GM's Spark EV Strategy

[FutureFolly]

The Volt and the Prius had almost the same buzz early in their life. "This is what we'll all be driving before you know it" followed by "the economics of all this technology will never make any sense". Of course, no one understood what they actually represented. The Volt was developed because electrification technology was seen as necessary for GM so they could isolate their products from the extreme volatility in oil prices experienced through out the 2000s. Oil prices haven't been a catastrophic problem they were once feared to be, and battery costs haven't fallen nearly as fast as some speculated they would. On top of the PHEV technology costs, it was also designed with a more premium interior closer to a Buick that raised the entry price out of reach of many would be buyers. To the narrow minded this makes the Volt a failure. Where it has succeeded is creating a viable vehicle with a cost of ownership detached from the price of oil.

Instead of aiming for the moon with the Spark EVs sales goals like GM did with the Volt and Ford with pretty much all their plug-in vehicles, they decided to use the Spark EV almost exclusively as a platform to develop their EV technology. Executives specifically are happy with the amount of time the Spark EV spends on dealer lots and excellent professional reviews. It's pretty clear that without California's mandate GM would still be developing the Spark EV. It probably wouldn't be available to anyone outside of GM, but the same research would still be going on. Instead of designing another halo car like the Volt, GM wanted the economics of Spark EV ownership to be paramount. I see their business model for the Spark EV as trying to make the best appliance car possible.

It clearly is both a compliance car and an appliance car, but how long before the nationwide launch of the Spark EV? Larger question, do you think GM wants the Spark EV to be a real success?

I think GM will launch the Spark EV nationwide at some point before 2020 when they can break even on each sale at about the current price point. I don't think GM has high hopes for the current Spark EV. The next Spark will no doubt have EV consideration built into it from day one that lowers the number of custom parts needed for the lower volume EV model, and if costs drop enough an executive will eventually push for a shift to a nationwide strategy. Also, if it's ever going to sell well it needs a generation or two of investment to feel like a little bit nicer of a car on the inside.

GM executives have done a much better job than Nissan execs of lowering corporate expectations and managing losses from EVs. Clearly with truck sales booming again and the pressure of bankruptcy has easing quite a bit, the financial performance of every business segment isn't such a central focus anymore. Positive media like winning the Car & Driver comparison test gives them a reason to support further investment by reinforcing how well the EV engineers have already done.

 

[emv]

I love our Spark EV. It's even made me reevaluate my opinion of the Chevy Volt.

I hope I'm wrong but I disagree with your assessment. It's a compliance car and never would have been built it the General didn't have to. I fear the ghost of Bob (we need more hummers) Lutz still haunts the halls of GM.

 

[FutureFolly]

Even though GM is no doubt subsidizing the price of the Spark EV I think it's also clear that they want it to be a fun, well reviewed car that will eventually be profitable to sell. With only a limited number required to be produced, finding buyers at any price point of BEV would have been possible. The Rav4 EV is a great example of how much niche demand exists across the price spectrum.

Nissan, Mitsubishi, Ford, GM, and BMW are the only car makers that have shown a strong commitment to pushing forward with BEV technology. Their strategies have been remarkably different though.

As the first out of the gate, Nissan has been really determined to gain a strong lead in sales numbers and profits to justify their large investment. As a result, the Leaf is available in the widest range of prices.

Mitsubishi was the first to come out with an EV appliance car at a reasonable price, but i-Miev suffered from the problem of being terrible.

Ford had sky high hopes for the Focus Electric. I think its biggest problem was too many people only saw it as a more expensive Leaf. Its sales numbers are fine for meeting compliance obligations, but they makes their national plans look foolish.

BMW has really focused on making the i3 as prototype as possible. For a car with a Roundel it doesn't have a ridiculous price point. BMW will probably get a lot of Mini owners very interested.

