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Sen. Carl Levin, Secretary of Energy Dr. Steven Chu, GM Chairman and CEO Ed Whitacre and Gov. Jennifer Granholm admire the new Volt battery. The battery was the first to roll off the assembly line, opened Wednesday.  (Source: Clarence Tabb, Jr./The Detroit News)

The 2011 Chevy Volt at CES 2010
Volt charges ahead in its path to market

GM engineers have been hard at work putting Chevy Volt pre-production vehicles through the test rounds.  Even as the pre-production continues, GM is warming up its production facilities to ready them to mass produce the nation's first consume mainstream electric vehicle launch.

Yesterday in Brownstown, Mich. the first 16 kWh (8.0 kWh usable) Volt battery stack rolled off GM's new assembly line.  The battery will power the Volt's 40 mile all-electric battery range.  The inaugural event drew U.S. Secretary of Energy Steven Chu, Gov. Jennifer Granholm and GM Chairman and CEO Ed Whitacre, and many other politicians who cheered the Volt's success as a sign of the start of a turn around for Michigan.

Secretary Chu commented, "We will recapture the lead we have lost and become the world leader in clean vehicles.  This is where the real work begins. I know we will succeed."

The federal government, under Secretary Chu's guidance, has offered $106M USD in grant money to GM to help with the new battery production facility.  Overall the federal government has given GM approximately $241M USD in Volt grant money.  While that may seem like a lot, it's less than the $750M USD the Chevy Volt is estimated to have cost GM to develop.  The new 160,000 square foot battery plant is estimated to have cost $43M USD -- the rest of the government grant is likely to go towards operations costs.

One thing that may determine whether that investment pays off is the vehicle's final cost, not yet announced.  Many critics and cynics are already blasting the vehicle over rumors that the price will be over $40,000.  However, speaking to the press at a recent event, Jon Lauckner, GM's head of global program management, said the cost could be significantly lower that $40,000.  He stated, "We have until this summer to figure that out."

If GM can hit a low enough price to deliver a vehicle under $30,000, with the $7,500 federal tax credit, that could be very important -- for the psychological significance with consumers if nothing else.  Mr. Lauckner comment also reflects upon GM's shift in production plans -- originally GM planned to launch the Volt in Fall 2010.  Now it plans to begin a limited rollout towards the end of the summer, barring delays.  An early rollout would likely be a small quantities release and could provide GM with helpful customer feedback on the vehicle.

Starting in the spring, the new battery plant will begin shipping its batteries to the Detroit-Hamtramck assembly plant which will put together the finished production Volt.  Before then, batteries will be sent to Warren, Mich. to be tested.  GM is manufacturing the Volt's 4-cylinder gasoline backup engine generator at its Flint Engine South plant.

GM will initially hopes to sell 8,000 Volts in the 2011 model year.  It plans to ramp up production to eventually reach 60,000 units a year.  The new battery production facility will also be employed in producing battery packs for the upcoming Cadillac Converj electric vehicle when it goes to market.  The Converj, formerly a very popular concept, was recently greenlighted by GM to become a production vehicle.


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Money money money...
By WoWCow on 1/8/2010 12:39:48 PM , Rating: 5
quote:
If GM can hit a low enough price to deliver a vehicle under $30,000, with the $7,500 federal tax credit, that could be very important -- for the psychological significance with consumers if nothing else.


You will have to explain to me what under 30,000 and/or 7500$ tax credit means in psychological significance.

Aside from that, I am concerned as a tax payer if it is going to take more government subsidization to keep this product "under" 40,000$ or 30,000$ Plus 7500$ "tax credit"...

Just my 2 cents.




RE: Money money money...
By Jedi2155 on 1/8/2010 12:55:45 PM , Rating: 5
The pyschological significance has to deal with the general idea that $30,000+ vehicles are considered to be in the luxury car range which the Volt is not and considered to be affordable only by the upper middle class creating a psychological barrier from further consideration to anyone who might otherwise have been able to purchase such a vehicle.

The same idea is applicable in many other areas "under a buck", "million-dollar homes" or computers less than $1000 etc.

This news is generally good however in that GM is finding cost savings possible in the Volt based on the heavy criticism of the high price tag and are pursuing any potential reduction in cost of the vehicle.


RE: Money money money...
By Yawgm0th on 1/8/2010 1:02:20 PM , Rating: 1
I don't consider that a psychological difference. It's a financial difference. Most people can't reasonably afford a $30,000 car. Between $20,000 and $30,000 there is a range in which cars become affordable for many more people.

