Will Low Gas Prices Make It Hard to Sell the Volt?

They will sell everyone they can make for the 1st year because of the hype.

By then the price of gas will be $4.00 a gallon or more and it should do fine,

Just another reason to get a high efficiency turbo diesel. $32,500 after a $7500 tax credit? This will get you a car with chevy build quality and an untested complex drivetrain. I'm sure it will sell because of the hype, I think the nissan has the better vehicle though.

It probably won't sell in significant quanitites but the drivetrain is a bona fide game changer. IF it does sell, just about every automaker is going to have to reassess their hybrid/alt fuel strategies.

The Volt was planned in a time of scary oil prices but full employment and near unlimited consumer credit. It was also planned that the battery cost would be about $5,000 less than it actually is.

None of that is true today.

Which is why GM has gone from talking about six digit sales volumes to just a few thousand units for 2011 and keeping supply low enough to avoid discounting.

It's a market failure and that's been clear since 2008. The only reason it's still alive is because it'd be politically incorrect to kill it.

The Volt is not a competitor to the Prius or Insight - both are far smaller. The Prius makes a statement for it's owners that they are "different" - as Toyota has said, it's appearance makes that statement so it can't be styled more conventionally. The Insight is a miserable little can. The TDIs are for a different market, people who think about oil burning and dream about french fry oil. You didn't mention the Leaf, whose styling will turn off most people. And the Volt is larger than all of these.

The Fusion is an excellent car all around, and even though the driveline is very different, it may be the main competition and it's probably more viable int he real world. In probably two years there will be a replacement for the Fusion and we already know there is a next-gen hybrid system coming for it.

The Volt has it's size working for it, it's technology (and lots of gadgets including smart-phone access that will appeal), unprecedented access to the development process, and the most marketing push of anything in GM behind it. Think about how many press releases GM puts out - a tiny amount compared to Ford, but still most of them are about the Volt. GM is on to something new here, and if they stay on this path they have set themselves apart. I predict it will sell it's planned first year production.

-Jeff
DrivingEnthusiast.net

TDI users with dreams of burning other fuels? You know the diesel engine has been around longer than diesel fuel right?

I do think there is a future in EVs, but I think if GM really had the answer they wouldn't need to market heavy for the past 3 years to make sure they sell under 10k of them. I think the answer is to stop trying to replace gas engines. EVs are perfect for city driving or commuting to school and work. As americans we will always want the ability to drive across the country and unless EVs capacity in both physical and electric storage increase signifcantly it will never replace conventional vehicles.

The first year or 2 the Volt will sell fine to the early adopters. If gas prices rise and stay higher (likley I think) the Volt will sell okay. The question is how quickly can they reduce the price?

It also depends highly on the style, price, features, and QUALITY...of the competition. Like firstwagon said, gas rises and people will be looking at these cars more. The Leaf is an ugly SOB but its also supposed to be cheaper.

Oh and GM may never recoup all the expenses it used to develop the Volt, but the company appears (to consumers) to be more concerned about battling the fossil fuel addiction which may help it sell other cars just based on image.

First off, yes, GM will have a hard time selling Volts. There are only so many enviromentally conscious celebs out there. A few might sell to state and federal fleets.

Second, of course low fuel prices will hurt sales. The only thing the Volt has going for it is the anti-oil movement that BP inadvertently started.

Folks aren't going to see the $32,500 price tag. They're going to see the $40K on the sticker. Tax credits are nice and all, but they don't move sales.

I'm convinced much of the price is derived from the huge advertising budget.

GM needs a Caddy version to drive down costs.

There is always a rush to buy the "new thing" and I am sure that will happen for the Volt. After that, I think sales will drop off no matter how much gas costs. There are so many other hybrids, EVs, diesels here and still coming that GM can't possibly get by with the price they have on the Volt. (You can buy a new Fusion Hybrid for about 28K-- without any gov't money.)

As far as the Volt making money: If I recall correctly, the Saturn never made a dollar for GM, and Saturn was around for almost 20 years.

If Prius is sold mainly based on its appearance and unique styling, the same can be said about the Volt. But at a near $40k price tag... good luck.

GM will have no problem selling it, because this is a new technology, and people still buy the Prius in times of low gas prices. Also, the public isn't stupid....or at least not in general. We know that the national average won't stay below 3 dollars for long, especially with the situation in the Gulf. So in other words, GM will be in a good spot at the time of the Volt's debut.

jwfisher

I don't see how you could think the Prius is not a competitor for the Volt. The Prius is the top hybrid on the market and the favourite for those seeking to minimize their use of fuel. That is exactly the market GM is going after with the Volt.

I haven't been in a Volt yet but I doubt it has anymore space then the roomy Prius so I can't see that being a big factor in sales.

In the end it will come down to which hybrid captures the publics attention most. I think the Volt will sell all GM can make for now ( I also believe they will keep them in short supply delibertly) but the Prius will still dominate sales.

