Can the second-generation Chevrolet Volt juice sales? by Doron Levin @FortuneMagazine October 31, 2014, 10:42 AM EDT E-mail Tweet Facebook Google Plus Linkedin Share icons General Motors’ GM Chevrolet Volt has been a tough sell since going on sale in 2010, making it a trying, exasperating project for the automaker, which probably expected too much success too soon. Consumer demand in the U.S. for the gasoline-saving Volt could remain problematic in the short term if energy prices keep moderating. Longer-term, GM and all automakers are convinced they must develop expertise and keep investing in alternative-fuel technology vehicles, including hybrids, diesels, electrics and hydrogen-powered fuel cells. GM this week revealed more details about the second-generation of its “extended-range electric” vehicle, a prototype of which will be displayed in January at the North American International Auto Show. GM officials, however, are avoiding sales projections, having been embarrassed by excessive optimism in the past. “The Chevrolet Volt—and other EVs and plug-ins as well as regular hybrids—are going to have a tough road in the U.S. if low gas prices persist, as many predict they will. Sales in the segment (along with small cars in general) follow gas prices – when they spike, sales rise; when they fall, so do sales,” said Michelle Krebs, an analyst for AutoTrader.com. GM’s luxury version of Volt, called the Cadillac ELR, has sold less than 1,000 units. The 2016 Volt “will store more energy in its battery pack with fewer cells, yet go further on a charge,” GM CEO Mary Barra said Tuesday during a speech at the Detroit Economic Club. “It will accelerate faster. And the car’s gas generator will come from an all-new GM engine family and use even less fuel.” Barra, less than a year on the job, has declared her intention to lead a cultural change at GM, emphasizing more accountability by employees, in order to improve the company’s performance. Today’s Volt has a 38-mile range in all-electric mode, after which a gasoline engine kicks in to recharge the battery, giving it the range of a conventional vehicle. Introduced four years ago, it has sold 69,000 units – well short of the 60,000-a-year expectation voiced by former chief executive officer, Dan Akerson. Last year its price was reduced by $5,000 to stimulate demand. According to Edmunds.com, the average price paid for the model is about $36,000. By comparison, Toyota’s exceptionally successful Prius, the gas-electric hybrid that first appeared in 1995 and went on sale in 1997, has evolved into a stunning success since then, selling more than three million units worldwide in several variants. There are a few obvious reasons behind Prius’s triumphal performance. First, Prius carries the Toyota badge and thereby carries with it the credibility and reputation for quality that the Japanese automaker has earned over the past few decades. Second, Prius has been an exercise in constant improvement: the first model was homely and not very impressive, from a performance standpoint. It didn’t sell well, either. Toyota executives more or less conceded that the first Prius was new, untested and not very impressive. The automaker hoped consumers would provide feedback that would lead to improvements. GM’s new Prius, according to executives, will likewise be an improved version of the original, helped along by comments from owners and reviewers. GM, as it strives to reform its corporate culture, recognizes the benefits of starting humbly, patiently and with an intention to learn—instead of making self-important or grandiose projections. A few more generations of Volt may bring GM the success that feels so elusive today. High energy prices would help matters, too.