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Chevy's Volt and Obama's Green Legacy

Edward Niedermeyer, an auto-industry analyst, is the co-founder of Daily Kanban and the former editor of the blog The Truth About Cars.
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When the history books are written about Barack Obama's tenure as commander in chief, the Chevrolet Volt will doubtless be remembered as the most important car of his presidency. Like selfies, secular stagnation and the Tea Party, General Motors's plug-in hybrid is inextricably linked with the America of the last seven years.

Like Obama himself, the Volt was cast as a reinvention, a new kind of player that could bridge the gap between zero-emissions electric-car enthusiasts and traditional car buyers. But like candidate Obama's promise of a post-partisan political order, the Volt's bold compromise between "green car" innovation and everyday practicality unraveled nearly from its debut in 2010 and only deepened the divides it sought to heal. With the first-generation Volt now ending production after building just a fraction of its projected volume, the Volt seems destined to become an enduring symbol of the Obama administration's surprisingly divisive legacy.

The Volt became inexorably entangled with Obama's bailout of General Motors, a fact that is as much historical accident as anything else. GM had begun developing the Volt -- a response to the runaway success of Toyota's Prius hybrid -- well before the company collapsed into the arms of the government. As Bob Lutz, the GM executive who led the Volt effort, told me, the extended-range electric car was a "reputational adjustment exercise" aimed at creating a green "halo" for the troubled automaker. But because it launched shortly after the bailout, the Volt was widely seen by conservatives as an "Obamamobile": a green car pushed by the government onto its captive automaker.

Like all too much of the conservative response to the Obama presidency (think death panels and birtherism), the anti-Volt backlash wasn't quite rooted in fact. Though Obama's task force had questioned the viability of the Volt, its decision not to cancel the vehicle's development was an act of restraint rather than intervention. But the real tragedy of the right's off-base critique of the Volt was that it distracted from the administration's very real -- and very critiqueable -- role in in the Volt's disappointing performance. 

Because the Volt was developed as a "halo car," its original sales goal was a modest 30,000 units per year. Just as GM didn't have to sell many Corvettes to enjoy the car's brand-boosting power, GM executives initially seemed to understand that the Volt could serve its purpose as a relatively low-volume model. But in late 2010, just after the Volt was introduced, GM Chief Executive Officer Dan Akerson floated the possibility that GM could build as many as 120,000 Volts per year. The news stunned the industry, which quickly understood the challenge of selling more than 100,000 units of a $40,000 car. Only later did it become clear where this hugely ambitious goal had come from: In his 2011 State of the Union speech, Obama promised to have 1 million plug-in vehicles on the road by 2015. In order to reach that goal, the Department of Energy said GM would have to build and sell 120,000 Volts a year. 

That goal, backed by billions of dollars in government production and consumption incentives, is now in tatters, and the Volt is a major culprit. Far from the 120,000-per-year volume that GM and the White House targeted, the first-generation Volt has ended production after a total run of just 70,000 units and four years on the market. And the result is not just the failure of the White House's goal or of the car itself: Suppliers who were encouraged by GM to build up production capacity for Volt sales that never came took a hit, badly damaging the already-frayed relationships between GM and its supply chain. Worst of all, by publicly setting totally unrealistic sales goals in order to lend credibility to a political goal, GM set up the Volt to fail at its most fundamental task: burnishing GM's credibility as a player in the green-car space.

To a certain extent, the Volt's failure to become "America's Prius" was quite predictable. GM's desire to leapfrog the Prius without simply improving on the basic concept led it to create a green car that its developers insisted should not be engineered to be as efficient as possible. But it was GM's arrogance and the Obama administration's commitment to an unrealistic environmental goal, as much as any deficiency of the Volt itself, that made it one of the most notable automotive flops in recent history. For historians of the Obama presidency, this suggests a provocative metaphor: The failure to meet overly high expectations can turn even the most clever and competent politician -- or car -- into a symbol of disappointment.

But even as the Obama presidency and production of the first-generation Chevrolet Volt wind down, the story continues. Later this year, GM will begin production of a second-generation Volt, to be followed shortly thereafter by a pure electric car that may be called the Bolt. Having learned tough lessons about the high cost of plug-in cars and the perils of too-high sales goals and political entanglement, perhaps GM's next generation of green cars will improve on the last. But one thing is certain: It won't escape the long shadow of President Obama, who has promised to buy a Chevrolet Volt when he leaves office. For better or for worse, the Obamamobile lives on.

This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.

To contact the author on this story:
Edward Niedermeyer at edward.niedermeyer@gmail.com

To contact the editor on this story:
Brooke Sample at bsample1@bloomberg.net