Study Finds Chevy Volt Isn't Cost-Effective

EVbattery Development of the upcoming Chevrolet Volt has been a bright spot amid some bad times for its parent company, but should GM sacrifice future gas-powered cars and trucks for this plug-in hybrid? A new study suggests the answer is no.

The Carnegie Mellon University study suggests that a plug-in series hybrid like the Volt with a range of 40 miles on electricity isn’t an economically prudent choice for consumers, despite the fact that the car hasn’t been priced yet. It’s expected to cost between $35,000 and $40,000. Jeremy Michalek, the chief engineer behind the study, said he believes there would be no way to recoup the cost of the batteries, even if the driver never used a drop of gasoline over the Volt’s lifetime. 

According to the study, the Volt’s steep price will hurt its chance of displacing the Toyota Prius, which starts at $22,000. 

The study reviewed the cost of a single car’s batteries (which could be $16,000), recharging costs and CO2 emissions created both in making the battery pack and in generating electricity for home or commercial recharging. The study is also extremely skeptical about the long-term lifespan of the massive batteries required in the Volt. K.G. Duleep of Energy & Environmental Analysis Inc. said such batteries only last seven years in lab tests. GM has said it hopes to give the Volt a 10-year/150,000-mile powertrain warranty to alleviate such fears. 

The cost-benefit of buying a Prius is still similarly debated, but despite relatively high upfront costs Americans buy that car in droves; it was the 13th-best-selling vehicle in the U.S. in January. 

What this study fails to factor in is consumers’ emotional and ideological reasoning in their purchases. In green-centric areas like northern California, the ultra-clean Volt might be a certified hit among car buyers used to paying inflated prices for homes, who are willing to hunt out all things environmentally friendly. 

A Volt would also be easily recognizable, loudly telling the world that you care about the environment and America’s independence from foreign oil, just by driving it around town. Factor in this emotional element, and we think GM’s stated goal of selling 10,000 Volts in 2011 and 60,000 in 2012 seems more than reasonable. In the end, the efficiency of batteries in a lab might not matter on the street or in a driveway.

GM Volt Cost May Limit Value to Drivers, Study Finds (Bloomberg)

Comments 

frank

A 40 miles electric car shows how incompetent GM is as a car maker considering we had electric car a 100 years ago. Home made electric cars can go over 200 miles per charge. The bail out money should go to the employee so they can transition to a new job and GM should be allowed to go bankrupt as they fully deserve.

Frank,
But those electrics can't do a cross country road trip without recharging. There's a lot to be said for that among the mainstream car shopper.

Ziggy

It took a study to figure this out. I believe that I made this point a few times in previous posts about the Volt.

kerry bradshaw

Cars.com is a little behind the curve here - GM Volt engineer has already ripped this study to shreds, starting with the study's totally ignorant claim that GM's batteries are costing $1000 per kilowatthpur. Not only is that assumption off by a large amount, by the time the cars arrive in volume it will be even more
inaccurate. The study's results are largely depdendenty upon battery costs, thus, right off the bat, the study is hopelessly inept and invalid. There are other major blunders by the
not-too-bright authors of the study concerning gas avoidance, etc, that cannot be explained by sheeer incompetence.

C

But only 40miles.

The RAV4 EV got about 80 to 120 miles 12 years ago already.

DodgeFan

So did the EV1, but notice neither is produced anymore. I talking about the all electric RAV4. The Volt is where the first generation Prius is. A step forward that will eventually make economical sense. Remember the Prius and hybrid tech is now mainstream. It use to not be so.

H

Making the point and proving the point are two different things and it's so easy for studies to make claims without having to prove their claims.

Technology isn't free and everyone who bought iPhones, HDtv's, Blueray, etc. when they first came out can attest to that. And last I checked, GM was not touting the Volt for the economics.

Furthermore this study is not an indictment of the Volt but an indictment of the plug-in hybrid (which truly is a misnomer) in general. What the study does not quantify is the savings these "plug-in hybrids" will provide in terms of oil independence from foreign nations.

