At $41,000, Volt Enters Cadillac Territory


I think GM priced the Volt too high for the following reasons:

  • The Nissan Leaf costs $8,220 less. Both cars offer close to the same lease plan. Both cars are eligible for the $7,500 federal tax credit. As a pure electric, the Leaf gives buyers access to rebates and tax incentives that some states offer.
  • The Volt looks like a Malibu, but you can buy a Cadillac or a 3 Series BMW for that kind of money.
  • There is no real competitor, according to GM, yet Tesla’s Model S, going 300 miles on a charge, will deliver in 2012 for $9,000 more and is better targeted to high-end, high-tech buyers. The Ford Focus Electric is coming early next year.

Volt buyers are getting a car with, presumably, a 340-mile range, lots of technology, and a high level of standard equipment for the base model. It is designed to be a family or commuter car, though it accommodates only four. The Leaf will go 100 miles on a charge and has zero emissions.

But the major difference that I see is how the cars are being marketed. Much has been made of the Volt’s attractive lease offering ($350 per month, 36 months, $2,500 down; Leaf’s is the same, with $1,999 down).

This is great until you factor in the 12,000-mile lease restriction, which works out to “32.8 miles a day, after which undisclosed excess-mileage fees will apply.” The leasing company will be eligible for the $7,500 tax credit. So if you’re a long-distance commuter and lease the car, it will end up costing a lot more than, say, a bought Prius.

Nissan LeafGM claims that having a booster-generator engine will increase the car’s residual value over the Leaf’s. Well, maybe, but that’s only a guess at this point. The company has present capacity to make 10,000 cars through the end of 2011, which should be sufficient to meet demand.

The cars will be sold by 600 Chevrolet dealers in six states and D.C., who will get special training in servicing and buyer education.

The Leaf has gotten much of its promotion through the Internet and has generated 17,000 orders in five states so far, says Nissan. The car is due in December. Enterprise Rent-A-Car is buying 500 and will offer them for rent in eight cities.

The Leaf and the Focus Electric were produced by alliances that required little in the way of development capital. GM, on the other hand, has invested some $750 million in the Volt and will have to sell a load of them to recoup that cost.

Don’t get me wrong: The Volt is from all reports a great technological accomplishment, and we wish GM all due success. But is it really a good selling proposition? What do you think?


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