I don't think people have the thought process "well at $32,500 it's a luxury car and I can't afford a luxury car". I think they don't have the credit rating and income to afford it and they know that.


RE: Money money money...
By bhieb on 1/8/2010 3:24:43 PM , Rating: 4
Your missing the point. Yes it is a financial decision. But there is a reason that everything you see is $19.99, or $99.99. Numbers have a psychological impact. Seeing $29,999 does seem far less than $30,000 even though it is not. Sure you won't make your decision based on that, but from a marketing perspective it absolutely will impact someones desire to even look into one.


RE: Money money money...
By bhieb on 1/8/2010 3:41:15 PM , Rating: 2
To add to that however the author was incorrect in saying that if it got under $30K with the tax break it would have a psychological impact. Being a psychological thing people don't do math first then think "oh I can afford that". If an item is on sale for $150 with a $51 rebate, it still will not appeal to someone on a budget of $99. They guy that would pass it up for $100 but not for $99 is not gonna see that rebate at all. The human mind is a funny thing.


RE: Money money money...
By Yawgm0th on 1/8/10, Rating: -1
RE: Money money money...
By bhieb on 1/8/2010 4:30:34 PM , Rating: 2
quote:
This isn't a pack of Coke. This is a car.

Does not matter what it is. The initial desire is impacted by numbers. Shortly thereafter your logical brain will kick in, but if you don't have that initial desire you never give it a thought at all.

quote:
people aren't going to suddenly purchase the Volt en masse if it's $28,999.99.


Since when does this have anything to do with them buying it en masse? This has to do with a larger potential buyer base. Surely you'd agree that at $30K it has more than at $40? You seem to think the 20-30K market is small. Certainly it is smaller than the 30-40 or the 40-50, but as you can see if GM can eek into the lower bracket there will be more people to stop and take a look.

quote:
I don't think people have the thought process "well at $32,500 it's a luxury car and I can't afford a luxury car"


Maybe not verbatim, but yes everyone has a thought process of what they think is too much for a given product. "That is cool and I can afford X so I'll take a look." And the lower X is the more people will have that thought. My point was whole numbers like every $10K, do have a psychological impact and it will open up more buyers. Certainly not all of the en masse though, but that is not feasible for any 1 car.


RE: Money money money...
By JediJeb on 1/8/2010 5:16:12 PM , Rating: 2
I guess Im weird, but to me the 30,000 doesn't seem higher than 29,999 because 9 is a bigger number than 0. And I always think someone is trying to cheat me when they try to make something seem lower by a penny or dollar. I prefer nice even numbers.


RE: Money money money...
By TSS on 1/10/2010 5:58:54 PM , Rating: 2
quote:
I prefer nice even numbers


Everyone does, that's the psychological side to it.

a $20,000-$29,999 bracket and a $30,000-$39,999 bracket. every person looks at the first digit first (myself included). Part of these prices is though, not everybody bothers to look beyond the first digit before deciding to "take a look".

For instance say your budget is $26,000. You go into the shop and see a $30,000 car. You instantly know that's above budget, and won't bother with it. $29,999 somehow seems closer, which'll make you put more thought into the car, maybe just enough to take a look, and i'll wager with the general populous more then likely to. And then it's up to the sales rep to close the deal.

It's not like a buck is going to be a deal breaker. It's just the bait on the end of a string the sales rep is slowly pulling towards that shiny new car you've heard sooo much about.....


RE: Money money money...
By JediJeb on 1/11/2010 2:04:08 PM , Rating: 2
I guess working with numbers every day dulls my sense of scale. 29,999 is one less than 30,000 so no big deal to me.


RE: Money money money...
By bhieb on 1/13/2010 9:25:49 AM , Rating: 2
Then you just reject it quicker but you do have a psychological response, just a very very fast one.

You read left to right so the first number you see is 2 which puts this in the 20K bracket. Now you may be one of the few that immediately sees the 9, and corrects that initial awe, but that is the exception not the rule.

Nonetheless you did, for however brief a time, see a 2 and think the car was in a 20K bracket. May have only been a nano second, but you saw that nonetheless. Fortunately for all the marketing folks out there looking to keep their jobs, you are not the norm.


By mmcdonalataocdotgov on 1/11/2010 7:45:22 AM , Rating: 2
A $30K car with a $7.5K tax credit is $22.5K before tax, tags, title and paperwork. So that seems to fit your requirements.


