The Chevy Volt is a good car, with marketing challenges. I asked GM about those challenges as it approaches the 60,000 units-sold mark.
Let me preface the interview with a brief explanation of the Volt and my own experience with the car.
The Volt, first introduced in December 2010, is a plug-in hybrid (or can be more technically described as an electric car with a range extending gasoline powered generator) that can go between 30 and 40 miles on battery. After that, a range-extender gas engine kicks in and adds another 300 to 350 miles.
I drive a 2013 Volt, which I lease relatively inexpensively (for $220 a month). I've had it for a little more than a year. It's easily the most impressive vehicle I've ever driven. Mostly because it's changed the way I think of the automobile. Miles are not measured out in gallons of gas but in energy consumed -- and gained.
Let me give a quick example.
Recently, I drove up into the Hollywood Hills. From my house, it's about a 15 minute drive to the base of the hills (small mountains, really) and another ten minutes to the top.
In battery mode, the power and speed the Volt delivers (completely silent) going up the steep hills is competitive with that produced by the (ear-piercing) Ferraris some Hollywood folk drive. Point: in battery mode, this car is not slow.
But if one goes up, one must come down. This is the beauty of the Volt. Going back down the hills to the freeway, I gained about 5 miles of battery power (because the car can regenerate energy). Then on the freeway it was battery power all the way back to my home.
This never ceases to amaze me.
But my positive consumer experience aside, I worry about the Volt. Would GM -- perish the thought -- pull the plug (pun intended) on the Volt because of meager sales? After about three years, it's sold just under 60,000 vehicles. I think it's safe to say that's not a ton of units.
My concern is markets other than Los Angeles. In the small community I live in, there are probably a half-dozen Volts including mine. And Volts -- as far as electric vehicles go -- are pretty common when driving around the city.
But go to other markets, like suburban Philadelphia or small towns outside of Los Angeles, and the Volt pulls a disappearing act. And even in Los Angeles these days you're more likely to see a (much more expensive) all-electric Tesla. And in places like Philadelphia (as in many other markets), the Toyota Prius is everywhere, with virtually no Volts to see on the road.
Now, I realize that the hybrid Prius is different from the Volt. But it's the mind share thing that worries me.
And about Los Angeles. Teslas (Model S) are multiplying like crazy here. In places like Beverly Hills, for example, the Tesla is replacing the Porsche Panamera as the vehicle of choice. And it's becoming more common everywhere in the city, as I said above.
With these concerns in mind, I asked Dora Norwicki, Volt marketing manager at GM, and Randy Fox, a spokesman for GM Electric Vehicle Technology, about the company's marketing strategy going forward.
Q: Do you have different marketing strategies for different regions?
Norwicki: In general, yes and no. Not every dealer is certified to sell Volts. Only two-thirds of Chevrolet dealers sell Volts -- because of the electrical requirements and the tools required; and the special needs of the service. The dealer would have to make a conscious decision to opt in. So, that's the only way they would receive allocation of the car.
The fact of the matter is, the State of California is the most active in pursuing clean air and emissions and they have legislated quite heavily. And [California] incents their residents to purchase cars of this class. For example: the tax rebate that you get along with the federal tax credits are quite favorable compared to other parts of the country that have access to the car. [Editor's note: California will cut you a check for $1,500 if you buy or lease a Volt.]
So, I would say that is one of the key factors as to why you see so many in California. And the infrastructure is more developed with regard to charging stations.
Does weather have anything to do with marketing? Maybe something that affects East Coast sales, for example? Because battery life can be adversely affected by cold weather?
Norwicki: There is a level of impact based on weather. But the customer controls what sells and what doesn't sell. What's' more prevalent on the East Coast is the sales of diesel engines and vehicles as opposed to electrics or hybrids -- that would be their alternative fuel vehicle of choice.
No different than full-size pickups selling in Texas. They (pickups) don't sell particularly well in New York City.
What are the biggest markets for the Volt outside of California?
Norwicki: Michigan. Illinois. And New York and New Jersey are also big markets. The Washington, DC-Baltimore area: the i95 corridor. And then you have pockets in Florida and Texas.
