Monday, September 29, 2008

Reaction to the Volt Launch

The year was 1972. Then Motorola R&D Chief Martin Cooper told designer Rudy Krolopp that they had to have a portable cell phone prototype in six weeks. Rudy’s response?

What the hell’s a portable cell phone?”

Ten years and $100 million dollars later, they launched their phone, the $3,995 DynaTac 8000x, affectionately dubbed “the brick.” If only the wealthy could afford it, and calls were a dollar a minute (staggeringly steep in 1983), some critics said it was too expensive to buy, too expensive to use, and the range wasn’t what they would have liked.

So what exactly, was the point?

25 years later, cellular phones would be nearly ubiquitous worldwide, with millions of consumers ditching their traditional home landline phones for their cells (me included).

Fast forward to September 16, 2008: GM unveiled the world’s first extended-range electric vehicle, the Volt, to a curious and sometimes puzzled press corp. Some reporters noted that it likely would be expensive to buy and the electric-only range wasn’t what they would have liked.

Sound familiar?

I wasn’t surprised when people questioned the yet-to-be-announced but oft-speculated $40K price tag. After all, $40K is well above the median price for a new car in this country, and the Volt is a compact, four-passenger car. Even with the $7,500 dollar tax credit, it’s a lot of money for a compact, but not unheard of for tremendous performance (e.g. BMW 135i, Audi A3 3.2).

But I was surprised to see some folks miss the point by citing the Chevy Cruze as being the far more significant car to roll out in 2010. Their argument is that it will be affordable to mostly everyone (relative to the Volt), and therefore it will save more fuel overall as more people are able to buy it (#/units sold x mpg increase = total fuel saved).

Don’t get me wrong, I think the Cruze will be great, and I’ve posted earlier on the virtues of turbocharging everything on this site. The Cruze will be marginally bigger than a the Cobalt, but its 1.4 liter gas turbo will push fuel efficiency into extremely competitive territory; interestingly the Cruze and Volt will share a common body structure, known in GM circles as Delta II. But is the Cruze really more significant than the Volt?

If the future of the auto industry ended in December 2010, this view would stand to reason. But the difference in interpretation of the significance between the view of some and GM is the long-term implications of the Volt, and its ability to begin to write a new chapter in the annals of energy and personal transportation. GM’s Frank Weber and Larry Burns made a very compelling case, and if you missed it, here it is in a nutshell:

· GM extensively studied the range issue, and found that the forty-mile range from the battery is the sweet spot for most U.S. consumers. Roughly 80 percent of drivers could commute without using a drop of gasoline;

· In the next iteration of the Volt, the electric-only range would still be forty miles, the aim will be to reduce size, mass and cost from the battery pack (keep Motorola’s “brick” in mind), which will bring down the cost of the car;

· For the next iteration, and subsequent extended-range electric vehicles, stir and repeat.

I thought they made this pretty clear. Thoughtful people ought to agree that the implications for weaning ourselves off oil for personal transportation are staggering . . . no, not by 2010, but neither will it take fifty years (keeping in the mind the adoption/development curve of the cell phone).

As I wrote after watching the unveiling of the production Volt, I think the Volt will be remembered in coming years as much for what it will represent—the all-too-rare game-changer ushering in the electrification of the automobile and the overcoming of our complete reliance on diminishing oil reserves for personal transportation. GM is one of our clients, but I still really believe this.

As Burns pointed out, by 2030, two-thirds of the world’s population will live in cities where vehicle speeds average 12-13 miles per hour. Using the tech represented in the Volt, close to none of these would need gas or diesel to drive around town. No gas. No diesel. No idling. Think about it.

Agree? Disagree? I'd love to hear what people think about this.

No comments: