Chevy Volt Marketing: Dead on Arrival, or Pure Genius?


2016 Chevrolet Volt's Exterior Was Revealed Sunday Night At CES

2016 Chevrolet Volt’s Exterior Was Revealed Sunday Night At CES

With the second generation of the Chevrolet Volt set to be unveiled this month (and recently revealed at CES), many people are speculating on what the specs will look like, and perhaps more importantly, whether GM will market the car to the masses.

Over the last four years, many fans of the Volt have been disappointed with the lack of marketing that GM has executed for the Volt, arguing that the car cannot be successful if people don’t know what it is.  While I’ve been in a part of this vocal group as well, I’d like to take an alternate position for a moment, namely that GM did precisely what it should have done for the first generation Volt.  Before you murder me in the comments section, please allow me to explain via a brief crash course in one aspect of marketing…

Any marketing majors reading this article are likely familiar with something called the product lifecycle.  Basically, the product lifecycle is the inevitable progression of a product through four lifecycle stages: Introduction, Growth, Maturity, and Decline.

Four Stages of a Product's Lifecycle

Four Stages of a Product’s Lifecycle


In this phase, the product is introduced to the market.  Revenues are slowly increasing, but profit may be negative for a time.  Initial sales of the product are low during this stage, as customers must learn about the product and its benefits before they decide to purchase.

This “individual adoption process” is actually characterized by many distinct stages.  Often times, in the case of a high technology offering, the “early adopters” come out first.  They are the quickest to learn about the product, see its potential, and buy it. These early adopters are willing to take more risk, and typically, they are also willing to pay more to have the latest and greatest product.


In the growth phase, there is a broad diffusion of the product into the mass market.  In addition to the early adopters that began purchasing, an “early majority” crowd now joins in.  The product is marketed more rigorously, volume of sales increase, and the profitability of the product is increasing substantially.


In this phase, sales growth begins to taper.  The “early majority” consumers are joined by the group referred to as the “late majority”


In this final phase, sales of the product actually begins to decrease.  Full market penetration and adoption has largely been accomplished through the early and late majority crowds, though some existing customer base (referred to as “laggards”) may still be purchasing the product.

Chevrolet's Price Skimming Strategy for the Volt has seen the MSRP drop by nearly $10k in 5 years.

Chevrolet’s Price Skimming Strategy for the Volt has seen the MSRP drop by $6,000 in 4 years.

In addition to this generalized product lifecycle, another marketing exercise would be how to price the product.  Here too, there have been vocal audiences at Inside EVs that felt the Volt was priced too expensively at first, and hasn’t decreased its price enough to appeal to the mass market.

However, there’s a couple approaches that a high technology product would typically take in the pricing strategy of a new product.  The most common is referred to as a “price skimming” strategy.

With a price skimming approach, a relatively high price is set first.  This typically works well: the early adopter crowd is willing to accept a higher price, and investments that went into developing the product can be recouped more quickly to help turn a profit sooner rather than later.

As the product traverses the product lifecycle, the price is slowly cut (or “skimmed”) to further appeal to the mass consumer base and capture additional market share.

So with that relatively short explanation of the product lifecycle and a related pricing strategy, I might propose the following:  Thus far, GM’s approach to marketing and pricing the Volt is precisely what it should be given the high tech offering.  Very little marketing and a high price is very well aligned with basic and proven marketing principles for a high tech product offering like the Volt during the introduction stage.

The Latest Variable: Declining Gas Prices (chart from

The Latest Variable: Declining Gas Prices (chart from

If GM does not increase marketing with the second generation Volt, then I would start to become concerned about whether they have a true desire to make it a success.

If all other variables were held constant in the economy, with the Volt 2.0 release, I would expect a small price reduction (on a dollars-per-EV-mile-rating basis), and a substantial increase in marketing for the Volt. However, all other variables are not constant, unfortunately. Oil prices are at new lows every day it seems, which could prevent GM from marketing the next-gen Volt as much as they want to given its position in the product lifecycle.

It’s easy to set our expectations high and be disappointed, especially when we may not fully appreciate the marketing intricacies that GM must try to optimize.  2 months ago, I would have published this article fully pardoning GM of any guilt over their present marketing efforts, provided they make a full marketing push for the second generation Volt; that’s just what marketing principles say they should do.

However, the oil prices of late have changed the tides a bit.  If GM does not market the second generation Volt as strongly as we all would like, we may need to keep in mind that lower oil prices are preventing the mass consumer base from looking at the vehicle seriously enough for a concerted marketing effort to pay off.

Category: Chevrolet

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102 responses to "Chevy Volt Marketing: Dead on Arrival, or Pure Genius?"
  1. David Murray says:

    I do see some of the logic. But not all new products are the same. For example, when Apple introduced the iPad or the iPhone, both were revolutionary products. And yet the marketing push was heavy right out the door. And it paid off, too.

