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GM says the 2011 Chevy Volt, America's first mass-market electric vehicle, will be offered in the low 30s (possibly before tax credit), and that it will make a profit.
Its unclear whether Volt's price tag in the low 30s is with or without tax credit

The 2011 Chevy Volt, designed and manufactured by General Motors, faces tremendous challenges as the highest profile electric vehicle launch to date.  Among the most pressing are performance -- currently the Volt can not tolerate very hot climates well -- and pricing.

Many factors, including the cost of the battery pack, the cost of the vehicle warranty (which could possibly include limited battery replacement coverage), and cost of design have led analysts to predict that the Volt will be quite expensive for a mass market vehicle -- in the range of $40,000 USD.  A $7,500 USD tax credit on electric vehicles will bump this price down substantially, but many have voiced doubts about how many consumers will bite at a $32,500 USD price point.

However, according to GM-Volt.com, the cost may be significantly less, improving the Volt's prospects.  The blog spoke with GM CEO Ed Whitacre and quotes him as saying, "We’re not in business to lose money, we did enough of that already.  [The Volt] is going to sell in the low 30s.  We’ll get a margin on that."

Noticeably absent was any mention that the low 30s price estimate included the government tax credit.  If that figure indeed proves to be before the credit, it could mean GM has a major surprise in store for the market.  If GM can hit the market in the high 20s after a  tax credit, it could steal a substantial amount of business from hybrid makers like Toyota and Honda.

Again, Mr. Whitacre's comments do not entirely rule out that the "price" he's quoting is after tax credit, though that is how GM-Volt.com has interpreted them.  Regardless, if GM can merely make a profit on the electric vehicles it is producing, that will be impressive.

If GM can achieve either goal -- a price in the 20s after tax credit, or a margin on the vehicles it sells, its bold experiment could pay off.  After all, its position is similar to that of Toyota, when the Japanese automaker entered the world market with the Prius in 2001.  At the time hybrids were unproven and doubts were high; now the car is the bestselling car in Japan and climbing U.S. sales charts.  The Volt has the potential to achieve similar success, if GM can live up to its big promises.

Update 1: Tues., January 19, 2009, 11:05 p.m. -

Turns out that like most things that sound to good to be true, the notion that a "low 30s" price might be pre-tax credit turned out to be wishful thinking.  A GM spokesperson contacted AutoBlog, commenting that while GM "has not officially announced final Volt pricing, a price in the low 30's after a $7,500 tax credit is in the range of possibilities."

While it may be disappointing to many that the Chevy Volt won't hit in the high 20s, this comes as little surprise.  Returning to the Prius parallel, if GM can indeed turn a profit, though, that will still be quite impressive.  Hopefully that prediction by Mr. Whitacre was not simply more wishful thinking.

 



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Of course it's including the tax credit
By 91TTZ on 1/19/2010 10:10:39 AM , Rating: 5
Manufacturers always release the most optimistic figures possible, even if they border on inaccuracy. You can be sure that this is referring to the most stripped down version they'll sell combined with the tax credit.




By Brandon Hill (blog) on 1/19/2010 10:12:41 AM , Rating: 2
Problem is, I bet the tax credit isn't going to last forever and will be limited to a certain number of vehicle sales. Toyota ran into this problem when sales for the Prius skyrocketed and customers lost out on the tax credit.


RE: Of course it's including the tax credit
By quiksilvr on 1/19/2010 12:21:02 PM , Rating: 2
That happened because the tax credit is only available for a certain battery capacity. If Toyota just use Lithium Ion batteries, the capacity would have increased and they would have received the tax credit.

Instead they whined about it a lot and cut their price of the Prius to compete (did I say compete? I meant pwned) the Honda Insight.


By Brandon Hill (blog) on 1/19/2010 2:11:15 PM , Rating: 2
We're talking about two seperate rebates here. I'm talking about the initial government hybrids rebate that was offered three or four years ago to boost the sales of hybrid vehicles. Once automakers reached a certain sales target, customers were no longer eligible to receive a rebate. That's what happened to Toyota.

You're talking about the new tax credit which Toyota was whining about. My point was that even with this new tax credit, it's probably sales based -- once a target is reached, you can kiss that $7500 goodbye.


