Is the Volt sticker price fair?

Hi Shelly,

From the point of view of accontants, yes. From the point of view of modern continuously improved industry - not even close.

Accountants tend to not take into account the cost of staying competitive as a neccassary expense. So, any improvement to stay competitive is costed to the new product, not the new buisness.

Or in other words, GM does not intend for the Volt to be the prototype of a new buisness (like Toyota did with the Prius), just a one-off stunt to earn greenie points - at least in my opinion....

The Volt is a heavy duty chasis version of the Prius (as has been learned recently - similar transmission parts, with only a few added clutches), with a 40 mile battery. The battery is like $10000 (versus Prius $2340)? So, that should put the Volt around $35K complete guess.

If they would not have had to have better + 70 mph efficiency, the transmission could have been much simpler, more simple and cheap than the Prius transmission. Which is what they were telling us up front. Somewhere along the line, that go changed. I do not see the issue with telling somebody they are going to get poorer gas mileage above 70 mph. They apparently did. There have been millions of Gen II Prius sold with that same issue (its actually 64 mph for the knee point in the Prius). Especially, when they are basing the car on getting ALL ELECTRIC range greater than the typical daily consumer range. Did they start to believe all the FUD about the Prius themselves?

The Cruze, with the turbo 1.4 is like $18 K , right? So, they are charging $23K for the hybrid system addition. In other words, you could by a Prius for the cost of the Volt hybrid system by itself.

 

Here's another question:
So, is the price for an iPad/iPod fair in light of the materials and components needed?

Pricing is and will always be what the market will bear.

 

I agree with this line of thinking. I was hoping the Volt would be $35k BEFORE the tax incentive but it seems that that is the price after.

For me the Volt is about $7000 overpriced. I still think it will sell, and I think the price is fair. Just fair.

The Leaf on the other hand is a good deal. I would go so far as to say bargain but I want to hear about real world range. In states with big tax incentives as well as the federal one it seems like a break even is even possible over the life of the car.

 

I've not heard the Volt is able to get CA tax credit, and they say fed credit is up to $7.5k bringing price ~ $33,500

I don't want to see them give tax credit on the Volt for long time. We really don't need to be subsidizing the sale of expensive cars. But I'm ok with it to get the car going in, say, the first year.

Geez, Leaf will cost around only $20k in CA because it can get the fed and state credit.

 

Since you asked....I think it's a ripoff @ that price.

 

So much for making it ecomomical, and priced for the masses!
I wonder if you have to show a current Bank Statement to get in the door?

 

As a second car that is really a no-brainer. Couple that with the thousands of free charging stations being given to homeowners and possibly free charging in public places in CA and you have a real electric option.

 

I'd like to suggest that asking whether the price is "fair" is the wrong question. Fairness comes into play when one party in a transaction is under duress to participate in the transaction, and the other party is in a position to impose conditions that a truly free and open market would not.

A market is truly free and open when there are a large number of sellers and a large number of buyers and no shortage of materials with which to make the product. Producers will make enough of the product to meet the demand and price will settle at slightly more than the cost of production.

But markets are seldom free and open. Car makers will endeavor to set their price such that they can sell the number of units they want to build. When there is greater demand than supply (e.g. the Prius in 2004) some people will pay a premium. Fairness does not enter into the matter because nobody NEEDS a Prius. Or getting back to the OP, nobody NEEDS a Volt. GM can charge what it likes, and if the price is too high it won't be able to sell as many cars.

Fairness comes into it when there is something that people NEED, and one person or company, or a small organized group, have monopolized the supply. It is UNFAIR to charge more for housing, or food, or health care than a segment of the population earns in wages. Similarly, it is unfair when people have only one thing to sell, to use violence or corruption to establish a monopoly and then impose an artificially low price on their commodity.

It's not unfair for GM to charge more for the Volt than the cost of manufacture, because if you don't like the price, or the car, just don't buy it. Nobody needs a Volt.

A better question would be: How much profit will GM make on each Volt it sells, and do you want one badly enough to pay that much? Or simply, is the car worth its price to you? No doubt a few people will answer yes to that question. I personally answer no. The former person would say the price is fair, I would say it is not. In the end, GM has a large investment in research and development, and if it really wanted the Volt to succeed, it would have to make that money back over some reasonable time period. (I believe GM actually wants the Volt to fail commercially so that it can scrap the project and claim "We tried!" To that end, it has set the price well above the price of comparable cars.)

 

Hi Daniel,

You are absolutely right. I did answer what I thought Shelly was asking though - which I praphrase as "Is the Volt Price a good value for what a consumer receives for the money the consumer pays?".

 

I believe the magic number in retail business is ~35% for markups.

Oh that excludes movie theaters.

