Cynics will argue that GM only built the Bolt because government emissions regulations require it, not because customers are dying to own a plug-in vehicle.
They’re probably right. But it doesn’t matter. The Bolt is virtually guaranteed to be a winner, even if it turns out there’s not much demand from retail buyers. Why? Because it’s the perfect vehicle to take advantage of the explosive trend in ride-sharing.
It’s no coincidence that the day before GM unveiled the Bolt EV it announced a whopping $500 million investment in Lyft, the San Francisco-based ride-sharing service. GM now owns an estimated 9 percent of Lyft, which valued itself at $5.5 billion after its latest $1 billion funding round. GM President Daniel Ammann will join Lyft’s board and together, the two companies plan to develop an on-demand network of self-driving cars.
That’s cool and fun, but the reality of a driverless taxi is still a decade or so away. In the meantime, the plug-in Bolt is the key to this Detroit-Silicon Valley partnership. GM will make Bolts available for short-term rentals to Lyft drivers at a new network of rental centers it’s establishing in urban areas. It’s a business model Lyft already piloted successfully with Hertz in Las Vegas: rent a car, earn money giving rides, return the car. Now GM, instead of Hertz, will provide the rental cars to Lyft drivers.
“When you look at Lyft, the places they do well are places we don’t do well, like California and the Northeast,” said GM’s global product development chief Mark Reuss. “It’s great exposure for us to get people into one of our most progressive cars.”
“It’s the best infomercial I’ll ever create,” added Alan Batey, president of GM’s North American operations and global head of the Chevrolet division.
If the logic sounds familiar, it’s no surprise. Back in the 1990s, U.S. automakers invested in car rental agencies because they were seen as a showcase for potential buyers to test-drive new models. (They were also a convenient way for automakers to unload vehicles when production exceeded demand.) GM bought National Car Rental,
Over time, however, rental lots became graveyards for poor sellers and the economics were so lousy that all three ended up dumping those rental companies.
So how is it different this time? For one thing, car-sharing is reshaping the automobile business faster than anyone could have imagined. In congested cities like San Francisco, Los Angeles and New York, people who can’t afford to own (or park) cars have embraced ride-sharing services like Lyft and Uber for their mobility needs. And the trend is just beginning.
“Everyone says Millenials aren’t interested in buying cars,” said Ammann. “What they’re really not interested in is paying for insurance and parking and all these things. They still want to get from Point A to Point B. People still want the convenience of a car when they need one, without the inconvenience that comes with ownership.”
The Bolt was purpose-built for this kind of shared urban usage. It’s surprisingly roomy for a small car, and easy to get in and out of because of the flat battery pack mounted beneath the floor. Thin, sculpted front seats give rear passengers extra leg room.
“It was important for this car to be super spacious and useful” because it was conceived for the sharing economy, said Pamela Fletcher, who heads up GM’s electrification efforts.
Because it runs on electricity, operating costs are low, and its 4G LTE wireless hotspot through Onstar provides a high-speed data connection that will make the Bolt smarter every day. Drivers can optimize their routes and maximize their electric driving range, for example, based on patterns such as the time of day, topography, weather and driving habits.
The Bolt is not the only car GM will make available to Lyft drivers at these rental centers; drivers can rent low-mileage sedans or pickups, too. (That keeps pre-owned models off used car lots for a little longer, propping up their resale values.)
But when it comes to urban car-sharing, it’s hard to find a more suitable model than the Bolt: it’s convenient, connected and electric.
So whether or not GM sells many Chevy Bolts to retail customers, the marketing boost it gets from Lyft and the real-world experience it collects on ride-sharing will make GM that much richer.