    1. Eric Cote says:

      Thanks for chiming in David.

      Generally speaking, Apple is typically considered a product follower, not a leader. That isn’t to say they don’t make fantastic products, but they weren’t the first to market with a tablet, or the first to market with a smart phone.

      In Apple’s case, they take other general ideas and then make them into perfection. And it works well for them. I think that plays into why they push more heavily on marketing from the get go, though their pricing strategy still resembles that of the Volt’s.

      1. Arkansas Volt says:

        could not have said it better myself. I completely agree.

      2. I think you have it backwards, Eric. The Mac and then the iMac was revolutionary. The iPhone was revolutionary. The iPod was revolutionary.

        1. Eric Cote says:

          Hi Neil,

          It’s not my intent to turn this into an Apple debate, but my only point was that GM’s Volt was the first EREV to market. There was no other EREV competition. It was a “moon shot.” Now there’s also the BMW i3 that has followed.

          Apple’s iPhone was not the first smart phone to market. The iPad was not the first tablet. Heck, even their iPod was not the first portable digital music player. The iMac was not the first personal computer.

          Apple takes product concepts, refines them, and delivers a user experience and interface that is unparalleled. There’s nothing wrong with that, and that additional capability can make a product revolutionary. That’s where they shine, and the consumer knows it. They are not, however, the first to market in any of these product segments.

          Hopefully that clears up the distinction that I was trying to make. 😉

          1. Aaron says:

            Except the Volt is not an EREV. Only the Karma and i3 are. We’ve had this discussion many, many times.

            I do completely agree with your Apple analogy though. There were cell phones before the iPhone, but the iPhone just made them easier to use. Witness Samsung’s phone line before the iPhone versus after the iPhone. (Hint: They all look like the iPhone now.)

            1. ModernMarvelFan says:

              Since we had the discussion many time but you like to repeat yourself.

              Since GM coinphrase the term EREV, then Volt is EREV by definition. The EREV is strongly depending on the EV portion of the opearation which Volt quality. How you extened the EV doesn’t really matter… Nobody defined EREV as Serial-hybrid REx only. Only some of you BEV nutjob do….

              Lastly, Nokia Communicator was one of the first smartphone, long before iPhone…

              Apple is also good at turning something geeky into something beautiful and easier to use for idiots…

              1. Lustuccc says:

                Technically,the Volt is a plug-in parallel Hybrid. Period!

                Calling it “the electric car that goes further” or an extended range EV is only GM’s creative anti-marketing to confuse people and make believe that this Hybrid is a pure EV.

                Only serial-hybrids have a range extender.

                ANd I don’t know what is a nutjob but it must be nasty and I am not a BEV nutjob.

                1. ClarksonCote says:

                  Every parallel hybrid I know of requires the engine for full acceleration or top speed. The Volt does not.

                    1. ClarksonCote says:

                      I honestly think many people who feel a Volt is not an EREV just don’t understand technology.

                      Big deal if it sometimes couples the engine to the wheels when it is more efficient. It still is a series hybrid when that makes sense, and all electric while it has battery.

                      To argue it is not an EREV is like saying a hybrid is just a regular ICE because sometimes it isn’t using the battery or electric motor. It’s an insane position to be arguing from.

                2. Nix says:

                  This petty and meaningless debate about minutia that mass market buyers won’t even understand certainly isn’t selling any cars….

                  1. Brian says:


                    1. Lustuccc says:

                      GM Lied about the EV supposed to replace the EV1, GM lied when they told in 2009 that it was a serial hybrid, they lied, they played their customers and they are fooling us again with a Volt 2 quite similar to the Volt 1, with even a bigger ICE and 1 more added mode implying parallel driving of the wheels.

                  2. Lustuccc says:

                    Of course but here we, more informed EVs lovers, discuss together more technical issues right?

                    1. Nix says:

                      Let it go.

            2. Eric Cote says:

              Aaron, M Hovis left a nice message that pertains to your comment at 11:43am, you should scroll down and read it. 😉

      3. Sun Man says:

        GM is also a product follower. The Volt is a plug in hybrid regardless of what marketing name they want to give it. Others lanched before them but were not popular. Much like the first tablets. The problem is GMs product did not become the standard (like the ipad did). Now they have just another ran that they waited too long to update. And if the specs leaked about the Volt 2.0 are correct it will be underwhelming compared to the other PHEVs hitting the market this year and next.