By Keeir on 1/19/2010 3:50:07 PM , Rating: 2
The current legistlative appears to be Not based on Make and lasts for the first 250,000 cars eligible.


RE: Of course it's including the tax credit
By Reclaimer77 on 1/19/2010 4:32:55 PM , Rating: 2
quote:
Problem is, I bet the tax credit isn't going to last forever and will be limited to a certain number of vehicle sales.


Problem is, the tax credit is offered in the first place. They already bleed the American taxpayer for BILLIONS. Now they are asking me and everyone else to fund your Volt purchase ?

Fuck that. This is an outrage.


RE: Of course it's including the tax credit
By Mint on 1/19/2010 5:43:48 PM , Rating: 2
If you can help bring to market a technology to get America off foreign oil for, say, $7500 * 250k ~= $2B spread over a few years, and our increased independence helps us cut just a few percent off our half trillion yearly spent on defense, it's a no-brainer.

Then you have the reduction in urban air pollution, too, which costs tens of thousands of premature deaths per year (look it up).

This is not just to appease some kooky global warming alarmists. It makes sense in so many ways.


RE: Of course it's including the tax credit
By Reclaimer77 on 1/19/2010 6:22:51 PM , Rating: 2
quote:
Then you have the reduction in urban air pollution, too, which costs tens of thousands of premature deaths per year (look it up).


Such bullshit. We do not have tens of thousands of deaths per year because of air pollution. And define "premature" deaths for me please. Anyone who doesn't live to the national average is "premature" ? That's absurd logic.

Please find me all these deaths where the coroner pronounced the cause of death was "urban air pollution".

quote:
If you can help bring to market a technology to get America off foreign oil


We already have a product. It's called DRILLS and pumps. We have them, we should use them.

quote:
This is not just to appease some kooky global warming alarmists. It makes sense in so many ways.


How ???


By Yawgm0th on 1/20/2010 4:44:13 PM , Rating: 1
quote:
Such bullshit. We do not have tens of thousands of deaths per year because of air pollution. And define "premature" deaths for me please. Anyone who doesn't live to the national average is "premature" ? That's absurd logic.

Please find me all these deaths where the coroner pronounced the cause of death was "urban air pollution".
I disagree with OPs position, but he's not far off. Air pollution is a serious health problem, particularly in the more densely packed urban environments. Of course you're not going to see cause of death of random people in big cities as hydrocarbon or CO inhalation (not counting suicides, of course). However, the overall air-quality does have a long-term health impact. You see an increased rate of lung problems. Average life spans are reduced.

It's really not up to debate. Air pollution has an undeniable causal relationship with reduced life expectancy.

It's like saying smoking doesn't kill. Sure, a puff from a cigarette won't kill you now, but a pack a day for thirty years very well could give you lung cancer. You wouldn't put "tobacco inhalation" as the cause of death, but it did cause the lung cancer.

quote:
We already have a product. It's called DRILLS and pumps. We have them, we should use them.
You fail in the same way as OP, more or less. Fungible markets mean it doesn't matter much if we drill domestically. Unless we can produce petroleum to the point of a surplus (truly impossible at even 30% of our current usage, no matter where we start drilling), the market will adjust itself such that our foreign providers, regardless of how much we like or don't like them, will still get compensated very well for their oil.


By Mint on 1/20/2010 11:45:08 PM , Rating: 1
quote:
Such bullshit. We do not have tens of thousands of deaths per year because of air pollution. And define "premature" deaths for me please.


Defined by who? How about the American Medical Association? World Health Organization? EPA? It's not the dumbass definition that you assumed it to be.
http://www.wunderground.com/health/airpollution.as...
http://dx.doi.org/10.1001%2Fjama.291.10.1238
EPA estimated 20k per year in 1997. WHO estimated 70k per year in the US. Journal of the Americal Medical Association says 22k-52k.

http://www.thestar.com/article/477901
20k premature deaths per year in Canada (Canadian Medical Association), 620k visits to the doctor.
http://www.medscape.com/viewarticle/412202
European Respiratory Journal says 3% of deaths in the US are due to air pollution (~80k/yr)

The bottom line is I don't give a flying crap if you don't want any of your tax dollars going to PHEV subsidies. Drivers are shortening our life expectancy, sending us to the hospital, and killing more people than traffic accidents, and think how much you pay in insurance to cover just the latter. Gas tax doesn't come close to covering the costs.

quote:
We already have a product. It's called DRILLS and pumps. We have them, we should use them.
You're an idiot if you think we can triple our oil production by drilling more.


