Chevy Volt: Sweetly Priced for Many Americans, Not for Poor Journalists
July 30th, 2010 // 2:23 pm @ Miss Electric
The Chevy Volt’s long-awaited price tag was finally unveiled this week – $33,500 to purchase (after the $7500 federal tax credit) or $350/month to lease (with $2500 down). Despite what underpaid journalists have reported this week in regards to the Volt being “too expensive,” this is a sweet price for many Americans.
The main reason why the media is wrong when it comes to characterizing the Volt price is their reference of comparison. According to Edmunds.com, other sedans in that price range do not come close to offering any of the features or efficiency that the Volt has to offer. Sedans in the $35-$40,000 price range include base models of the 2010 Buick Lucerne, 2010 Cadillac CTS, 2010 Acura TL or TSX, or the 2010 BMW 3 Series. Typical gas mileage of these models is between 18 and 25 mpg.
The Chevy Volt, by comparison, has a much lower overall total cost of ownership as a result of its 40-mile all-electric range and gas-sipping extended range mode. It also comes standard with a new energy-efficient Bose sound system and five years of OnStar service free-of-charge. For consumers in in the market for a hyper-efficient, stylish sedan with a rockin sound system and the most technologically advanced propulsion system in the world, they cannot go wrong with $33,500 sticker price.
Leaf: Nice Ride for A Commuter Car
Another faulty Volt comparison is with the Nissan Leaf. While the Nissan Leaf is priced at $25,280 (after the federal tax rebate), they belong to two different vehicle categories with distinct electric drive systems. They will have an entirely different consumer base altogether. For those looking for an economy urban commuter car, similar to a Honda Fit or a Nissan Sentra, the Leaf would be an ideal vehicle with its 100-mile all-electric range. Any respectable journalist would not compare the price of an urban commuter car with that of a relatively luxurious sedan…so the Leaf vs. Volt price debate is completely irrelevant.
To better communicate the Volt value to the public, it would be highly advantageous to spoon-feed this information directly to the media. For example, when justifying the 40-mile all-electric range, GM included the statistic that this is suitable for “75% of each American driver’s daily commute.” When discussing the price, it is absolutely necessary to say something about the target market for this car, their purchase power, and how they will benefit from the overall lower operating costs.
It is critical to foresee all possible media perceptions of information before it is shared. Having been present at the Chevy Volt Press Dinner at Plug-In 2010 the evening before the price was publicly released, I learned something very crucial. Journalists are excited about plug-in cars, but they are not market researchers. When not given accurate market research information, they will manufacture it. This is dangerous, since we know that the media plays a key role in shaping public perception.
GM and the Chevy Volt team have worked hard to create the technological masterpiece that is the Volt. So have all the other plug-in vehicle manufacturers in this space. Rather than let the media get hung up on faulty comparisons, let’s create compelling and resonant stories that communicate the real value of a plug-in future.
Category : Marketing EVs
Paul Scott
1 month ago
Thanks, Shannon, for putting those “journalists” in their place.
It’s frustrating as hell to read nothing but over-all cost numbers being compared when so many aspects of this car are worthy of consideration by millions of Americans. I read at least 5 stories in major media on the Volt price and there was not a single mention of the need to get off of oil! Not a single mention of our massive trade deficit from buying foreign oil. And not a single mention of the coming peak oil crisis. It’s as though we’ll sail into the coming decades with gas forever at $3/gallon, no one will ever get sick from the pollution, and we’ll never have to compete with China for a dwindling supply of oil.
Paul C from Austin
1 month ago
Very good article Shannon- maybe the one I have enjoyed reading the most that you have written, and maybe the best concerning the Volt pricing and/or its comparison to the Leaf. Extremely good insight to the current slant of most car journalists as well. Obviously, GM needs to hire you as their consultant on this;-)
I agree with your points as well, Paul Scott- but I have a feeling that this will be a hard sell with car buyers- not that it isn’t a valid argument to be made in the car buying decision- but I think these are larger arguments that have to be made and won on a larger stage, so that the buying of an EV made on this knowledge is a decision already made. I have repeated this in a post or two before, so forgive me for repeating myself- I read an article a year or so ago, that we wasted the opportunity to break the gas habit after 911. At the time, then-President Bush encouraged people to not let the attack affect them but to continue with their buying and spending habits like before, so as not to let the terrorist attack negatively impact our economy. When this first came out, most Americans, including myself, agreed with this. Well, frankly, we were wrong. 911, for a brief time, galvanized our country to want to do things to combat terrorism in the world- many service organizations, for example, saw increases in volunteers. THAT would have been the time to make the change to EVs. We had the will and a better economy to do it, and we missed the opportunity.
Sadly, we currently lack that will as a society, and our economy is still a mess- both of which will make the transitions to EVs and renewables much harder. Not that we shouldn’t try, not that the public shouldn’t continued to be educated and journalists taken to task for failing to report the full picture accurately. But I fear that EV adoption is still going to be a long road (forgive the pun;-) without some incident or event that can be used to galvanize the country as a whole, along with the leadership that will make good use of it.
