GM is basically giving away Chevy Volts

The automaker is offering as much as 4 times the average incentives.

By Jonathan Berr Sep 24, 2012 12:38PM
Los Angeles, Calif., traffic on Interstate 405 copyright VisionsofAmerica, Joe Sohm, Digital Vision, Getty ImagesGeneral Motors (GM) recently bragged that the Chevrolet Volt, its well-hyped plug-in hybrid electric vehicle, posted its best-ever monthly sales in August of 2,831 units. What North America's largest automaker didn't mention is that it is practically giving the vehicles away as rival Toyota (TM) rules the alternative-fuel car market.

According to The Associated Press, GM's per-vehicle discount may be more than three or four times the industry average, depending on which data source is used. Patrick Michaels of the Libertarian Cato Institute pointed out that two-thirds of Volt sales were actually leases and that government purchases are distorting the figures. 

Volts are leasing at rates of $299 a month, $30 higher than a comparable Toyota Prius, and GM is matching the payments offered on the Buick Enclave, a midsize SUV.
 
The Volt, an upscale midsize car, has a sticker price starting at $31,645 (including a $7,500 tax credit), which tops that of the hybrid Prius, which starts at $24,000, though its plug-in hybrid models are more expensive. The Enclave starts at $36.786. Given those choices, it's hard to imagine many consumers would pick the Volt.

The problem with the Volt and other alternative-fuel vehicles is that they are still more expensive to own than their conventional counterparts because gasoline prices in the U.S. continue to be relatively low compared with those in the rest of the world. In fact, gas prices recently declined for the first time since July. As the Prius has illustrated, consumers will buy vehicles that don't run exclusively on gasoline if the price is right.

As noble an experiment as the Volt may have been, GM can't continue to produce it at a loss, which Reuters recently pegged at $49,000 per vehicle. Though the automaker denies that figure is accurate, it does admit that the Volt is not profitable. The plant that makes the Volt is currently idle because of lackluster demand. More incentives to move Volts may be in the works.

For now, the Volt appeals to consumers who are motivated to do right by the environment, regardless of the cost. That is a small market indeed.

Jonathan Berr does not own shares of the listed stocks. Follow him on Twitter@jdberr.


Tags: gmTM
169Comments
Sep 24, 2012 1:56PM
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LOL.... Hope and Change hows that working for you!
Sep 24, 2012 1:54PM
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Unless gas gets really expensive in the not too distant future, this sound like another recipe for bankruptcy 2.0.
Sep 24, 2012 1:48PM
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How you gonna get us out of debt by giving this crap away Obumer?
Sep 24, 2012 1:45PM
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There are basically 300 major city markets in the US.  With that, GM'S August sales were 9.44 cars per market average.  Not much question the Volt is a lead balloon.  
Sep 24, 2012 1:20PM
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People need a leason in economics and sunk costs vs marginal costs. $49k figure is based on if they didn't sell another unit and is based on the past sunk costs. As they sell more units the sunk costs are spread over more units and therefore continue to decrease. GM is selling them based on their marginal cost. It would make no sense economically to quit producing Volts as the sunk cost is in the past and stopping production is not going to recoup that investment. From a marginal cost standpoint, the Volt are selling at the right price and if they sell enough volts over the liftime of the design they may recoup the intial investment and then some.
Sep 24, 2012 1:13PM
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Tom Krisher presented a much more thorough evaluation of Chevy Volt sales in his article a couple of days ago.  No doubt, price means a lot.  and people driving electric vehicles of any brand,typically are not car enthusiasts except for the few that love new tecnology.  The usual envirnmental types couldn't care less about cars in general.  But Tom's article points out some real facts and reasons for the Volt, including:

 

"The Volt is now the top-selling electric car in the U.S. — 7,400 ahead of the Prius Plug-in. Nissan's Leaf is a distant third, and analysts say Volt sales could reach 20,000 this year."  He also points out that the gas mileage of teh Volt helps GM attain rediculous new fleet mileage standards and it has develped the technology which can be incorporated in other products in the future. 

 

The Volt haters are generally GM haters.  Look at all the facts and don't believe all the noise from the other side.  The Leaf, in my opinion, a far less popular vehicle, is among the "flops" because it can leave you stranded with no alternative power backup.  For 7,000 dollars more, I'  take the Volt if I ever desire to own an electric vehicle.

 

 

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