was.

As it happens, I mostly agree with all of that. But something about the Volt needs fixing: namely, the fact that it's not selling. In its latest effort to change that, the company is deploying aliens.

Volt sales get zapped
After selling a record 1,529 Volts in December, General Motors (NYSE: GM  ) managed to move just 603 in January – the car's worst month since last August.

Momentum for the innovative plug-in hybrid had been building since summer, but negative publicity of the last couple of months may have hurt sales, GM executives have said. Speaking before a Congressional panel in January, CEO Dan Akerson lamented "collateral damage" resulting from the Volt having become "a political punching bag."

There's no doubt that the Volt has become exactly that. Conservative talk-radio hosts and TV personalities like Fox News's Eric Bolling have denounced the car, seeing it as an overhyped, overly expensive, taxpayer-funded boondoggle. Bolling even claimed that his test-driven Volt had "run out of electricity" on him in the Lincoln Tunnel, an event he complained about extensively on air.

Bolling wasn't stranded, or even inconvenienced -- the car simply switched to its gas-powered generator on the fly, as designed. But his point was made: The car's all-electric range after 12 hours of charging is actually quite short. At a moment when Tesla Motors (Nasdaq: TSLA  ) is touting 160-mile-plus ranges for its upcoming all-electric sedan, which starts at a price not all that far north of the Volt's, the attack has some resonance.

In an election year, when attacks on GM's taxpayer-funded bailout are really intended as attacks on the Obama administration, there's likely to be a lot more of this stuff.  Does GM have any hope of salvaging its halo car's reputation and restarting sales?

GM thinks so, and those aliens are part of its solution.

Can aliens save the Volt?
It's clear that the company's going to try. Akerson's appearance on Capitol Hill in January coincided with a series of newspaper ads defending the Volt after it was declared safe by Federal regulators. That was the first salvo, and the company followed up with a Super Bowl ad last weekend.

In the ad, a Volt owner patiently explains how the car works to a group of befuddled aliens – and to consumers as well, many of whom have been confused by the difference between the Volt and conventional hybrids like Toyota's (NYSE: TM  ) hot-selling Prius.

Selling the Volt's advantages over the Prius will be a daunting task for GM, not least because the Prius is substantially less expensive. But it's important – while the Prius has been a strong seller for long enough that most people at least know someone who owns one, the Volt represents a genuinely new approach to the problem of combining gas and electric propulsion.

But whether it's a better approach is still an open question. Volt owners love their cars, but new "plug-in" hybrids from Toyota and Ford (NYSE: F  ) will offer similar functionality -- with more conventional (read: less daunting to consumers) technology. 

To sell the Volt successfully, GM needs to explain not just why it's good, but why it's better. The truth is, it's a pretty good car – arguably one of GM's best models. But it's also expensive, and it has been tarred, probably unfairly, by politically motivated attacks. Can GM and its aliens pull off a Volt turnaround? We'll find out.

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Fool contributor John Rosevear owns shares of Ford and General Motors. The Motley Fool owns shares of Ford Motor. Motley Fool newsletter services have recommended buying shares of Ford Motor, General Motors, and Tesla Motors. Motley Fool newsletter services have also recommended creating a synthetic long position in Ford Motor. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a plugged-in disclosure policy.

Read/Post Comments (8) | Recommend This Article (5)

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  • Report this Comment On February 07, 2012, at 6:13 PM, NOTvuffett wrote:

    If history is a guide, the aliens will have to use their rectal probes to measure the 'voltage' after a short abduction, lol.

  • Report this Comment On February 07, 2012, at 7:54 PM, gsned57 wrote:

    I went off on the last article as ridiculous but this one hits the nail on the head. Volt owners love their cars (highest customer satisfaction of all cars according to cunsumer reports). One of the most technologically advanced production cars in the world (motor trend and popular mechanics). Lasy as far as the driver is concerned there is no compromise as the car can work like any other gas car when the battery goes low.

    The only issue I have with the car is the price. For the technology it's probably pretty cheap but to sell 60000 a year it's gotta be 10 grand cheaper.

