Another $5,000 dollars loped off the sale’s price of the
Chevy Volt. And there are still far more fiducially responsible ways to invest
hard earned dollars. In the financial world there is a saying: Buy things when no-one else wants them.
The person who coined that advice clearly never saw a Chevy Volt sitting on a
car dealer’s lot. As GM struggles to prove that Obama’s “saving of Detroit” was
not a thinly veiled handout to union workers, and that the “green movement” is
backed by economical alternatives to cheap fossil fuels, it has decided to cut
its Volt prices yet again.
According to the Wall Street Journal, “The sticker price on the lowest-cost 2014 Volt will fall to $35,000 from $40,000 and could cost as little as $27,500 after federal tax incentives.” But don’t rush out just yet. . . That tax “incentive” – also commonly referred to as government funded bribery – of $7,500 will show up on your next tax bill; not your dealership receipt.
The price cut is another attempt to convince would-be-green-hearted liberals, with more money than brains, that the Volt is the vehicle for them. While the auto industry has made significant strides in the green-car market, the Volt has been largely absent from that progress.
Altogether, auto makers sold roughly 7,500 battery powered and plug-in hybrids in July. (Which is still less than 1 percent of total light vehicle sales for the month. . . But aside from investors, companies, and dealerships, who’s counting?) GM’s Volt sales, however, represented a 3 percent drop from last year’s July sales. In contrast, Nissan’s Leaf saw a 500 percent increase in sales over the same period. Even Tesla continues to sell almost 1,500 new cars per month.
Much of the Volt’s challenge lies in its ridiculous price point. Starting at $35,000 after the latest price cut (the second this year) it still remains more than $10,000 more expensive than its gasoline powered counterpart, the Chevy Cruze. And, before anyone talks about the additional savings earned because of its electric (if flammable) motor, the battery is over $8,000 to replace. And while those batteries are expected to last an average of 8 years, it does raise the overall cost of ownership.
According to snopes.com, and other irrefutable sources, the Volt costs roughly 7 cents a mile to operate before the cost of the battery is taken into account. After the inevitable cost of the battery is accounted for, the cost of operation increases to 17 cents per mile. Compare that with the Cruze’s 11 cents per mile. I know I’m just a finance guy who has a fascination with Excel spreadsheets and slide rulers, but it appears to me that 17 is a larger number than eleven.
More than the Volt’s economically challenged consumer base, is its patently dishonest presentation to the American people. Tesla, which has seen an incredible increase in sales (and by extension, stock price) is far more expensive, beginning at $62,000 for their base model. With no thrills, decals, leather, extra cup holders, navigation system, or seat heaters they are nearly twice as much as the newly reduced Volt. And you should expect them to continue to outsell despite their expensive price point. Tesla is a luxury car directed toward luxury consumers. The Volt is an economy vehicle, selling for a luxury price. (All so you too can claim to be an environmentalist.)
Additionally, the Leaf, Fusion, and other competitors that price their cars nearer to the $17,000 mark should also be expected to outperform the Volt. GM’s biggest mistake was taking the concept of an electric engine (or – er – partially electric engine) and placing it in their cheapest car. . . Then charging over 200 percent of the gasoline version’s price for the “satisfaction” of driving a “green” car.
According to Forbes, what the Volt does have “is an increasing base of owners who love the car. It topped the Consumer Reports owner satisfaction survey the past two years running.” I assume this was a survey of people who have yet to experience the Volt’s tendency to spontaneously combust. And while Volt customers might be thrilled to have their cheaply built car, with poor safety history, for an extremely premium price, most American consumer base their purchases off of value. And value is something the Volt has yet proven to possess. GM’s attempt at an electric (or – er – partially electric) vehicle is little more than a frantic attempt to appease an environmental agenda without consideration of economic realities.
Of course, Barack Obama should be pleased with Government Motors. . . They’re finally starting to finance like a government agency.