Original sheth

As someone already said, the premise of the study is based on their assumption that the batter costs $16k which GM says is inaccurate. In addition, the study chose to ignore the tax breaks already signed into law.

Those talking about the EV1 and RAV4 are missing the point. The Volt can be driven for HUNDREDS of miles. 40 miles is the range without using any gas. While the EV1 had more of a total electric range, the car was tiny and impractical and could not be used once the batteries ran out of juice. I believe the EV1 took many hours to fully recharge as well.

rsbaker

Frank,
It's clear that you haven't clue what you are talking about. First of all the Volt is and Electric car that has a small gasoline engine that will extend the range to mor than 400 mile, after used all of the 40 mile range in Electric only mode. we do not know what the car will finally cost but what ever it costs it will receive $7500 tax credit. This will certainly keep it in range of the buying public. The battery range is limited to 40 miles per charge in order to extend battery life. GM says batery will never go below a 30% charge. The old Gm EV-1 had a 90 mile range but it was a 2 seater. finally 70 percent of American commuters and probably close to 100% of European drivers drive less than 40 miles to and from work or other trips so it is very likely that a Volt or Ampera and future Cadillac Converj owner will rarely ever buy any gasoline. GM say 2nd generation Voltec vehicle will certainly cost less than the first.

ziggy

GM will probably go under before we'll ever know the total long term costs of this car.

C

Sheth,

It seems like you are the one missing the point.

It is still a hybrid. We wanted an electric car, not a hybrid/electric car wannabe.

H

We want an electric car? Who is we, C? I and the vast majority of Americans who drive would not find the compromises of an electric car acceptable. Maybe in the long term these compromises will resolved with new technologies but the EREV is the best solution at this time and until an electric storage device can mimic the energy density of gasoline.

Ziggy

H -
I want an electric. I want the Mitsubishi iMiev. 100 -120 miles per charge is good enough for me.

skinner

I am tired of hearing about the "40 mile range" of the Volt. The range is virtually forever, as long as you can find a gas station roughly every 400 miles - shouldn't be too hard virtually anywhere in the civilized world.
Is it high priced now? You betcha - and so were microwaves, VCR's, DVD players, home computers, etc when they first came out. GM is finally doing somehing right - give 'em a break!

Juan Carlos

the prius is also a joke when it comes to money. if you are do it for the greens, is by far the worse think you can do in order to save money. you do it for mother earth and not to give money to exxon or hugo chavez. and you keep americans working.

Steve

The Volt won't save GM. By the time it hits the market or is on sale for a few years someone else will have something cheaper and more reliable and with a better battery. It's been the trend for the last 20 years. Gm stays focused on one thing while the world goes on by.

Juan Carlos

this isn't any different than solar panels. if one does it for the money, forget it. but if you do it for mother earth, etc, then go for it. the day will come when it will be worth it, but that day is not today in the next few years.

Original sheth

steve:

The car will be on sale next year. Also, GM never said this car was supposed to "save" them. They have other models like the Cruze and Equinox and Camaro coming out that will be higher volume that this car and more likely to be profitable. The Volt is about changing GM's image and establishing know how and a supplier base right here in the US. Instead of making vague claims about competitors who will leapfrog GM maybe you should offer specifics. Toyota has said they plan to have 150 plug ins (with much shorter range) available late this year to loan to universities. They said they will use that as a trial to "study" the concept of plug ins further. Doesnt sound like they will have anything available to buy for years.

Ziggy

I guess the question that every automaker should ask is "Why is Kia and Hyundai turning a profit during a tough economy?" My guess is price of vehicles. If this is the case and we probably won't get an economic turnaround for about a year or longer - I don't see a $35k Volt, $20k+ Cruze, Equinox and Camaro as really helping GM (and the same holds true for other automakers). I foresee GM losing another 30 billion in 2009.

Original sheth

ziggy,

I dont believe Hyundai has posted any financial results yet. They have not announced looming losses like Toyota and Nissan but I beleiev the jury is out on whether or not they will be making money. Hyundai has done better than many in recent months, but their incentives are sky high. In fact, they have the highest incentives out of any Asian brand.

