Chevy Volt a bad sign for electric car sales?

Chevrolet Volt / General Motors

Does General Motors' (GM) five-week production suspension of the Chevrolet Volt because of oversupply cast doubt on whether electric cars can sell in volume at current prices? The analysts at Edmunds.com think so.

"The oversupply of Volts suggests that consumer demand is just not that strong for these vehicles," says Lacey Plache, Edmunds chief economist. Plache notes that high price is a drawback. "The price premium on the Volt just doesn't make economic sense for the average consumer when there are so many fuel-efficient gasoline cars available, typically for thousands of dollars less."

GM says its temporary Volt shutdown and idling of 1,300 workers is necessary to get its inventory levels in line. The company sold 7,671 Volts last year -- well short of its 10,000 target. And selling 1,626 in the first two months this year is far below the pace needed to hits its original 2012 sales goal of 45,000.

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In addition to the price issue, Volt sales stalled with news that Volt battery fires had broken out after the cars were crash tested. The National Highway Traffic Safety Administration pronounced the Volt as safe as gasoline cars, but the issue clearly put off some shoppers.

Rising gas prices haven't helped

Even with gas prices rising and expected possibly to approach a national average $5 a gallon by summer, the Volt price level -- about $41,000 before a $7,500 federal tax credit -- remains a problem. Edmunds senior analyst Michelle Krebs points out that even at $5 a gallon, gas savings on the Volt (rated at the equivalent of 95 MPG in city driving and 93 on the highway) would take nine years to pay back the price differential over the similar-size Chevrolet Cruze. The Cruze is rated at 25 MPG city, 36 highway and has an average selling price of $19,656 according to Edmunds' data.

The Volt's major competitor, the Nissan Leaf -- at $32,780 before the credit -- fares slightly better in this comparison with gas at $5 a gallon. The all-electric Leaf (the Volt has a back-up gasoline engine) would pay back the price differential over a Nissan Versa in five years, Krebs says. Leaf sold 9,674 in North America last year and 22,000 worldwide.

Electric models still coming

Slow Volt sales seem to complicate auto company plans for using electrics and plug-in hybrids to meet stringent federal mileage standards for 2016 and beyond. But new electric models keep on coming,  with about a dozen new models scheduled for introduction this year and a similar number in 2013.

Ford's (F) electric Focus goes on sale this month in California, New York and New Jersey. Just last week Ford trumpeted that its mileage equivalent ratings (110 city, 99 highway) topped the Nissan Leaf, making it the most fuel-efficicent vehicle in the U.S. But with a list price of $39,995 before the federal credit -- just below the Volt and above the Leaf -- will likely have a price issue as well. The most expensive gasoline-powered Focus, rated at 26 MPG city, 36 highway, lists for $22,700.

The tough federal mileage requirements for 2016 and 2025 have pushed automakers to sharply improve efficiency of their gasoline engines. They are using technologies like turbocharging, gasoline direct injection and so called idle stop, which shuts the engine off at a traffic light or other full stop then restarts it smoothly. The result has been a number of small cars that are rated for 40 MPG on the highway. With such choices, shoppers likely will remain reluctant to pay much more for the new, unfamiliar technology of plug-in electrics.

[FocusElectric]

You're all forgeting the physiological issues involved. It's depressing paying $5 a gallon for gas! Last week I waited in line for 30 minutes just to save 3 cents a gallon. People were yelling at each other to hurry up in line. Why do you think people in California buy EV's? Save the trees?! No, they buy them so they can breeze through morning traffic in the carpool lane by themselves. Get "Free" parking and "Free" charging by the front door of most business. $40,000 Volt - $10,000 tax credits = $30,000 of peace of mind and never having to pump gas again.

[TheCraneHusband]

Unless you are a millionaire, spending $41,000 for any depreciating asset is ridiculous, especially when much cheaper options are available. As for the Volt, anyone not in the 7 Digit Net Worth Club who is buying one to "save money" needs to take a financial management course. And anyone who CAN afford $40K for a vehicle probably isn't going to be worried about $5/gallon gas anyway. That leaves a target market of rich people who wish to shore up their environmental bonifides. No wonder sales are so weak.

[CBSDAF]

The debate over buying a depreciating asset is a completely different argument. Millions of people buy such assets everyday. In fact, most everything we buy, used or new, is a depreciating asset. That being said, buying the Volt certainly can be a money saving proposition. And, while I certainly dont consider myself rich, I do consider myself smart. So smart, that not only did I realize that I could save approximately $75 per month over the total cost of my VW but that I could do it by owning a luxury vehicle that also happens to be the most technologically advanced car available on the market. It did take "some" effort to come to this realization and to find and secure the right deal but that goes with the territory.

[CBSDAF]

Here are the numbers for my Volt after 9 days of owning the vehicle:

EV Miles Drive: 256.35
Total Miles Driven: 265.52
EV%: 96.5
Gas Used: .3 Gallons
MPG Equivalent: 394.92
MPGe: 77.49

Electricity cost @ 8.5 cents per KwH (this will go down to approximately 5 cents when I am switched over to an hourly plan)
KwH needed for full charge of battery = 13 KwH
Current # Full Battery Charges: 7
Current # Half Battery Charges: 2

Volt Lease Payment: $349 per month (zero down)
Volt Cost to drive 256 electric miles: $8.84 (8 charges X 13 KwH X .085)
Cost per mile: $.0345 cents per mile

TDI Payment: $349 per month
TDI Cost to drive 256 miles: $31.09 (256 / 35 X $4.25)
Cost per mile: $.121 cents per mile

The Volt provides me with approximately 75% in "fuel" savings over the TDI. Obviously the realized savings would be higher or lower for individuals depending on current vehicle and usage.