RE: Money money money...
By ATC on 1/9/2010 4:55:16 PM , Rating: 2
I hope that GM, in the process of cost cutting, doesn't turn the Volt into a "cheap" poorly built car. The Volt has a lot of potential; I hope GM doesn't screw it up.


RE: Money money money...
By Yawgm0th on 1/8/2010 12:59:11 PM , Rating: 2
Agreed. I consider that a very significant financial difference, not a psychological one. I can afford (but not justify) a $30,000 sedan. I cannot afford a $40,000 sedan unless I'm going to live in it.

Someone who can afford and justify spending more than $25,000 (really, more than $20,000) on a sedan probably doesn't have any psychological issues with a $40,000 car.

quote:
Aside from that, I am concerned as a tax payer if it is going to take more government subsidization to keep this product "under" 40,000$ or 30,000$ Plus 7500$ "tax credit"...
Also agreed. I'm not even necessarily opposed to the government subsidizing research to decrease the time it takes a technology to economically viable. But in this case, the government is simply forcing a technology and product that isn't economically viable to be close-to-viable-but-still-not. I'd rather see GM spend more time developing this and reducing costs and eventually bring it to market when it can turn a profit and deliver return on investment. The worst part about this is the tax credit is going to cause GM to turn a profit on a taxpayer investment -- and GM will probably not be owned by the government by the time there is return.

This tax credit is never going to deliver a return on investment for the taxpayers. Even with GM being the government's car company, it doesn't make sense. It's basically the poor and the super-rich subsidizing the moderately wealthy for no economic and little ecological benefit.


RE: Money money money...
By TSS on 1/8/2010 6:39:55 PM , Rating: 3
As a tax payer i would be more worried if they'd actually manage to get the car below 30,000 with the tax credit.

If the car is cheaper, and more people buy it, there will be more cars sold, and if there's a tax credit on each car, there will be more in tax credits handed out. And thus the government spends more (or earns less either way loses money).

Still you can argue the extra addoption of EV's is worth that...


RE: Money money money...
By MCNEIL1986 on 1/8/10, Rating: -1
look at that box full of toxic greenness...
By semo on 1/8/2010 12:42:23 PM , Rating: 2
... or are batteries not toxic anymore, i forget. Still, a bucket full of useless chemicals in 10 years time.

As long as it reduces street level pollution I'm all for it! I suspect it will satisfy a lot of half-environmentalists "I need to buy a green car to save the environment"! Step in the right direction (talking from a non environmental stand point) as it is much more efficient than ICEs and has a greater potential.




RE: look at that box full of toxic greenness...
By Yawgm0th on 1/8/2010 1:14:21 PM , Rating: 1
Forgetting carbon, which is all your average environmentalist cares about these days, air pollution is so much worse than having toxic chemicals in products. It's not like we dispose of cars by dumping them in lakes. The vast majority of components gets recycled and disposed of properly. There is going to be negligible environmental damage from the batteries and other components. Conversely, I might one day be able to comfortably drive with my windows open in a densely-packed city thanks to EVs.

I'm all for more EVs and more efficient cars for the sake of my lungs and the skyline. It's just too bad it needs a huge subsidy to still be unaffordable.


By SoCalBoomer on 1/8/2010 1:27:50 PM , Rating: 2
it's a cumulative effect.

This uses Lithium batteries, which create a HUGE amount of pollution when they are created, when they hit EOL and have to be disposed of or recycled. . . they're a nightmare and that's not even including trying to GET the crap from foreign sources.

What about Zn-Si batteries, which are MUCH safer, higher power density, much LESS pollution upon creation, are entirely recyclable. . .on and on.


By SoCalBoomer on 1/8/2010 1:32:27 PM , Rating: 2
sorry, NiZn, which are available . . .


By randomly on 1/8/2010 3:45:41 PM , Rating: 2
NiZn battery energy density is only about 1/2 - 2/3 of Li and the power density is also lower. The real deal breaker at the moment though is the insufficient cycle life, in the 100-500 cycle range. They seem to be marginally better than NiCd and NiMH, but a long ways from the performance of lithium.
They also have higher internal losses and a significant self-discharge rate.

Things may change but currently they are not competitive with Lithium batteries for the EV market. They do make great 1.6V rechargeable AA cells though.

