Thoughts about Chevy Volt cost-effectiveness, or lack of
Under the right lense, the Volt makes cost-effective sense
At least based on Volt data according to Consumer Reports
Just going over some more data regarding hybrid and plug-in cost-effectiveness, and it just amazes me how no two studies ever find the same results. Why? Is it all just about advertising? Anyway, check out Hybrid and plug-in cars that make the least financial sense for more on that angle.
Anyway, according to Consumer Reports, the Chevy Volt is cost-ineffective, taking at least 6 years — after the federal tax credit is deducted — before the Volt makes up its plug-in premium compared to the Chevy Cruze. But that could be a worst case scenario.
Most interesting, Consumer Reports gives the Volt just 61 mpg, a number I won’t contend is wrong. I get what Consumer Reports is going after. Basically more mainstream, general buyers that’ll probably use gasoline around a 20 – 30 percent of the time. And that’s OK. It’s a good reference point for general buyers. Over-selling and under-delivering is not the path to mainstream plug-in success.
However, for those that do use electric mode more often, long term the Volt actually offers even better cost-effectiveness — assuming the battery is reliable for at least 10 years. Furthermore, for those committed to ending their personal foreign oil dependence, 6 years for payback isn’t bad. Even in a worst case scenario, you’re probably coming out even, while ending your foreign oil dependence. That’s not a bad economic case for those willing to take a stand. Plus, a few gasoline spikes might make these economics even better.
Still, a Volt purchase does require a pretty hefty, extra upfront premium, which means higher financing costs as well. That is certain to keep the Volt out of most mainstream hands. And what happens when the tax credit is gone?
That makes me wonder, is the Chevy Volt still being sold at cost? If so, then even if scale, etc. reduce costs to the level that the tax credit is now enabling, won’t much of this reduction be made up in terms of R&D efforts, necessary profit margins, etc? Don’t get me wrong, I love the statement the Volt enables committed energy independence hawks to make, but the Volt will never have much of an impact on US dependence until costs decline a good bit.
Chevy Volt cost-effectiveness still has some hurdles to jump before moving into the mainstream, and that’ll probably take time, but for those committed to foreign oil independence, tax credits make the Volt a cost-effective option — as long as long term battery costs don’t become a major issue.
Smurf – you are one of the very few that did put their money where their mouth was.
No one can take that away no matter what.
but the recent post by Dach about FORDs view of hybrid/EV technology in trucks/heavier vehicles did not sound promising.
I AM amazed that the Prius supposedly weighs over 3K pounds and the Volt 3.5K.
that’s pretty hefty when you consider that a Corolla weighs 2800 and a Ford F-150 weighs over 4k.
those numbers reveal a lot about the issues IMHO. There’s just a a lot of weight in pickups because the frame has to be robust enough to carry additional weight as payload.
batteries have to get more powerful and less costly before this technology can go mainstream…
Larry,
It’s a no brainier that a $25K Volt would be an easy sell. But don’t expect to see one in the next 3-5 years.
But if you strip down a Volt it is still not a Cruze, because it has an electric motor. The performance smoothness and general luxury feel, comes mostly from the electric motor. If you stripped down a Volt it would still not cost $25K.
I too am waiting to see what GM does next, but if the Prius is any indicator of the timeline for development, the Gen II product will be in 2015 and the Gen III product around 2020.
This is part of what made me buy the Volt. In looking out the next 3-4 years, the Volt was the best product that was going to be available. I see no indication that a cheaper version is coming.
I’m also curious to see if we will see Voltec minivans or small trucks in the future. It does have that potential….
When Consumer Reports says something is cost-effective – it has impacts – good impacts.
that bodes well for cars like the Volt and the future especially is the costs of batteries comes down and/or other price-reduction techniques are found.
Question for you Smurf.
If you could buy a Cruz in a Volt-like configuration but for 5-10K less… would
it be a harder choice for you?
Everyone is “waiting” to see what GM does next … and to see if the Volt is just a one-trick PR Pony or it’s the first EV shot from the GM cannon and much more is coming.
As an aside, I think it IS comical how many “stealth” hybrids and EVs the other car companies continue to “announce” to make sure they at least keep up with GM in the PR dept.
I’m getting tired of people comparing the Volt to the Cruze on cost effectiveness. That is like comparing a Lexus hybrid to a Toyota Corolla. Like the Cruze and the Volt, the Lexus hybrid and the Corolla are built on the same frame.
I rented a Chevy Cruze last week on business. While it is a nice car, it simply is not in the same class as a Volt.
The Cruze felt like a basic economy car. The Volt is smoother, quieter, better handling, has leather heated seats, keyless entry, two LCD displays, a Bose sound system, rear camera,…. none of which are even available on the Cruze.
It is bad enough to hear these comparisons from conservatives. I would expect better on this site….