GM's primary EV strategy has focused around the Volt, which has stands out range among PHEVs. Price pushed a lot of people into a Cruze, even if they really liked the test drive. I don't think it's an accident that the Spark EV won KBB's lowest 5Y Cost of Ownership. I think they specifically chose a base price point exactly where it needed to be to beat anything else on 4 wheels. Their real challenge is bringing their costs down to a point where the subsidy is trivial.

Even choosing the Spark over the Sonic was a long term strategic choice that wouldn't have been done if they didn't have larger ambitions.

 

[cwerdna]

Nissan, Mitsubishi, Ford, GM, and BMW are the only car makers that have shown a strong commitment to pushing forward with BEV technology. Their strategies have been remarkably different though.

Sorry, I'd change the names of the above to be these, in the order of seriousness:
Tesla, Nissan, BMW and Mitsubishi.

GM's current only pure BEV is what this forum is about and it's resulted in puny sales in only 2 states. Yep, Ford made some very bold statements early on (hilarious if you look back) but basically got only CA compliance car numbers in sales.

Although the i-MiEV has been a sales disaster in the US, it and its re-badged variants elsewhere in the world haven't done as badly: http://insideevs.com/global-sales-of-mitsubishi-i-miev-exceed-33000-units-ev-enters-malaysia-as-countrys-first-production-electric-vehicle/. It will be interesting to see if the changes and price cuts for MY 2014 (http://green.autoblog.com/2013/12/04/mitsubishi-i-miev-priced-ridiculously-low-22995/) will resurrect them, a bit.

TonyWilliams put together this chart: http://www.teslamotorsclub.com/showthread.php/25590-The-Three-CARB-ZEV-Compliance-Car-Classifications.

 

[FutureFolly]

Nissan, Mitsubishi, Ford, GM, and BMW are the only car makers that have shown a strong commitment to pushing forward with BEV technology. Their strategies have been remarkably different though.

Sorry, I'd change the names of the above to be these, in the order of seriousness:
Tesla, Nissan, BMW and Mitsubishi.

GM's current only pure BEV is what this forum is about and it's resulted in puny sales in only 2 states. Yep, Ford made some very bold statements early on (hilarious if you look back) but basically got only CA compliance car numbers in sales.

Although the i-MiEV has been a sales disaster in the US, it and its re-badged variants elsewhere in the world haven't done as badly: http://insideevs.com/global-sales-of-mitsubishi-i-miev-exceed-33000-units-ev-enters-malaysia-as-countrys-first-production-electric-vehicle/. It will be interesting to see if the changes and price cuts for MY 2014 (http://green.autoblog.com/2013/12/04/mitsubishi-i-miev-priced-ridiculously-low-22995/) will resurrect them, a bit.

TonyWilliams put together this chart: http://www.teslamotorsclub.com/showthread.php/25590-The-Three-CARB-ZEV-Compliance-Car-Classifications.

I should have included Tesla. I was really only thinking of traditional car companies that want to sell electric vehicles. GM is committed to the technology but not the market.

PHEV hybrids with a range over 25 miles are practical enough to be categorized together with BEVs. The design of the Volt was much more about creating a range extender with a BEV than creating a hybrid with a big battery pack.

Comparing the major world automakers:

-Nissan is firmly committed to BEVs and CVTs as their solution to MPG standards. They aren't the trailblazer now they were when the Leaf launched though.
-Honda and Toyota are strong supporters of hybrid and fuel cell technology, but they're publicly very against the transition to BEVs.
-Mitsubishi wants to stay relevant as a small player through EV technology. It's basically electrify or die to them and that's admirable.
-Hyundai/Kia hasn't taken a strong position any which way. They will most likely invest significant resources into whichever option seems to be working best for them.

-Tesla is battery electric vehicles. It's their body, mind, and soul. Tesla is trailblazer in so many areas(i.e. Range, DC-FC & Network, Swappable Battery Packs) not giving them credit for the general adoption of EVs in the future will be difficult.
-GM is committed to electric vehicles. From the beginning their emphasis was on designing the vehicle to match their customers. They're not the market leaders they could be, but the Volt is still very relevant.
-Ford's resistance to diesel's seems to be their biggest indicator of commitment to electrification. They were early supporters and developers of hybrid technology, and almost everything they say about the future of the industry includes electrification of some form.
-Fiat/Chrysler won't go near an electric vehicle they aren't forced to build for a good number of years. They have a good partner in Bosch at least.

