General Motors has gotten much attention on its controversial Chevy Volt tax-subsidized vehicle. The hype for the Volt started over two years ago as GM was trying to put a positive face on the future green potential of a plug-in vehicle that was to be a game changer for the industry as Washington was lobbied for a taxpayer funded bailout. While the final verdict on the success of the Volt has not been reached, the initial performance is underwhelming; especially considering the amount of hype and marketing money (supplied by taxpayers) emanating from GM.
Many of the claims regarding the Volt have been suspect, such as the initial 230 MPG estimate, the assertion that the vehicle was purely electric and claims that supply can not keep up with demand. The latest cause for skepticism comes as Consumer Reports (CR) does an about-face by changing its view of the Volt from “a vehicle that doesn’t seem to make a lot of sense” to a recommended vehicle with a high predicted reliability rating. A look into the numbers raises questions about the credibility of both the recommendation and of CR itself.
Let’s look at the data and how CR rates vehicle reliability to see why something is very fishy about the recommendation for the Volt. During the spring, CR sent out vehicle reliability surveys to an approximate 7 million subscribers. It received about 1.3 million responses. Over 100 responses on any given vehicle are needed to obtain a reliability rating. The Chevy Volt supposedly had positive data from over 100 respondents even though the vehicle had only been offered to the public for a few months. A further look into the numbers shows that it is statistically highly unlikely that the responses were not fudged.
First, let’s review the response rate for all vehicles. Estimates put the amount of vehicles on the road in America at about 240 million with a median age of 9.4 years. Vehicles rated for reliability by CR have to be less than ten years old, so let’s say there are about 130 million vehicles on the road that fit the criteria. A 1.3 million respondent rate correlates to 1% of vehicles on the road. Compare that to the rate of responses for the Volt, which only had roughly 1,000 vehicles owned by individuals (many of the sales of Volts were to government fleets, localities and inter-dealership) at the time of the CR survey. The response rate would have to be about 10% of Volt owners. It is unlikely that 10% of owners even subscribe to CR. Even if the number of individual owners of Volts at the time of the survey was double the amount it would require a response rate of 5 times the average. What is the statistical probability that the Chevy Volt would have 5 to 10 times the average response rate to a reliability survey?
I’m not a statistician, but I have to believe that it is likely that there was an outside influence on the Consumer Reports recommendation for the Volt. President Obama and officials at Government Motors have staked much on the perceived success of the vehicle and they risk the loss of credibility if they can not convince Americans of the value of green initiatives like the Volt. Even if there was a valid explanation for the statistical anomaly that allowed the Volt to get a recommendation, why would a supposedly unbiased non-profit organization that consumers rely upon for car buying advice make claims to the expected reliability of a vehicle that has been on the road, in limited numbers, for only months?
Whether or not the CR reliability ratings are valid or not, the Chevy Volt will continue to inspire as much skepticism as it does hype. A few hundred wealthy purchasers may be happy with their decision to purchase the vehicle, but many of us feel that those that can afford the Volt should purchase them with their own money and not benefit from a $7,500 tax credit paid for by the rest of us. And for the critics of the Volt, the vehicle epitomizes wasteful green initiatives, crony capitalism and unwanted government intrusion at its worst.
Mark Modica is an NLPC Associate Fellow.