        1. Brian says:

          Without getting into the PHEV/EREV debate, what other OEM plug-in hybrids are you counting that predate the Volt? The only ones I know of are aftermarket conversions of hybrids (e.g. Enginer PHEV Prius kit)

        2. ModernMarvelFan says:

          First of all, you like to make some crazy claims about other PHEV. Which modern PHEV was released before the Volt? Can you even name one?

          Second of all, you said this: “And if the specs leaked about the Volt 2.0 are correct it will be underwhelming compared to the other PHEVs hitting the market this year and next.”

          Which PHEVs hitting the market this year and next would have more EV range than the Volt? Care to specify?

          Or are you just one of the Volt hater ranting here again?

          1. Lustuccc says:

            THere we go, If you’re not with us, you’re against us.

            The Volt is in no way an EREV, it is as you said a PHEV, like all other PHEVs.
            The fact that it has more range is irrelevant.

            Does all other BEVs are not because the Tesla S has much more range?

            1. ClarksonCote says:

              I honestly think many people who feel a Volt is not an EREV just don’t understand technology.

              Big deal if it sometimes couples the engine to the wheels when it is more efficient. It still is a series hybrid when that makes sense, and all electric while it has battery.

              To argue it is not an EREV is like saying a hybrid is just a regular ICE because sometimes it isn’t using the battery or electric motor. It’s an insane position to be arguing from.

              1. Lustuccc says:

                This Hybrid design is flawed on purpose to make it consume more gas. A good serial design never require parallel mode since his electric motor is powerful enough to do the job in any circumstances. It is simpler than a parralel design and it is much more economical on gas than the Volt.

                ICE car makers are in a continous process of sabotaging the dawn of electric cars, because they will make less profits from them.

                Tesla do three times better than any of the 1000 times bigger established carmaker. You can explain this?

                1. ClarksonCote says:

                  You’ve confused a motor being powerful enough with one that is the most efficient. That’s not the same thing.

                  Couplong the engine to the wheels through the motor in some conditions saves fuel, by avoiding conversion losses. I would recommend you look up the laws of conservation of mass and energy.

                  It is very amusing that you think it was done to use more gas when, in fact, the exact opposite is true.

                2. ModernMarvelFan says:

                  “A good serial design never require parallel mode since his electric motor is powerful enough to do the job in any circumstances”

                  Absolutely false.

                  That is exactly how Volt is. The electric motor is far more powerful than its engine.

                  Volt did allow the mode b/c it is more efficient.

                  You don’t understand how Volt works at all..

        3. OppChg says:

          Correct. The Volt is described by the vehicle category plug in hybrid. There can be many subcategory designs of plug in hybrids. The Volt’s subcategory is EREV (Extended Range Electric Vehicle) which is a GM term that describes in effect a unique combination of EV40+HEV to use industry and research standard acronyms. The EV40 describes a pure battery electric vehicle with highway capable performance and electric only acceleration that meets any legal car standard while in battery mode. In this case the specs are 0-60 in ~8.7 seconds, and top electric only speed of 101 mph (governed) with zero gasoline engine assist to get there. As for how the hybrid depleted battery mode (HEV) of the vehicle operates, as others have correctly said, that is irreverent to the Volt’s subclassification as an EREV, and about the only thing that matters is that GM willfully and after the original concept, used excellent research and engineering to calculate the maximum ways to use gasoline energy once in the HEV, not only to generate electricity, but also minimize energy loss (conversions) and even determine when it makes more sense to use engine heat (rather than drain the battery for this so that the battery is used for propulsion energy). All while striking a balance to allow the single motor EV mode to have ultimate performance priorty (so that it pretty much always “drives like an EV” not a hybrid if people are familar with the driving dynamics difference.) In other words, floor the Volt in any mode or state, and for best performance it switches into 1 motor EV mode (like a LEAF or Tesla) or in ER mode into 1 motor serial hybrid mode (like the BMW i3 REx and the late Fisker Karma)

  2. Kent West says:

    curious.. this logic seems all to deal with a product/car that could achieve a profitable margin at some point in product lifecycle .. the gen1 volt was assured to always cost GM about a $10,000 net loss on each unit if not more.. , I wouldn’t want to market that too much either.

    1. Spider-Dan says:

      Fox News logic at work.

      Bob Lutz broke down the costs of the Volt and explained thusly:

      “The Volt “variable cost” (labor and materials, without revealing any confidential GM information), looks very roughly like this: A Li-Ion battery today runs about $350 per KWh. The Volt’s is 16KWh, so that’s roughly $6000. Add $4,000 for the battery pack structure, the cooling, the high-voltage wiring, the motor and the power electronics. So, that’s the electric portion. Add about 20 hours of assembly labor which we’ll round to a very generous $1000. The dealer net price is, say, $37,000. We now have $26,000 left for the rest of the car, which, cost-wise, is about equal to a Chevy “Cruze” which sells for around $22,000 retail! (And the Volt has no costly conventional transmission.) Thus, the “Volt”, by my estimate, is either close to “variable break-even” or may be on the cusp of a positive gross margin.”