-BMW is just getting out of the gate, but their carbon fiber technology could really help them gain momentum and stay relevant.
-VW/Audi has taken a scatter shot approach to next-gen vehicle powertrains development. They seem much less interested in hybrids than they do in BEV and Fuel Cell technology. I personally like their Audi A1 Wankel re-BEV the most.
-Mercedes has mostly been dabbling with next-gen technology. They will probably go with whatever technology can span the gap between their luxury and commercial division best the way their diesel technology does.

I would reorder the EV commitment list as:

Tesla, Mitsubishi, Nissan, GM, BMW, Ford

 

[cwerdna]

GM is committed to the technology but not the market.

PHEV hybrids with a range over 25 miles are practical enough to be categorized together with BEVs. The design of the Volt was much more about creating a range extender with a BEV than creating a hybrid with a big battery pack.

Disagree w/your categorization.

-Nissan is firmly committed to BEVs and CVTs as their solution to MPG standards. They aren't the trailblazer now they were when the Leaf launched though.

Yep, but they've also dipped back into the hybrid game too after the Toyota HSD-based Altima Hybrid (my mom has one) was discontinued and are now using single motor, dual-clutch non-HSD based hybrids.

-Honda and Toyota are strong supporters of hybrid and fuel cell technology, but they're publicly very against the transition to BEVs.

Yeah, but Honda has the Fit EV available in more states than even the Spark EV (http://automobiles.honda.com/fit-ev/) but it's lease only and they're basically done now.

Agree that Toyota's not pro-BEV.

-Mitsubishi wants to stay relevant as a small player through EV technology. It's basically electrify or die to them and that's admirable.

I don't think the i-Miev sales and other electrification efforts are particularly large for them in terms of sales. Per http://www.mitsubishi-motors.com/publish/pressrelease_en/ir/2014/news/detail0918.html, they produced over 1.2 million vehicles in 2013.

i-Miev cumulative worldwide sales are somewhere north of 33K. I doubt they've reached 53K. I found this 18K sales figure for the Outlander PHEV for 2013: http://insideevs.com/in-2013-mitsubishi-sold-9608-outlander-phevs-in-japan-approximately-18000-worldwide/.

-Hyundai/Kia hasn't taken a strong position any which way. They will most likely invest significant resources into whichever option seems to be working best for them.

Virtually all major ICEV makers have been dabbling for FCVs for ages, including Nissan, GM and Hyundai/Kia. I've driven their FCEVs and a bunch of other FCEVs, PHEVs and EVs at https://web.archive.org/web/20120916110904/http://www.altcarexpo.com/exhibitor_vehicles.html.

Hyundai/Kia has been dabbling w/hybrids and EVs along w/FCEVs. Kia Soul EV is coming soon.

-BMW is just getting out of the gate, but their carbon fiber technology could really help them gain momentum and stay relevant.

Uhh... sorta yes and no. They had the Mini-E lease-only test vehicle followed by the ActiveE. Many ActiveE leases are running out now and many of the Electronauts have been turning in their cars over the last month or so.

I put them as very serious because they've invested a HUGE amount towards the i3 (dedicated platform, carbon fiber, new processes, etc.) There are a ton of videos out of various parts of its production process.

If the numbers at http://ev-sales.blogspot.com/ are right, total BMW i3 sales have already exceeded total Spark EV sales, despite it going on sale in November 2013 (https://www.press.bmwgroup.com/usa/pressDetail.html?title=bmw-i3-market-launch&outputChannelId=9&id=T0156045EN_US&left_menu_item=node__803).

Although they've had widely varying presence at auto shows (sometimes VERY poor) and other shows, they have been doing test drive events around the country. I test drove an i3 2x at CES in Vegas in January 2014. IIRC, they had 45 cars for test drive.

