GM seeks Volt tax break to avoid $40k sticker
GM seeks Volt tax break to avoid $40k sticker
Automotive News | May 26, 2008 - 12:01 am EST
DETROIT — General Motors expects its gasoline-electric Chevrolet Volt to come to market in 2010 priced close to $40,000, say sources close to the project.
That’s pricey compared with rivals such as the Toyota Prius hybrid, but taxpayers may help lower that sticker.
GM is lobbying Congress to create tax credits benefiting "extended-range electric vehicles" such as the plug-in Volt, says GM spokesman Greg Martin. "We need to make sure the legislative language does include extended-range electric vehicles."
The Volt concept is powered by an electric motor running off lithium ion batteries. A small gasoline engine recharges the batteries after the vehicle has traveled 40 miles or so. Owners can recharge the batteries overnight by plugging the car into an electrical outlet.
A source familiar with GM’s Volt program says some proposals for federal tax credits could knock up to $7,000 off the Volt’s price.
Company insiders now predict 10,000 to 30,000 Volt sales in the first year, with volume growing as it hits full production. GM is counting on the Volt to be a high-volume seller after the first few years. GM expects to bring the Volt to market by November 2010, sources say.
"There haven’t been any recent developments that threaten the timing," says a source familiar with the project. "To the contrary, our confidence in the lithium ion battery continues to grow. But we still have a lot of development and testing to go."
GM unveiled the mid-sized Volt concept at the 2007 Detroit auto show. At the time, product chief Bob Lutz said GM planned to sell the sedan at a price similar to competing vehicles.
There are no vehicles on the market with a Volt-type powertrain. But the mid-sized 2009 Toyota Camry hybrid has a base price of $26,310, including shipping. And the 2008 Toyota Prius starts at $22,160, including shipping.
| Chevy Volt update • Sources expect November 2010 launch • GM wants government incentives to cut price; if not … • … Sticker near $40,000 is likely • GM expects 10,000-30,000 sales the first year; high volume eventually • Engineering cost of less than $500 million; total cost of program significantly higher |
‘Work in progress’
"The whole story on pricing is still a work in progress," says the source. "The final price to the customer will heavily depend on whether the next administration in Washington is willing to establish incentives for customers and producers. Absent some sort of tax incentive, a $30,000 price is not likely."
Congressional Democrats appear willing to help GM. Last week, the Democrat-controlled House of Representatives approved a $55 billion assortment of tax breaks that included a subsidy for plug-in hybrids.
Backers may ‘reload’
The measure has received little attention because its prospects are uncertain in the Senate and the White House is threatening a veto. Nevertheless, one industry lobbyist said he expects GM’s congressional supporters will have an opportunity "to reload."
In a meeting with bloggers in March during the New York auto show, Lutz implied that GM would be willing to sell the Volt at a loss initially. The Volt would help GM develop technology and improve the company’s image, he noted.
"We’re now talking to the board about a lot of programs where it could be years before we make a dime on it," Lutz said in a video of the meeting posted in April on GM’s FastLane blog. "The board said, ‘Hey, don’t even talk to us about profitability. General Motors needs this car.’ "