DodgeFan

Hyundai had a gain one month because it advertised on t.v. that it was willing to back risky buyers. Take the hit. Some of those buyers aren't risks but obvious anexious due to the times. So pschyologically those ads worked. Technically the Volt from what I heard and other posters have said is an electric car. The gas engine charger works indirectly with the electric propulsion system. It charges the batteries that run the electric batteries. I see the gas engine as replacable with fuel cells or whatever in the future.

Paul

Once GM is gone,where will the few Volt buyers get batteries? Oh yea,when the high tech electronics break down in a couple years you wont be able to buy those either,so the cars will be scrapped before the batteries expire.

Original sheth

Dodgefan:

You are correct, the Volt isnt a hybrid because it doesnt use a combination of a combustion issue and electric motor to propel the car. It only uses electricity to propel the car.

Paul:

Thanks for the insightful comments.

Toyota Tom

The Volt DOES have a gas engine so it's not a pure electric car. How many of these have been sold? Zero as it's still a pipe dream for GM. Be smart and buy Toyota.

Original sheth

Toyota:

A hybrid is a car that uses the engine AND electric motor to propel the car. In the Volt, the engine acts as a generator but does not drive the wheels. Its an extended range electric car.

Many cars being discussed (including Toyota's plug ins) are not for sale. Automakers are all trying to show whats coming down the pike.

Tulley

"An extended range electric car" - What crap as the car has a gas engine too! You should go work for GM marketing, then again you'd soon be looking for another job. Bye-bye GM!

The Prius was designed and built by a company making billions in profit per quarter. It was also the first mass production hybrid, and sold well since it was the new fad. Just like the iPod or the iPhone.

Sales are now down... they are offering incentives on them!

The Volt is being designed by a company that lost $30bn last year, to be an 'also ran' car competing with the Prius, the Fusion hybrid, and other alternatively powered cars.

With GM's reputation for poor quality and execution, and their lack of any market penetration with the granola and Birkenstock crowd who would buy this alternative type of car, I'd be surprised if they sell 5000 units per year.

The best thing for GM would be bankruptcy, a reorganization with new labor contracts, and a concentration on the high volume, inexpensive cars and trucks that the fans they have left would actually buy.

K

Sheth said: In the Volt, the engine acts as a generator but does not drive the wheels. Its an extended range electric car.

Sheth had said: Instead of making vague claims about competitors who will leapfrog GM maybe you should offer specifics. Toyota has said they plan to have 150 plug ins (with much shorter range) available late this year to loan to universities. They said they will use that as a trial to "study" the concept of plug ins further. Doesnt sound like they will have anything available to buy for years.

Sheth also said: Those talking about the EV1 and RAV4 are missing the point. The Volt can be driven for HUNDREDS of miles. 40 miles is the range without using any gas. While the EV1 had more of a total electric range, the car was tiny and impractical and could not be used once the batteries ran out of juice. I believe the EV1 took many hours to fully recharge as well.

C said:The RAV4 EV got about 80 to 120 miles 12 years ago already.

Here is my opinion:
The RAV4 EV only needed 5 hours to recharge. Meaning that it needed to be charged when you are going to bed, just like when you need to charge your cell phone.
What Sheth said in one post that the Volt is an Electric car and a hybrid car in the other post is simply contradicting him/her/itself.

Original sheth

K,

one problem: You never showed where I contradicted myself and called the Volt a hybrid. Nice accusation, but you didn't bother to back it up with anything.

Original sheth

Tulley,

I hate to try and confuse you with details but the Volt is an electric car because electricity moves the car. The gas engine gives it a range beyond a comparable electric car. Once the gas runs out the engine cannot generate power and keep the batteries energized. In a hybrid the electric motor provides all power under certain conditions and assists the engine under certain conditions. In other situations the electric motor doesn't do much of anything.

Charles Thompson

But it's so horrendously UGLY ! Why carry through such ugly lines from the horrid Cadillac range. One of the posters here mentioned this vehicle is at the stage of the Mark 1 Prius -- except that even that car had nicer lines.

