In August, Chevrolet dealerships across the country sold a monthly record 2,800 Volt EVs. In a country that’s less than eager to abandon their 8-cylinders and for a car with a starting MSRP of $39,145, this was no small feat for the General Motors brand.
While other EV manufacturers in the U.S. like Nissan, Ford, Toyota, and Honda looked on with envy, many began to wonder why the Volt was becoming America’s go-to electric car. According to data released this week from an automotive pricing website, TrueCar.com, the answer is in the incentives.
As reported by the NY Daily News, the Volt’s impressive August sales were attributable in large part to incentives offered by General Motors that exceeded the industry average by more than 400%. In some cases, TrueCar.com noted that dealerships knocked down Volt prices with low interest financing and cash discounts by a quarter of their sales price—almost $10,000. Because General Motors admitted that they were in the red with the Volt even before August and before the incentives, it’s probably safe to call the American manufacturer’s first attempt in the EV market unsuccessful.
Though it’s hard to know exactly how much money General Motors is losing on the Volt, it’s definitely not an insignificant sum. It’s been suggested that it costs well over $50,000 to manufacture an electric car. Therefore, we’re left to suspect and wonder if other EV manufacturers are upside down on their electric cars as well. If so, are electric cars unappealing to American consumers in general? Or are they merely out of reach price-wise for most consumers in the current economy? The majority of experts allege that it’s the latter that’s holding back the popularity of EVs in the United States. If that’s really the case, one of two things can happen that may help EV sales in the current economy.
The price of an electric car is equivalent to the price of an entry-level luxury vehicle, and because sales in the luxury segment aren’t as strapped as sales in the EV segment, we know that there is a demographic that can afford EVs, but is choosing a different option. The easy answer, therefore, is to make EVs more attractive to these buyers. Make them bigger, more luxurious cars instead of basic compact vehicles that appeal to young drivers who are without a lot of cash. On the other hand, manufacturers can keep targeting these younger, less wealthy consumers and at the same time—lobby state governments to provide tax credits on top of the $7,500 the federal government already offers. While both of these suggestions come with their own set of issues, either way it’s clear: the price of EVs must come down or their luxuriousness must go up for them to survive in this economy.
This article was contributed by Brittany Larson, an electric car enthusiast and a blogger for Gordon Chevrolet.