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August 3, 2011 by Matt

2011 Chevy Volt

The latest report in a long string of stumbles out of the starting blocks, Chevy moved exactly 125 of their new Volts last month, far below expectations.

With most technological vanguards, an initially slow rate of adoption is somewhat to be expected, but given that the Volt was barely visible through the cloud of hype surrounding it for the past year and a half, the recent sales figures are stunningly low—if not entirely unsurprising.

Legions of automotive journalists have addressed the myriad of possible angles to the Volt narrative, so I won’t attempt to cover it in any sort of comprehensive sense. That said, I do want to emphasize one aspect of the story in particular: The connection between the overambitious yet half-baked nature of the car’s technology and the subsidies that underpinned its development.

The problem here, as with most government-funded endeavors, is that the absence of “skin in the game” in the form of the company’s own capital means risk assessment and market analysis is much less rigorous than it would be otherwise. When a company isn’t constrained by a sober appraisal of the position of the their product vis-a-vis market demand weighed against the capital they’re investing, they’ll almost always want to push the specifications of their product beyond what the market is prepared to accept. If it’s not your money, why not go nuts and make the most sophisticated car you can? Gotta give the taxpayers their money’s worth, right?

So, in contrast to other companies (Toyota, Honda, Ford, etc) who have been doing their due diligence, easing alternative propulsion technology into the marketplace progressively and deliberately—their own investments at stake—and achieving a fair amount of success (see: Prius, Civic and Escape Hybrids), GM, flush with capital they’re less accountable for, made the financially-dubious attempt with the Volt to pass their rivals in one fell swoop. It’s evident that a more conservative rolling-out of hybrid technology into their model line probably wouldn’t captivate the automotive press, but it might lay a foundation for more long-lasting success.

Government subsidies almost invariably produce solutions miscalibrated to market demands, whether below or above the parameters requested by would-be buyers. The Chevy Volt carries the unfortunate distinction of having its feet in both camps: Too “advanced” compared to other hybrids, which mesh better with existing infrastructure, and less car for the money than most consumers are looking for (seating capacity for only 4, range restrictions, very expensive even with “incentives,” etc). Those obvious reasons for its lack of popularity seem to escape GM, at least publicly, who prefer to harp on about “supply problems” and so forth. I don’t relish the premonition, but as with the EV1, I fully expect the Volt story to end in ignominy.

Filed under: Alternative Propulsion, Car Industry, Chevrolet, GM, News


  1. John D says:

    And that’s really too bad. I think it’s a pretty nifty car…good looking, too (especially compared to the sedans they’ve been turning out for the past 5 years or so). Just a bit too different than what most people are willing to spring for. Ah well. When are people going to realize that when the government sticks it’s nose in something and starts ‘fixing’ things or providing ‘solutions’ for certain economic conditions, that a huge majority of the time it just makes things worse or, at best, wastes huge amounts of money? I guess there’s just not enough evidence throughout history that would confirm such a conclusion. Oh wait…there is. Let’s use some good old fashioned critical thinking and common sense, people. It’s time for us to start thinking outside our politics. When it comes down to it, who would you rather have running the country: a politician or business man? Someone who repeats words and theories to impress, or someone who actually knows what is effective in the real world? About the only thing I agree with Obama about is that we do need a change…he just wasn’t the change we needed (which should be pretty self-evident by now).

    • Matt says:

      It is unfortunate that so many resources should be wasted on the car. The whole thing just has echoes of the cheap “compacts” GM (and Ford) crapped out during the early ’70s fuel crisis, in response to the flood of more fuel-efficient and cheaper imports, who had been patiently anticipating such a turn of events. I just don’t feel like GM ever really learns anything, you know? Wish they would.

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