Chevy Volt Sales Pick Up in March
Last week, in my post about the new Better Place electric vehicle company, I wrote that I was concerned that the electric vehicle “economic model cannot work in places like the U.S. where prices are lower, spaces are bigger, and there is not as much [government] support.”
I really do think that there’s not yet a good reason to buy an electric vehicle here in the U.S. yet. Though gas prices are approaching a nationwide average of $4.00 (it was $3.94 this week), I still don’t think that’s high enough to justify the extra cost. For instance, a Chevrolet Volt costs $40,000 (plus a $7,500 tax credit), while the Cruze, which is basically the same car with a 138 hp gasoline powered engine, costs only $17,000. Even at $4 per gallon, it’s hard to make those numbers match up. Across the Atlantic, though, where gas prices are higher and there are higher sales taxes on traditional cars, it can make more sense.
Up until March, that was the narrative that was playing out: the U.S. market for cars like the Volt and the Leaf wasn’t strong enough to support the investment GM or Nissan were making. We saw that the Volt’s sales were disappointing, and GM was forced to slow the production line. Meanwhile, when the Opel Ampera, Volt’s European cousin, was released it has quickly sold out.
However, recent developments seem to be going against my prediction. The Volt hit its monthly record high with 2,289 sold in the month of March, more than double its February sales. This led GM to add a week of production back in.
Ultimately, though, there are so many advancements that can be made in America’s fleet of traditional gasoline-powered internal combustion cars and hybrids that, for now at least, government and corporate policy should focus more on increasing fuel economy than on promoting electric vehicles and plub-in hybrids. This will help consumers across the board. When the ’08 gas price spike happened, consumers rushed to buy fuel efficient cars, but their choices were limited to just small cars and the Prius. Today, that’s no longer the case. Everywhere along the line from small cars to full-size pickups, the automakers really are focusing on fuel economy. The attached graph shows how the when I saw how much average fuel economy has increased. The fleet fuel economy was over 33 mpg in the 2012 Model year for the first time.
And the consumers are responding – high gas prices are pushing fuel efficient vehicles to record sales: Toyota sold 28,711 Prius hybrids in March, a new record for the Hybrid. For now, cars like that are where the market is. Only time will tell if Americans are ready to move to next generation cars like the Volt.