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Chevrolet Volt will need big subsidies

 
5 412 views Feb 7, 2008
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Chevrolet Volt will need big subsidies

Chevrolet Volt will need big subsidies

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Producing hybrid vehicles is expensive for carmakers but customers aren’t willing to pay huge premiums to cover the extra cost of the technology especially when they can get a comparable petrol or diesel vehicle for thousands less. The Toyota Prius is the current top selling hybrid but its prices start at $22,000. There’s no way GM could sell its upcoming Volt for that kind of money and still be profitable, which means the General will likely have to heavily subsidize the cost of the car to get it off the showroom floor.

GM is targeting a price of around $30,000 to $35,000 for the Volt, a significant premium over the Prius, but it will feature advanced plug-in hybrid technology that allows it to drive up to 40 miles on electric power alone. People using the car for short distances only may never have to visit a fuel station again.

Officials expect the cost of the technology to come down once the car has been in production for several years. GM’s North American Chief Troy Clarke admitted to TheCarConnection that much of the technology for the Volt is still being invented and that the biggest hurdle is still lithium-ion battery technology. “The first generation (of new technology) will cost you like the dickens,” Clarke explained. “It’s usually the third generation of a technology that gets you to a normalized cost base.”

One solution to avoid the high costs of the batteries is to implement some sort of battery rental scheme, which could allow the car to reach the $30,000 price point. Under the rental scheme, owners would only need to spend a small amount of their usual monthly fuel bill on renting the batteries – about $25 a month.
GM Volt Concept

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Comments (5)

  1. By Michael Posted: 2/7/2008 7:45am PST

    $25 a month would not be much for battery rental.

    'Much of the technology is still be invented" - Not so much. The only thing being invented is the packaging and integration, and it's not being invented; just getting everything to work together.

    Subsidizing would be nice at the start until there is greater market acceptance. The biggest obstacle to that is not producing a vehicle that people actually can live with.
     
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  2. By Gus Posted: 2/7/2008 10:59am PST

    I think Toyota doesn't make (or didn't, at first) make much money with the Prius either, correct?

    I wish I could use a plug-in, but living in an apartment building offers me nowhere to plug it in!
     
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  3. By chris Posted: 2/7/2008 11:46am PST

    yeah theres something that GM doesnt seem to be looking into and that is eco-friendly vehicles under 100k in sales are discounted something like 10% of their value by the federal government in the states.

    also, I think GM is vastly underestimating just how many people will ACTUALLY pay 40k for a 5 seater compact that goes 40 miles..... on electric power.

    if people are paying a 10k premium on the prius (you can get similarly powered and sized cars for 12), people will easily pay a 20k premium for this car. EASILY.

    and every model year you can drop the price to keep the MSRP in line with the actual cost of production. hell, half of SoCal will buy this car at 40k a pop if it does what it says it will. I guarantee you that this car will have production problems. they wont be able to make enough of them. I know i'd buy it.... if i had the money..... and if it was a ford :p
     
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  4. By Gus Posted: 2/7/2008 3:20pm PST

    Yeah, where is Ford in all of this? They tend to have the broadest range of cars, and their Focus is fantastic, so why not build a plug-in hybrid Focus?
     
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  5. By Kelly Posted: 2/27/2008 7:59am PST

    Ford is working on a plug-in Escape.
     
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