The Chevy Volt: Driving Local Garages Into the Ground

NEW YORK ( TheStreet) -- For the next 50 years, one business I don't want to be in is the car service business. Why? Because with the conversion to electric cars, there will be very little to service.

This is what we call a secular shift, in this case of Olympian proportions. How many hard disk drives do you repair in the iPad and iPhone world? None, of course. They don't exist.

Likewise, with electric cars, how often do you need to change oil, change spark plugs, timing belts, various other hoses, crankshafts, transmissions and much more. The answer is never.

Most people bring their cars into their dealer once every 5,000 or 10,000 miles to spend approximately $200 or sometimes much more to change oil, filters and a lot more. If you have an electric car, you too will bring in your car from time to time, but primarily to do one thing only: rotate the tires, and by the way you can do that yourself.

There are at least 45,000 Chevy Volts on the road worldwide as of the last month -- perhaps closer to 50,000 if you count some international locations that lag in their sales reports. Cumulatively, they have been driven 300 million miles thus far.

With a regular gasoline/diesel-only car, those 300 million miles would have been a gold mine for the auto service business. With the Chevy Volt, not so much.

This is one reason the Chevy Volt, for the second year in a row, has obtained the highest customer rating of any car in Consumer Reports. Ninety-one percent of owners recommend it to their friends, neighbors, colleagues and relatives.

In other words, the Chevy Volt basically sells itself. No need for expensive advertising, so GM ( GM) is clearly wasting some money here. The most effective sales method is the enthusiastic owners. Why pay $100 million a year to magazines and TV channels, when existing owners will promote the car for free?

During the first four months of 2013, sales of Chevy Volt inside the U.S. are only barely up from the equivalent four months of 2012. Still, this is a reduction in sales momentum. It is no catastrophe to be up only 3% year over year, but in previous months the increase was often over 100%.

So why are sales of Chevy Volt up only 3% year over year? There are five reasons:

1. A new Chevy Volt 2.0 model might be announced at some point in the coming months:

The current Volt was engineered starting in 2006, mostly finished in 2008, and production started in 2010. We are now well into our third year of the Volt's mass production.

As technology advances rapidly in battery-powered cars, a car such as the Volt should see a complete redesign after only four years. This means that an all-new Volt 2.0 could enter production as early as 2014, as a 2015 model.

Some people are speculating about a Volt 2.0 not happening until 2015, as a 2016 model. I believe they are wrong. GM has most likely been working hard on the Volt 2.0 since at least early 2012, probably 2011.

Seeing as it took only three years to develop the Volt 1.0, we should expect production of Volt 2.0 to start in calendar year 2014, not 2015.

As a result, some prospective Volt buyers are waiting for an improved 2.0 version to show up in approximately 15 to 18 months from now. This one might be slightly less expensive, but more importantly, it will have a richer interior, space for five people (instead of four), and perhaps better infotainment technology.

2. Tesla ( TSLA). The California carmaker achieved volume production in December 2012, and seeing that it is an outstanding car, it has taken sales from Volt owners who don't mind spending approximately three times as much on the car. A loaded Tesla is over $100,000, whereas a loaded Volt, after tax credits and other discounts, could be as low as $30,000.

Tesla also fits five adults, as well as much more luggage than the Volt. The novelty of a car locally made in Silicon Valley has also steered sales away from the Volt to Tesla in the country's largest electric car market by far -- Silicon Valley.

3. The Cadillac ELR. For those who would like a great-looking Volt but don't need a car as big as the Tesla and don't want to go all-electric as with the Tesla -- some are waiting for the 2014 Cadillac ELR. GM announced in January 2013 that deliveries of the Cadillac ELR would start in January 2014.

That was the exact moment -- January 2013 -- when Volt sales started to moderate, to the point of being approximately flat sequentially. It's clear that some people are waiting for the Cadillac version of the Volt, and everyone agrees that it is stunning.

4. Chevrolet Spark EV: As I wrote more than a year ago, after Volt comes Chevy Spark EV. This is a smaller, all-electric car made in Korea. It will cost approximately $10,000 less than the Volt, at $32,500 or less, before tax adjustments.

Production of the Chevy Spark starts this summer, and at least in the beginning, it will be sold only in California, Oregon and South Korea. It has an electric motor that is unusually strong, with 400 pound-foot worth of torque, similar to a Ferrari 458 -- but at barely 10% of the Ferrari's price.

Chevrolet Spark EV is clearly the car you want if you want Ferrari power. But you'll pay only $22,500 after California tax adjustments. That sure beats paying a quarter-million dollars! Surely some prospective Volt buyers are holding out for this one.

5. BMW i3: I wrote in 2012 that the BMW i3 will be the 2014 car of the year. It may be the most dramatic new kind of car we have seen in well over a generation, arguably besting both the Tesla and the Volt.

The BMW i3 is basically a Tesla, but made in carbon fiber and with a motorcycle engine as on-board generator, so you will never risk getting stranded. On top of that, the interior and exterior design of BMW i3 is both stunning and supremely practical. I have been predicting for the last year that it will be the most-talked-about car when it hits U.S. streets this December.

Clearly, some prospective Volt owners have been holding out for the BMW i3 and will keep Volt sales lower than otherwise in 2013 and well into 2014.

Conclusion: Don't be in the car service business.

Going forward, being in the car service business is like trying to service the hard disk drives inside iPads and iPhones. It's pointless; there's nothing to do. Electric cars need their tires rotated, but little or nothing else. Even the brakes -- thanks to the regenerative brakes on all electric cars -- will likely last 20 to 50 years for most drivers.

Close to 125,000 electric cars will be sold in the U.S. this year, up a little over 100% from last year's 52,500. In 2011, the number was under 18,000. As for 2014, we don't have a good idea yet, but it should be dramatically more than this year's 125,000.

I guarantee there is an electric car in your future. What I can also guarantee is that your auto service bills will decline dramatically as a result.

At the time of publication, the author was long AAPL.

This article was written by an independent contributor, separate from TheStreet's regular news coverage.

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