Hybrid Car Review

Earth2tech caught an investor who let the cat out of the bag on Fiskers future plans.  It seems they want a plug-in hybrid in production by 2012.  The kicker is, they want to price it at $39,000.

That's very significant.  The Chevy Volt is supposed to go on sale at around $40,000 a pop.  GM will also have the Volt out 2 years sooner than the Fisker model will appear.  And it looks like none of the other major automakers will have their own plug-in on the road sooner than GM will.

Which, I'm sure, makes GM very happy.  After noting the success of the Toyota Prius, and realizing that like everyone else, they can't beat or match the price/fuel efficiency/image of the Prius, GM looked to leapfrog the competition by building up the Volt.

But it looks like that leapfrog is going to be a lot smaller jump than they wanted.  If Fisker, a small niche automaker can get a plug-in hybrid in to production at about the same price range, what does that say for the possibility that Honda, Toyota, or Ford could do the same and possibly for less?

And, while GM should be happy they are going to be first, that doesn't give them the head start they wanted.  Look at the Insight and the Prius.  One took off, while the other stagnated.

No, if I were GM, I'd be a little bit worried about the Fisker plug-in.

If they are to succeed with the Volt, they are going to have to look at the plan Toyota followed to make the Prius a success.

One, they need to take the long view.  The Prius was not an overnight success.  It took a decade for it to really catch on and become a cultural phenomenon.

Two, they have to keep the price tag down as much as they can.  The Prius was not sold for a profit for years.  Can GM afford to wait until they can sell even one Volt and say they made money off of it?  Can they afford not to?

Three, push hard to make the Volt as good as they can at first, then push hard to simplify.  The Prius was made as fuel efficient as they could using the technology they could.  It was also made as well as they could.  You didn't hear about massive battery failures, or the electronics failing or the brakes failing on huge numbers of cars.  Toyota also included some luxury and tech items which, I'm sure, kept the losses up for Toyota, not down.  But the buyers who eventually made the Prius a success wanted those items.  Prius buyers were older, more conservative and more affluent than you might expect.  GM should expect Volt buyers to be the same, if not more so given the price they're going to have to pay.

Four, diversify the product, but at reasonable levels.  Use the research and technology and place it into other vehicles.  Test out some options.  Toyota now has more hybrid models than anyone else.  Not only does that help to spread out the cost, it also helps you test out different types of models.

But don't do it like Honda has done it.  Honda deliberately tries something very different every time, while Toyota looks to try subtle differences each time.  They focus on fuel efficiency, but after that anything goes but only in small doses.  Luxury, power increase, etc...  Honda has emphasize in each of their hybrid models extremely different things.  The first was a two-seater, but very fuel efficient.  Then the Civic was the mainstream model.  Then the Accord was the muscle car, with not enough muscle.  Then the Insight II was the cheaper version of the Prius.  Two of those models are already gone by the wayside.

Or GM could model itself after Ford and spread the Volt across the same model, just different brands.  Ford created the Escape Hybrid, rolled it out to Mazda (barely) and Mercury, and left it at that.  They continued refining the process, but at the same time, they limited the number of sales and production.  That kept them from losing too much at any one time.  Then, once they got the cost down, they rolled it out to the Milan and Fusion.  But that's a cautious approach and one that will leave GM in second or third place in the new plug-in hybrid world, something they seem desparate to avoid.

And finally, focus in on fuel efficiency at a practical size.  The Toyota Prius wasn't the most fuel efficient vehicle.  Nor was it the most luxurious hybrid.  Nor was it the largest hybrid.  No, it's just the most fuel efficient hybrid at just the right size.   That's why the Prius has beat out all the others.  That's how it became the image of fuel efficiency, despite not being the most fuel efficient.

So, can GM do all that in the post bailout world?  Can they afford to lose money on the Volt for years?  Can they figure out fuel efficiency first?  Can they spread out the technology even as it loses money?  Can they keep the price down as much as they can, while still building the Volt as well as they possibly can?  We'll just have to wait and see.