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Chevy Volt Price Drop Hints At New Opportunity for Clean Fleets

| Thursday August 8th, 2013 | 0 Comments

GM drops price of 2014 Chevy Volt by $5000The electric vehicle (EV) world has been abuzz with the news that GM plans to drop the price of its 2014 Chevy Volt by $5,000, which will bring the starting price below $28,000 once tax rebates are factored in. That sounds practically irresistible if you’re in a household with a solid income and you’re looking to get your hands on a pioneering piece of all-American automotive technology that wins rave reviews from auto experts and ordinary owners alike. However, if you’re one of the growing legion of underemployed, underpaid, temporary and/or part time workers, buying a new car of any kind is becoming a pipe dream.

That’s a formidable obstacle to overcome, but the key characteristic of the Chevy Volt — its gasoline tank backup — puts GM in a good position to grow the business market for clean fleet vehicles, and that could eventually have a ripple effect on individual consumers.

A green fleet advantage for the Chevy Volt

When GM designed the Chevy Volt, it had range anxiety at the top of its collective engineering mind.

The solution was to install a full-sized gasoline tank in the vehicle along with an EV battery. When the battery runs low, the Volt automatically shifts to gasoline mode. Aside from paying attention to the gas gauge the way a normal person would, the driver never has to worry about running out of fuel.

That provides generous room for a learning curve while drivers adjust their habits to new EV technology. As a group, Volt owners quickly found that they could go for months, and in some cases longer, without using the fuel tank, simply by adopting a trip and charging routine that enables them to run exclusively off the battery (a similar trend has also been identified among owners of Ford gas-electric hybrids).

The advantage for clean fleets is pretty straightforward. Right now, a company that wants to transition its passenger vehicle fleet to EVs is going to see plenty of first-time EV drivers behind the wheel, which could make for a bumpy transition. Having the gasoline backup would ease the transition and provide the company with a window for training employees, planning routes, and developing a charging routine that fits its schedule.

Winning back reluctant buyers

As for enticing individual buyers into the EV market, the Volt makes a good introductory vehicle because, although it does have a gasoline tank, it does not have a gasoline engine. When the battery runs low and the fuel tank kicks in, it runs a generator that powers the Volt’s electric drive.

In other words, a Volt driver is always going to enjoy the performance quality of EV technology, even if they’re drawing from the fuel tank.

That still leaves open the question of EV affordability and the future of individual car ownership.  Earlier this week, GM Chief Economist Mustafa Mohararem took note of the trend toward lower rates of car ownership among young people.

Some obstacles to ownership for young people are the ongoing wage stagnation at the lower parts of the income scale, the aforementioned growth in temporary and part-time employment, and, as Mohararem notes, the burden of paying off student loans.

The availability of a used car (namely, the old family car) can also provide a significant disincentive to invest in a new vehicle, at least until the old one gives out.

Mohararem views the trend as more of a delay than a permanent crimp in the market. Whether or not that proves true, as more companies transition their fleets to EVs, more potential car buyers will have a chance to experience the EV experience firsthand, and that could make all the difference when the time to buy comes around.

[Image (cropped): Chevy Volt by Robert Scoble]

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