The Chevrolet Volt’s biggest problem: its cost

Chevrolet Volt

When GM first announced the Chevrolet Volt project, Bob Lutz said the production version could end up being priced somewhere in the high US$20,000s. That’s not so bad. The car is Cobalt-sized and a Cobalt starts at just under US$15k and tops out at US$23k. For about US$29k you can get a fully loaded up Chevy Impala. So I suppose you’ll be trading an upsize in vehicle class for the advanced EREV powertrain. But not any longer. It turns out the price tag was a big underestimation.

Apparently now the realistic price tag for the Volt hovers at somewhere around US$43,000. For that kind of money you can buy a fully loaded top of the range 3-Series, or even a basic BMW 5-Series. A Prius starts at just under US$22k. And how did Lutz end up with high US$20k range in the first place? “I just thought if a conventional car of that size with a four-cylinder engine can go for US$15k-16k, add US$8k for the battery and we’re at US$25k,” admitted Lutz.

Chevrolet Volt

But of course the Volt is more than a regular inline-4 car with a battery. Yes, the battery did end up being US$8,000, supplied by Korean company LG Chem. But you also have to add the electric motor, ECU and various controls for the motor and battery charging systems, as well as equip the car with new auxiliaries that can continue to work via other methods rather than draw power from an internal combustion engine via an aux belt. The Volt also ended up using many one-off parts which does not benefit from economies of scale from use in other GM cars.

Even at the US$43k to the customer price tag, GM will also have to sell the car to the dealers at a loss. They are banking on warranty costs being much less than they provisioned and for technology advancement to reduce the costs of the Volt’s components halfway down the road to make the car profitable.

It was last reported that our neighbours up in Thailand north will be getting it beginning 2011, and who knows, maybe we’ll get it too, albeit if that happens it will probably be only as a halo model of some sort because of the kind of price tag it will have. Even in Thailand it is estimated to be priced at nearly 3 million Thai baht (roughly RM300,000), because of Thai import duty structures.

Related Posts:
Production Chevrolet Volt Hybrid Car Revealed!
New official details on the Chevrolet Volt

PHOTO GALLERY: The Chevrolet Volt
Click thumbnails to view high resolution photo

[zenphotopress number=99 album=417]

Looking to sell your car? Sell it with Carro.

10% discount when you renew your car insurance

Compare prices between different insurer providers and use the promo code 'PAULTAN10' when you make your payment to save the most on your car insurance renewal compared to other competing services.

Car Insurance

Paul Tan

After dabbling for years in the IT industry, Paul Tan initially began this site as a general blog covering various topics of personal interest. With an increasing number of readers paying rapt attention to the motoring stories, one thing led to another and the rest, as they say, is history.

 

Comments

  • l3ryan on Aug 05, 2009 at 7:18 pm

    “I just thought if a conventional car of that size with a four-cylinder engine can go for US$15k-16k, add US$8k for the battery and we’re at US$25k,” admitted Lutz.

    With idiots like Lutz at the helm running GM, no wonder they went bankrupt.

    Like or Dislike: Thumb up 0 Thumb down 0
  • if want a fuel saving,low emission, just refer to VW internal combustion engine way of technology.

    period.

    Like or Dislike: Thumb up 0 Thumb down 0
  • Antistereotype on Aug 06, 2009 at 3:37 am

    potentially revolutionary vehicle

    Like or Dislike: Thumb up 0 Thumb down 0
  • Littlefire on Aug 06, 2009 at 3:53 am

    Yup, better go for Turbo Diesel engines…

    Like or Dislike: Thumb up 0 Thumb down 0
  • Elvis on Aug 06, 2009 at 4:08 am

    Coming from GM i am not surprise. GM did produce eletric car before in California but the initial program was ended without valid reason. You can watch the movie, "Who Killed the Electric Car" to get the whole idea. It very sickening to see a dinasour car manufacturer keep doing this type of drama over and over again. Better get this GM bankcrupt forever. Not i understand why Warren Buffett dont give a shit(pun intended) anything about GM. I really hoping that BYD of China can pull off EV technology. I dont look down on China ability to introduce latest innovation. Remember that Japan cars used to be the butt of jokes for our grand parents. Who's laughing now? And i am sure BYD cars will be affordable. Except that, BYD cars…hehehe..body wise….complete rip off from others…hahahaha…

    Like or Dislike: Thumb up 0 Thumb down 0
  • how come they never tot of the cost n pricing??

    heran nye..

