Hold Off on Buying That Chevy Volt; Price to Drop $10,000 in Face of Dismal Sales

Volt and AkersonGreat news for consumers who are considering buying General Motors’ green wonder car, the Chevy Volt. I know how excited those environmentally conscientious Volt enthusiasts can get, but a little patience can pay off big time if potential buyers hold off for a year or so on their purchase. According to GM CEO Dan Akerson and following another dismal month of Volt sales (1,306 in April), the car that defies logic will soon be available for up to $10,000 less money. The good news extends to shareholders of GM as the next generation of the Volt will supposedly be profitable for the company. So, as we say prepare to say goodbye to the current generation of the obsolescent Volt, let’s take a trip down memory lane to review how past promises for the car panned out.

The Chevy Volt’s taxpayer-funded roots date back to the Bush Administration, with a concept car being developed in 2007. The fact that government funding and subsidies for dubious green projects began under Bush is often referred to by proponents of the Volt, many of whom continue to maintain the political strategy that the best way to defer criticism is to blame the previous administration.

Hype for the Volt initially built up steam as GM claimed that the miracle car would be a savior for both the company and the US auto industry while it made a plea for a taxpayer-funded bailout in 2009. The car was touted to get 230 mpg and would be a “pure EV” that used no gas when utilizing its lithium-ion based battery power source with a gas-powered engine that would be a back-up to only generate power for the battery system as opposed to driving the wheels. Both of these claims turned out to be false.

While GM now indignantly denies that the Volt was “Obama’s car” or had political motivations, it sure is hard to ignore the fact that the White House was one of the biggest cheerleaders for what would become the electric version of the Ford Edsel. The Volt hype shifted into high gear as the GM IPO approached. In late May of 2010 the White House announced that they would purchase the first 100 Volts that rolled off the assembly line. President Obama served as the Car Salesman in Chief, visiting the Volt plant in July of 2010. He took a Volt for a 10 foot test-roll and proclaimed the ride “pretty smooth.” He later suggested Americans who felt they could not afford the rising price of gas should buy Volts as a solution.

Dan Akerson played his part as he displayed either a lack of auto industry savvy or an abundance of BS in January of 2011 when he raised sales guidance for the Volt. 2011 would see 25,000 Volts sold as opposed to 10,000. The Obama-appointed Akerson had a vision of a green GM and planned for 120,000 Volts to sell in 2012, up from the previous 60,000 units. The final numbers were an embarrassment as 7,671 Volts sold in 2011 followed by 23,461 in 2012.

The deceit surrounding the overestimated potential and subsequent failure of Volt sales ramped up faster than the aforementioned hype. Akerson and GM’s spin on why the Volt did not live up to expectations began with a flat out denial that demand did not exist for the car. Claims were made that the car was in fact so popular that GM could not build the darn things fast enough! This was proven to be an outright lie (exposed here) as it appeared that GM was focusing on both a political goal of vehicle electrification and a “bait and switch” strategy to drive consumers into showrooms to see the much-hyped Volt only to try and sell them gas-powered Chevy Cruzes. The lack of supply fib was followed by Akerson claiming that a right-wing conspiracy was the culprit for the Volt’s woes.

The measly sales for the Volt that did exist were driven by governmental help and an attempt by GM to “manufacture demand” that otherwise did not exist. Tax subsidies along with manipulated lease programs put drivers in Volts for as short a term as two years for low payments – at the expense of taxpayers. The federal government gave money to localities to buy Volts. This was in addition to the purchases by the federal government and military. Crony company GE (manufacturer of charging stations) purchased an undisclosed amount as well.

Despite all of the evidence that lithium-ion based vehicles like the Chevy Volt do not have the potential that we were led to believe that they did, GM and the Obama Administration refuse to acknowledge the facts. Taxpayers continue to be on the hook as Obama now wants to raise the federal tax credit for EVs to $10,000. GM is doubling down on the technology with new plug-in vehicles being planned and promises for a new and improved Volt. The Chevy Volt has been a fiasco that refuses to die as bottomless taxpayer pockets stand ready to continue the funding for an idea spawned out of a dangerous union of a wasteful government and a deceitful corporation.

For those optimists considering the purchase of a Volt that continue to believe GM and Akerson, even after all of the previous lies, I would make the following suggestion. Wait a year to purchase your new shiny, green vehicle. I’m sure Mother Earth will manage to survive the dire consequences of global warming for one more year while you wait. You can then save $10,000 on your purchase while learning more about just how viable the supposedly wonderful technology behind the Volt really is. You may even be able to get some additional money in tax subsidies if Obama has his way. If all goes well, you will be driving the wave of the future in a year’s time as the new Chevy Volt finally ramps up and becomes the great success that GM promised.  I wouldn’t bet on it, though.      

Mark Modica is an NLPC Associate Fellow.