Monday, May 30, 2011

The Volt: More Good News

The New York Times leads today with a piece about Detroit's recovery, but somehow manages to overlook the continuing and crucial good-news story of the Chevy Volt, which will eventually do for General Motors what the iPhone did for Apple. This would only be a business story if electric cars were not so critical to American manufacturing and the planet, too.

In response to strong demand and glowing reviews--including Motor Trend's "Car of the Year" and a strong endorsement of its engineering from IEEE Spectrum--GM will increase production of the Volt (the Opel Ampera in Europe) to 60,000 a year; it had originally projected a third less. GM's Volt program is beginning to reach the point at which scale will drive down the prices of its most innovative components, as well as second generation development of its batteries and proprietary software. This will make electric mobility feasible for the mainstream market and drive, in turn, the smartening of the electric grid. "Our challenge," a friend at GM writes, "will be, going forward, how do we reach the ordinary mainstream customer so that we can continue to grow the volume and with this added scale, continue to reduce our costs."

Incidentally, customers love the car. My friend, a program insider, tells me that marketing people involved with early adopters mostly hear what car companies long to hear. The car is "fun to drive." Any Volt on a dealer's lot will not sit there for more than a day; GM has nearly 700 selling dealerships and a little over 300 units in inventory. The Volt team is not only gearing up for a full US national launch for later this year but also a global launch in Europe and China (and a roll-out the following year including Australia and Israel).

The Volt is connected to GM's OnStar network, which will eventually allow for charging information about all Volts on the road to roll up to power companies; and also allow GM to monitor cars and download software updates. (Think of OnStar as GM's iTunes.)  "We are collecting a good deal of data from our OnStar connectivity," my friend writes, "which is proving particularly rich. On average, our Volt customers are driving over 1,000 miles before they have to fill-up their gas tanks, which ends up being about once a month. Nearly two-thirds of their miles are powered from electricity from the grid. The OnStar MyLink mobile app for smart phones, which monitors and can initiate charging, has been downloaded by nearly a third of the customers (and is used many times a day)."

Early Volt buyers seem to be a fascinating group: the kind of tech pioneers who feed valuable information back to product developers. Well over a third of them were not even considering buying another car when they purchased their Volt. Toyota Prius, BMW 3-series, and Honda luxury makes were the cars most often traded in. Nearly half have an iPhone, nearly half have an iPad and nearly a quarter have or are planning to get home solar. They are highly educated and affluent: mostly male. Nevertheless, presumably, this group will not be voting Republican.

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