GM is hoping its Chevy Volt will become a huge success, and from a product design perspective they might well have a great car. It certainly is the only car that competes in its exact category. From an energy perspective, there will be four basic kinds of cars on the market by the end of this year – the traditional internal combustion engine cars, the hybrids like the Prius and Fusion Hybrid that run primarily on gas but switch to electric at times to improve gas efficiency, the pure electric like the Tesla and the upcoming Nissan Leaf, and the Volt. The Volt runs as a pure electric car until the battery is drained, at which point it seamlessly switches over to its gas engine. So GM is positioning the Volt more directly against pure electric cars like the Leaf, but for people who are nervous about the battery dying on a longer trip.
Compared to the Leaf, which will also be sold in the US by the end of this year, the Volt has a lower capacity battery (40 miles vs. 100 miles) and is more expensive ($41,000 vs. $33,000 – although each qualifies for tax breaks). So, unfortunately for GM, consumers are forced to trade better electric milage and significantly more more money for the peace of mind afforded by the gas engine. It won’t be an easy sell, although it’s possible.
The Volt’s price, though, presents GM with a much bigger sales problem because of Chevy’s brand positioning. Chevy has always been GM’s lower cost, every man’s car (separate from the iconic Corvette). Virtually all of its car models have starting prices of between $10,000 and $20,000. People expect Chevy’s to be less expensive. So the Volt’s price will be its albatross – it doesn’t fit Chevy’s brand positioning. Moreover, people don’t associate the Chevrolet brand with leading edge technology and innovations, which clearly GM is trying to do with the Volt.
GM would have been much better off if they had launched the Volt under the Buick or Cadillac brand. In addition to better lining up the car with the brand’s established position in people’s minds, GM could even have raised the price a little to include a larger electric engine. It would then have a car that beats the competition on all fronts.
The time is coming soon, though, when we’ll see how well GM’s strategy worked. By the end of this year the Volt will be on the market, along with competitors like the Nissan Leaf. As an early indicator, though, consider a few interesting statistics. The Nissan Leaf is significantly ahead of the Chevy Volt in terms of internet search volume (Google Trends) and Facebook fans (Nissan Leaf Facebook page vs. Chevy Volt Facebook page).
Domus is a marketing communications agency based in Philadelphia. For more information, visit us at http://www.domusinc.com.