      The only way you get the Volt “losing” $10k per unit is if you roll all the Voltec R&D costs forward. This is akin to saying that the first 100 iPhones lost Apple $1 million each, the first 1000 iPhones lost Apple $100,000 each, etc.

    2. Common industry estimates have the Volt at a variable cost of $26k a copy.

  3. Fraser says:

    Given the fact that Volt drivers still on average use gasoline I think around 25-30% of the time, lower gas prices make it even more compelling! iMHO if it was branded a Cadillac to begin with then people would not have balked at the price so much. Tesla has shown that driving electric is the new Luxury and so the Volt should have been branded. Unfortunately the ELR has gone too far up on the price scale but perhaps GM will eventually skim it down to the original level of the Volt.

    1. ModernMarvelFan says:

      The problem with ELR is lack of performance.

      If ELR can beat CTS-V in performance, it would have sold like hot cakes.

      If Volt could dust off a Mustang or Camaro in drag race, it would have sold 10x as much as it does today.

      1. Lustuccc says:

        Too high price was a good way NOT to sell them and make believe they tried, Don’t you think that engineers at GM didNt know that the ELR lacked performances?!?

        And for the gas prices, a study exposed that there is no influence whatsoever on EV sales.

      2. Nix says:

        That is one of the reasons why Tesla is so successful. It beats gas cars at their own game.

  4. M Hovis says:

    First off, good to see you writing again Eric. It is hard for me to understand what is best for marketing an EV when the market is still in its infancy. I do feel like word of mouth is the strongest and I am most critical of EV owners who throw stones at EV designs they personally do not approve of. I think the LEAF is ingenious and perfect for the market sector they seek to reach. I think the luxury Tesla Model S is our pride and Joy.

    And last but not least, I think the Volt EREV is the absolute best transition to the pure electric drive. You get all the experiences of all electric drive (AER) up to 100 mph with impressive acceleration and handling with the security of a gas extender. This is the perfect starting point for many who don’t quite trust or understand what is coming.

    So to all of my dear friends and EV brethren who muddy the water by saying the Volt is not an EREV, even though GM invented the term EREV, I say to you with the most sincerity I can muster, you are not helping the electric cause.

    I am so happy for Nissan achieving the 30,000 milestone and owning the crown for 2014. This is good for the cause!

    The Chevy Volt is good for the cause. Any vehicle with a plug is good for the cause, but those with an extender are better until we have a BEV world, and don’t give me the crap about when the moon is the right phase the Volt is running as a parallel hybrid therefore disqualified as an EREV. (I am channeling James at the moment). GM made the term EREV. Though on rare instances the Volt can function as a parallel hybrid this means nothing to the new wave of buyers nor will it disappoint in any way from the electric experience the Volt brings which helps the cause.

    So cheers to the i3, LEAF, Golf, Soul, Model S, Smart ED, Volt, Ford Energis, MB, and every single individual who buys their next vehicle with a plug!

    1. Eric Cote says:

      Well said Mark, and thanks!

    2. Brian says:

      +1 The more plug-ins the better.

      Now how about a true EREV with room for a family of 5, and all of their luggage for a week’s vacation?

      1. M Hovis says:

        true EREV. Hmmm sigh…..

        1. Brian says:

          Not sure what you think I’m saying here, but I certainly was not disparaging the Volt, nor implying that it is not an EREV. If that’s what you were thinking, then maybe you are just being oversensitive in the first place.

          As far as I can tell, the only true EREVs on the market in the US are the Volt and the i3 REx. Both are 4-seaters.

          The CMax Energi PHEV is not bad, as it gets plenty of performance in all-electric mode for my commute (yes, I have driven one). And it has 5 seats and more cargo space than a Volt.

          But what I personally want is what I described – an EREV with enough to take a family of 5 on a week-long vacation. That means plenty of trunk space. And a fifth seat. Neither is a given in Volt 2.0. I also think that this form factor will have a much larger market appeal than the current form.

          1. kdawg says:

            I think there’s a huge market for this.. not sure why no automakers sell one. A family hauler that can go full electric for errands/work, but still take everyone to grandma’s for the holidays. The Outlander PHEV is the closest thing, but an EREV Dodge Caravan would be more desirable. I guess if you have the cash, you could get a VIA Van.

            1. Brian says:

              An EREV Caravan is about the only possible way you could get me to consider a minivan 😉

              1. sven says:

                How about a PHEV minivan with falcon-wing doors instead of those uncool sliding doors? 😉

                1. Brian says:

                  No thanks. I live in snow country, and would rather not have snow dumped on my passengers because I’m too short to completely clear the roof. What about a PHEV small SUV with standard swinging doors instead of sliding ones?

