In the wake of the Chevy Volt fire investigations, sales are down, and General Motors' CEO Dan Akerson is blaming the downturn on a spate of bad publicity.
Akerson told Congressional investigators recently that the Volt has become "a political punching bag," and said that the car has suffered "collateral damage" because of two months of relentless questions about safety, according to the Detroit News.
Judging by the sales numbers for January, there may be truth to Akerson's allegations. In January, the Volt's sales dropped to just 603 units, after reaching 1,529 in December.
GM's Chevy Volt: Safety isn't an issue, but cost still is. (Source: General Motors)
But the Volt's bigger problem is cost, not fires. When we reviewed a Volt for a week in October, the sticker price of our vehicle was $44,680. Typically, it should be closer to $40,000, with a $7,500 federal tax rebate, but even on a Volt, extra features can add up.
Those numbers place the Volt close to low-end luxury vehicles. As we've said before, the Volt is a car for those with an untraditional sense of luxury -- well-to-do people who are willing to spend the extra money to clean up the environment. GM as much as admitted that when vice chairman Steve Girsky reportedly said that the median income of Volt owners is $175,000 a year, according to AutoWeek.com. Girsky also reportedly said that the car "is bringing more BMW customers to GM than Cadillac is."
Our online readers have echoed such sentiments. One online commenter, who calls himself "averagejoe72677," noted that "unless you're raking in over $100K a year, the Volt is far too expensive to buy, and long-term ownership cost is unknown." Another reader, named "jmiller," added that "even at $40K, when you start to look at the payments and how much money one really spends on gas, it's tough to make the numbers work out."
That's probably why, before the fire investigations affected sales, the Volt was still running below its projected sales levels for 2011. Even with a big December, it fell about 2,300 units short of its year-end sales goal of 10,000. So it's a stretch to blame everything on bad publicity.
@rickman: Your point about long-term cost of ownership may be valid, but most peoples' cash flow doesn't allow them to make decisions which take five years to pay off. I need to pay my bills from month to month. So money which is available right now is worth much more to me than money which I might have five years from now. (Besides, if the car gets totalled in an accident, or some other unforseen event happens, the long-term savings which the spreadsheet predicts might never materialize).
You may have a point when it comes to leasing. But in any case, I'm not in the market for a fully-loaded Prius, either. I might consider a $19,000 Prius C.
Am I the only person left who still uses a spreadsheet these days? Take a 2012 Volt w/ leather, and Bose. Skip the chrome rims and Nav for now. Take a comparable 2012 Prius (i.e. leather, stereo upgrade, tele-whatever (whatever their onstar equivalent is), and other comparable features. Apply the tax credit. Good? Now assuming typical driving habits, cost them out year by year for gas purchase and electric cost. Amazing what happens in year five right? VOLT IS CHEAPER. Change the price of gas to $4 or $5 and that savings kicks in on year 4 or 3. So if after 3-5 years of ownership the Volt equals or is lower in cost than a Prius, why is the Volt 'priced out of market' and a loaded Prius is not?
Let's take it one step further. Assume you LEASED both cars. Well, in that case the Volt is cheaper day ONE, since the Volt's attractive lease deal puts it ahead of a comparable Prius lease (assuming similar mileage and down payment).
Do the numbers before you try blasting the numbers.
"See if the Volt has legs"??? Is that suppose to portend an early demise for the Volt? Talk about a ding in GM's reputation. Why not get that engineering team back on the design and figure out a way to make the batteries smaller and take cost off the BOM?
I know automotive development cycles are far longer than other products, but isn't agile and iterative engineering what it's all about, especially when you're talking about new technology like EV vehicles. Obviously, you need to strike a balance so you don't have the market sit and wait until you finally get it right. Maybe there's some sort of rebate or upgrade plan for brave early adopters. But it is far too soon to give up on the Volt, PR problem or not.
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