By Yawgm0th on 1/20/2010 4:28:07 PM , Rating: 2
quote:
If you can help bring to market a technology to get America off foreign oil for, say, $7500 * 250k ~= $2B spread over a few years, and our increased independence helps us cut just a few percent off our half trillion yearly spent on defense, it's a no-brainer.
You clearly have no understanding whatsoever of how a worldwide market of a fungible product works -- or where we get our oil. Almost all of it is foreign. Even if the Canucks could provide us with all of our oil (assuming by "foreign" you meant "from countries we don't really like") that wouldn't effect how much money goes to the Persian Gulf or Venezuela. If we don't buy their oil, someone else will at a similar price while we continue to pay a similar price.

Reducing how much we use we reduce would reduce quantity demanded for the entire market, but it's not enough to particularly damage the oil states that "we don't like" -- certainly no more than it hurts our domestic oil companies or our hat's oil companies.

If you want to lower air pollution, a better way would be to eliminate all subsidies and mandates for ethanol. Making Ethanol doesn't substantially impact the petroleum market (which, as I said, doesn't really do anything for us geopolitcally or economically anyway) and, in fact, results in MORE pollutants and CO2 being emitted.

Alternatively, apply that same money towards other ways to clean or prevent air pollution and the effect will be much greater. The technology has come a long way in ten years, but subsidizing it now is not going to make it move much faster. Give it five or ten years and we'll be ready to see a more reasonable shift to cars like the Volt -- but without the outrageous subsidies and the drawbacks.


RE: Of course it's including the tax credit
By shin0bi272 on 1/19/2010 11:18:20 AM , Rating: 2
Can someone explain to me how the government (and yes I know they own GM) giving me money to buy a car makes the production of that car cheaper? The car still costs 40k+ to make unless they strip out stuff like 91TTZ said or get the batteries cheaper somehow. Just because the Gman decides Im being a nice little progressive and bending over and taking it in the wallet so I deserve 7500 extra dollars, doesnt mean that the car is cheaper to produce. That will just lead to GM losing more money each year and the government having to give them more money to keep them in business while they are handing me money too. So in the end wont the losers here be the tax payers?

I mean eventually your tax dollars are gonna be given to GM and anyone who does what the environmentalists say and buys one of these cars. Cause the way a tax credit works (except for cash for clunkers) is you go buy the car at 40k+, GM loses money on it, then next april you file your taxes and the government pays you money (which is classified as an outlay of misc funds) for your favorable action of purchasing a car they deemed worthy. That results in lower tax revenue for the government at tax time and because of that we'll run higher deficits every year this credit is around. That results in higher taxes eventually and more bailouts for companies owned by the government (see fascism) all of which are paid with tax payer dollars.

So isnt the government paying you to do what they want and then taking money from you later to keep their programs and companies running? How is that turning a profit?

Not saying dont buy the car... that's up to you... Im just lost as to how this means GM turns a profit


RE: Of course it's including the tax credit
By theapparition on 1/19/2010 11:37:42 AM , Rating: 3
I don't agree with subsidies and tax credits, but to answer your question:
quote:
Can someone explain to me how the government (and yes I know they own GM) giving me money to buy a car makes the production of that car cheaper?

Increasing the production of any item reduces it's cost. Imagine how expensive an iPod or GPS device would be if they only made a few. Sell thousands, and prices are somewhat affordable. Sell millions, and now they are downright cheap. Billions and now they are the surpirse at the bottom of cereal boxes.

So the thinking is that if the government can artificially create demand, production increases and costs decrease. Once again, let me reiterate that I do not agree with that conclusion, just trying to explain it.


RE: Of course it's including the tax credit
By shin0bi272 on 1/19/2010 2:07:08 PM , Rating: 2
That kinda makes sense. If the government could sell enough of them to make the price go down so that it could actually turn a profit. They did artificially create demand with the cash for clunkers and now I would postulate that all the people who bought cars in c4c wont be purchasing cars this year like they might have without c4c. Essentially they didnt really create any demand they just displaced future demand to last summer which is already leading to lower buying now. But thanks for explaining it that does make sense now I appreciate it.

