MARINA, CA – The recent $5,000 price cut on the Chevrolet Volt in the U.S. makes the plug-in electric vehicle more competitive against newly discounted rivals in the segment, but it also reflects new manufacturing efficiencies and responds to consumer shopping habits, the brand’s top marketing chief says.
“The market dynamics are changing, there are savings (we) have identified and then there are consumer habits at some of the shopping websites,” General Motors Vice President Chris Perry says. “Their cutoff has always been $35,000 and below, and we were always above that.”
So when customers were shopping for electrified cars, their searches rarely returned the Volt among results, often leaving the car completely off their shopping lists, Perry says.
GM cut pricing on the ’14 Volt 13% to $34,995, compared with $39,995 for the ’13 model. Factor in federal tax credits of as much as $7,500, and the extended-range EV can cost $27,495.
The move came shortly after Nissan slashed stickers on the ’13 Leaf EV 18%, or $6,400, to $28,800 from $35,200. The auto maker said that since ending imports from Japan with the launch of production this year in Tennessee, Leaf manufacturing costs have dropped and the car no longer suffers from an unfavorable yen-dollar exchange rate.
Honda recently cut the lease price of its Fit EV more than 30% and Ford has taken the price of its Focus EV down 10%.The Toyota Prius PHEV, arguably the Volt’s principal competitor, has seen incentives on its hood as high as $6,500 in some areas of the U.S. this year.
Auto makers are slashing prices steeply to stimulate demand. According to WardsAuto data, only 47,452 EVs and PHEVs were sold in the U.S. through July.
Perry declines to say how the Volt’s new pricing will affect its profitability.
“It has always been about showing (consumers) the technology we can bring to the market,” he says. “That car, in my mind, is still the most technically advanced in the industry with its EREV technology.”
The Volt travels about 38 miles (61 km) on battery power, depending on driving styles and environmental factors. Once the battery is depleted, an internal-combustion engine acts as a generator to provide another 250 miles (402 km) of electric range. After that, the driver needs to plug in for more juice or refill the gas tank.
Perry does not detail the Volt’s production-cost savings, saying, “It’s not just two or three parts, it’s all elements of the car.”
Generally speaking, he adds, cheaper EVs are a good sign for the industry. “The segment still has a long way to go, but the advances we’ve been able to make in the space have been significant,” he says.
GM expects the ’15 Volt will cost even less.
Perry also reiterates comments made last month by GM Chairman and CEO Dan Akerson, who called the important rollout of the redesigned-for-’14 Chevy Silverado and GMC Sierra large pickups the smoothest launch in GM history.
“It’s going really well,” Perry says, characterizing the July recall of 843 of the newly built trucks for an airbag issue as a “minor” glitch.
“And it’s been a nice sell-down of the ’13 models. That’s always the tricky part,” he says.
Perry expects by the end of August to have more ’14 models of the pickups on dealer lots than ’13 models.
The faster model-year inventories flip the better, because GM must discount the older pickups, while new ones will sell with very few incentives. The auto maker also plans to earn more money from the new truck, because it will stock more crew cab models, which the market presently favors.
Speaking to WardsAuto on the sidelines of a media preview here for the ’14 Chevy Corvette Stingray, which is completely redesigned to make it more competitive against leaders in the segment, Perry says success of the sports car will be its overall impact on the Chevy brand rather than units sold. GM delivered 14,132 Corvettes last year and has not sold more than 20,000 in a single year since 26,971 units in 2008.
“This is the best representation of performance, design and technology that we build, and it’s about that infusion of imagery and excitement to the brand,” he says.
Perry admits the seventh-generation Corvette stands as a more legitimate halo car for Chevy than ever before, but GM plans to selectively increase its marketing of the car.
“We’re looking to expand the owner base to a younger audience, and go after those guys who haven’t put it on their shopping list (and) are more apt to go European,” he says. “This is as good as anything out there. It used to be a good car for the price. Now it is flat-out a great car.”