Automotive sized Lithium batteries are very recyclable, not to mention useful in the used market since end of life is considered to be at 80% of original energy capacity and cycle life is in the many thousands. That's still a lot of battery, especially for stationary applications. NiZn batteries are no safer than LiFePO4 batteries.

Please site your sources for where Lithium production creates HUGE pollution, but nickel and zinc do not...
Also site your evidence comparing NiZn and LiFePO4 recycling difficulties and environmental impacts. How do you know that Lithium batteries are also not completely recyclable? Please don't just make stuff up because you want it to be that way.

Lithium is also more abundant than either nickel or zinc. 30% of the world's nickel supply comes from a single meteorite impact area in Sudbury, Ontario. It may cost more per pound than Nickel, but Lithium is also 16 times less dense so where you need a pound of nickel, only 1 oz. of Lithium will do.

There are no magic solutions for any of this stuff, they all have advantages and disadvantages, technical, economic, and environmental. It's unwise to get emotionally attached to any technology, you have to keep reevaluating it based on it's merits and the merits of alternatives.

Things change.


By Yawgm0th on 1/8/2010 3:57:55 PM , Rating: 2
quote:
which create a HUGE amount of pollution when they are created
In what manner? What does pollution mean in this context? Am I going to breath it in when I drive my car in a big city? Can this pollution be contained at all or is it simply released into the air, ground, or water?


The Anti-Robin Hood
By donjuancarlos on 1/8/2010 2:30:05 PM , Rating: 1
Fantastic. Tax the poor to subsidize cars that only above-average income earners can afford.




RE: The Anti-Robin Hood
By lightfoot on 1/8/2010 3:08:19 PM , Rating: 4
Since when do the poor in this country pay any tax??

The lowest 25% of the population by income has either a 0 or a negative federal tax liability.

Sales taxes don't count because they aren't federal taxes. Payroll taxes don't count because they go toward social insurance (entitlement) programs.

In all honesty this is a tax on the wealthy to subsidize cars for upper middle class hippies. It in no way taxes the poor - it doesn't even take away their welfare.


RE: The Anti-Robin Hood
By Yawgm0th on 1/8/10, Rating: -1
RE: The Anti-Robin Hood
By Kurz on 1/8/2010 4:19:03 PM , Rating: 2
Thats the Socialist way.
Distribute the wealth to different classes.


RE: The Anti-Robin Hood
By Yawgm0th on 1/8/2010 4:28:38 PM , Rating: 1
Any economic system distributes wealth to different classes. Any taxation is inherently redistributive of wealth.

Additionally, subsidies are not the same as socialism -- although, in this case, government ownership of a car company is blatant socialism and uncalled for in any free society.


The biggest buyer of the Volt...
By TheEinstein on 1/8/2010 8:17:43 PM , Rating: 3
Easy money prediction:

The Leftists governments through-out the United States will be the biggest buyer of the Volt.

Well it was an obvious choice!




By Noya on 1/9/2010 2:19:46 AM , Rating: 2
So true! My state has a ton of hybrid Prius and Civics as government agency cars.


Nice :)
By werfu on 1/8/2010 1:02:51 PM , Rating: 2
I wonder how this car is gonna be in our cold harsh winter here in the great white north. We pay significantly less for eletricity (at least in Quebec province) than our southern neighbor, so running this car would be really cheap for us. Also, it would make it a true green car, as our electricity comes from hydro-electric plant.

For those who've got objection about batteries, I think you need some update. Li-Ion batteries as used in these car will not end up in landfills. Lithium is valuable. Batteries will be processed and recycled. I guess that upgraded batteries with newer technologies and holding more charge will be available to replace old one. I do think that the car industry will convert to fully upgradeable car, selling up to date parts that will fit on most model. A standard platform would easily do the trick. There's a lot of science fiction novels that have integrated this.

I've got interrogations on the US powergrid though. If every car in new york city would be plugins, does it power grid could handle the charge load at night?




RE: Nice :)
By Yawgm0th on 1/8/2010 4:36:15 PM , Rating: 2
quote:
I wonder how this car is gonna be in our cold harsh winter here in the great white north. We pay significantly less for eletricity (at least in Quebec province) than our southern neighbor, so running this car would be really cheap for us. Also, it would make it a true green car, as our electricity comes from hydro-electric plant.
The car isn't manufactured with energy from a hydro-electric plant and isn't made with entirely green materials (although it's definitely improvement). If you can afford to own this car, you can afford to drive virtually any car. Energy prices are a very small portion of the TCO of any car.

quote:
I've got interrogations on the US powergrid though. If every car in new york city would be plugins, does it power grid could handle the charge load at night?
Charging outside of peak hours would be a start, but realistically there will have to be overhauls to the entire continent's power grid if EVs are expected to take over. It's still going to be more energy efficient and "green" than petroleum-based ICEs powering all cars, but the infrastructure isn't there yet.


