GM's Chevy Volt Should Help Recapture Market Share

This seems like the kind of thing that could get more people into GM (GMGMQ.PK) showrooms and help them recapture lost market share, even if most consumers do not purchase the new Chevy Volt, due out in late 2010.

According to an Associated Press story today GM announced that the Chevy Volt rechargeable electric car should get 230 miles per gallon in city driving, more than four times the mileage of the current mileage leader, the Toyota Prius.

From the story:

“The Volt is powered by an electric motor and a battery pack with a 40-mile range. After that, a small internal combustion engine kicks in to generate electricity for a total range of 300 miles. The battery pack can be recharged from a standard home outlet.”

Despite a hefty initial price tag (expectations are ~$40,000), the car could still be cost effective. Why? According to the story, “If a person drives the Volt less than 40 miles, in theory they could go without using gasoline.”

If we want to reduce our use of foreign oil in a meaningful way, this is exactly the kind of innovation that could do it. Not only will less of our money go to the Middle East region, but we will be reducing pollution and Americans will be able to keep more money in their pockets by saving on the cost of gas. Count me as very much looking forward to the launch of more electric cars in the United States.

Disclosure: No positions

Comments

[Mad Hedge F...:]

ncv. GM says that its new Volt hybrid will get an unbelievable 230 miles per gallon for a 300 mile range when it is introduced at the end of 2010. The $40,000 car will use no gas at all for the first 40 miles a day, which covers two thirds of all American drivers. At three cents a mile, this will give the average driver of 15,000 miles a year a $450 annual fuel bill. By the time the car hits the market, seen by many as the troubled car maker’s lifeline to the future, the Prius will have been on the market for ten years. Toyota’s current $22,000 benchmark competitor gets 50 miles/gallon, giving you a $900 a year gas bill at current prices, and has a huge quality advantage. The problem for GM is that by the time the Volt comes out, Toyota will have brought its plug in version to the market, which will deliver the same performance at half the price. Nice idea, GM, but you’re 30 years too late.

Aug 11 12:50 PM

[simpsonj:]

Ummm...sorry but that is not quite right. The prius will only run about 8 miles on pure electricity before the internal combustion engine kicks in to DRIVE the vehicle. The volt, in contrast, is always driven by electricity even if the electrical current is generated by the small internal combustion engine. Nowhere near the same performance on the two vehicles -- with or without the plug. Two different technologies one -- as you put it -- already 10 years old and yet the price has only come down to 22k while the other is leapfrog ahead and starts at 40k. GM said today the volt is still on track for 2010 delivery so I'm not sure what toyota is delivering ahead of the volt. And since GM already has the next gen of the volt under development you might soon find that toyota will be updating the prius to try and catch gm. Now wouldn't that be a switch...


On Aug 11 12:50 PM Mad Hedge Fund Trader wrote:

> ncv. GM says that its new Volt hybrid will get an unbelievable 230
> miles per gallon for a 300 mile range when it is introduced at the
> end of 2010. The $40,000 car will use no gas at all for the first
> 40 miles a day, which covers two thirds of all American drivers.
> At three cents a mile, this will give the average driver of 15,000
> miles a year a $450 annual fuel bill. By the time the car hits the
> market, seen by many as the troubled car maker’s lifeline to the
> future, the Prius will have been on the market for ten years. Toyota’s
> current $22,000 benchmark competitor gets 50 miles/gallon, giving
> you a $900 a year gas bill at current prices, and has a huge quality
> advantage. The problem for GM is that by the time the Volt comes
> out, Toyota will have brought its plug in version to the market,
> which will deliver the same performance at half the price. Nice idea,
> GM, but you’re 30 years too late.

Aug 11 02:19 PM

[JPSmith:]

And the electricity to charge the Volt batteries is free?

The economics for the Volt will be terrible -- until Government Motors gets its sugar daddy (the Govt) to institute "Cash for Clunkers II" wherein vehicles getting >100 mpg receive a $10,000 taxpayer-funded subsidy.

Aug 11 03:58 PM

[William Taylor:]

The Volt will be a "shocking" failure. You could not even give me one.

Aug 12 08:46 AM

[slvrfx29:]

GMGMQ.PK is the ticker symbol representing Motors Liquidation Co, which controls the assets that are to be liquidated after General Motors (scheduled to go public in Q2 '10) emerged from bankruptcy.
While the technology may someday be useful, this vehicle is overpriced, has a very limited range, will never be profitable, & is really nothing more than a PR ploy.

Aug 12 09:15 AM

[quick:]

A lot of people like to bash all the auto makers, especially GM, for all the mistakes they've made in the past, but I really think that a car like the Volt is the future. That $40,000 price tag is not counting the $7500 tax credit the govt. is going to give you, so the price really comes down to $32,500, which is still high, but a lot more doable. For everyone who thinks it's a waste of money for the govt. to be giving away all these tax rebates for fuel efficient vehicles, would you rather have people continue to purchase gas guzzlers and keep sending all of their money to OPEC? $7500 may seem like a lot, but I bet the US makes it back with a lowered trade deficit because we'd be spending less to import oil. Not to mention places like Iran and Saudi Arabia are going to have less money from us to give to Al Quida. That's a good thing in my book.

You guys can bash GM all you want, but more than likely there's going to be a Chevy Volt in my garage within the next few years!

Aug 12 09:51 AM

[jerrydd:]

As GM got paid to develop, build the Volt I'd expect it to be quite a bit cheaper. While series hybrid and better, series/parallel hybrid with a much smaller engine of say 35hp that can be clutched in for freeway driving, is the best choice of future car drives as it needs no transmission, very eff, low parts counts., costs.

There is no reason the Volt is priced so high. It should be under $30k and drop after a yr or 2 to no more than an ICE.

There are others that will kick GM's but if they don't start getting things right.

Aug 12 10:55 AM

[Gosh-137:]

Mr. Brand, please do not use GMGMQ.PK as a ticker symbol for the current General Motors Company. They do NOT have stock yet.
Also another responder mentioned "GMGMQ.PK is the ticker symbol representing Motors Liquidation Co, " No it is not. To attempt to avoid confusion about the "old" General Motors CORPORATION and the "new" General Motors COMPANY" the old GM's name was changed (as mentioned by the other responder) to Motors Liquidation Corp. The ticker was also changed to MTLQQ.PK.
I have been finding out there is still a lot of confusion over this situation.

Aug 12 11:34 AM

[Gandalph:]

How can so many people be taken in by this hype? Am I the only physicist reading these electric car claims? If a significant fraction of the automobile fleet became plug-in, the entire electric grid would have to replaced, with resources that we will never have.

Aug 12 01:44 PM

[User 169775:]

I don't think the Volt will be very practical.

First of all, it has that huge battery pack down the middle of the car, which means the back has two bucket seats-- No car-width bench seat like a regular sedan. That means the Volt will seat 4, not 5.

People looking for a family car may reject it just for that reason alone.

Then you got the T-shaped battery pack extending well into the trunk space, and the bucket seats don't fold down, so you are stuck with a tiny trunk.

In comparison, the Toyota Prius seats 5 and has the versatility of a hatchback with fold-down rear seats, and costs $10,000 less (accounting for the $7500 Volt tax credit).

The Volt is going to suffer the same kind of impracticality that doomed the first-generation Honda Insight.

I'd rather buy the $49,000 Tesla Model S (which also qualifies for the $7500 tax credit). It seats 5, and costs less to maintain because it has no gasoline engine like the Volt, and you can order a Model S right now.

Aug 15 12:15 AM