Chevy Volt Will Cost $41,000, $33,500 After Credit

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Chevy's new plug-in hybrid Volt is a pretty cool concept, but it will cost you. After nearly a year of price speculation, GM announced today that the vehicle will start at $41,000. If you take the $7,500 credit paid by Uncle Sam on plug-in vehicles into consideration, then the price could drops to as low as $33,500. The company will also begin taking pre-orders for the vehicle, which will be available in select markets later this year.

There are three major obstacles facing the Volt. The first is its high price. Owners of the new vehicle will need to do a huge amount of driving or face steeply climbing fuel prices to make the high sticker price worth the purported 240 miles-per-gallon (without even including the charging costs), as noted here and here. The Volt's price comes in right around where GM speculated it would last August, when it said the vehicle would likely start at $40,000. Considering the price reported today includes a destination freight charge of $720, it's within a few hundred dollars of that early estimate.

The second obstacle is the public's perception of GM. This isn't isolated to the Volt in particular, but is a problem that all new GM vehicles face. Even though GM has been taking measures to enhance its image as a new, improved, and even different company lately, it's unclear whether or not Americans believe the change is significant enough to outweigh their concerns. Many people are angry about the bailout, and some have had negative experience with GM vehicles in the past and moved onto its competitors.

Finally, there's the fear of the unknown when it comes to a very new vehicle concept like the Volt. Will the technology work as advertised? What will maintenance cost? GM did foresee this issue, and will include the following warranty with the Volt (from today's press release):

Volt owners will be provided outstanding battery and vehicle limited warranties. The Volt's 16-kWh lithium-ion battery is covered by an industry-leading transferable warranty of eight years or 100,000 miles. In addition, Chevrolet will provide:

  • 3-year / 36,000-mile bumper-to-bumper coverage
  • 5-year / 100,000-mile roadside assistance and courtesy transportation
  • 5-year/100,000-mile limited gas engine coverage
  • 6-year/100,000-mile corrosion protection coverage

That should help eliminate some, but not all, of the uncertainty that worries potential buyers about Chevy's new vehicle.

It will be interesting to see how pre-sales come in versus the Volt's obvious competitor, the Nissan Leaf. You may recall that the Leaf's pre-order capacity sold out in just 35 days, as it quickly reached the 13,000 reservation mark its executives set. According to GM, 10,000 units will be available for pre-orders, as that's how many units the company intends to build in the first year. Of course, the Leaf's after-credit price weighed in at $25,280 -- more than $8,000 cheaper than the Volt. So selling out the Volt out as quickly may be more challenging based on price-point alone.

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Daniel Indiviglio was an associate editor at The Atlantic from 2009 through 2011. He is now the Washington, D.C.-based columnist for Reuters Breakingviews. He is also a 2011 Robert Novak Journalism Fellow through the Phillips Foundation. More

Indiviglio has also written for Forbes. Prior to becoming a journalist, he spent several years working as an investment banker and a consultant.
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