Calm Down People, $350 a Month is Not that Much

Here are some thoughts regarding the Volt price announcement and the subsequent outcry in certain sites over the high price (Darryl Siry has a great post here):

  • First of all, $41k is not that far from the original estimated price of $40k.
  • The Nissan Leaf looks like it has been cost-cut to the bone. Despite its funky design, there is a whiff of rental car quality to it. The interior in particular seems very cheap in comparison with the Volt (although I will reserve judgment until I can see both cars on the road).
  • Some people say you can buy a Tesla Model S for only $8k more. Are they on crack? The original Roadster jumped from $89k to $120k by the time it was on the road. Do these people really believe that a brand new car (from scratch) as ambitious as the Model S is going to cost only $50k? Leaving aside the fact that you can't buy one yet, ask everyone with a bit of knowledge about cars and watch them smile when that price is mentioned. I'll believe it when I see it.
  • The lease price ($350/month) is very competitive, and as Darryl says, that's what one should do anyway. Why buying a technological breakthrough that it's going to be antiquated in a few years, maybe months? Lease it, give it back, and get v2.0 which will be much better.
  • Neither GM nor Nissan are making any money out of these cars. Their low production numbers (10-15k a year) suggest a the less we sell, the less we loose strategy. Nissan can do whatever they want to their shareholders, but We own GM. Imagine the outcry if the price would have been artificially deflated, creating the impression of a back door subsidy for green cars. Do you remember WSJ vs Fisker? Just read the first paragraph here. That's not the kind of controversy GM needs now, I think.

In reality, these three vehicles are aimed at different markets, and it doesn't make sense to compare them that much. The Leaf is an entry level EV (this is as cheap as Li-ion can get now, let's don't kid ourselves), while the Model S will be a premium product, taking away orders from BMW and Lexus, regardless of whether it costs $49k or a more realistic $70-75k.

That leaves the Volt as the most pragmatic alternative if you don't want to jump electric with both feet, as an excellent next step after a Prius. In my particular case, it would be my choice simply because I am the one with the family car while my wife does not want to give up her Mini Cooper. A Nissan Leaf will simply not work as a family car that needs to reliably drive for a couple of hundred miles some weekends, while the Model S is, well, not here yet. The Volt on the other hand is available now, costs only $50 a month more than the Golf, and will use a minimum amount of gas while we wait for the EV infrastructure to come on line.

The three models are great vehicles that deserve to succeed, and I think it's a shame to criticize GM precisely when they are, for the first time in ages, ahead of the timesa with the right (green) product.


Update: now the New York Times piles on too, with this Op-Ed. What do they want GM to do, keep building Hummers? I just don't get it.