Original sheth

charles:

I think the Volt is more attractive than the Prius (versions 1 through 3) and the Insight.

K

Sheth,

Play on words is your specialty to begin with, so let's just not get there.

What the hell do you mean when it is not a hybrid, not an electric car and not a gas powered car?!

Will Bain

There is a huge misunderstanding (mostly by sheth) about the meaning of the term "hybrid".

There are parallel hybrids and series hybrids. The Prius is a parallel hybrid, since gas and electric motors both power the wheels. The Volt is a series hybrid, since gas engine generates electricity, which then powers the wheels.

Of course, some say the Prius doesn't really count as a true hybrid, because you can't plug it in. Ultimately, all the power comes from gas, so there aren't really multiple energy sources to choose from. This argument makes sense to me.

The Volt will be a true hybrid; you will be able to use strictly gas, or strictly electrical from the power mains.

BENTLEY DRIVER

How many of you have cash in hand - right now to put your money where your mouth is?

$40,000? How many of you have that cash? And whose to say the dealer is not going to put on a DEALER MARKET FEE of $8,000 because there is "such demand for the car" like they did with the Ford Thunderbird which tanked because the price was not worth it at $40,000 let alone $48,000.

$40,000 for a Volt - even with a $7,500 credit (which you can get sales tax credit on buying ANY new car) is way beyond the reach of many in this economy - including the granola and Birkenstock crowd.

For $20,000 you can buy a LOT of other great used cars and not have to worry if there is some plug in at your destination.

Trainer

When the oil supply is disrupted by terrorists or a hurricane you can sit in a gasoline line for hours and stare at your walnut dashboard and fancy wool carpeting while Volt drivers easily get around until the crisis passes. That's when you'll understand why a Volt will be worth every penny.

Original sheth

K:

"What the hell do you mean when it is not a hybrid, not an electric car and not a gas powered car?!"

Its an ELECTRIC CAR. What part of that is confusing you? Is that a play on words? Its powered by an ELECTRIC MOTOR ONLY. I don't know how to be any more clear. GM has never called the car a hybrid.

Will Bain:

If you use the term hybrid to mean a vehicle that has batteries and an engine your definition makes sense. Hybrid cars (until now) use a combination of electricity and internal combustion to turn the wheels. In that sense, the Volt is not a hybrid. The gas engine is not coupled to the transmission and does not propel the car.

Bentley:

the Volt has not been priced. We have heard estimates from $35k to $45k and usually people who don't like the car are quick to use the higher estimates. Commenting about an unconfirmed price is pointless. GM has not said the car will be $40k so dont use that figure as if it's fact. The Volt is sharing components with the Cruze (including engine) in order to reduce costs. This is not a totally unique vehicle like the EV1 or even the Prius.

Original sheth

Bentley:

One more thing, the tax break for electric vehicles is not the same as the tax break for interest passed by Congress. The latter is MUCH smaller than $7500 and applies to any purchase before 11/09 I believe. Any plug in would be eligible for the large tax break but the Volt is likely to be the first to get it. Unless, that is, GM still launches the Vue plug in.

Chuck

Chevy Volt is proof that Chevy, and their apologists, are what sunk them as a brand. Out of touch, behind the times, not thinking smartly, and instead of really innovating to change the more ignorant among American population (i.e. GM's target demo) public perception, i.e. that gas is in finite quantity, they should be making strides to eliminate gas. As it stands, the Volt is not the solution, or near it, and is bound to the footnotes of auto history. Never sure if it's funny or just sad those who do the "I could drive a Volt cross country" meme, typical blowhard American tomfoolery of vacuous nothing because, those idiots who say that, DON'T, they never go anywhere most of them, or they could rent a gas powered car if they had to. The majority of idiots that would buy a Volt and think they're doing something like a Prius only go five miles to the store or 20 miles. Reality 101, a tough thing to swallow by the 'Merican yeehaw we loves are gas' types is that, you don't NEED a gas powered car, had to break it to ya, but you never GO more than 40 miles. And a perfectly decent 100 mile electric car could be made by chucking that gas powered engine. You never go more than 40 miles so you're just using some wishy-washy excuse logic to try to make yourself feel better. If you'd get over yourselves and realize reality (tough to deal with, I know) you'd see the Volt is just silly. Saying "but what if I..." would be like buying an airplane, just in case you were going to learn to fly. Are you? No? Why did you buy it? OH, but what IF you decided to get your pilot's license. YOU'RE NOT! So stop trying to convince yourself of things you're not doing, it's sad, and tired, and you're disingenuous.