    Like or Dislike: Thumb up 0 Thumb down 0
  • Tocam on Aug 06, 2009 at 6:16 am

    One of the analyst working for Mercedes' hybrid program has long claimed that those figures never add up, because there currently are very few suppliers in the world which are capable or mass producing batteries for this sort of application.

    Even if GM managed to secure a deal to supply at such low cost, it would never meet the production demand due to scarcity of supplies. Toyota is the world's largest producer of hybrid cars and they are currently limiting the production of their Prius due to the limited supplies of the batteries pack.

    I am not surprised at all that GM had released the real-world estimated cost for the production VOLT because at the time when the news of the VOLT went into press, GM were in financial crisis, and needed that image boost to increase the faith of shareholders and the public, but that never went too well.

    They reckon that by publishing headline news showing what they are capable of doing, perhaps it would increase the value of their shares, and that the American federal government will inject more money into their accounts to finance this project. However, they still entered bankruptcy eventually.

    Now that they have the financial support of the federal government, they do not need to try and impress the news headlines anymore, and everything is starting to come into reality. The cost is just one major claws that has being discovered, but mark my words, there will be more to come.

    They haven't factor in other claws such as the time it takes to fully re-charge the battery pack. The reliability of the vehicle itself as American cars are famous for being unreliable, this being an entirely new model will not escape that fact.

    No doubt, the Volt will eventually end up in production, but I do believe it would differ much from the current concept model and I wouldn't be surprise if all the previous claims will not be met.

    Like or Dislike: Thumb up 0 Thumb down 0
  • demio121 on Aug 06, 2009 at 6:34 am

    ever wonder why GM is in such dire situation now??? Ppl like Lutz thinking just add $8k of battery price and you can get an all electric car…!!!

    Like or Dislike: Thumb up 0 Thumb down 0
  • Elvis on Aug 06, 2009 at 7:54 am

    Tocam, that a great comment. But if you roughly look at this Volt, can see already that this car is has too many redundant add ons. And like i said, GM is making another drama on electric car. I think they will drop electric car from their production once the economy bounce back.

    Actually, India is ALREADY selling their electric car in India and UK! It's a very funny looking electric car and yet NO PUBLICITY AT ALL. So i am as casual observer of this technology feel that somehow BIG OIL companies are in control of the flow of news regarding any electric car innovations. Aptera a new US based electric car already received advance bookings which due in the market by end of this year. Yet the US government reject their application for funding! And yet Aptera is selling for 20K. I think we should not expect GM to pull off production of electric car at all.

    Maybe Japan, India, China will be forth front in this technology and perhaps our Proton too. Electric car technology has been around for 100 years now. I believe once electric car become common, all problems with be solved along the way.

    Like or Dislike: Thumb up 0 Thumb down 0
  • nabil on Aug 06, 2009 at 8:55 am

    wat a stupid marketing and cost analysis department thy have….soooooooo stupid

    Like or Dislike: Thumb up 0 Thumb down 0
  • Cocobear on Aug 06, 2009 at 10:13 am

    U can't blame the GM for proposing an in-house hybrid. They have to make the commitment entrusted by the US government by producing new efficient cars. It is their pet project.

    Like or Dislike: Thumb up 0 Thumb down 0
  • GM WILL TURN on Aug 06, 2009 at 11:57 am

    All electric cars will be manufactured in the red. Currently the Prius cost to Toyota is 32K. Toyota is actually absorbing this cost and selling the car at a loss. This shows in Toyota's current financial situation and is the reason why the company has been losing money for the last year. GM is not able to eat the cost of the VOLT, which is why we will see a 40K price tag. Will the price come down, absolutely. When, 3-4years. And, as far as who killed the electric car? GM, Toyota, Honda & Ford. & the EV1 had a price tag of 80K and up…Which is why the only people who had EV1 or any other electric car, was California Politicians and movie stars. Why, because politicians can get the manufacturers money & movie stars get the car known. Lets not forget that GM was not the only company making a pure electric car. All manufacturers share some blame. GM just got the blame or killed the car, because they are the big kid on the block.

    Like or Dislike: Thumb up 0 Thumb down 0
  • azrai on Aug 06, 2009 at 3:39 pm

    Haha. A syok sendiri design by GM, without even a thorough feasible study. Proton used to be a syok ssendiri car producer too.