I had hoped the BP oil spill would help in this (hey- not to wish for bad things to happen, but when you get lemons…), but it has quickly faded from public consciousness and was not used (or maybe cound not be used) by our political leadership enough to propel the problems with oil to the forefront.
Ah well- enough ranting for the wee hours of the morning;-)
Oldevguy
1 month ago
We also had a very good opportunity to get our oil usage down in the 1970′s. If we don’t get it right this time around we may never get another chance.
Future Leaf owner
Rusty
4 weeks ago
Very good article! The only thing I would add is that the Leaf and the Volt ARE comparable, but only for consumers who have decided that they want an electric vehicle of some sort.
Although you are right in that the two vehicle types are completely different, and will appeal to different markets all together.
Thank you for the smart article! =)
Juan C
4 weeks ago
If they are not comparable let me ask one thing: Why is it that despite the Volt has been priced way higher than the Leaf, the Lease price for both the Leaf and the Volt are basically the same? Excuse me but financially speaking that does not just seem right.
Either the Leaf is overpriced and GM is giving its Volt for non profit on the lease, or the Volt as I suspect, is effectively overpriced on purpose to discourage people to purchase it and its real market price should be simmilar to that of the Nissan Leaf (the difference on the cost between the battery packs should offset the additional engine system GM put in the Volt)… Simply do the math and you will see.
noah
4 weeks ago
Not sure this is really an article at a few paragraphs long, more than a brief commentary. Not seeing them in person, it is hard to justify comparing the Volt to premium luxury car models and the Leaf against economy cars based on pricing alone or the availability of a few random car features (on-star or BOSE audio). In reality BOSE has a poor reputation among even casual audiophiles and many prefer not to have Big Brother installed on their vehicles. In reality the Leaf has more passenger and trunk capacity which alone would put it in a class above the Volt. Watch out for the Prius plug-in as well, not mentioned here it is already posed to dominate the market with almost 2 million in world-wide sales of the hybrid model. When we see final production models of each, I think the cars and the sales numbers will speak for themselves.
Miss Electric
4 weeks ago
Hi Noah,
Thanks for your comment. Having experienced both the Leaf and the Volt first-hand, I can very confidently say they belong to two distinct vehicle categories with two very different driving experiences. Some people, like yourself, will prefer space for one more passenger (although that will be a very tight fit sitting “cherry” in the Leaf). The beauty about the particular Bose system in the Volt is that has been specially created to maximize efficiency. For those that like to crank it up (like myself), I can appreciate that. And, all plug-in vehicles feature GPS tracking (as well as SmartPhone applications) to estimate your nearest proximity to charging stations. It will be great to see the Plug-In Prius come out to the market as well. There’s a plug-in for everybody, that’s the beauty
Miss Electric
4 weeks ago
Hi Juan,
Very good question. My understanding is that both the Volt and Leaf lease price reflect the $7500 tax credit (which is assumed by GM and Nissan, who are the “owners” of the leased vehicle). Why they are similarly priced for leasing (Volt: $2500 down/$350 a month, Leaf: $1999 down/$349 a month) is unclear. I haven’t seen the breakdown of pricing over the three-year period, but it could be that GM expects the Volt to have a reasonably decent resell value. I think it’s an awesome deal either way.
MissMotorMouth
4 weeks ago
Interesting points but the one that practically every writer has missed, including you, is that the $7500 tax credit is not an automatic given for every potential Volt or Leaf buyer. It is “up to $7500″. As a Volt employee stated to me, “GM is not an accounting firm and it is necessary that you consult your CPA before considering your purchase.”
In other words, the tax credit is dependent on each individual or joint filing couple’s amount of income, deductions and tax liability: the full purchase price of $41,000 is due at the time of delivery and the tax credit will not be estimated or received until taxes are filed the following April and not every credit will be the full $7500. It is misleading to promote that the Volt is going to be $32,500 or that the Leaf will be $25,280.
Additionally, the lessor automatically receives the full tax credit of $7500 unlike the individuals who decide not to lease the car but to buy it outright.
Miss Electric
4 weeks ago
Nice to meet you MissMotorMouth! Great site
Would love to collaborate with you…
You are right about the tax credit. I have discussed this on Honk.com: http://blog.honk.com/nissan-leaf-should-you-lease-or-buy/. It has been a point of contention among many as a policy flaw. It should have been an instant tax rebate at the point of sale, instead of a tax credit. Many policymakers realize this and are now working to make any current incentives be tax rebates instead of credits. You can see that reflected at the state level, where many state governments (including California and Alabama) have offered tax rebates instead towards the purchase of an electric car. For those that do not usually owe that much in taxes, leasing may be the better option in the short-term.
