Dashboard: Jun-Sep 2013

Profitability comes in many forms. PlugIn's afford GM/Toyota CARB credits that enable them to sell their land barges (Low MPG vehicles) without taking a huge hit/penalty/cost. One can attribute those penalty dollars not paid as profit.

 

No it isn't. Toyota is in stead, opting to NOT go electric. That's why they haven't anounced any plans to send the RAV-4ev nation wide . . . that's why they've reversed their decision to sell their Scion EV and do lease-only arrangements and only with businesses/organizations ... and that's why you hear ZERO about a larger capacity battery in the PiP. You hear lots of 'maybe next generation' that the PiP will get a seriously larger capacity battery ... but you don't hear it from Toyota. What you hear from Toyota is their manic attempt to put a hydrogen vehicle on the road. Why? Their lobby has gamed CARB so that hydrogen cars will get WAY larger CARB credits than EV's will. So with smaller credits on EV's (you know ... those credits that allow you to sell high profit land-barges penalty free) you can expect WAY less electrification of Toyota's products.

 

Don't forget the effects on CAFE, which is maybe what you meant.
Then there are the intangibles in publicity and foot traffic to dealers these new tech vehicles generate.

In terms of basic accounting though, products that incorporate new technology or a novel concept generally aren't profitable until the second generation.

 

The catch is, that wasn't the plan for Volt. GM had planned to hit mainstream volume in the third year. They even stated a production capacity target of 120,000 with the hope of actually needing it. Falling well short of that with sales and the drop in MSRP raises good reason to ask what the intent is with the remaining years of the first generation.

 

No, they aren't likely selling below their variable costs from what we have heard from analysts. We have gone round and round into the silly session of investment here, where some want to believe a plug in car needs to cover fixed costs in its first year or two on the road, which is the idea that car companies should be very short term thinkers. This is the same reasoning that SUVs and trucks are the only thing american car companies should make in the early 2000s because they were the most profitable in the short term. That kind of thinking did not work out well for gm or chrysler.

When a new car is developed it is extremely rare that it recoups R&D in the first generation. We have had a bunch of technology haters, divide R&D by the number of volts gm has sold to this date assuming there would be no marketing advantage or future cars to recoup that price.

 

To me, most of this thread is a bit of silly circular arguments...

But I'd like to point out that having patents is a big difference from being able to build and make a cost effective, reliable power train. You can have a patent on something that makes no business sesne. You can have a patent on something that is technical genius, but too costly to make.

Mike

 

I can certainly agree with that.

 

To all, if you have not seen the movie "Flash of Genius" please watch. It shows how automotives will go to great lengths to keep from paying royalties on patents. Remember the intermittent wipers.

 

We won't know the exact but the difference is $76k - $90k vs $35k - $45k.

PiP starts from $30k.

 

Industry Resistance. What a great topic. Automakers fight change. We see that all the time when it comes to regulations. They'll kick & scream even to do just the minimum. Example are abundant too. It's sad. Ironically, Toyota has actually worked that to their advantage with respect to Prius.

Think about how unstoppable the advancement of Prius has been. There's simply too many ordinary people that purchase them. Those are the consumers who just plain don't care about the rhetoric. For that matter, they don't even follow it. They're purchase decision primarily comes from checking out the car for themselves. Stopping at the dealer for a close up inspection and a test-drive convinces them to buy.

It's a simple formula... deliver something practical & affordable. The hype surrounding Volt was amazing. I kept asking the "Who" question in dismay, wondering how that could possibly appeal to someone from middle-market. It was a vehicle with characteristics which didn't match that of other mainstream offerings. How could something so different attract enough sales?

The efficiency and green approach has drawn in many for closer looks. The midsize seating of Prius and generous cargo area won them over. Adding a plug requiring nothing more than the same knowledge & outlet required to recharge their phone as a package comparably priced with other upgrades option positions it for mass appeal.

Where's the resistance going to come from with that? What good would it do for other automakers to resist offering something similar? If they try to step it up by offering a system with larger capacity, it would act as an endorsement for Prius... confirming the addition of a plug is safe & reliable.

Notice how the computer industry thrives on purchases of products with well-balanced features? Only the dedicated purchase systems with large capacities (storage & processor). The major just get something in the middle. How is the automotive industry any different? Think about where production & profit are focused.

 

November Sales:

9,801 Prius liftback
2,227 Prius v
3,001 Prius c
1,100 Prius PHV

2,003 Leaf

1,920 Volt

2,398 C-Max
941 C-Max Energi

870 Fusion Energi

68 Accord PHEV

1,031 Civic Hybrid

 

November 2013 Dashboard - HybridCars.com

Take rate 2.9% for hybrids, 0.71% plug-ins, 0.93% for diesels
Monthly Plug-In Sales Scorecard