    Like or Dislike: Thumb up 0 Thumb down 0
  • knoxx on Aug 06, 2009 at 3:59 pm

    every each articles I read, i found word "proton" from some of the comment.. why ar??

    Like or Dislike: Thumb up 0 Thumb down 0
  • rexis on Aug 06, 2009 at 5:20 pm

    GM did it again.

    First EV1, and then Volt.

    GM is good at bringing up the cost, not the other way round.

    They should focus on making compact car now. Americans should forget about large gasoline powered big displacement SUV.

    Like or Dislike: Thumb up 0 Thumb down 0
  • gogreen on Aug 06, 2009 at 5:43 pm

    WHAT? Prius at under 22k only.and here their sellin around rm175k after 50% discount on tax.goverment,stop pretending for supporting to save the enviroment when the stats tells all.

    Like or Dislike: Thumb up 0 Thumb down 0
  • tonton on Aug 06, 2009 at 6:56 pm

    bob lultz thinking style doesn't fit his position.

    he tends to simplify things. like JC when he talks about putting a magnet in front of every car so there will be no head on collision at all.

    but i like this kind of thinking style.

    Like or Dislike: Thumb up 0 Thumb down 0
  • roti naan1 on Aug 06, 2009 at 9:32 pm

    Anyone who buys a Prius (RM 175k) in Malaysia is a big sucker, with plenty of money to throw around, with the excuse of so-called 'environment friendly".

    To the G of Malaysia, upgrade the damn diesel quality la, and import those diesel powered sedan, while reduce the sales/import tax. That will save heaps of money for the consumers.

    Anyway, i suspect the boneheads sitting in the ministry are just plainly boneheads, will be boneheads and forever boneheads.

    Like or Dislike: Thumb up 0 Thumb down 0
  • bobdbilder on Aug 06, 2009 at 10:30 pm

    Lutz is a specialist in marketing. He got everybody including the Prez to believe in 'the right thing to do'. He got the money didn't he? It's what we call believable bs. What he did was to get time to sort out the factory closures, the layoffs, dropping a brand. Simply marketing genius!

    So what now? Will Congress pull back the soft loan? Or will they ask Lutz to come out with a better solution? Maybe an Omnivore engine from Lotus?

    Like or Dislike: Thumb up 0 Thumb down 0
  • Elvis on Aug 06, 2009 at 10:34 pm

    GM already have all the electric car technology via previous EV before VOLT. And so funny, GM never mention about it? As if this VOLT is completely new electric car technology, didnt they keep blueprint of EV1?

    Like or Dislike: Thumb up 0 Thumb down 0
  • MycarMylife on Aug 07, 2009 at 1:37 am

    Nice car from Chevy, as usual they can contain their high costs with all the fats and excesses around.The unit have an exhaust and a muffler , wonder emission comes out from it ? Hot air and dusts from the generator ? and what sounds does it make? No more vroom vroom maybe screamm and swoosh .

    Use to have an electric slot racer with a screamer ( 48000 rpm ) motor running races during my younger days.

    Like or Dislike: Thumb up 0 Thumb down 0
  • SexyThang on Aug 07, 2009 at 2:23 am

    solve the cost problem? easy….take out the $8k battery.

    Like or Dislike: Thumb up 0 Thumb down 0
  • GM just cheated american. They will never produce electric car, not before their oil conglomerates can find other venue to make money. These people control the oil price, the oil trading, the gov of the oil producing country and the world. If oil not in demand, they lost all these, they lost their control of the world.

    So you think toyota's problem about the battery supply is real?

    Like or Dislike: Thumb up 0 Thumb down 0
  • this car make a cameo on TRANFORMER REVENGE OF THE FALLEN rite..hehe

    Like or Dislike: Thumb up 0 Thumb down 0
  • Ford_GT on Aug 12, 2009 at 7:54 am

    This is whole reason why they are so desperate to promote this car in Transformers 2 movie otherwise Lutz is gonna lose his head sooner…

    Like or Dislike: Thumb up 0 Thumb down 0
  • Anna Quah on Apr 25, 2011 at 5:27 pm

    I do hope Proton will copy some of the fantastic designs and incorporate it as our future hybrid cars! Almost everyone seemed to be copying these days!

    Like or Dislike: Thumb up 0 Thumb down 0
  • winnie on Sep 13, 2011 at 9:45 pm

    chevrolet volt have sellin at malaysia?
    how much for this car?
    like the design so much….

    Like or Dislike: Thumb up 0 Thumb down 0
 

Add a comment

required

required