Chevy Volt Pricing: The War of the Asterisk
The New York Times
By Jim Motovalli
Jan. 20, 2010
How much will the forthcoming Chevrolet Volt actually cost? Is it the low $30,000s? Or is it around $40,000? Call it the war of the asterisk. The growing confusion over the pricing of battery E.V.'s and plug-in hybrids has to do with a $7,500 federal tax credit available to purchasers of cars with battery packs of 16 kilowatt-hours or more. With high prices made unavoidable by expensive batteries, carmakers are sorely tempted to simply lower the price by the amount of the credit, then add an asterisk and fine print reading, “Price includes a $7,500 federal tax credit.”
Both Fisker and Tesla cite prices that include the tax credit. That’s one way to get the price on coming models down to $39,900 (Fisker’s Project Nina car) and $49,900 (Tesla Model S). Khobi Brooklyn, a Tesla representative, said the company used this approach on coming products because it “does bring the price down, and makes the cars sound a bit better.” She said that the company cited the full price in Roadster literature, referring consumers to both the federal tax credit and state incentives.
G.M.'s chief executive, Ed Whitacre, set off the latest round of speculation by citing a possible low Volt price in an interview with GMVolt.com. Mr. Whitacre said the 2011 Volt “is going to sell in the low 30s.” And he added, “We’ll get a margin on that.” But don’t get too excited. According to Rob Peterson, a G.M. spokesman, Mr. Whitacre was including the tax credit in that estimate. “We haven’t announced Volt pricing yet,” Mr. Peterson said. “There’s been a lot of speculation and chatter, with some people saying it might be $50,000 or $60,000, but most are focusing around $40,000.”
Mr. Peterson said that G.M. would cite the actual manufacturer’s suggested retail price for the Volt but feature the rebate prominently. “Some retailers might do it differently, though,” he said.
Nissan will take the same full-disclosure approach to pricing the 2011 Leaf battery car, according to Mark Perry, a Nissan spokesman. “Most consumers we’ve asked that question recognize the tax credit as cash, but we don’t want to misrepresent the price of the car,” he said.
Pricing of battery-electric cars offers a further opportunity for confusion because carmakers sometimes cite figures without the actual battery included (especially if the packs may be leased). It may be that pricing of electric cars eventually becomes standardized, but today it is still largely uncharted territory.