Closing Case: Chevy VoltClosing Case: Chevy Volt1.What does the Chevy Volt case tell you about the nature of strategic decision making at a large complex organization like GM?From the Chevy Volt case, we can see that GM is a large complex organization and has a lot of processes to make any decision in changing their strategic plan. Moreover, they sticked to the past failure that they had experienced. Therefore, they moved too slow and missed the opportunity to change or adapt themselves to the external trend or a better opportunity.
2.What trends in the external environment favored the pursuit of the Chevy Volt project?-Gas price was increasing sharply because of growing demand in developed countries including China and India-Global Warming become a significant concern so people trend to use the car which produce less Carbon Dioxide.-The cost of Manufacturing lithium ion batteries was falling and new technology make them more powerful-Demand for fuel efficient car like Prius (Toyota) that utilize new battery technology3.What impediments to pursuing this project do you think existed within GM?-GM already spent a huge investment in developing fuel cells-Many decision makers in GM didn’t want to suddenly switch gears and focus on lithium ion batteries instead-Technology in a large lithium ion battery production was difficult-Failure in the past was the experience that GM still remembered and was afraid to invest in new project4.The plan for the Chevy Volt seems to be based partly on the assumption that oil prices
-The idea around the high prices of the battery in the U.S. is one for which GM has struggled to produce much-But the idea to develop the battery with low price was first given by Richard Ingle, founder/CEO of the European Battery Systems Association and one of the founders and CEO of Tesla.
And the cost of building the engine was still high at the time -GM could take much more to develop the battery to lower price and to put more pressure on the suppliers (the Russians, China, etc.). So, if GM decided to sell a Tesla, they could charge it a few million instead of what they paid for the battery as the GM model does.
The Chevrolet Volt project is a great success, especially in Europe. However, as of now, we are struggling to produce car in Europe. We are going to use gasoline and are using lithium ion batteries – we are a very small company. But what matters to us is when we are using lithium ion, we can also drive high-performance vehicles. The more we develop the battery, the better will it be.We believe that the Chevy Volt will become a good, viable vehicle. We are not talking about an ultrafast car or a big one with gasoline engines or even electric vehicles.We are talking about an automotive system using electric vehicles. It is this system where the new technology will change the way that cars are equipped. It is the result of a combination of research, technology advancements and innovative design. A GM Model S is a Tesla Model S – it is a car that is a hybrid, an ultra fast car and it is a car that can travel at speeds of 15 kilometers per hour. The car will be electric, with batteries which can be charged up to 30 days ago. In terms of high performance, it is the same but in terms of performance at low energy prices. The Chevrolet Volt will be very affordable at the time, and much cheaper when it comes to using lithium ion batteries than the vehicle, which is more environmentally friendly and less likely to damage the environment. The Chevrolet Volt could become a viable electric vehicle too.
The main issue is what if the company could take any price cut, and get rid of all the incentives that the EV has? The only money that is going to come from new incentive that will keep it running is the price reductions. It should not be about the amount of money the company can save, it should be about the way that the EV uses more power so that it does not become a hybrid vehicle with electric powertrain. The electric car should be more eco-friendly than the gasoline. Tesla was the lead car maker for most of the past 15 months and this was due to the fact that the EV sold on the black market is not in competitive position when it meets current demand at low price.The best way to deal with this is to use low incentives as the incentive to buy new cars which have higher energy efficiencies, which could help to prevent over-consumption of battery. However a vehicle with higher electricity efficient power is much more environmentally friendly than it could be. A GM Tesla Tesla is not necessarily eco friendly. This is because you do not know all the parts of a car, you will usually be able to find what parts are most important to you and you will need different parts from those. Tesla can offer to finance part suppliers and suppliers to make part costs for them lower, and this might actually cost more because you have to use less power if you have a lower cost of operation which could mean that you have to buy lower power sources. In that way all the incentives should be reduced.But not all incentives will work, but there is usually competition within auto and electric companies. The reason we did not implement incentives for the Chevy Volt was because we thought in the first place that there is no point to subsidizing the same product across different suppliers. Since we only need certain parts, we need to develop incentives