Exclusive: GM planning lower-priced version of 2016 Chevy Volt - sources

DETROIT Tue Apr 8, 2014 5:11pm EDT

1 of 2. A 2012 Chevy Volt electric car is seen at the sixth annual Alternative Transportation Expo and Conference (AltCar) in Santa Monica, California September 29, 2011.

Credit: Reuters/Lucy Nicholson

DETROIT (Reuters) - Hoping to boost demand for its slow-selling Volt hybrid, Chevrolet is planning to sell two versions of the redesigned 2016 Volt, including a lower-priced model with a smaller battery pack and shorter driving range, supplier sources told Reuters on Tuesday.

The second-generation Volt is slated to go into production in about 16 months at General Motors Co's Detroit Hamtramck plant, the sources said.

Chevrolet spokesman Mike Albano declined to comment on the brand's future plans but said: "Volt customers are the happiest customers in the world. We found a formula that works for them, and we're not going to deviate from that formula."

Chevrolet has sold just 58,158 Volts since the car went on sale 39 months ago, despite price cuts and heavy discounting. In comparison, the best-selling Ford F-series pickup last month sold more than 70,000.

GM on Tuesday said it will spend $384 million to upgrade tooling and equipment at Detroit Hamtramck, which it said will build the next-generation Volt "and two future products."

Detroit-area suppliers familiar with GM's plans said the future products include a new flagship sedan for Cadillac in late 2015 and a redesigned Buick LaCrosse midsize sedan in spring 2016.

The 2016 Volt, suppliers said, will share its underpinnings with the next-generation Chevrolet Cruze, which is due to begin production in late 2015 or early 2016.

The standard Volt won't deviate dramatically from the current model, which is priced from just under $35,000 and has a driving range of up to 380 miles, according to Chevrolet.

GM also wants to offer a lower-cost edition, priced from just over $30,000 that would likely have a range of less than 300 miles, with less equipment, the supplier sources said.

The strategy is similar to the one employed by electric-car maker Tesla Motors, which originally offered its Model S luxury sedan with a choice of three different battery packs at three different price points.

At just over $30,000, the "entry level" Volt would be one of the least expensive plug-in hybrids in the U.S. market.

The 2014 Toyota Prius Plug-In starts at $30,800, while the 2014 Honda Accord Plug-In Hybrid is priced from $40,570. The 2014 Ford C-Max Energi, also a plug-in hybrid, starts at $33,745.

When the Volt was introduced in late 2010, it was priced at nearly $40,000. With sales running well below GM's expectations, the base price on the 2014 Volt, introduced last August, was slashed by $5,000 to $34,995. Chevrolet dealers also continue to offer discounted lease rates on the car.

Volt sales last year were flat, at 23,094. In the first three months this year, Volt sales dropped 15 percent to 3,606.

(Reporting by Paul Lienert and Bernie Woodall in Detroit; Editing by Cynthia Osterman)

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Comments (3)
brotherkenny4 wrote:
The characterization of the price and that low sales drove the price reduction is incorrect. The price reduction was most likely driven by the decreased cost of batteries and other components associated with the electric drive portion of the vehicle. Also, despite the oft repeated mantra of the right wing facists, that GM is losing money on the Volt, they are not losing money on the Volt. The assumption of the facists is that GM had to pay for the development of the Volt and that cost should be considered as a simple percentage of the cost of a Volt as the vehicles are sold. Well, that is not how it’s done. Development costs need to be considered over the entire expected sales volume of the Volt. That is somewhat subtle, but not really, if you have a brain and are not brainwashed. Given the actual cost that GM said it has in the parts and labor ($24K), and assuming those cost have gone down (which is a pretty obvious thing that they have) relative to the price reduction GM can expect to recover all of their development costs once they have sold about 75K Volts. That’s a number they will undoubted reach before the second version is on the market. Now that said, the new Volt will have some development costs too, except that those cost will be significantly less than the first version, as they are simply tweaking the system and not significantly changing it. Thus they will only need to sell relatively few to recover those costs. Therefore, the expectation is that the Volt will be a profitable car some time in the future, which is typical of all new products and is not a mystery at all. Again, let me restate this, this is typical of all new products. All new products! The representation of the Volt as a money losers is a lie, an intentional misrepresentation of reality, a lie. Now, GM may not be your favorite company, but the Volt will make them money, even though they don’t really want to do it, as is obvious from their inability to correct the misinformation that comes from the facists. That’s probably due to their historic ties to facism and the residue of those ideological soldiers in their management ranks. Please see GM and Ford support Hitler. Note, Henry Ford was a big fan of Hitler.

Apr 09, 2014 9:36am EDT  --  Report as abuse
ZivBnd wrote:
BK4, GM’s CEO Akerson stated that they were losing money on every Volt sold. Now he may have been saying that for accounting purposes, i.e. shortening the timeframe used to write off the cost of developing the Volt, but we can’t ignore what GM has said about the Volt and its lack of profitability. If you look at how few Volts they have built over the past three years, seldom allowing total inventory in the US to go over 4,000 cars, you have to admit that there is a strong possibility that they aren’t making any money on each Volt sold.
I love my Volt and hope it will eventually be a hit, but at the current MSRP a car with just 4 seats (and limited rear seat legroom) and only 38 miles of AER is simply not going to sell in large numbers.
The “evil fascist right wingers” aren’t the main problem. The car has problems of its own. I think the Gen II will be cheaper, have longer legs (hopefully 50 miles of AER) and will be slightly roomier. And I think GM will be selling a lot more of the Gen II Volts once they hit the car lots.

Apr 09, 2014 10:25am EDT  --  Report as abuse
steve90068 wrote:
Did you really just compare sales of the Volt to those of a F-series truck? Lazy journalism….

Apr 12, 2014 10:14am EDT  --  Report as abuse
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