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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, 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 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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By Yawgm0th on 1/20/2010 4:28:07 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.
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.

"What would I do? I'd shut it down and give the money back to the shareholders." -- Michael Dell, after being asked what to do with Apple Computer in 1997

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