 

It's certainly not fair to the consumer who has been hoping for years to see an American car that could compete in price and performance with the best Japanese models! If GM knew they couldn't deliver this thing for under $30k, they should've revised the concept till it was a viable contender! Now they have a vehicle that only is "affordable" by leasing! Volt fans say the second gen will be far better and much cheaper, but when has any car ever been reduced in price by a third to a half? If it sells at this price, that price stays. If it doesn't, there will be no second gen Volt!

 

Actually, retail markups vary widely from industry to industry. In the grocery business, margins are razor thin, because there are many competing retailers, selling essentially identical goods, and a fast turn-over. In the art business, I believe galleries typically get 50% of the sale price. In the auto industry manufacturers' margins are hard to determine because R&D is extremely high and must be amortized over the entire production run, which is an unknown quantity at the start; and retailers' margins depend greatly on the relative bargaining skill of salesman and buyer.

My advice for movie theaters is to smuggle in your own popcorn.

I contend that GM wants the Volt to fail because they have a bigger stake in selling gasoline and large high-profit gas-guzzling cars than in providing consumers with an efficient car. The poor mileage and performance in CS mode and the relatively short EV range, along with the astronomical price, are all part of their plan. And they know they won't sell many, which is why production runs are so small. They are willing to spend a lot of money for the right to say "We tried. We really did! But nobody wants an electric car." It remains to be seen whether the public will swallow that when Nissan Leafs are selling like hotcakes and people are lining up around the block to buy the Tesla Model S and the other EV offerings coming down the pike.

So is it really "unfair" of GM to not offer the Volt or a Volt-like car at an affordable price? No, it is not "unfair." It's just another calculated business decision from a company that knows the government will bail it out every time it declares bankruptcy. (It is, however, stupid of the taxpayers to keep bailing out corrupt companies that base all their business decisions on what will put the most money in the top executives' pockets.)

 

Maybe the OP needs multiple answers:
1) It's a bit early to say, "NO ... it's too expensive". World economics are morphing back to how things were 100 years ago ... meaning a much smaller middle class. A smaller middle class means fewer buyers. So future sales turn on how fast the middle class shrinks.

2) Are 6,000 +LB land barges over priced? You tell me. The reason GM bought the "Hummer" line all the while (spending millions in) lobbying against & crushing perfectly good EV1's ... was because GM said behemouths are where the big profits are/were.
Sooo ... which ones are over- priced?
.

 

So I think what Shelly wants to know is whether the price of the Volt includes a so-called "hybrid premium": an amount above and beyond actual manufacturing cost + normal profit, being charged just because it's an unusual car, or does the price reflect actual manufacturing cost plus a margin similar to a conventional car?

I still think the question is somewhat clouded by the higher R & D costs compared to a conventional car, but my guess would be, yes, by the above standard the Volt is overpriced, since, again, I believe GM wants it to fail and so has priced it well above what it could be sold for.

I have a friend who is an artist. When she finishes a new painting she does not want to sell it right away, so she prices it well above the going rate for paintings of that size and artistic quality. After she's shown it for a time, she's ready to sell it and she drops the price to what she knows someone will pay for her work.

I think GM is overpricing the Volt because they don't want people to buy it. A few will anyway, but the high price will keep sales low and allow them to justify scrapping the project while claiming that they tried to market an efficient car but the public didn't want it. (Never mind the phenomenal success of the Prius and the high demand for the Leaf.)

 

I think GM is overpricing the Volt because they don't want people to buy it. A few will anyway, but the high price will keep sales low and allow them to justify scrapping the project while claiming that they tried to market an efficient car but the public didn't want it. (Never mind the phenomenal success of the Prius and the high demand for the Leaf.)[/QUOTE]

Yeah right, that's exactly what GM's strategy is. What a great business plan - with Wikileaks, I'm sure we would have heard of this by now....

I think the VOLT is overpriced for what you get. Here is my reasoning: How much would a company like Toyota or Hyundai invested in R&D to come up with something similar? A LOT LESS!! GM promised a lot more in the several year lead-up to production and there were several write-ups that expressed dissappointment when the truth was revealed - the much lower EV range and in certain driving conditions, the ICE has a direct connection to drivetrain. For the same price, I'll bet Toy or Hyun would have designed a roomy, versatile family vehicle with the same efficiency.

Only time will tell how well the VOLT does. If it holds up well with few problems, and the public supports it with sales (possible back orders?), and GM proves it can make a profit - meaning they'll continue production after a few years, only then will it be a success.

 

Hi All,

Here is the Cruze MSRP package price levels - Build Your Own 2011 Cruze | Chevrolet

The ECO is the one I was thinking of, at $18,175 with 17 inch polished alloy wheels, the 1.4 turbo.

 

Gen1 goals were not met. Will they meet gen2 goals? What are the gen 2 goals?

 

They spend a lot of the tax payer's money. GM Precept used [ame="http://en.wikipedia.org/wiki/Partnership_for_a_New_Generation_of_Vehicles"]PNGV[/ame] money and no production vehicle came out of it. Volt used the bailout money. I am not sure about EV1.