As General Motors anticipates launch of its 2016 Chevy Volt after this summer, it has promoted its superiority, begun showing build specs online, but unknown is the sticker price.
Will GM price and market the second-generation Volt effectively and let it transcend the dues-paying 2011-2015 Volt, or as speculators and at least one alternative-energy analyst suggest, will sales remain relatively flat relegating it indefinitely to green halo status?
Cost can be a sensitive issue and with GM and its extended-range electric vehicle this is especially true as price and the Volt have a storied history.
Prior to the original 2011 model’s December 2010 launch, talk had been of it coming in below $30,000, but that back-of-napkin guesstimate soon proved unrealistic, and when GM slapped a nearly $40,000 sticker on its compact Chevy, eyebrows were raised.
In 2014, following the lead of Nissan, and others, the Volt’s price was dropped to just below $35,000 before potential subsidies, and so a key question these days is what will it ask for the 2016?
In our interview with lead Volt engineer Andrew Farah at the Detroit launch in January, he implied costs had been shaved out of the now 50-mile range, 41 mpg car, but would not specify how much.
Previous reports had put a goal of whittling $10,000 out, but this has not been confirmed, and it appears unlikely that this much did come out.
General Motors has been noticeably quiet about these topics while it otherwise touts benefits, gauges excitement, and refines the last details of the 2016 Volt.
Speculators on the GM-Volt.com forum have several times suggested $29,995 would be a decent starting point – some have said as low as $27,995, others higher – and a fully loaded one would be fair at $39,995, it’s been said.
Of course wishful thinking of the Volt’s biggest fans wondering how much does the 2016 Chevy Volt cost may be optimistic. Or is it? This question will be put to rest perhaps by June or July when the automaker makes the announcement everyone is waiting for.
If it is a dismaying one this would not be without precedent. GM has tended to price alternative-energy products according to what it thinks they are worth, and not necessarily what many in the general marketplace think they are worth.
Less euphemistically put, the 2011 Volt gave many a jolt starting – not “comfortably below $30,000” – but $10,000 over that amount, and in light of initially short supply, dealers around the country gouged up to $10,000 and more over that yet again.
Combined with politicized backlash and other factors, sales never took off as projected, and GM’s initial forecast for 2012 of 45,000 U.S. sales and 15,000 overseas Volt/Ampera sales was changed by end of 2011 to “match supply to demand.”
Then GM launched the 2014 Cadillac ELR. It thought a fair price was $76,000, about $5,000 over a base Tesla Model S at the time. It has since had to discount the ELR steeply and tales of buyers snapping up examples in the $50,000-range have come forth.
Before this too were two-mode GMC, Chevy, and Cadillac hybrid trucks and SUVs that were engineered marvelously, but contented highly, priced up, and sales were in the onesies and twosies per month and most of them have now been discontinued.
Flat Sales Into Perpetuity?
GM says it wants the Volt to be more of a “mainstream” car. Last year the outgoing lame duck Volt sold 18,805 units. In 2013 GM sold 23,094 Volts and in 2012 the number was 23,461. Those two years – essentially flat growth – were the peak, and triple 7,671 sales in 2011, the first full sales year.
The automaker has said the new Volt is to present broader appeal, it will market it more cleverly, support its dealers sufficiently but how is “mainstream” defined?
GM of course is putting no sales estimates on the Volt. That subject may be more sensitive than the price, but for his part, analyst Alan Baum projects for year one the 2016 Volt will sell 24,300 units or thereabouts.
In 2017 model year as the pure battery electric Chevy Bolt comes online, perhaps around October 2016, Baum’s Volt sales estimate drops to 21,500. And by 2018, the Volt may be cruising at 20,000 units per year having peaked a bit, and settled within the range of the first generation.
Because the Bolt may have better interior packaging, 200-miles EV range, and be priced only a couple-few thousand more, it may siphon off sales from a pool of early mover type buyers, suggests Baum. And, GM has shown a mediocre track record of marketing the Volt, but this it aims to reform.
Not Just About Price
Surveys have shown many consumers are befuddled by fundamental questions about electrified vehicles, and it will be incumbent on Chevrolet to educate them as possible to sell its product.
Marketers have long known positive consumer perception can overcome objections to price, and so it will remain to be seen how effective Chevrolet is at spreading the word through social media, video spots, and other channels to get people excited about the new Volt.
The plug-in car offers double the EV range of any competitive PHEV sold in the U.S. Engineering studies have shown it saves a lot of gas, on the order of pure EVs today.
Volt owners are among the most loyal as a group and the battery and design of the first-generation car have shown it to be durable. Evidence suggests it was “over engineered” because it was a product with a mandate not to fail being all new, reliant on lithium-ion batteries and needing to overcome concerns.
Steve Majoros, Chevrolet director of car marketing, observed in January a bigger promotional budget has been allocated to more effectively overcome objections, enlighten consumers, dealers, and all concerned.
At the same time, the Volt did settle into a “niche” according to Chevrolet representatives and so whether GM has the incentive or desire to truly bump it beyond to that “mainstream” status is unknown.
Majoros said that the Volt is now attracting people who will pay more to avoid buying gas. Will $2 per gallon gas adversely affect Volt sales?
“I don’t think so,” said Majoros. “Eighty percent of trips taken in a Volt are done in all-electric. These people are gas averse; they don’t want to use any gas.”
The car won’t be marketed as the cheapest set of wheels to own he said, rather, low operational costs are just one aspect of its total appeal.
Nor is the Volt just about selling itself anymore, it is about selling Chevrolet and GM as brands.
“If you look at the demographic composition of these customers within the Chevy portfolio, they’re some of our highest household income, highest percent professional managerial, younger in the portfolio; the types of vehicles they’re trading in to come into the Chevy family,” said Majoros, “they’re the types of customers you want to bring into the franchise.”
Meanwhile indicators are the 2016 Volt may even be priced nearly the same as the present $35,000 car, said Baum. Never mind cost cuts or savings on the manufacturing side.
It’s perceptibly better, GM is known to price things high then if necessary work down as needed, so why not?
At the same time that strategy taken too far has backfired before, so what will GM do?
How much do you think the Volt should sell for, and what needs to happen for it to truly break beyond green halo status?