Motley: The government giving you a tax rebate doesnt reduce the cost of producing the car it reduces your price of the car theres a difference. The car's tires are still the same price for GM to purchase and install. The windshield, the engine, transmission, etc. are all the same price for them to purchase and install. That means the cost of making the vehicle is the same but the price to the buyer after the fact goes down.


By foolsgambit11 on 1/19/2010 6:02:39 PM , Rating: 1
True, the rebate doesn't reduce the cost to produce the car. But that's not really germane. GM gets paid for the full price of the car - it gets the $7500 from the Government and the rest from you. So if they price it at $40k pre-rebate, and it costs them $35k to make, even if you only pay $32,500 (or $32,499 more likely), GM doesn't lose $2500, they make $5000.

That's good for GM's budget, not so good for the Government's. Let's say GM sells 5000 Volts while the rebate program is going on - it'll probably cost the Government more than $40 million after administrative costs. $40 million to help sell 5000 cars. Wow.

The hope with c2c, by the way, is that it will, in the long run, increase demand more than it reduces demand. If everybody who bought a car during the c2c program holds out until they would have bought the car after their current one, then there's no increase in demand overall. But if, by moving their purchase forward, it moves all their future purchases forward as well, then overall it increases the total demand in the long run. Not much. But some. Not saying it'll work, just expounding on the theory a bit more.


By Motley on 1/19/2010 12:21:42 PM , Rating: 2
By the government giving a tax credit, the cost of the car is reduced significantly. There are a lot more people that would be interested in buying the car at $30k than $38k, and that increases the quantity of cars needed to be produced. Many costs of a manufacturer are "set up" costs. It may be programming the robotic arm to precisely weld points A,B,C on the car, or creating a mold for the plastic trim. So the more cars selling, the more cars these costs can be spread over. It doesn't reduce the cost of doing them, but it's cheaper per car.

A $20,000 plastic mold for 1000 cars = $20 each car. If you sell 5000 cars it's $4 each car.


RE: Of course it's including the tax credit
By someguy743 on 1/19/2010 1:42:02 PM , Rating: 2
The bottom line is ... in order to get the prices of the (now) expensive batteries for the Chevy Volt to come down, you need subsidies and incentives in place so that the R&D costs and the new factories can be finished and optimized, etc. Once the big factories are built you'll see "economies of scale" kick in and the price of the batteries will probably go down 50-70% ... according to what GM and others have said.

It'll be like with HDTVs. They were expensive at first. Then the competition kicked in and the factories got built. THAT lowered the prices of HDTVs a lot. You also probably don't realize how much this product called GASOLINE is subsidized by the government do you? How do you feel about that?

Read this: http://www.setamericafree.org/saf_hiddencostofoil0...

Another good reason WHY the government should be subsidizing the Chevy Volt is because of what George W. Bush said in a "State of the Union" address about 5-6 years ago ... WE'RE ADDICTED TO FOREIGN OIL !!! Oilman T. Boone Pickens says the same thing. It's a bigtime military, economic, and diplomatic problem. Remember in 2008 when GW Bush was over in Saudi Arabia kissing the hands of the fat cat oil sheiks trying to get them to lower their crude oil prices? These same oil sheiks have people around them that are inclined to give money and other assistance to radical terrorist groups like Al Qaida.

We need to "grow our own" energy here in America. Create more energy jobs here. We can make plenty of ELECTRICITY here to "fuel" our Chevy Volts and tell the oil sheiks and petrodictators "we don't need no stinking oil". :)

http://www.youtube.com/watch?v=2ixqMYKodeg&feature...


By shin0bi272 on 1/19/2010 1:56:09 PM , Rating: 2
Right I understand that the price goes down eventually if you sell enough (look at the ps3). But if you are selling them at a loss to begin with then your giving people additional money to buy the thing for the first few years or so youre loosing over 7500 bucks per car (since the government owns gm now and all that).

We have been addicted to foreign oil for a long time and lots of presidents have tried to gin up support for stopping it but none ever have... I just doubt battery powered cars are the answer to getting off foreign oil... Mainly because the bulk of the lithium to put in the batteries comes from china anyway last I heard.


"Young lady, in this house we obey the laws of thermodynamics!" -- Homer Simpson














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