          2. MTN Ranger says:

            The only car coming this year that qualifies would be the Mitsubishi Outlander PHEV, arriving in late 2015 to the US.

          3. QCO says:

            One point that often gets lost in the SUV discussion is that an SUV, by definition, is larger, heavier, and carries lots of cargo. That makes an electric SUV just as much of an electron guzzler as its ICE brethren is a gas guzzler.

            So a Voltec based SUV is going to need bigger batteries, bigger tires, and a stronger drive train to meet both the EREV and performance expectations. That’s a significant incremental design change and will make it measurably more expensive.

            There is a reason why all affordable EVs are all based on small and light weight platforms at this time.

            I’m sure GM will evolve the Voltec to a utility form at some point (likely in a compact CUV form), but probably not until things move further down the cost curve.

            The Outlander does not compare with the EREV Volt, it’s a plug in hybrid with a much smaller battery, shorter range, and will cost more. If you want that and can afford it, that’s OK. But it’s not in the same category as a Volt and direct comparisons are not really valid.

            1. Josh says:

              I would say the better compromise would be to increase the power and kWh of the Voltec drivetrain and use the identical system in both.

              The Volt would be faster and have more range. The CUV/SUV would have less acceleration and ~30% less range, but the cargo space many people are asking for. Let the buyers make the tradeoff based on their preferences.

              At least GM could increase the volumes (lowering cost) on the common components that would otherwise be unique to the Volt.

            2. ModernMarvelFan says:

              I agree with you said.

              But I think GM can easily drop Voltec into a Crossover and then add anther Electric motor to the rear for 4WD and power boost.

              The current generation of Equinox has the same wheel base only 7 inches longer than Chevy Cruze which is the same wheel base as Volt. They all share the next generation platform.

      2. Scramjett says:

        Yes! +10!

        I’m Mfr agnostic (whether it’s Chevy, Nissan, Mitsu, or someone else). I’ll take anything under $50k with a plug that can seat 5 within reasonable comfort and hold 1 weeks vacation worth of luggage!

    3. Scramjett says:

      Don’t forget the Mitsu and its Outlander PHEV in that list! 😉

    4. Victor says:

      Hovis, thanks for your comment. The Chevy Volt is an extended range electric vehicle. It gives you what you want when want it with the efficiency that you need.

      1. M Hovis says:

        My comments, were trying to stay in tune with Eric’s premise of marketing. My comment was simply that word-of-mouth is the strongest form of marketing currently and often we critique models that do not fit our personal needs.

        The average US number of people per household is still 2.54. Not to get too off track with that, I am a little sensitive of improper language used to explain the Volt driving experience. Brian is a regular contributor who is intelligent, articulate, and passionate about the cause. So maybe I hold his verbage to a higher standard with his language as well as being a little too sensitive myself. @Brian: Now that I know the boat is kept on Oneida, I’ll get you my pretty and your little dog too! =) (buddy)

        1. Brian says:

          I apologize for my unclear wording. When I said “true EREV” I meant to imply along the lines of the Volt – in complete agreement with what you had written. In my mind it was clear because it was followed by “with seating for a family of 5” which the Volt does not (yet) have.

          As for word of mouth, I do talk up the Volt quite a bit. People ask me about my Leaf, which I love. As soon as they suggest that the range is a deal-breaker for them, I tell them about the Volt. I don’t try to convince them that 84 miles (50 in an upstate NY winter) is enough for 80% of their driving. Because I just don’t know. But isn’t it great to have options?

          Do you have a boat on Oneida as well? You’ll never hear me coming with my electric outboard 😉

          1. Brian says:

            P.S. Thanks for the kind words.

          2. M Hovis says:

            My brother is in Cooperstown and his boat is electric too. I read all of your responses as everyone should that visits this site. You had made note of the fact on one of Ted Dillard’s boat articles.(viral stalker) Keepum coming Brian! You are an asset to the site!

            1. Brian says:

              Ah, you have a better memory than I do. But this does ring a bell. You and I had a conversation about boats at the time. And sadly, I had forgotten the whole thing.

    5. Josh says:

      +1 Mark

      (and you haven’t fully channel James until you reply to your own comment) 😉

      1. Rick Danger says:

        At least once 🙂

    6. ModernMarvelFan says:


      Thank you! I could have said this better myself.

