Here’s a quote GM doesn’t want to hear from auto analysts: “Why do we need the Volt?”
GM has spent years and untold amounts of money developing their electric Volt concept. The quote is from Bill Pochiluk, an auto analyst with Automotive Compass. He said it in response to the news that Ford is preparing to release its own electric vehicle, despite having spent almost no development dollars of its own.
Ford’s electric Focus has been developed almost entirely by outside supplier Magna International (which has built cars for BMW, Mercedes-Benz, GM, and Chrysler, so don’t write them off). The electric Focus is due in early 2011 and expected to have a 100-mile range per charge.
Ford’s strategy seems to make a lot of sense, as GM’s in-house development of the Volt has hit many road blocks and drained the company of valuable and hard-to-come-by money.
While GM will earn bragging rights for developing the Volt on its own (if it’s successful), the bottom line is that consumers care a lot more about price than bragging rights. In this case, I’d expect the electric Focus to come in well below the estimated $40K cost of the Volt.
The one drawback for Ford, if it can be called a drawback, is that Magna is free to sell the same technology to other automakers. Ford doesn’t seem to mind, though, because the more successful Magna is, the more the price of their technology will drop. Ultimately, that’s beneficial for Magna, for Ford, and for anyone buying an electric car.
The partnership between Ford and Magna is a great example of the teamwork needed to efficiently achieve and distribute innovation in the auto industry today. Ford seems to be taking advantage, while GM struggles to succeed in innovating on their own.
It all comes back to the question above: Why do we need the Volt?