[ad#post_ad]”How much it will cost?” is by far the most asked question about the Chevy Volt. Not only most discussed but certain to bring forth strong discussion. The higher the quote the stronger the vitriol.
There was no mention of price when the concept debuted in January 07. The dialog began in May 07, when GM vice-chair Bob Lutz first was quoted as saying the goal price for the car would be under $30,000 (see post) . We luxuriated over that number until in January of this year when Mr. Lutz said: “I don’t want to wait for cost optimization. I’d rather it come out in 2010, and if it costs closer to 40 than 30, well, that’s too bad.” He did indicate the car would eventually reach the 30K price point but not until production costs could drop.
As your public liaison to the Volt team, when I last went to Warren MI, I went with the hope of obtaining GM’s current target price.
First, I asked Frank Weber, E-Flex/Volt vehicle line executive this question, “Since you guys always like to talk about a 40 mile EV range goal, what is your price goal for the car?” His answer was really just a wry smile indicating he wouldn’t answer.
Not undaunted I was ready when I came across VP of global program management Jon Lauckner and Mr. Lutz himself at the event’s closing dinner (pictured above), and yes, I did it again; I asked how much the Volt will cost.
What’s the target price for the Volt, it used to be $30,000?
Lutz: It keeps going up. Every time you ask, Lyle, it goes up again.
Is there a target?
Lauckner: We want to push it down to the maximal possible extent.
Lutz: It’s like this joke about a man at a conference who goes like this (demonstrates a steady clap) Then he says every time I clap my hands, a child in Africa dies. Some guy in the audience shouts “Then why don’t you bleedin’ stop clapping ya heartless bastard!’ (laughter)
So stop asking how much it will cost!
[ad#post_ad-left-1-1](Seriously) The answer is that we don’t know. Needless to say, the big chunk that we don’t control is the battery. Everything else we have a pretty good line of sight on. We know how to do electric motors, power electronics, the charger is pretty straightforward. The battery is the big unknown. We’ve had intense discussion about it.
Lauckner: The battery is the biggest cost component of the car by far. To give you an idea, if you look at just the powertrain, maybe 90% of that stuff, we know who is going to build it, its in common with other GM cars, and we know how much its going to cost. We have some work to do on that but we basically have it well understood. We’ve only sourced 10% of the car so far. That is we have production suppliers of about 10% of the value of the car. So we still have in front of us to source about 90% of the car. And that’s on schedule by the way, that’s not unusual for this point in a program. Part of that is the battery. That’s one of the vehicle side components that has to be sourced. How well we do with that sourcing process will impact our final product price.
Mr. Lutz also advised me that the recent quote of him saying “$48,000 was more reasonable” was never actually said by him . That he never gave that figure was also verified by his spokesman Dee Allen who was there for the interview.
I was also later instructed by other executives that a new car’s MSRP usually doesn’t get revealed until literally days before the release date. So whether its a wonderful surprise or a terrible disappointment, it looks like well have to wait until November 2010 to find out for sure. There is little doubt that over the long term, affordability is the goal, and that will depend in large part on the expected decline in cost of the batteries over time.
This entry was posted on Monday, April 28th, 2008 at 7:29 am and is filed under Financial. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.