Filed under: Company News, General Motors, Rumors, Automotive Industry, This Built America
General Motors (GM) is expected to take the wraps off an all-new Chevy Volt in Detroit next week.
The new Volt will replace a car that was touted as a symbol of GM's post-bankruptcy renaissance -- and targeted by critics of GM's bailout, who saw it as a symbol of misplaced priorities. But will it outperform its predecessor?
The Current Volt Is a Good Car That Never Sold as Well as GM Hoped
Despite the criticism (and the hype), the current Volt did a pretty good job of living up to the technical expectations set for it by GM. But it never lived up to GM's sales expectations: Former CEO Dan Akerson wanted to sell 45,000 Volts a year starting in 2012, but U.S. sales peaked at 23,461 that year and have fallen short since.
Still, the Volt has been an important model for GM in several ways. For one thing, it proved that a Detroit automaker could build a fuel-efficient car using advanced hybrid technology. For another, Volt owners love their rides: The Volt's customer-satisfaction ratings have consistently been among the highest in the business.
Building on that legacy will be important for GM. Also important: advancing the electric technology that powers the Volt, so that it can be extended to other models across GM's product line. So what can we expect with this new model?
How GM Will Improve the Chevy Volt
We won't know for sure until GM reveals the new Volt on Jan. 12. But GM has dropped some hints -- and a few details have leaked.
- Improved range: The new Volt is expected to get about 50 miles of electric-only range before its gasoline-powered "range extender" engine kicks in, up from 38 miles in the current version. That'll give more Volt owners the ability to get through their daily commute without using any gas. And when they do use gas, they should use a bit less: The new Volt will get a new 1.5-liter four-cylinder gas engine that is expected to be more fuel-efficient than the 1.4-liter engine in the current Volt.
- Improved charging. Of course, owners only get that electric-only range if they recharge their Volts every night. GM is making recharging the new Volt a bit easier, with improved chargers that allow owners to preset charging time and levels (to take advantage of off-peak electricity rates, for instance) and provide better indicators and other enhancements.
- More power. GM says that the new Volt's propulsion system is all-new from scratch, with only a single part -- a shipping cap -- in common with the current model's. Those who've seen it say that the new Volt has a much-improved transmission and a re-thought operating system that gives it better acceleration. And the new gasoline engine is expected to be a bit more powerful than the current car's four-cylinder.
- More room. One of the few consistent complaints about the current Volt is its tight backseat, which is strictly for two. The new model is expected to have more room in back, with seating for three.
Will the New Volt's Changes Be Enough to Boost Sales?
It depends. Some were hoping that GM would make a more radical leap with the new Volt, but from what we know so far, the new model will be evolutionary, not revolutionary.
If the new Volt's features are in line with those expectations, its success may come down to one big factor: sticker price.
Early sales of the current Volt were limited by the car's relatively high price -- almost $40,000, nearly double the cost of a Toyota (TM) Prius hybrid. The Volt's price has come down since its introduction, with new 2015 models starting at just over $34,000, not counting the $7,500 U.S. tax credit. But in the meantime, gas prices have plummeted. The case for a premium-priced plug-in hybrid has become a bit harder to make.
The price drops have helped Volt sales. But the current Volt is still more expensive than even the plug-in version of the latest Prius, which starts at just under $30,000, or the similarly-priced all-electric Nissan (NSANY) Leaf.
And looming in the distance is another car the Volt is likely to be competing with in a few years: Tesla Motors' (TSLA) much-anticipated Model 3. The Model 3 will almost certainly be more expensive -- over $40,000, most analysts think -- but it'll likely be more luxurious and considerably sportier.
The upshot: GM may feel pressure to price the new Volt under $30,000. That could turn out to be the revolutionary move that jump-starts Volt sales. Will it happen? Stay tuned.
Motley Fool contributor John Rosevear owns shares of General Motors. The Motley Fool recommends General Motors and Tesla Motors. The Motley Fool owns shares of Tesla Motors. Try any of our Foolish newsletter services free for 30 days. Find out the easy way for investors to ride the new mega-trend in the automotive industry in our free report.
