GM's (GM) Biggest Hurdle for Volt Success Might Be Itself
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General Motors (NYSE: GM) shares closed Monday's session lower following reports over the weekend the automaker will be putting the kibosh on Chevy Volt production for several weeks. The WSJ mulled why the Volt isn't selling well this afternoon, making some solid points in the process.
The Volt currently retails for about $40,000 before any taxes, fees, or government discounts are taken into consideration. That's about twice as much as its new economy ride the Chevy Cruze Eco.
Then there's the whole feeling-good-but-not-at-a-cost issue. People want to feel good about saving the planet and would expect to at least break-even over the useful life of the vehicle. With the Volt, the initial outlay means that even if the average driver didn't buy a drop of gas to keep the vehicle running, it would take about 12 years to recoup the costs of the Volt.
Next, the Cruze can travel reliably at about 40 miles per gallon, while the Volt's battery life depends on weather, driving habits, and other factors which might improve or reduce the amount able to be traveled before a gas engine kicks on.
Volt owners have to plug it in everyday. Not a big deal, but yet another item a customer has to remember to do.
Overall sales speak for themselves. GM sold 7,671 Volts in 2011, compared with 9,674 Nissan Leaf vehicles sold. Of note, GM moved 231,732 Cruzes over the same period.
The Volt is a very respectable car in many aspects, but GM has to ask itself what can be done to distinguish the vehicle enough for pique interest. Right now, the Volt appears to be more of a risk to many rather than a feel-good ride. Plus, production halt might throw a few more flags up for potential customers.
Shares of GM closed down 1.7 percent at $26 even.
The Volt currently retails for about $40,000 before any taxes, fees, or government discounts are taken into consideration. That's about twice as much as its new economy ride the Chevy Cruze Eco.
Then there's the whole feeling-good-but-not-at-a-cost issue. People want to feel good about saving the planet and would expect to at least break-even over the useful life of the vehicle. With the Volt, the initial outlay means that even if the average driver didn't buy a drop of gas to keep the vehicle running, it would take about 12 years to recoup the costs of the Volt.
Next, the Cruze can travel reliably at about 40 miles per gallon, while the Volt's battery life depends on weather, driving habits, and other factors which might improve or reduce the amount able to be traveled before a gas engine kicks on.
Volt owners have to plug it in everyday. Not a big deal, but yet another item a customer has to remember to do.
Overall sales speak for themselves. GM sold 7,671 Volts in 2011, compared with 9,674 Nissan Leaf vehicles sold. Of note, GM moved 231,732 Cruzes over the same period.
The Volt is a very respectable car in many aspects, but GM has to ask itself what can be done to distinguish the vehicle enough for pique interest. Right now, the Volt appears to be more of a risk to many rather than a feel-good ride. Plus, production halt might throw a few more flags up for potential customers.
Shares of GM closed down 1.7 percent at $26 even.
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