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.
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
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
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
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.
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?