Jimza Skeptic
4 weeks ago
Hi Shannon — Maybe you can do a more detailed story on the Fed Tax credit and look into the various state credits/rebates. California rebate does not include the VOLT. In addition, if you look at the fine print, it only covers about 820 cars for this year and is not funded at all for next year. The one thing I am seeing is that many of the state programs appear to have been developed as “feel good” programs. Law makers would pass the law and not fund it because in general there were no real cars on the market back in 2006 & 2007. Many of the companies were developing in stealth mode (Nissan). And I don’t think many really thought GM would come through. All of a sudden there is VOLT, LEAF in 2010, and Mitsubishi & BMW in 2011 and Ford in 2012 with others to announce soon. Now it is time for states to Pony up the money, but they are broke. Even Canada’s program for $10,000 rebate suddenly dropped to $8,500 and now may be capped.
Would be great if you could provide an update! Thanks!
Rob
4 weeks ago
My dad had me at 48 and he was alive in the thirties. He told me stories about electric model T’S driving around LA back then. The technology has been around for decades but oil powers have held it back. They also had the red car that was electric back in LA and that was torn apart by Firestone and GM so people would buy more cars. Finally we are moving in the right direction but it has been way to slow. We need to have hundreds of electric cars to chose from starting in the 10,000 range for the masses. 33,000 car is still really pricey for most people. If we could add solar panels then we have the whole cycle and not have to burn cole. I got a quote for solar power and it was around 25,000, we need to get that down to around 5,000 per house and then people would do it. How about the government giving away panels to homeowners they waste that much everyday on a pointless war.
Brian
4 weeks ago
Have you considered just the pure purchase and operating cost over a 200k miles worth of driving along with the projected fuel and battery replacements costs compared to some other efficient vehicles such as the VW Jetta diesel. I have a strong hunch that if you forget about luxury and features for a moment, you may find that there are other alternatives for efficient vehicles that are way less expensive to purchase and operate over the long term.
CodyOzz
4 weeks ago
I’m seeing compelling arguements on both sides here. Let me attempt to support the idea that the Volt is in a different class than the Leaf, or even the Prius. First off, the Volt is priced as such partially because they want to break even on the first generation of production. GM has basically told us that their initial price target was 30-35k for the car and here we are at one notch higher. This is why we are seeing the Volt laden with gadgets and options that the others in the class (30-35k) can’t touch. Saying that Onstar us Big Brother watching us is just idiotic. I’m sure the CIA, NSA, FBI and other acronyms have better things to do than to track a few hybrid drivers going to work everyday. The Volt is optioned rather sweetly, and is a reasonable value when compared as such. It will be comfortable, quiet, peppy, luxurious, and fun to drive. These are all common attributes in the 35-45k segment. These are much less common in the 20-30k segment of which the Leaf just misses, but seems to compete in more directly. The Leaf is supossed to come with such cool features as a nice GPS system and um, I don’t know what else. Nissan hasn’t done well selling the features within the car, as much as selling the idea of the car. (does that make sense?) One other note about Nissan management, Carlos and company seem pretty smug and cocky when communicating with us. I see a lot more smoke and mirrors on the Leaf side of things, and less reality. Volt engineers have been very forthcoming when talking about battery management and expectations, I have seen very little on the Leaf side. The Nissan folks seen unconcerned about battery management, and more concerned with telling folks “it will be a 100 mile range car, period!” Granted, the Leaf is a much less complex car, so engineering is easier, but to just come out and say it competes with the Volt, and we are going to sell a 1/2million a year is just ludicrous if you ask me. I appreciate that Volt engineers are sensitive to electric vehicle propulsion issues, and I wish Nissan would admit that. It all comes down to range anxiety, doesn’t it? Nissan wants to pretend it’s not there, and chevy wants us to all know it’s there.
dmjp
4 weeks ago
I don’t object to the pricing for what you get. I don’t need that much crap in my car. I am not looking for Luxury. I am looking for a way to get off of the oil bandwagon. They need to have a cost reduced version without all the bells and whistles.
EVNow
4 weeks ago
Really ? “Any respectable journalist would not compare the price of an urban commuter car with that of a relatively luxurious sedan…so the Leaf vs. Volt price debate is completely irrelevant.”
Let us see – Volt has cramped driver seat compared to Leaf. It is a 4 seater instead of 5 seater Leaf. It is not peppy unlike Leaf.
So, what part of Leaf is “economy” compared to “luxurious” Volt ? Why the bias against electric cars ?
Are you “miss electric” in the same way as “clean air” act ?
ps : I’m a moderator in the largest Leaf forum.
Aaron
4 weeks ago
What kind of milage will Volt deliver on the freeway? I’m assuming that people driving more than 40 miles are likely to be driving mostly on highways. Here in the west, we might average 65mph on the highway.
I would guess that the volt will do great in gridlock, kicking on the generator from time to time to keep things topped up, but being quiet, comfortable, and low-emissions in those conditions.
Miss Electric
4 weeks ago
Great idea Jimza….I’m on it!
Miss Electric
4 weeks ago
EV Now…Welcome! Great to have a Leaf moderator in the discussion! First off, I would like to say that I really like the Leaf. As I’ve said before, there is an electric car for everyone. Some, like yourself, will really dig the Leaf…others will like the Volt. Stylistically and technologically, they offer two different driving experience. The others coming on the market soon will each have their own unique selling points as well