I also don't think its concept of an electric car with a back up generator will be anything more then a short term solution. As batteries improve the idea of carrying around (and paying for) a gas engine will be redundant.

I hope they sell well. They will provide the same image boost as a prius, but look infinitely better. Everybody complains about the price, but if it has a good interior and drives nice, it may not be soo bad, there are plenty of $40k cars that sell, and even more going for $32k. Unfortunately, I have very little faith in the American public to have the foresite to do what's good for themselves. Since gas is cheap right now, they will all flock back to their SUV's. Then as soon as gas prices go up, they'll be bitching about how the OE's don't make enough small, economic, hyper-miler cars, even though they didn't buy them when they came out and therefore the funding wasn't there. We are a country of fads and no sense of responsibility, so unless the Volt becomes the new fad or gas prices go up, I fear it will not go as well as planned after the initial rush.

@lostboyz:

"This will get you a car with chevy build quality and an untested complex drivetrain."

As sort of a halo car for GM, I believe this thing will get Cadillac like attention to detail. The software to run the drivetrain is complex. The drivetrain itself is not. It's just a generator running electric motors from batteries. The UPS in my datacenter isn't much different. If GM can work out all the bugs in the software before release, there should be very few problems.

GM will sell the Volt at a loss for a while, but technology will catch up. Toyota sold the first generation Prius at a loss for several years in Japan before releasing it to the rest of the world.

I think it's too soon to answer that question. First GM needs to actually start selling the Volt, then people need to find out what it's like to actually drive and live with. I agree with the comment that early sales will be good, but long-term success like the Prius will be based on how well the car actually works.

If the Volt doesn't get substantially better economy than say the Fusion, then what's the point of paying the premium?

Hang on a second....Time Out!!!!

Since when is nearly $3.00 per gallon considered a "low" price. This is exactly what oil companies hoped would happen.

*RANT ON*

Let's analyze gas pricing and basic business fundamentals for a minute, shall we?

First, the key to a successful business is to figure out the highest price you can charge the consumer for your product. This holds true for ALL products, regardless of market type. You need to hit that sweet spot where a consumer can justify their purchase price and you can bring in maximum profit.

Now, think back a decade. I remember 10 years ago paying around $1.50-1.70 per gallon of regular gasoline. Let's go back a bit more, I remember back in the early 90's paying under $1 per gallon. Most often, gas hovered around $1.20 per gallon for most of the 90's.

Now, in that 15-20 year span, has technology gotten better...or worse? Obviously much better. Technology makes things far more efficient. Now apply that to oil drilling and refining. Think about why the number of US refineries has decreased by about 50% over that time. Efficiency is the reason. Fewer refineries = more profit.

So why did oil prices spike by 4-6 times their normal trading price?

Oil companies and investors have been pushing the fallacy that oil is running out and that demand is rapidly growing. So prices began to get pushed. Obviously India and China are changing to the automobile, but the oil companies were more than ready for the increased demand. They had thousands of capped wells around the world waiting for the day when prices increased enough to make billions. Europe and US have decreased their oil intake while AsiaPAC increased, so really that works out to a wash.....all while becoming more efficient and ever more profitable.

Look at the latest Economic news on Oil companies. They have all-time record profits. Heck, Exxon had the highest profits of ANY corporation in history.

OIL IS NOT CHEAP RIGHT NOW......it is expensive!!! Filling up a 16 gallon tank for $50 is NOT cheap. Think about what $50 is...at minimum wage that is a around 7 hours worth of work!!!

*RANT OFF*

Now, with that said.....the Volt will sell for anybody that understands that $3 bucks per gallon is NOT cheap.

Hell, I drive a CTS-V, so I obviously don't care about MPGs much less spending 35k, but I am seriously considering a Volt, even though it's literally half the performance of my car. However, it's half the price and I'll almost NEVER have to fill up that fuel tank with my driving habits.

1/2 the payment minus the $250 per month in fuel costs = MAJOR WIN for Chevy

Heck, with the money I'll save I can throw a used C6 vette in the garage for when I want to have fun and still pay less than my V. LOL

Oil isn't running out yet but easy to get at (inexpensive) oil isn't increasing. World demand is increasing however and much more expensive (and riskier) methods will need to be used.

The Gulf of Mexico disaster will mean new off shore drilling isn't going to happen so as soon as the economy gets rolling again and demand increases so will prices.

Right or wrong, prices are low now and will only get higher.

It's probably an impressive machine... but I'll stick with my $5,000k 02 Civic LX with a true manual transmission and gets 35-45 mpg (city/highway) and no car payments.

People will buy the volt early on... If it can prove reliable and trendy... it will sell.

"Folks aren't going to see the $32,500 price tag. They're going to see the $40K on the sticker. Tax credits are nice and all, but they don't move sales."

Agree completely. Also 40 grand opens up a lot of choices.

Then there's that nasty little thing called "Added Dealer Markup" (ADM). If there are only 10 thousand of these little econoboxes to go around, that's maybe 2 or 3 per dealer per month?

How much are people going to be willing to pay for the "Exclusivity"?