Larry Burns, General Motors vice president of Research and Development and Strategic Planning, demonstrates how to plug in a Chevy Volt in Washington. (Photo : Reuters)
When General Motors introduced the Chevrolet Volt two years ago they had high expectations for car sales due to the new technology the car offered that they predicted would help end America's reliance on oil. Two years later, they are now just looking to sell the car period.
Sales rose for the Volt in August when the car sold a monthly record of 2,800 cars, and it seemed like the car was going to finally start living up to expectations. It turns out that sales rose largely due to a huge price reduction from the sticker price. When the Volt was introduced, it was sold for $40,000, a number that has dropped almost $10,000 after sale numbers have not been what was expected in 2010.
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The discount on the Volt includes low-interest financing, subsidized leases, and cash discounts to buyers. The discount being offered on the Volt is more than four times the industry's per-vehicle average TrueCar.com estimates.
Electric car sales have had a slow year in 2012, but if the sales of the Volt in August are any indication of a trend, dealers may have to start reducing the asking price for some electric cars to help move them off the lot. Gas-electric and electric hybrids add up to just barely over 3.5 percent of U.S. auto sales this year currently.
The Volt costs an estimated $65,000 to make after including the price of manufacturing, materials and development. If the car sells at the discounted price, each car is still losing $30,000 per car for the company.
GM has to be disappointed with the lack of success the Volt has experienced thus far, as the car was advertised a great deal to be a top competitor with the Nissan Leaf, a pure electric car that came out at the same time. It was advertised as a car that goes around 35 miles on battery power before a gas-powered generator takes over, giving it about the same range as a car with a gasoline engine. The battery can be completely recharged from a home electrical outlet for just $1.50.
The poor economy at the time seemed to hurt the Volts chance at succeeding, but GM had hoped to see a sale increase by 2012. The company achieved those expectations, it'll just cost them more then they had envisioned.