Cost-effectiveness: Consumer Reports becoming more fond of the Chevy Volt

Under the right driving conditions and with generous federal tax credits, the Chevy Volt can be as cost-effective as fully loaded Toyota Prius.

Consumer Reports is liking the Volt more and more.

The Volt can be cost effective, thanks to generous tax credits

Compared to a loaded Toyota Prius, the Chevy Volt can be a more cost-effective choice, dependent upon driving conditions, according to the latest testing by Consumer Reports, although the cost-comparison is based on significant tax subsidies. More important, compared to some past CR assessments, Consumer Reports offers up a pretty positive take on the Volt.

Still, what does more cost-effective than a loaded Prius mean?

Basically, if you can use mostly electricity, then the Volt will eventually recover its higher cost compared to the loaded Prius, which CR puts at about $3,000. In how many years? Several, for sure, but that ultimately depends on your driving conditions.

So, what does this say about the cost-effectiveness of the Volt?

I’m not sure.

How long will tax credits last? Already some in Congress are trying to extend plug-in incentives. That could be critical. Likewise, how much can GM reduce Volt costs over the next few generations? Enough to completely replace the tax credit?

Today, GM supposedly sells the Volt at cost, which means that in addition to the $7500 federal tax credit, GM also needs to eventually add in a profit margin for both GM and for dealerships. If you’re a real stickler, GM also needs to recover the billion+, and growing, amount of money already invested into the Volt program, although I’d argue much of that development cost can be written off to marketing and PR. For instance, while the Chevy Cruze is a great offering own its own, Volt buzz is definitely helping drive Cruze sales, and that’s worth something.

Nevertheless, that would still just leave the Volt competitive with a fully loaded Prius. How about the plug-in Prius? More important, will GM ever compete with a base Prius? In the crazy world of automotive accounting, high end amenities are becoming more and more critical to profit margins, particularly in alternative vehicles. Thus, maybe the Volt will forever be a loaded, $35,000+ vehicle.

Regardless, today, thanks to generous tax credits, the Volt is a great deal for those willing to pay $30,000 – $40,000 for a new car, especially a hybrid or plug-in. Thus, if you’re in the market for a loaded Prius or a Lexus CT 200h, you should definitely check out the Volt.

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