Love him or hate him, you’ve got to admire Bob Lutz’s ability to speak his mind, consequences be damned. And, as GM’s Vice Chairman and Volt front man, he’s somebody the world tends to pay attention to.
The same guy who once called global warming a crock of crap has now remarked that the hybrid car market is unlikely to ever comprise more than 10% of the U.S. market. Furthermore, Lutz seems to think that General Motors will always lose money on hybrids, driving up the costs of its other cars. If you ask me, that seems like a bit of a paradox.
Admittedly, Lutz has done a lot of good for GM. He was a big proponent for the Volt, GM’s plug-in electric extended range car due out this fall. He also pushed hard for the return of the Camaro, which sold so strongly that GM recently had to add a second shift to the Oshawa assembly plant where it is built. Lutz is an old school car guy, and to a certain extent, that is a good thing.
But sometimes he doesn’t seem to think before he talks (I can relate to that). Right now, hybrids comprise just 3% of the market in the U.S., with the Toyota Prius selling more than all other models combined, according to Edmunds Green Car Advisor. Considering the Prius has been on sale for about a decade, and year-over-year sales of hybrid cars are continually increasing, 3% of the market is actually a pretty impressive share. Every major automaker either has a hybrid car, or plans on releasing one in the near future. So it really won’t take much to reach that magic 10% that Lutz thinks is the ceiling on hybrid car sales.
But let’s just say that Lutz is right, or that he may think that electric cars will surpass hybrids in popularity rather quickly. He then went on to say that the money GM loses on hybrids will drive up the cost of other cars. Sounds like Lutz lacks faith in GM to be able to sell a hybrid people are willing to pay for, even though they sell a $110,000 Corvette ZR-1. Well now, if so few cars sold are money-losing hybrids is it really going to drive up the cost of other cars? Lutz seems to think people want fuel efficient cars, but are unwilling to pay the extra cost for the technology. It is unclear how much, if any, money the Prius earns Toyota, but that doesn’t mean it won’t one day contribute to the bottom line. GM has already acknowledged that the Volt is going to lose them money, at least for the first few generations. But even the Camaro probably still hasn’t turned a profit, despite selling almost 100,000 units in under a year.
Lutz shouldn’t be so quick to give up on hybrids, especially since they are going to need them to meet the 2020 fleet fuel economy average of 35 mpg.
Source: Green Car Advisor | Image: GM