By Chris Haak
We’re not quite sure why this is even news today, since former GM vice chairman Bob Lutz told reporters two years ago, in 2008, that the Chevy Volt would sell for about $40,000 before the $7,500 federal tax credit. But as the Volt’s fall 2010 launch date approaches, the company has confirmed that Lutz’s prediction proved true. At that time, Lutz also noted that the Volt in its first generation would blow past its cost target by some $10,000, or 33 percent over the $30,000 bogey at the time the program’s development began.
Why is the Volt so expensive, when a new Prius goes for about half the price with similar interior space (actually, the Prius seats five, and the Volt seats only four) and an all-electric Nissan Leaf goes for $32,780? And why should you consider a Volt over a Prius or Leaf?
Similar to the Prius and other hybrids, the Volt literally requires two concurrent powertrains. It and the Prius have a gasoline engine and all of the associated infrastructure (fuel lines, fuel tank, pumps, electrical systems, air intakes, transaxles, etc.) with an electric motor and all of the associated infrastructure (batteries, wiring, sophisticated powertrain control, regenerative braking, etc.) Too, the Prius and Volt have to integrate these two very different powertrains as seamlessly as possible. Forward momentum actually seems to be easier to integrate than does braking for most hybrids; getting consistent braking feel and performance from mechanical brakes and regenerative braking is a challenge that has already forced a Toyota recall.
To the Prius’ engineering, the Volt adds much larger battery capacity (the current Prius can travel about a mile on battery power, if driven very gently, while the Volt claims a 40-mile range), more modern (and expensive) battery technology in its lithium ion cells, a more powerful turbocharged direct injection gasoline engine, and a more powerful electric motor. The Prius’ electric motor can propel the car, but can’t do so swiftly.
Nissan’s Leaf, as noted before, costs less than the Volt, but also dispenses with half of the Volt’s powertrain systems. (Perhaps not literally, but figuratively: the Leaf has the EV infrastructure only, so it can skip the engine, gas tank, and fuel lines). At 100 miles per charge under optimum conditions, the Leaf handily tops the Volt’s published 40 mile per charge range, but after the Leaf’s battery dies, the car needs to be charged for The Volt’s gasoline engine kicks in when the battery dies, and the car can be driven across the country with no need to stop for anything more than five-minute fuel fillups (plus bathroom breaks for the occupants, of course).
Another dark horse in the race for EV sales supremacy is the Mitsubishi i-MiEV, which is slated to hit the US market in 2011. Sold by a Japanese automaker with arguably the weakest US presence, the i-MiEV promises an 80-mile driving range and a price that the company hopes will be below $30,000 before the $7,500 tax credit.
To counter this pure-EV competition, GM’s marketing boss Joel Ewanick, hired recently from Nissan, is calling the Volt “a real car.” It’s not a “toy” that can only tote you only to fairly local destinations not far from its home base. It’s a somewhat compelling argument, but unless the Volt is really saving a lot of money on fuel costs, the price premium over its competition may be too large to make the car attractive to buyers other than the early-adopter population.
Helping make the Volt’s purchase price more palatable, GM plans to offer $350 per month 36-month leases with $2,500 down. When not buying the car outright, the Volt’s price suddenly becomes competitive with the Leaf’s $349 per month 36-month lease with $1,999 down. For another $500 over three years ($13.88 per month), I think I’d go for the Volt’s lack of EV “range anxiety” over a Leaf. Or you could just go for a 2012 Focus or 2011 Cruze Eco and top 40 miles per gallon on the highway and pay half as much for your car. Either way, competition in this space will quickly improve the breed, and eliminate the pretenders.