Is there a barrier to Volt sales in the sense that not everyone understands fully what the Volt is? In other words, some people who may be casually considering a hybrid or electric car may not know that it's different from a Prius hybrid, for example. And they may think it's just an expensive take on the Prius. The Volt starts at about $34,000. So, I'm talking about your average consumer, who may not know that much about hybrids, plug-in hybrids, and electric cars.
Norwicki: It's an extended-range electric vehicle. It's a unique car in that sense. That fact that some people may not be familiar with the Volt technology is a function of whether they were interested in alternative-fuel vehicles available to them. If you're not in market, you're not likely to pay attention. Is it a little confusing to people? Perhaps.
But how can you get a simple, easy-to-understand message to consumers about what the Volt is?
Norwicki: One of our key messages is that our owners -- and we track them quite extensively -- on average go 900 miles between each fill-up. Which is an attention-getter and stops people in their tracks when they think about [that statement]. Most of our owners have told us that they spend very little time driving on gas. The majority of their travel on the Volt is in electric mode. So, to them, it is an electric vehicle.
Fox: The situation that you're describing is exactly the challenge that we have. In order to communicate the message on how the Volt works, you can do that on the Web site, but if you look at a 30-second commercial, that's where it's challenging. And unless you've been in the market specifically looking at the Volt, the awareness is still something that we're working on.
What about TV ads? I don't see Volt TV ads these days.
Norwicki:Generally speaking, the category isn't advertised on TV. You go where the target customer for your vehicle is. And oftentimes people that are drawn to specific categories of cars, alternative-fuel vehicles in particular -- those people do not view TV. They are online. They're in social media. But they are not typical TV watchers. So just because you don't see us on TV doesn't mean we're not advertising online and in social media.
If you advertise on TV, you'll increase awareness, but that doesn't necessarily mean you'll increase consideration. So, by targeting we can more efficiently use our marketing funds.
Is the Prius a Volt competitor?
Norwicki: The Prius plug-in would be the most appropriate competitor. The original Prius, the hybrid, not so much. And you have to put everything in context. The Prius has been in the market for 10 years. And it's predominately sold, if I have my facts correct, in California. So, you have people who are more familiar because it's been in the market longer. The Prius plug-in is a relatively recent addition to their lineup. [Editor's note: The Prius plug-in has a range of 10-15 miles on battery-only power; the Volt has between 30 and 40 miles.]
Certainly, [Toyota has] the benefit, versus Volt, of brand awareness. So, unless you spend considerable amounts of money to get name awareness, it takes time.
What about the Tesla and the hold it has on the media mind share right now?
Norwicki:Anything that helps the category is good. The enthusiast population is well aware of the difference in price points [between the less expensive Volt and pricey Tesla]. Definitely, it's on the high-end luxury side of the market.
Do you think the Volt has been successful based on the numbers?
Norwicki: 58,000 Volts sold to date. That means we've outsold [individually] the [Nissan] Leaf, the Prius Plug-in, the Toyota Rav 4 EV, The Ford C-MAX Energi, The [Ford] Fusion Energi, The Focus EV, and the Telsa S. So, I guess in context, it is a lot. In the alternative-fuel space it's at the top, and we have been there for some time. Expectations need to be set. This is new technology and it's going to take time for people to understand that this vehicle could be for them. Certainly, California has embraced it and we're quite appreciative of that. And good word-of-mouth; the customer enthusiasm for this car is huge. And it's been on top of the pile in all of the Consumer Reports owner satisfaction ratings. And we're beginning to see consumers trading in their first Volts and getting a second one. And that's how it starts.
Is GM really serious about electric cars?
Fox: In addition to the Volt, we have the Spark EV. That's pretty successful. And we've taken the extended range [electric] propulsion system to the Cadillac ELR. Then we have the e-assist strategy, some stop-start systems (in certain conditions, when the vehicle is stopped the engine will stop running to save fuel). And I think you're going to see more and more as the years go by.
About the Spark EV. Why is it sold only in California and Oregon?
Norwicki: It's a limited-availability car sold globally. So, we have to share the available technology and production availability with other countries. To make sure we were actually able to grow our volumes, it made all the sense in the world to go where the infrastructure is. Like I said, not every state has charging stations, so much of the growth in the segment is going to be where the infrastructure exists and where the customer is and where the mind-set is to support that.