      I wish there are more people like you and less BEV purist nutjobs…

      1. ModernMarvelFan says:


        “I couldn’t have said it better myself…”

        I can’t type either…

  5. EV says:

    If the car is good it will become a success regardless of marketing (Ex. Tesla)

    1. David Murray says:

      That has not always worked out to be true with all products. There have been many times the superior product has been beaten in the market due to better marketing strategies. Beta vs. VHS is a good example. Or the Commodore Amiga would be another.

    2. Many good products fail because of bad marketing. None of the major automakers, with the exception of Tesla, are doing much demand creation. Some, like Ford, actively hide their EVs.

      They don’t do this because they are stupid. They do this because they are only forced to sell EVs in California and a few other states. So they comply with the regulations. But as pointed out in the Nov 14 edition of Car & Driver they don’t want to sell a single unit more than they have to.

      This will change in 2017, as they ramp up sales (double) to comply with increased 2018 ZEV mandates.

      It will also change as Tesla prepares to launch Model 3 and they feel more of a threat of technological disruption.

    3. JakeY says:

      That’s only because the Tesla doesn’t really have anything that is even close to it in the market. While for the Volt there are other options that while are still quite different, but are close enough to be cross shopped (like the Energi for example).

    4. Josh says:

      Tesla does do marketing, just not in the same way as auto OEMs. They also spend zero dollars on traditional forms of marketing (print, tv spots, web ads, etc.).

      The SuperCharger network is booked as a marketing expense in the company’s accounting, so they do spend money on marketing.

    5. Spider-Dan says:

      The sales volume of the Model S would be considered a dismal failure for the Volt.

    1. Eric Cote says:

      Nice! The addition of “Fox News” at the end of that bell curve cracks me up. 🙂

    2. Scramjett says:

      Love it! 🙂

    3. ModernMarvelFan says:


      You are just awesome with charts…

      Love your charts. Keep them up.

      Ross Perot should have hired you to do his charts… =)

    4. Priusmaniac says:

      Actually a car producer should try to flatten his production so as to optimize the production line to 90+% capacity. In order to do that the price curve has to be the same as the bell curve above, so you actually start selling at a much lower price, then you increase it when the main market start to buy it and finally you discount at the end of the life. Starting with lower price for early adopters of a brand new product is counter intuitive but it really pays off in market buildup speeds which decrease your delay to full load production and therefore actually increase your profits. In the same time, you get a smother production at more or less constant rate, you also accelerate your product against the competition.

      1. Priusmaniac says:

        In a sense one could call that the big bang marketing because the product start in an instant due to low price and all the advertisement right from the start. It is like a pop concert, all the ads at once and lower prices for early tickets. Of course production lines can build several types of cars but it still required retooling, other molds, others press matrices, etc…

      2. Justin W. says:

        It worked for selling meth on Braking Bad…. 😉

  6. Brian says:

    Thanks for writing this up, Eric. Many of us enthusiasts underestimate the business side of the equation, and just want to see more plug-ins sold. The sooner the better!

    I know it’s probably not your chart, but I’m curious as to why the profit would start declining during the “maturity” phase, even as revenues continue to climb. Is this because of continued price skimming? In other words, does a company typically continue to lower prices on a mature product? This seems counter to my experience and gut impression of what a “mature” product is.

    1. Eric Cote says:

      Thanks Brian,

      Regarding the mature product portion of the lifecycle, that’s just typically “the way it goes.” I think that as a product reaches maturity, its incremental profit on each unit decreases more than what is offset by the increase in revenue, decreasing the overall net profit.

      Viable companies always have a new product in the introduction phase to replace its mature product. This happens all over the electronics industry with phones, computers, TVs, etc. It’s just the nature of the beast I suppose.

      That’s not to say that some products break out of this kind of lifecycle (think Morton Salt), but more often than not, that’s not the case for high tech offerings.

      1. Josh says:

        I would also throw in that there is usually competition/copycats once the mature phase is in full effect. This puts increased pressure on margins.

    2. David Murray says:

      I imagine profits start going down in the mature phase because competition enters the market and so the price has to drop to stay competitive.

      1. Josh says:

        I guess I should have scrolled a little more before posting 🙂

    3. Nix says:

      Usually in most products, this represents the point where all the savings from moving to mass production, and savings from newer technology getting cheaper to manufacture have all already been exploited.

      When a new product is in the “Growth” phase, profits rise vs. revenue through cost savings in production. One of the characteristics of entering the “Mature” phase is that there are no more big cost savings to found in production. At that point, the cost of production tends to increase at the rate of inflation for labor and materials. Instead of production costs going down, they start going up. That cuts profits. At the same time, competition from new products tends to drive the sales price of your product down. Or at least the price gets stuck being stagnant against inflation. Like a .99 cent bag of candy getting stuck at .99 cents for years because that is what everybody expects to pay for that certain bag of candy.

      Price per unit dropping vs. inflation while costs rise in accordance with inflation causes lower profits.

