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Can Chevy Sustain Volt Electric Car Sales After Incentives End?

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NASCAR racer Jimmie Johnson checks out the Chevrolet Volt

NASCAR racer Jimmie Johnson checks out the Chevrolet Volt

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Last month, more Chevrolet Volts were sold than in any month since the range-extended electric car went on sale in December 2010.

The total of 2,831 handily surpassed the 2,289 sold in March, the previous best-selling month for the Volt.

But Chevy may not be able to keep up that pace indefinitely.

The end of a host of discount deals could combine with a planned plant shutdown to limit supplies and render the remaining Volts more costly to buyers.

Anton Wahlman, who covers plug-in cars for TheStreet.com, wrote to Green Car Reports earlier this week about what he sees in Silicon Valley, a hotbed of Volt sales.

The super-duper lease/sale promotions for the Volt ended yesterday.

I heard and saw anecdotes saying that Chevy dealers worked overtime this three-day weekend to sell and lease a bazillion of them. Many cleared their Volt inventories down to zero. 

And now they won't be getting any more Volts for two weeks or more, in some cases. Those dealers can get cars from other dealers, but otherwise they may be supply-constrained for the rest of the month, and even much of October.

That's because while there are Volts in the distribution pipeline, on September 17, Chevrolet will suspend production at the Detroit-Hamtramck assembly plant for four weeks. 

This will allow the company to install tooling so the plant can build 2014 Chevy Impala sedans as well as the Volt and the 2013 Malibu now made there.

2011 Chevrolet Volt Production Line at Detroit-Hamtramck Assembly Plant

2011 Chevrolet Volt Production Line at Detroit-Hamtramck Assembly Plant

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Wahlman suggests that September sales of the Volt may be closer to 1,500 than 3,000. He continues:

I have multiple neighbors who picked up Volts in the recent days; I think one guy even got two of them. At $199 a month plus tax, with almost nothing down, why not? I wonder when those kinds of deals will return.

Wahlman did note that it's possible that the strong Volt sales are limited to California. (GM has said sales were strong in Michigan too.)

California buyers account for roughly one-third of all Volt sales.

Now that recent 2012 Volts--and the updated 2013 Volt--are eligible for the coveted "green sticker" that gives the cars access to the High Occupancy Vehicle (HOV) lane with just a single occupant, the Volt should continue to sell better until all 40,000 of those stickers are assigned.

The car, of course, is far from the only one eligible for those stickers. Others include the Toyota Prius Plug-In Hybrid, the Honda Accord Plug-In Hybrid that will arrive early next year, and upcoming Energi plug-in hybrid versions of the Ford C-Max hatchback and Ford Fusion sedan.

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Comments (15)
  1. Kinda burying the lead on this one aren't you?

    Why did Chevy feel the need to place such large incentives in the first place? This seems like a money losing proposition for Chevy unless there is some other plan for recouping the costs. You basically get the used of a $40,000 vehicle for two years for $5500. Of course the lessor gets $7500 from the feds, so that helps, and maybe $2500 from the state of California. But what will a two year old Volt be worth and can they make money doing this?
     
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  2. Leasing company doesn't get anything from the State of California. And the amount is ONLY $1,500 (PIP also gets that).

    A typical car loses about 30-36% of its value in the first 3 years. 30% of a $40k car is $12,000. $5,500 + $7,500 is $13,000... Chevy must figured that its 2 yr old car won't lose more than 30% of its original value. That is NOT a bad bet.
     
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  3. Don't you think Volts depreciate by $7500 on day one? I expect to see a lot of depreciation on these Volts because they will lose their normal value plus all the tax rebate value. But who knows, maybe they will retain their value well as the Prius has typically done.
     
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  4. I wouldn't worry about the HOV sticker.

    Even if Chevy end up selling about 30,000 Volt this year (which it won't), that is only 10,000 Volt in California. I am guessing it is more in the 21,000 to 24,000 range. At that amount, only 7,000 and 8,000 HOV approved vehicles. Out of that, I am guessing only 50-60% of the Volt owners will put that UGLY HOV stickers on their brand new Volt. So, only 4,200-4,800 stickers will be issued for the Volt.

    Now, Pip will probably end up selling about 10k cars this year and probably 60% of them are in California. That is 6,000 PIP qualifying for the HOV sticker. So far, just about every PIP has the HOV sticker (one of the most likely reason to buy it). So, 40K sticker will last a while...
     
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  5. Ford's Energi models and Accord Plugins won't be hitting the market with significant volume until 2013 at earliest...

    The program ends on dec 31st, 2014. So, I seriously doubt that 40,000 stickers will be gone by then...
     
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  6. I think they want to scale up production to get to better cost savings as fast as possible...the competition is coming fast and selling at a loss to get market share works. Same thing the Prius did at first...

    MrEnergyCzar
     
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  7. There are other markets around the world where the Volt would achieve decent sales, but is currently not sold there. Might have to privately import them to jurisdictions outside America.
     
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  8. Couldn't those buyers get Vauxhall Amperas instead?
     
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  9. @Nick: The Opel/Vauxhall Ampera is not sold in the States, only Europe. And to the best of my knowledge, the Volt is sold only in North America, Europe, and China.
     
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  10. We're still waiting for the Volt to come to Australia.

    On a different note, one of my blog readers who bought a Nissan Leaf in Australia was discouraged by a Nissan dealer. I think they tried to sell him and his wife a SUV. They had to visit another dealer. In fact, the Leaf was not advertised upon release. I also experienced similar resistance from a Nissan dealer and when I went to a Mitsubishi dealer to inquire about the i-MiEV, the sales person seemed confused and had to go to his office to work out what an i-MiEV was. It's like you almost have to beg on your knees if you want to buy an EV in Australia. The car makers have no excuse when they say they can't sell EVs.
     
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  11. i think they will have a viable long term market. flooding the market with dirt cheap leases is a good ploy if the product has the cajones to deliver on its promises.

    this builds a loyal customer base with high probability of repeat purchases if the Volt performs or at least a life long "plug purchaser" if the Volt doesnt
     
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  12. Cheap leases are a good idea to promote the Volt. People driving this car are not only very satisfied, they become advocates. And, in my mind owners of the Volt do a better job at selling the concept than the local dealerships, or the media.
     
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  13. Here is reason why Volt will sustain the sales on its own: The good combination of "green" and "Performance"...

    http://www.sfgate.com/business/article/Car-rankings-new-twist-3845798.php#photo-3414143
     
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  14. I glad that Chevy is selling the Volt in significant numbers. I bet lots of automakers are looking at the Volt's plug in electric drive train with gasoline generator now since it may be the only way to significantly increase C.A.F.E while maintining a decent size. Liek Bob Lutz said the electrification of the automobile is going to happen.
     
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  15. Maybe. Since the incentives have gone, there obviously won't be the big push from dealers, but September typically has higher sales than summer months. The big thing going for it is that the more Volts there are out there, the more people see them. When people see a neighbor, friend or co-worker with a Volt, they will consider it for themselves. In 2011 Chevy sold 7671 Volts and so far this year 13497 so 2831 represents a 13.3% increase. The way I figure it, that represents 13.3% more exposure. Without the promotion sales might have been about 1950 so only 9.6% more exposure. My prediction is that this event will result in 3.7% more sales in the coming months.
     
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