Even after falling subject to a federal safety investigation and disappointing sales of the Chevy Volt, it's possible that General Motors and Chevrolet executives could look back on 2011 as the halcyon days for the plug-in hybrid. That's because 2012 looks so foreboding for Volt already. GM faces at least three problems with Volt heading into 2012. And then there's Mitt Romney.
As Forbes reported on Dec. 30th, "the 64-year-old Republican presidential candidate and former governor of Massachusetts responded with dismissive laughter when asked what he thought of the Chevy Volt, adding that the plug-in hybrid is an 'idea whose time has not come.' His campaign later went on to defend the statement as reflective of the car’s slow sales — but critics were quick to pounce."
GM already faced a tough new year for Chevy's electric car before Romney's diss, even while CEO Dan Akerson has been publicly confident about the Chevy Volt. First, while executives have leaked word that it is imminent, GM hasn't yet announced the "quick and cheap" fix that they've been promising to make to Volt to eliminate the post-crash batter-fire problem with the car that feds are investigating.
Second, at a time of continued fiscal distress for the United States, the huge tax breaks granted on Volt purchases are getting closer scrutiny than ever. And third, as Romney noted, the car just isn't selling that well (although 2011 sales aren't reported until tomorrow), which of course is partially the fault of problems No. 1 and No. 2. So far this year GM has sold only about 6,000 Volts compared with its initial projection of 10,000 sales.
Likely in 2012 problem No. 2 will gain more traction. Each Volt sold so far may have as much as $250,000 in state and federal incentives behind it, according to a new analysis by the conservative, Michigan-based Mackinac Center for Public Policy — an amount that includes not only outright tax credits of up to $7,500 per purchaser but also direct funding for GM and suppliers and other amounts.
Morever, Volt critic Mark Modica alleged on Fox Business that many Volt purchases are not direct to consumers but, rather, to fleets whose purchasing practices are heavily influenced by the federal government. Fleet purchasers range from the White House to local governmental units such as townships to General Electric, a company that is heavily beholden to the federal government.
He called Volt a "'moonshot' with an electric Edsel." Some "wealthy elitists might be buying [Volt], but why charge taxpayers $7,500 to subsidize the wealthy?"
Meanwhile, charged Modica, an associate fellow at the right-leaning National Legal and Policy Center, ordinary consumers tend to yawn at Volt — or flee it (even as tech-obsessed CNET readers picked Volt as their car of the year). "Every time I speak to someone from a Chevy dealership," Modica said, "I'm hearing that there's not a great deal of interest. Gawkers are coming in but not really buying." Many dealers, he said, use Volt as "bait" to swing people over to a Chevrolet Cruze.
So expect the issues around Volt to achieve a higher wattage in 2012. GM has boosted production of the car and promised higher sales. "Whither Volt" will become one of the most interesting questions in the auto industry in 2012.