First shots fired in EV war

The new Chevy Volt will sell for $41,000 when it is introduced later this year. GM tells us the base car comes standard with navigation, five years of OnStar, Bose premium sound and more; what car-makers call 'nicely equipped.' (photo by Chevy)

There is major electric vehicle news this week as General Motors’ Volt took on Nissan’s Leaf EV in the pricing department.

Neither GM nor Nissan expects to make any profit on either EV for a long, long time, perhaps several years. Just the research and development costs and building all-new assembly lines for Volt and Leaf will cost their manufacturers billions. 

GM said their “extended range hybrid EV” low emission/high mileage base Chevrolet Volt will sell for $41,000 when it is introduced later this year. GM tells us the base car comes standard with navigation, five years of OnStar, Bose premium sound and more; what car-makers call “nicely equipped.” A fully-equipped Volt is expected to cost around $44,600. Remember, though, that’s before incentives.

That $41K tab is in somewhat stark contrast to Nissan’s recent announcement that their Leaf EV will sell for under $33,000. That’s an amount which, with federal, state and local incentives, might see its true base price drop to as low as $25,500 after those credits are applied.

So a base Volt, even given a buyer taking advantage of all incentives (including the $7,500 federal incentive), should tip the money scales very near $32,000. And that’s near the base price of Leaf before any incentives.

To make the cars widely affordable, and to get them out on the streets where the public can see them, we’re already experiencing what are probably the first shots fired in the EV Wars: both GM and Nissan will offer subvented leases on Leaf and Volt.

“Subvented” means the car maker picks up the difference between what the customer pays and what the car actually costs to make.

Both Volt and Leaf customers will be able to opt for a three-year, 36-month lease which will cost about $350 a month. Chevy Volt dealers will ask for a  $2,500 down payment and Nissan wants $1,999 down for the Leaf.

Lessees can buy the cars when the lease is up, which is different from GM’s highly-regarded and much-missed EV1 electric car, which was never sold, only leased to customers.

GM says they expect to sell (or lease) just 10,000 Volts in its first year of sales; Nissan has said they expect to ramp-up Leaf production to 20,000 cars annually for the U.S. in a couple of years.

But GM, apart from Volt’s high technology, edgy styling and oh-my-gosh interior, will be depending on one main thing to draw buyers from less-expensive “pure electrics” (like Leaf and Mitsubishi’s i-MiEV), and it’s called “range anxiety.”

It’s a new term in the auto world, but it means just what it says: people driving cars which use any fuel other than gasoline worry about how far they can go without running out of that fuel.

Here’s where Volt starts to sound like a great idea: While Nissan predicts a 100-mile range per charge for Leaf, GM says their car will have a range of around 600 miles per gasoline tankful, that gasoline powering a small engine which keeps Volt’s battery charged.

Volt will also charge its battery by plugging into an electric outlet, so it appears an owner could have a tough time running out of range in one.

Most car-makers plan on their initial EVs being second or third commuter-type cars. And because the average American’s round-trip work commute is said to be 40 miles or under, a 100-mile range should allay any range anxiety. And Leaf should be perfect for that and similar short-haul uses. Leaf also has the cachet of being completely emission-free; the car has no fuel tank or filler nozzle.

But Volt, at its price, size and features, is clearly being aimed at buyers as a primary family car. That $32K, which an incentivized base-level Volt may actually cost, is right smack dab in the middle of the biggest part of the marketplace, where Taurus, Camry and Accord all make their homes.

GM first called Volt an “extended-range hybrid” because of Volt’s on-board gasoline engine which is used to keep Volt’s battery charged.

Because there is no direct connection between the gasoline engine and the electric drivetrain, GM decided they could legitimately call Volt an electric vehicle. It seems they’ve gotten their way even though in many minds the issue is still somewhat confused. GM has seen the media pick up on the EV claim (probably because “extended-range hybrid” is long and hard to explain in articles), making their EV claim, so far, successful.

Volt seems more-or-less an interim vehicle until GM comes up with their own pure EV and we’d love to see that product.

Now that we know Volt’s price, it makes it easier to see where GM is aiming this new car and will probably give the competition some fodder when it comes to the cost of ownership.

Prius won’t be built in the U.S.

Through 2008, about 600,000 of the 1 million Priuses sold worldwide were bought in North America, the bulk of them, it sometimes seems, in Santa Monica. Now, Toyota has postponed plans for building the Prius in the US.

And the delay could be for as long as six years.

Putting-off a U.S.-built Prius is no big surprise; the very Mississippi plant where Toyota planned on putting these cars together has seen its own construction stop-and-start due to the worldwide recession (last month, Toyota announced construction has resumed on the plant and the factory will produce Corollas starting in 2011).

As the world gets greener, but the recession hangs on (and maybe returns), even the building of the world’s most popular low emissions/high mileage car has been put on hold in its most-important market.

 Steve Parker is a two-time Emmy Award-winner who has covered the world’s auto industry and motor racing for over 35 years. Contact Steve through his own automotive issues website at http://www.SteveParkerMotoring.com