The running list of events is at https://www.facebook.com/notes/bmw-i3/bmw-i3-test-drive-events/584642081609657. If you can't see the post, here's an excerpt of ones that haven't passed already + a few recent ones:

July 1: BMW of Roxbury, Kenvil, NJ
June 28: BMWi of Manhattan, NY
June 27: BMW of Tenafly, NJ
June 21: Park Avenue BMW, Rochelle Park, NJ
June 21: Prestige BMW, Ramsey, NJ
June 20: Paul Miller BMW, Wayne, NJ
June 20: BMW of Bayside, Douglaston, NY
June 18: Princeton BMW, Princeton NJ
June 17: BMW of Newton, NJ
June 14: BMW of Morristown, NJ
June 13: BMW of Bloomfield, NJ
June 12: JMK BMW, Springfield, NJ
June 10: Flemington BMW NJ
June 7: BMW of Bridgewater, NJ
June 6: Daniels BMW, Allentown, PA
June 6: Life Quality BMW, Brooklyn, NY
June 5: Thompson BMW, Doylestown, PA
June 3: BMW of Reading, PA
May 30: Circle BMW, Eatontown, NJ
May 30: Faulkner BMW, Lancaster, PA
May 28: BMW of Freehold, NJ
May 24: Open Road BMW, Edison, NJ
May 22: West German BMW, Fort Washington, PA
May 20: BMW of Mount Laurel, NJ
May 19: BMW of Devon, PA
May 19: BMW of Fairfax VA
May 15: Otto's BMW, West Chester, PA
May 14: Union Park BMW, Wilmington, DE
May 12: BMW of Turnersville, NJ (They have an on-site mini test track!)
May 10: BMW of Atlantic City, Egg Harbor Twp. NJ

June 12-21: Seattle area dealers
early June: Chicago area dealers

mid-May: IA, MN, NE, KS
May 3-9: Colorado dealers
May 2-10: Boston area dealers, including:
May 7: BMW of Peabody, MA

April 16-25: Georgia dealers, including:
April 25: Nalley BMW, Decatur, GA
April 22: United BMW Roswell, Roswell GA
April 18: Bob Smith BMW, Calabasas, CA
April 17: BMW North Scottsdale, Scottsdale, AZ
April 16: BMW of El Cajon, El Cajon, CA
April 13: Center BMW, Sherman Oaks, CA
April 5: South Bay BMW, Torrance, CA
April 4: Century West BMW, North Hollywood, CA
March 29: Nick Alexander Imports, Los Angeles, CA
March 28: Shelly BMW, Buena Park, CA
March 26: Beverly Hills BMW, Beverly Hills, CA
March 23: Santa Monica BMW, Santa Monica, CA

April 3-4: Houston area dealers

-Mercedes has mostly been dabbling with next-gen technology. They will probably go with whatever technology can span the gap between their luxury and commercial division best the way their diesel technology does.

They've also been dabbling w/FCVs. I drove one of https://www.mbusa.com/mercedes/benz/green/electric_car at Alt Car Expo. They've also had a few hybrids here and there, but all have sold in tiny quantities in the US. I doubt most Americans are even aware of Mercedes' hybrid efforts.

There's a B-class BEV coming soon, powered by Tesla.

They also have the Smart ED (IIRC, this is the 3rd iteration), which from http://insideevs.com/monthly-plug-in-sales-scorecard/ is outselling the Spark EV, on an average sales/month basis.

I would reorder the EV commitment list as:

Tesla, Mitsubishi, Nissan, GM, BMW, Ford

I certainly wouldn't. The order to me for EV commitment is:
Tesla, Nissan, BMW, Mitsubishi, Ford, GM

There are many factors here, such as sales volume, sales ramp, investment in charging infrastructure, geographic availability of vehicles (e.g. 50 states + many international markets vs. compliance car), investment in development, other BEV programs, dedicated platform vs. conversion, DC FC support, etc.