Chevy Volt Fail?
Andrew is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
When I first heard about General Motors (NYSE: GM) concept for the Chevy Volt, I became very excited. I believed that this car could be the future of automobiles. It was back in 2008 when gas prices were well over $4 a gallon. The thing that excited me the most was the possibility of almost never having to purchase another gallon of gas again. My current driving conditions were well within the estimated 40 miles of electric range ensuring that I would never have to pay the pump again. Now that the Volt completed its first production year, should it be considered a failure?
There are multiple arguments that can be made for and against purchasing the Volt. Sure, after purchasing the vehicle you feel better about your environmental impact and the price savings at the pump. But is it really worth all the cash you just shelled out? Chevy lists the price of a new 2012 Volt as low as $31,645, however after it is all said and done, you will probably be spending closer to $40,000 for a new off-the-lot Volt. Compared to Toyota Motor’s (NYSE: TM) plug-in hybrid, Prius, which prices around $32,000, that is a lot more dough to dish out. Both vehicles qualify for a $7,500 federal tax rebate, as well as varying state rebates, unless you are a Chevy Volt owner in California. California offers an additional $5,000 tax credit for vehicles they deem are “Advanced Technology – Partial Zero Emissions Vehicle.” The Toyota Prius qualifies for this credit thus reducing its price an additional $5,000 under the Chevy Volt.
Recently, the Chevy Volt has come under fire for a possible design flaw with the battery system. After a collision a couple of the Volt’s battery packs have caught fire, causing an inquiry to be performed by the US Government. General Motors has been so concerned with the potential public backlash they offered to provide a free loaner vehicle or even to completely repurchase the Volt from customers if they were concerned.
Despite a high price, a minor design flaw and sales numbers that aren’t where GM would like them, should the Volt be considered a failure? I don’t think so. It is too early to label such an innovative technology as a failure. Sure there have been bumps on the road, but they haven’t been large enough to derail the Volt’s progress. I think eventually the Volt will become a cornerstone brand for Chevy; it will just take time to get there.
Andrew Dillard does not own shares in General Motors or Toyota, but wishes he owned a Chevy Camero.