cody

this will be an interesting car, but i wonder what kind of fuel economy a similarly configured car would get if it relied less on the huge battery and more on the small gas generator to provide the electricity to power the electric motor....and how much cheaper it would be.

think about it. an electric car with a smaller battery pack, with a battery range of say 10-15 miles. after the batteries deplete, a small, efficient gas/diesel generator kicks in, providing the electricity to power the electric motor and recharge the batteries.

if the car could return fuel economy in the 60mpg-range it would be a hit. i would guess the smaller battery back would cut cost and weight quite a bit. i wonder how a hybrid with the electric motor being the primary propulsion source would price out compared to today's hybrids.

cody

Chuck,

Just read your post...wow, amazing. Where are you from???

Anyway, I must be an anomaly within the American population. I drive an average of 10 miles a day during the week, but then I drive over 400 miles every other weekend to visit family in San Antonio. Funny thing, I see plenty of other people on the interstate...so they must be anomalies within the population as well.

America is a BIG country with quite a bit of distance between its cities and towns. Many Americans actually visit family, friends, take weekend getaways in those other cities/towns, or drive their own cars when we go on vacation.

My driving habits, and everyone else I see on the interstate, is the reason a car like the Volt makes sense for Americans. Don't make statements about a country and a people you seem to know very little about.

Hybrit

Cody, you nailed it.

cody

hybrit,

thanks.

i really think that the most significant thing about this hybrid is that it is really an extended range electric vehicle.

i was always curious about why this approach wasn't taken in the beginning, as it seems much simpler engineering-wise than trying to have the gas engine and electric motor share the burden of propulsion as with the current hybrids. once battery costs come down, this type of car should be cheaper to produce as well.

Skinner

Cody, you are quite right about the "extended range electric vehicle" idea being the most efficient hybrid concept. Why wasn;t this taken in the beginning? Probably because horsepower addicted drivers get much more of a rush with gas AND electric both propelling at the same time than with just electric alone.
Prius aside, why do most hybrids get so-so mileage? Because the gas engine is way too big and the name of the game has been horsepower and not economy.

Hybrit

The first hybrid car was designed and built by Dr. Ferdinand Porsche in 1901. It incorporated electric motors in the wheel hubs and was propelled by a small internal combustion engine spinning a generator to charge the battery pack. Yes Sheth, that car and the Chevy Volt are hybrids (series hybrid), as others have already pointed out to you. The GM EV1 offered a range extender option with a motor and generator in a trailer that hooked up to the back of the car.

K

Using gasoline to recharge a battery and use the battery to motivate the motor and powering the vehicle. If that is what you call an Electric car not a hybrid, you have serious issue with understanding what is an electric car!

ugr

Most of the people I see saying so much about the failure of the volt seem to hate GM in general anyway, so for those people it doesnt matter what they make since all they can see is the faults of GM.

About the Volt being a hybrid I admit I dont know a whole lot about hybrids in general, but how I understand it a Hybrid is a type of assist power. If the gas engine was also attached to the drive train then yes it would be a hybrid, but as it stands the electric motor(s) is(are) the only type of power source driving the vehicle. Lets say you have a normal vehicle. Does it suddenly become a hybrid if your able to make gas with an electric motor, and you attach this to your vehicle?

Jack

Wow! We are re-inventing the electric car! What will we do next? Invent the wind turbine and solar panels. What amazing new concepts! Having the government subsidize bad ideas with the public tax money is another poor idea. VW already has a 3 cylinder diesel that already out performs any electric powered gas generated car. You know it is a bad idea if the government has to pay to make a bad idea seem attractive.

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