Chevrolet today announced the price of its Volt “extended range” vehicle due for delivery later this year. The company narrowly missed its price target of “less than $40,000” and said that the Volt will sell for $41,000, which is lowered to $33,500, if you are willing to accept tax incentives as official price reduction.
2011 Chevy Volt
The Volt isn’t quite as affordable as we would have hoped, but it may be Chevy’s most revolutionary and most anticipated car in quite some time and reported demand certainly justifies GM’s pricing strategy. The Volt base model will sell for $41,000, but tax incentives of $0-$7500 potentially reduce the price to $33,500. GM will also offer the Volt for $350 per month in a lease program ($2500 down payment, 36 months.)
The Volt will be initially available to Chevrolet customers in California, New York, Michigan, Connecticut, Texas, New Jersey and the Washington D.C. area. Not all Chevy dealers will accept orders, but GM will be offering a dealer locator tool that will help customers to find out where the car can be ordered.
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What makes the Volt unique is the fact that it can run 40 miles on a battery charge alone. Chevrolet said that the actual range will depend on driving conditions as well as climate conditions. The maximum range is 340 miles, which is achieved through a gasoline engine that “seamlessly operates to extend the driving range another 300 miles on a full tank,” Chevrolet said. The company did not confirm a gas-mileage rating yet, but initial conversations with the company suggested that executives still hope for a 200+ mpg rating.
As anticipated the Volt is, we are wondering if $41,000 is not too steep for what essentially is a small family car and what may be used, in most cases, as a commuter car. Honda’s Insight hybrid costs $19,800 and the difference of more than $20,000, or $13,500 in a worst case scenario for the Insight, can buy a lot of gas. At the current rate (we assume a gas price of $2.75/gallon, $13,500 purchase price difference and ignore tax incentive as well as sales tax variations), you would be able to buy more than 4900 gallons, which are good for more than 160,000 miles. Count in that GM only provides a 100,000 mile warranty on its Volt battery pack as well as unknown service cost and the Volt could be a rather expensive adventure that does not make much economic sense. In a worst case for the Volt, a customer may be confronted with the question whether she/he should buy one Volt or two Insights (one for the spouse).
Bu then we know that there are few electric cars that make economic sense (has anyone mentioned Tesla?) and driving an electric car today has more to do with personal preference, privilege and idealism. In that view, the Volt will certainly be a groundbreaking vehicle and a winner for GM.
