Bob Lutz Says a Realistic Price for the Chevy Volt is $48,000

By Chris Haak

04.03.2008

Well, so much for the $30,000 price point bandied about when the Volt made its debut in Detroit in January 2007.

GM Vice Chairman Bob Lutz told MSNBC in a recent interview (see page 2) that development costs for the upcoming Chevrolet Volt range-extending electic vehicle have been higher than initially anticipated, and that a “realistic price” for the car would be $48,000.

Now, Volt bashers/doubters on various Internet forums and blogs have thrown up their arms in disgust because to them, the price target has been completely blown up and the car’s value proposition – as a car that will potentially eliminate the need to fill the gas tank during normal commuting duties for most buyers – becomes dubious. After all, you can buy a LOT of gasoline, even at $3.15 per gallon, for $18,000. Actually, assuming 40 miles per gallon that a $21,760 Prius can easily manage, $18,000 buys about 228,571 miles of driving. If the Volt were $48,000 with no tax incentives, a buyer could pay for 333,206 miles’ worth of gasoline by purchasing a Prius instead.

However, Mr. Lutz also went on to say that a $40,000 price for the Volt may be possible if GM didn’t earn a profit on it, and the price could potentially be pushed closer to $30,000 with government tax incentives. Since GM has already made the choice to sell its expensive two-mode hybrid system fitted into its largest trucks and SUVs at a loss to build volume and brand recognition, it seems extremely likely to me that GM will sell the first generation Volts at a loss just for the environmental and PR coup the car would be. On top of that, let’s hope that if our own federal government was willing to give generous tax incentives to buyers of hybrid vehicles that still use gasoline (and in the case of some, still use a reasonably large amount of it), it would hopefully be willing to step up to the plate with incentives tailored to the Volt, which – if it performs as advertised – has the potential to significantly reduce oil consumption.

Once the Volt becomes more recognized in the marketplace and production volumes increse, GM should be able to take the time to engineer away some of the more expensive aspects of the car, such as its redundant systems for necessities like wipers, lowering the car’s cost, weight, and complexity. I predict that the Volt – or its successors – will fall below $30,000 within the next several years and will be an even better car than the first Volts will be.

So, to all of the Volt supporters and detractors out there, don’t put too much weight into the $48,000 figure, because I would be extremely surprised if GM had the nerve to put that large of a price tag on that car, regardless of how much sophisticated technology makes it work. (Of course, inevitably, dealers will be adding “market adjustments” to the price of the initial Volts to take some extra money from early adopters). But I expect the price to be $35,000 or less after tax incentives. As Brendan Moore says, we Americans like to buy our vehicles “by the pound,” and a sub-midsize Chevy will not be a sales success at $48,000.

COPYRIGHT Autosavant.net – All Rights Reserved

Author: Chris Haak

Chris is Autosavant's Managing Editor. He has a lifelong love of everything automotive, having grown up as the son of a car dealer. A married father of two sons, Chris is also in the process of indoctrinating them into the world of cars and trucks.

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9 Comments

  1. Which vehicle can you get 333,206 miles out of, the present generation Prius or the still-to-be-on-the-road first generation Volt? And it will not look like the picture that is included in the article. I heard that when they took the design that they showed at the auto show and put it in a wind tunnel, the aerodynamics were terrible.

  2. In this case, I don’t feel bad about saying I told you so. I knew they’d never make the $30k price.

  3. Who the hell will buy it at $48,000? Some hollywood stars and that’s about it.

  4. Well, maybe it will go really, really fast. And get 100 mpg. And take away the heartbreak of adult acne.

  5. Anonymous 7:28,

    First, I am aware that it will not look like the photo in the article. Since photos of the production Volt are not yet available, I figured the concept would be a reasonable facsimile to jog readers’ memories about what I’m talking about. My point about the 333,206 miles is not about any specific car’s longevity, but that if they did try to sell it for $48,000, you could buy a lot of gas for the difference in price between it and a Prius.

    Anonymous 12:42,

    As I tried to make very clear, I would be EXTREMELY surprised if they sold it for over $40,000, much less $48,000.

    I guess I’ll have to do a better job of clarifying the points I’m trying to make. You guys just shot my self esteem as a writer all to hell. 🙂

  6. Well, I got the point when I read it. It’s clear to me that Lutz was saying a good retail price might be $48k if they were going to make money on it, and that GM might sell it for $40k, which apparently is cost or below.

    And if the Feds and the states chip in with tax credits as will probably happen since it’s happened before with the current crop of hybrids, the net price might be around $35k.

    I got all that, but I’m sure the headline stuck with most people, so they remember that.

  7. It will be interesting to see just what the government does for hybrids in terms of tax creditd going forward. It made the Prius a pretty good deal for a couple of years.

  8. Is there going to be a cheap bare-bones, stripped hybrid available from any company for people like me that are only interested in the best fuel economy possible? I’m talking crank windows, low-dollar radio, low horsepower engine, two-seater, etc. but a great hybrid system. That’s what I want. Something that costs $15,000 and gets 60 mpg.

  9. Why should anyone get angry if GM makes the Volt expensive. No one is forcing anybody to buy it. Hey, if GM could sell it for less, they would. At least they built it and maybe it will go down in price like any other new products that comes from the market.

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