    I'm a conservative and I love this car. I didn't like the bailout and would be ok with the subsidy going away as long as the oil subsidies go also (all subsidies including production refining exploration transportation and military intervention). This technology can allow most commuters to drive on American generated electric

  • Report this Comment On February 07, 2012, at 8:09 PM, neamakri wrote:

    gsned57: you are exactly right on the price point. Ten grand less would work very well.

    Sorry I'm down on GM because they gouge so much. A recent tv ad shows a Cadillac CTS zooming around a track, and they say it is better than a BMW 3-series. The Caddie costs over $66K, the BMW under $36K. So GM will sell you a better car for $30,000 more. See?

    Anyway, I like electric and have owned a Vectrix motorcycle. Hope the future has more simpler, less expensive electric choices.

  • Report this Comment On February 07, 2012, at 8:52 PM, TMFMarlowe wrote:

    @neamakri: I think the ad you saw shows the new Cadillac ATS, not the CTS. The CTS is positioned against the 5-series, not the 3er, and last I looked it was considerably cheaper than the BMW at every comparable trim level. The $66k version is the CTS-V, a 556-horsepower supercar; compare it to an M5 (which was recently discontinued, but cost more like $80k+ if I remember right).

    Pricing for the ATS hasn't been announced but I'll bet on it likewise being cheaper than the BMW at every comparable trim level.

    John Rosevear

  • Report this Comment On February 07, 2012, at 9:25 PM, WylieH wrote:

    @gsned57: You are certainly right about the price of the Volt being too high.

    As for leveling the playing field-- the equivalent of dropping +all+ subsidies on oil, is dropping +all+ subsidies on the Volt, not just the whopping rebate the feds and many states offer to Volt buyers.

    And how much of the oil subsidy is offset by taxes at the pump?

    The Volt isn't overpriced. Its technology is too expensive. Is there a fix for that?

  • Report this Comment On February 07, 2012, at 9:49 PM, 50yardline wrote:

    I think they sold a lot in December because of people going for the tax credit at year end, which took away sales from January. And they'll blame poor February sales on it being a short month - but wait, 2012 is a Leap Year! They should be able to beat January sales and move 800 of these babies this month. I still don't think GM has all the bugs worked out, and they probably don't want to sell a lot of the "Beta" version yet. I agree with the previous comments, all they need to do to increase sales is to drop the price.

  • Report this Comment On February 08, 2012, at 5:26 AM, TMFMarlowe wrote:

    @WylieH: You say "The Volt isn't overpriced. Its technology is too expensive. Is there a fix for that?"

    And I say: You're exactly right. The fix for that, at least from GM's perspective, is time -- in a few years, the thinking goes, battery prices will come way, way down. A lot of money is being invested now to gear up for mass production of automotive lithium-ion batteries by mid-decade. But whether or not that's how it really plays out... we'll see.

    Thanks for reading.

    John Rosevear

  • Report this Comment On February 08, 2012, at 3:58 PM, bobbleheadguru wrote:

    I drive a Volt.

    Your article is insightful. I think GM has made a few gaffes in marketing and PR that eclipsed the value proposition of the car itself. That is all in the past at this point.

    I am very optimistic about the Volt moving forward. A few reasons:

    1. California. Not having HOV eligibility is a big deal in the biggest state which has demand. This issue will go away in March.

    2. International sales. The punching bag baggage does not exist in Europe. It will not take many sales to keep the factory going in Hamtramck. The NHSTA hurdle caused a delay to the roll out to Europe.

    3. The lease. The hidden value in the Volt is the lease. I am paying $160/month more in lease payment (v. the new version of my old car, Impala). However, I saved $125/month in fuel (even including electricity) over my first 5000 miles.

    If I could reduce my above-average 55 mile roundtrip commute down to under 40 miles, charge at work or if gasoline spiked to over $4/gallon, I could probably save around $160/month.

    Bottom line: same costs. More to payment. Less to Exxon and BP.

    It is very likely that GM will promote a more aggressive lease offer than I received. This is particularly true because of the timing of the tax benefit. Buyers today have to wait until 2013 to realize their benefit. However those that lease can get the benefit right away.

    Also for me, it allows me to be an early adopter without assuming risk.

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