Volt pricing to be very competitive
General Motors Co. will offer a competitive lease price on its Chevrolet Volt that could soothe consumers hinky about buying a vehicle that relies on pricey battery technology.
The lease price will be unveiled today, along with the Volt's retail price tag of slightly less than $40,000, minus a $7,500 federal tax credit. The pricing is one of the last secrets surrounding a car that GM hopes will turn around its perception as the maker of gas-guzzling SUVs.
The Detroit News has learned that GM plans to set a lease price that will be far lower than monthly payments to buy the extended-range electric car, and competitive with Nissan's Leaf, whose monthly lease price starts at $349.
The Leaf will retail for $32,780 before the federal credit.
"No one has ever done this type of vehicle before. People might be very hesitant of buying something that's this new and different," said auto analyst Joe Phillippi of AutoTrends Consulting in Short Hills, N.J.
"To a lot of people, if the Volt doesn't work as advertised, by leasing it, GM takes all the uncertainty out."
Spokesman David Darovitz confirmed GM will offer leases on the Detroit-built Volt, but declined to discuss the pricing or estimate leasing volumes.
"Customers will be pleasantly surprised with the pricing," Darovitz said.
Battery reuse part of plan
GM decided to offer low lease prices because it can retain and eventually reuse the expensive, lithium-ion battery packs. And the automaker can apply a $7,500 federal tax credit, per vehicle, to the lease payments.
That strategy could trim monthly payments on a three-year lease by around $200.
The advantage of a low lease price is to boost enthusiasm and get people into showrooms to look at it, the experts say.
"You have to find the sweet spot, where you aren't pricing it out of the range of people, but clearly there is going to be a premium," said IHS Automotive analyst Rebecca Lindland.
Joel Ewanick, GM's vice president of U.S. marketing, will announce the sales and lease prices and ordering details today at the Plug-In 2010 conference in San Jose, Calif.
GM has conducted internal research on pricing and believes its lease price will be attractive to customers.
A lower-than-expected lease deal is GM's second calculated bid to overcome consumer concerns about buying a vehicle that relies on new and expensive technology. Earlier this month, GM announced an eight-year, 100,000-mile warranty on the Volt's new battery -- three years longer than GM's standard powertrain warranty.
The Volt, which will travel up to 40 miles on electric power alone, will have a range of 300 miles on its gasoline engine. The Leaf's range is 100 miles
The Volt's engine kicks in after its lithium-ion battery is drained by about 70 percent to sustain the battery's remaining charge, which will keep the car running for several hundred additional miles.
Analyst Aaron Bragman of IHS Automotive said the Volt's price "has been one of the great mysteries for the past three years. "This is really one of the big steps for the public to look and say 'Gee, I really can afford that,' or 'I can't,' " he said.
Bragman said GM should be able to command a higher price than what Nissan is asking for the Leaf, because the Leaf relies solely on a battery while the Volt's four-cylinder engine extends its range.
GM plans to produce just 10,000 Volts for the 2011 model year, eventually expanding to as many as 30,000.
"You would think GM could sell 10,000 Volts for $35,000," Bragman said, adding that tax credits could push the price below $30,000.
'It feels upscale'
"Remember: The Volt is a small car. And there's still somewhat of a stigma in America's mind that small equals inexpensive," Bragman added.
"Small can be premium, but it has to justify the cost. The Volt can capitalize on that. It feels upscale and they've worked very hard to make sure people say that it does feel like a $35,000 car."
Separately, GM posted on its website Monday a list of option packages for the Volt.
Standard equipment includes a Bose sound system with six speakers, 30 GB of audio data storage and 17-inch, five-spoke painted aluminum wheels.
The option packages include a leather-wrapped steering wheel, leather-trimmed seats and a backup camera.
Owners will be able to order a cargo net, vehicle cover and front window shade. And they'll get five years of free OnStar.
The Volt will come in six colors: Silver Ice Metallic, Black, Crystal Red Metallic, White Diamond, Cyber Cray Metallic and Viridian Joule. Detroit News