      This is classic mature product market reality. The classic response from manufactures to keep their product from entering the “Decline” phase is to attempt to cut costs where there is nowhere left to cut. This leads to lower quality, or fewer candies in that .99 cent bag of candy. That ultimately leads to the age-old comment of “They don’t make ’em like they used to anymore”. Now you know why.

      1. Brian says:

        Wow, thank you for the detailed analysis! Very insightful.

  7. abc123 says:

    The big thing GM and dealerships should be advertising in this current situation (low gas prices), is that the Volt not only runs on battery, but also on gas.

    Customers like options and this option (whether to run on gas or battery power) is something that BEV’s can’t match.

    1. ModernMarvelFan says:

      Yes, Volt was a “dual fuel” car back in 2011 EPA label.

      GM can advertise that. It is all about freedom. Freedom to choose whichever source you want. Go after the freedom and choice banner.

      But that won’t sit well with BEV purist. Then again, they already hate the Volt anyway.

    2. JakeY says:

      Actually GM refuses to do that because they refuse to market the Volt with any reference to it being a hybrid (even though the plug-in kind). The emphasis was always that it was an EV with range extender, which is why they avoid talking up the gas engine.

      1. Nix says:

        Jakey — That is correct. GM correctly identified that the hate-on for anything labeled “hybrid” rages strong among the masses that make up Chevy’s normal buyers. This led GM to avoid at all costs identifying the Volt with hybrids in an effort to evade all the Prius haters.

        Green car enthusiasts often forget how harsh an environment EV’s and PHEV’s face in the mass market. If it weren’t for Tesla laying out suppression fire with their ultra-cool EV’s, the entire EV/PHEV sector would be being pummeled by attacks on their masculinity.

        GM can’t sell the Volt to the mass market as being like a Prius hybrid, but better because it has a plug. Selling it as a leap-frog completely new technology is really their only choice.

        1. > Tesla laying out suppression fire with their ultra-cool EV’s

          lol, best turn of phrase I’ve read in a while.

        2. JakeY says:

          That’s not the reason I see. The reason is GM had lots of backlash from WKTEC (and subsequent rise in interest in electric cars), so they built the Volt in response as their own “electric car”. For that reason they must insist that the car they are building is an “electric car,” and “hybrid” became a dirty word for GM.

          I don’t think it had anything to do with “Prius haters”. I’m sure GM would be perfectly happy with conquest sales from other brands, plus marketing a PHEV as a better hybrid worked perfectly well for Toyota and Ford’s Energi anyways.

  8. Fishhawk says:

    Maybe the approach (such that it was/is) has been wrong all along. Instead of advertising it as an electric car with range extender (EREV is too hard for people to grasp), advertise it as an ICE car (with good fuel economy) that has an all-electric mode. Seems like that is what Ford has done with the EVNow mode.

    1. Stephen says:

      In EU ads can quote >100mpg for PHEVs. However, in the USA, GM must quote EPA combined 38mpg for the volt. The Consumer sees this and thinks the Volt uses more gas than a Prius.

  9. Calitran Dresdner says:

    Check out Fishhawk’s and Boraski’s comments over at

    Oh, Just before posting this I see Fishhawk is here too. Still, worth a look.

    I don’t copy their posts here as they are their posts.

    Their comments and ideas support this thread’s thinking nicely.


    1. Calitran Dresdner says:

      Typed in my own title name wrong. Opps.

      In James fashion. That’s very funny.

      1. Calitran Dresdener says:

        Let’s get this right. Dresdener!

    2. Nix says:

      I went and read that thread at Since I don’t post there, I don’t have any problem paraphrasing here what was said over there…. =)

      The main idea seems to be to advertise the Volt as just another gas car that gets really good MPG. I’ve got a couple of problems with that.

      First off, GM would run smack into the argument of: “I can buy a gas car for $15K and buy a lot of gas with the extra $$$ it would cost to buy a Volt.” That’s an argument that GM doesn’t want to charge into head-on. It is just a swamp of bad math that GM doesn’t want to intentionally wade into.

      Second off, buyers are considering MPG much less with gas prices dropping than they did even just a year ago. In fact, lots of buyers have become tired of even thinking about MPG’s, and are really looking for some new reason to get excited about buying a new car. Saying that the Volt is like a gas car, but with a feature that many buyers are tired of talking about (and seem to be ignoring quite a bit recently) is NOT a recipe for mass-market success right now.

      Right now Tesla seems to have the right idea for competing with gas vehicles. Just build a better car that beats their gas competitors in the same category in every way — but happens to be electric.

      That’s what GM needs to pull off with the GEN II Volt. They need to build a car that is better than the Volt’s gas competitors, that happens to have a plug. Then don’t even talk about the plug, sell it as a better car all around, regardless of the plug.

