GM price shock on Chev Volt
SALES SLUMP? General Motors has cuts its electric Volt car prices by 13% in a bid to increase sales and stay on par with rivals like Nissan's Leaf. Chevrolet
DETROIT, Michigan - General Motors is knocking 13% off the sticker price of the Chevrolet Volt electric car as it tries to keep pace with rivals in the US market for plug-in vehicles.
The automaker said Tuesday that the 2014 Volt would start at the equivalent of R346 100, including shipping - about R50 000 less than the current model. The new model is scheduled to reach showrooms by the end of the third quarter of 2013.
NO VOLT FOR SA
General Motors South Africa says the Volt will not be coming to SA any time soon; neither is it in the pipeline for the future. "If international experience is anything to go by, there will be several challenges to be faced before the technology can be fully adopted by South Africans.
"From GM’s global portfolio of electric vehicles we have various options available for this market but would only be in a position to make a decision in this regard once the EV roadmap has been finalised."
Sales of electric vehicles are rising, but they're still only 0.2% of the US auto market, and the Volt price cut shows how difficult it is to move them from showroom to highway. Nissan dropped the price of its electric Leaf and sales soared, something GM had to notice.
Senior analyst at Kelley Blue Book Karl Brauer said: "Chevrolet is undoubtedly aware of this shift in Leaf pricing and its resulting sales spike. We all know what you're supposed to do when you can't beat 'em."
Electric vehicles once were billed as the answer to high fuel prices and dependence on foreign oil but US oil production is rising and fuel supplies are abundant. Pump prices have remained relatively stable through the previous past three years and petrol and diesel cars have become way more fuel-efficient, making consumers reluctant to give them up.
There's also the worry that an electric car could run flat on a long trip.
In practice, the price of the Volt has been lower since 2012. The TrueCar.com auto pricing site said that in 2012 Volt discounts were nearly R100 000 or 25% of its sticker price at the time. The discounts were more than four times the industry's per-vehicle average, according to TrueCar estimates. Discounts include low-interest financing, cash incentives to buyers, sales bonuses to dealers and subsidised leases.
Mustafa Mohatarem, GM's chief economist, said GM hadn't identified the "sweet spot" for pricing. "You're trying to build a market for this new technology," he said at an auto industry convention.
Kelley Blue Book said in a report Tuesday that the average price for battery-powered and plug-in hybrid vehicles has dropped 10% so far in 2013, to the equivalent of R365 100 from R406 500. That's before the federal tax credit equivalent to R74 000. GM says that including the credit, the cost of the Volt could drop as low as R272 000.
Chevrolet has sold 11 643 Volts through July, up 9.2% from the same period in 2012, but Leaf sales more than tripled to 11 703, after Nissan cut some features and lowered the base price to the equivalent of R293 200 including shipping.
The Volt can go about 60km on a battery charge then a small gas-powered motor kicks in to power the car until it can be recharged. GM said it has cut costs as it has gained experience making electric vehicles and parts, all while adding features and increasing the car's battery range.