General Motors has announced a starting price of $41,000 for the Chevrolet Volt, the company’s first move into the nascent market for electric vehicles.  Buyers may be eligible for a federal tax credit of up to $7,500.  The Volt is advertised to offer “up to 40 miles” of driving on an electric charge with a range extension feature that uses a gasoline generator to provide additional electric power for up to 300 more miles.  Because of the range extension feature, General Motors is positioning the car as a product that a driver can purchase as a primary vehicle. The company is taking pre-orders starting immediately for customers in California, New York, Michigan, Connecticut, Texas, New Jersey, and the Washington D.C. area with deliveries starting late this year.

The Chevy Volt may have an edge over the Nissan Leaf which is an all electric vehicle priced starting at $32,780 (before rebates) but lacks a range extension feature to supplement the car’s 100 mile electric range.  In addition, BYD’s e6 all-electric vehicle with a range over 200 miles will launch soon (click on this link for our past coverage of BYD).

Price remains the main obstacle facing all of the electric vehicles scheduled to hit the market in the near future.  While General Motors and other manufacturers are sure to attract upscale environmentalists eager to make a statement with their cars, most Americans are going to be reluctant to purchase a compact car for ten to fifteen thousand dollars more than excellent gasoline vehicles based on proven technology that offer well over 30 miles per gallon.

The lack of infrastructure  for recharging the vehicles is also a major impediment.  Many of the upscale environmentalists who may be interested in electric cars live in urban areas where few people have garages.  Those who have garage spaces in large buildings usually lack power outlets near their cars.  Even buyers who have garages with power typically lack the 240 volt charging stations requires for quick recharges.  To partially address this problem, GM is offering a limited number of customers a free 240 volt charging station.

To achieve mass adoption, electric vehicles will need to offer customers an attractive value proposition in terms of total cost of ownership.  A buyer who pays a ten to fifteen thousand dollar premium to own an electric car today will probably never recoup this amount unless gasoline costs skyrocket while electricity rates remain moderate.  In the short run, improvements in internal combustion engines may offer a more realistic alternative to curb fuel consumption.  Eventually, experience and economies of scale will lower the price of electric vehicles compared to conventional gasoline vehicles and the charging infrastructure will improve.  However, that day has not yet arrived.

GM Announces Volt Pricing Starting at $41,000 Limiting Mass Market Appeal
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