Current Lease Deals for other vehicles

I have owned or driven quite a few of these vehicles and my honest opinion would only place the Infiniti, BMW, and Regal in the same class as the Volt. You can also bet that these lease numbers are for basic cars with very few options. If applicable, I have rolled any "due at signing" money into the listed lease payment.

2012 Infiniti G35: $465 per month
2012 BMW 328i: $475 per month

2012 VW Golf (manual, non TDI): $335 per month
2012 VW Jetta (manual, non TDI): $215 per month

2012 Toyota Prius: $332 per month
2012 Mazda5: $358.83 per month
2012 VW Passat: $275 per month

2012 Subaru Outback: $380 per month
2012 Kia Optima: $258 per month
2012 Buick Regal: $335.27 per month
2012 Acura TSX: $350 per month

[Joseph_Wallace]

Wow, where did you get $349 lease with 0 down? I have only seen this with $2499 down. I will jump at the deal if this is true. I want to get in a Volt and just looking for the right deal. Let me know.

[CBSDAF]

Let's compare "comparable vehicles". US News ranks the 2012 Volt the #1 Upscale Midsize Car. Actually it tied with the 2012 Audi A4 and the 2012 Buick Regal. The "comparable vehicles" it beat out to attain that number 1 ranking? Infiniti G, Cadillac CTS, MB C Class, Lexus ES, Audi A5, VW CC, Acura TL, Nissan Maxima, Volvo C70, Lexus HS, Lincoln MKZ and the Lincoln MKZ Hybrid.

EV or not, the Volt is fairly priced amongst its competition.

http://usnews.rankingsandreviews.com/cars-trucks/rankings/Upscale-Midsize-Cars/

[Rod_Smith]

Yeah, because the US News people are the experts cars? Try the reviews from a car magazine and see what they compare it to. Carmax lists a number of what they consider comparable vehicles, nary a Cadillac, or Lexus in the bunch, if fact not one of the cars on your list, CBSDAF.
http://www.carmax.com/enus/similar-vehicles/2012-chevrolet-volt-1427.html

Consumer Guide Auto found it comparable to the Volvo S60 ($31k) and the VW CC ($28k)

[CBSDAF]

Carmax? Really?

More food for thought:

Automobile Magazine Car of the Year!
North American Auto Show Car of the Year!
Wards 10 Best Engines 2011 !
Popular Mechanics
-Automotive Excellence-Breakthrough Technology Award!
-Editors Choice Award!
-Top 10 Vehicle Award!
Car and Driver-10 Best Cars of the Year!
Popular Science Magazine-Best of What's New
2011 Green Car of the Year-Green Car.com
2011 Motor Week Best of the Year Award
SAE International's Automotive Engineering International (AEI)
"Best Engineered Vehicle" of 2011.
International World Car of the Year Awards program
World Green Car award

[Rod_Smith]

I suspect most of those that do buy an EV does so out of a perception that they're saving the environment. "Zero pollution vehicles" they are called; "pollution displacement vehicles" is what they really are. Run the numbers - after production and transmission losses, the electricity is no cleaner than burning gasoline per mile traveled.

[CBSDAF]

So is your argument now that EV's are no cleaner then gasoline burning vehicles? Is that the evil in EV's?

[Rod_Smith]

Yes, with half of our electricity produced by coal-fired power plants, the pollution produced to move your Volt a mile down the road on electricity is about the same as it is using the gas engine. It would take more time than I have at the moment, and more math than you could probably follow to explain it. Maybe later.

[musashiz]

Well ya the volt is a POS. Its well understood that any electric car made by chevy is going to be a major fail. Stick to what your good at - gas guzzling loud vehicles for people with small genitals, leave the real electric cars to the pros.

[sirmarion-2009]

A Car that runs on a Nuclear fuel rod would be the most reliable and longest drivable car with out refueling,with no polution.

[musashiz]

so id be able to drive and get radiation poisoning?? alright!!

[CBSDAF]

My Situation:

Chevy Cruze Lease for 36-months @ $225 per month + $125 per month for gas = $350 per month

or

Chevy Cruze Lease for 36-months @ $349 per month + $25 per month electricity = $375 per month

So, yes, the Cruze would be less expensive, assuming gas prices stay where they are today. But for $25 more per month I own a fully loaded Volt, the most technologically advances car in the world. And, had I purchased a similarly equipped BMW, Lexus, Mercedes, etc. my costs would be much higher.

[FocusElectric]

Get your facts straight. $32,780 for a Nissan Leaf?! Maybe last year. A 2012 Nissan Leaf starts at $37,250.

[sjc_1]

2012 Nissan LEAF SL
MSRP
$37,250

2011 Nissan LEAF SV
MSRP
$32,780

[jameskatt]

At $40,000+, the Chevy Volt is RIDICULOUSLY EXPENSIVE.

You will end up saving much more money by buying a $30,000 Prius.
And you will save even MORE MONEY buying the 40 MPG Ford Focus for $16,000.

What average American can afford a $40,000 car?

At $40,000+, the Chevy Volt POORLY compares to the new Tesla Roadster at $50,000.

Thus the Chevy Volt is PREDICTABLY a FAILURE.

Price the Chevy Volt at $20,000 and it will sell like hotcakes.

[CBSDAF]

Ridiculous comments. Using your reasoning, why buy a Ford Focus for $16,000 when you could buy a used Civic for $7,000? And to further your reasoning, why buy a used Civic for $7,000 when you could ride a bike or take a bus?

I do agree though that pricing the Volt at $20,000 would result in greater sales, but that can be said for any car priced over $30,000. The problem many people are having is that they are not comparing apples to apples. Compare the Volt to $40,000 cars, not $20,000 cars.

[sjc_1]

2012 Chevrolet Volt Base
MSRP
$39,145