      1. QCO says:

        GM recognizes the fuel saving argument is going soft fast with low gas prices.

        In response to a question at CES, GM’s chief marketing guru implied the Volt marketing message will be directed more to the driving experience than mpg.

  10. Epicurus says:

    “lower oil prices are preventing the mass consumer base from looking at the vehicle”

    This should be the marketing slogan:

    “Fill up a Volt for the equivalent of a dollar a gallon!”

    I doubt we will see gasoline fall to a dollar a gallon.

    1. Nix says:

      That’s no good. It opens the door way too wide for EV haters and GM haters to challenge the math. And since the math for electricity is so convoluted across the US, GM would be shooting themselves in the foot.

      The last thing I want to do is to spend the next 10 years debunking bad math repeated hourly by anti-EV and anti-GM haters just because GM once ran an ad campaign that said that.

  11. Nix says:

    I completely agree with this article. GM now needs to enter the “Growth” stage, and all signs so far are that the 2016 Volt marketing is designed exactly to do that.

    The only part that I would somewhat disagree with from the story was that idea that GM didn’t put any effort into promoting the Volt in the early days. My recollection of the early days of the Volt are the complete opposite. GM spent a lot of time and resources on their nearly daily drip-drip-drip of minor details about the Volt during its development.

    That kind of steady, detailed drip-drip-drip of information doesn’t just happen by accident. GM intentionally ran a campaign to drip-feed the very enthusiast crowd that they needed to make up their “early adopters”.

    Personally, I think that sales campaign worked wonderfully. I believe it is part of why Volt sales squashed the Leaf in the early years. GM had buy-in from way more early adopters because they fed the enthusiasts a steady diet of what to talk about daily in all the EV sites. That led to lots of early sales.

    Now the 2nd Gen 2016 Volt has been nearly the opposite. Compared to the original Volt, we hardly know anything at all about the 2016 at this point in development. We don’t have pictures and reports from mules like we did with the first Volt. The drip-machine with leaks has only been turned on for the 2016 for maybe the last month, way later than the original Volt.

    The way GM marketed the GEN I Volt directly towards early adopters was the right answer for that point in the product life cycle. Marketing to the mass market wouldn’t have fit that part of the life cycle. But now everything needs to change with the 2016. I hope they can pull it off.

  12. Scott Franco says:

    The volt’s main customer is gone.

    That is, the democrats no longer run congress nor GM any longer. The need to impress them with “green technology” is gone.

    Back to big pickups.

    1. Nix says:

      Bob Lutz didn’t sell GM’s Board of Directors on the Volt because he’s a member of the Democratic Party, or because Obama was President, or because GM was getting a bailout.

      He’s a strong Republican, and he made that pitch to GM’s board long before any bailouts. The Volt started on the drawing board while there was a Republican majority in Congress, and a Republican President.

      The Volt wasn’t built for the reasons you suggest. I suggest you go back and read up about Bob Lutz and the original push to build the Volt.

      1. Nix says:

        Oh, and don’t forget that Obama and McCain basically arm wrestled to be the first to be photographed standing shaking hands with GM executives in front of the Volt prototype.

        It is sad how badly members of McCain’s party have deteriorated in such a short time regarding things like the Volt.

    2. M Hovis says:

      Easy big guy, the world is larger than the city commute…see comment above about injecting personal driving habits.

  13. Spec9 says:

    What marketing?

  14. JSegal says:

    I’m trying to wrap my head around the marketing point of view to this article. There seems to be this desire for GM to sell more units. That should be GM’s concern. As a consumer, my concern is that the Volt be a great car and meet my desires for quality and efficiency at the lowest possible cost.
    Toyota has marketed Prius as an efficient all-around car that happens to be a hybrid. Volt has that same advantage. If GM can get a handle on build cost, the car will sell even in times of low gas prices. The public is beginning to see the Volt as just a smart, super efficient car. Work with that.

    1. Nix says:

      The more Volts that GM sales, the faster they recoup their R&D costs, and the more GM benefits from mass production.

      You care because this hopefully will reduce how much you will have to pay to buy a Volt.

  15. doudis2 says:

    Seems to me that another factor was the “work out the kinks” factor.

    For one they did not roll the Volt out world wide to start with (still isn’t actually). Remember, the Prius was Japan only at first. Second is evident in that they totally redesigned the Volt for 2016. Everything is new. This is not cost effective, but they used Gen 1 to learn, and they started from scratch (sort of). Then they applied that knowledge to Gen 2. This may have been part of the plan from day 1.

    I fully expect a marketing blitz for Gen 2, now the GM thinks that the finally got it right.