8000 Cars?
By heulenwolf on 1/8/2010 2:36:01 PM , Rating: 2
quote:
GM will initially hopes to sell 8,000 Volts in the 2011 model year. It plans to ramp up production to eventually reach 60,000 units a year.


8000 cars? Doesn't Ferrari sell more cars than that? Is this like the Wii strategy - hoping to artificially drive up sales prices to limiting supply? Even "ramping up to 60,000" doesn't really sound like much for a sedan. How is this production schedule supposed to revolutionize efficient cars and save GM, again?




RE: 8000 Cars?
By lightfoot on 1/8/2010 3:12:19 PM , Rating: 2
Maybe they should see if they can even sell 8,000 of these cars before they ramp up production to build more.

Did GM even sell 8,000 cars total last year? (sarcasm...)


Sure! Why Not????
By FPP on 1/8/2010 6:54:35 PM , Rating: 2
After all, they're losing money making cars anyways....




RE: Sure! Why Not????
By wookie1 on 1/8/2010 9:14:26 PM , Rating: 2
It doesn't matter to them anymore. It's not like it's their money that is being lost.


"Could Be?"
By rzrshrp on 1/8/2010 12:37:27 PM , Rating: 2
I guess we'll just see when the cars are on the market.




Atlas Shrugged?
By menace on 1/8/2010 1:45:41 PM , Rating: 2
quote:
Secretary Chu commented, "We will recapture the lead we have lost and become the world leader in clean vehicles. This is where the real work begins. I know we will succeed."




lol
By mattclary on 1/8/2010 3:40:26 PM , Rating: 2
quote:
Volt Could be Under $40k


lol




By VooDooAddict on 1/8/2010 3:59:02 PM , Rating: 2
Gov't Subsidized Research...

So if the research is paid for by the Gov't ... does that make the end result open for use by anyone?

Is it limited to US companies? If so what impact does that have on trade agreements? Gov't subsidies can be tricky for trade agreements.




Funny money
By wookie1 on 1/8/2010 6:25:42 PM , Rating: 2
Since GM is now gov't owned, and substantial portions of the cost of development and production can now be paid by taxpayers, the "cost" of the vehicle is decreasing (at least the sticker price). Now the gov't can decide if it isn't selling well enough to just lower the price and take more of a loss on each car. Nobody will notice, as the earnings reports won't show a loss because the gov't will just provide additional funding to GM to cover it. Electric cars for everyone! A chicken in every pot!




By rudy on 1/10/2010 3:08:02 AM , Rating: 2
I keeps seeing people say this is a rebranded that but then another guy comes in and says your wrong. GM had a partnership with toyota and many cars were produced in the same factories more of which were technically GM factories. Oh did you see how toyota did that. Produced in the US they say but limit investment in it buy pushing that off to GM. The main point you all need to understand is this. ALL of the car companies are inbred hill billies now. This is why they were all so scared during the economic collapse. The lines between who develops what are blurry as hell all over and it will keep getting worse. Toyota for all the talk was moving toward bigger cars and trucks yet no one talks about this, maybe the fact that they were going in this direction is the real cause of their success not because mick said they USED to build small cars. They couldnt sell trucks till they hired GM engineers to design them. Was it a korean or GM car? Is it a ford or mazda or what? The fact is they all are out sourcing to the same suppliers and they are all mixing up products and so on. So one must wonder how they differentiate? And if just like macs all the claims that company A is better than B have any basis at all or if it is just a bunch of fanbois. The most amazing thing is that GM and Toyota could sell nearly the exact same car built by the same workers in the same factory and Toyota could fetch thousands more dollars for it simply for the name. As one other person said you dont have to build a good car you just have to get people to think its good.




Poor way to look at it...
By R6Raven on 1/8/2010 12:56:31 PM , Rating: 1
quote:
"We have until this summer to figure that out."

Isn't that kind of attitude what lead them to bankruptcy the first time? I can see it now:

GM Exec: "Oh yeah stock holders, we understand our share price is dropping and our quality is dropping faster, but we have until next model year to figure that out."




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