The company reported today that it sold 7,671 Chevy Volts in 2011, fewer than the 10,000 it had expected to sell because at $40,000 the cost is simply out of reach for most buyers, especially Chevy buyers. The car should have been sold to Cadillac customers, who tend to be wealthier, or the cost has to be lowered to the level of a Toyota Prius.
There were more than 1,500 Volts sold in December, the best month since the car was launched in late 2010.
Sales of the Volt have been closely watched as a barometer both for uptake of electric vehicles and GM's financial health.
Buyers receive a $7,500 federal tax credit for buying an electric car with a battery as large or larger than the Chevy Volt battery. But because of the cost of large batteries, electric cars still have a significantly higher price tag than conventional cars. The Volt price starts at $39,145, the Nissan Leaf starts at about $35,000, and Ford's Focus Electric costs just under $40,000. The full $7,500 tax credit is available for each.
Electric vehicles are cheaper to fuel up but the internal combustion engine efficiency continues to improve and hybrids have become more commonplace. Unless there is a spike in the price of gasoline, many analysts expect electric vehicle sales to remain a small fraction of overall sales in the next five years because of that higher purchase price. Although the Volt attracts a lot of media attention, its muted sales volume is less significant to GM's overall financial picture since it represents a tiny portion of overall volume. The National Highway Safety is still investigating the cause of a Volt catching fire three weeks after a side-impact crash test.