Pity the automotive industry. With a minimum three-year lead time for new product development, timing vehicle launches to coincide with appropriate fuel price levels is never easy. Chevy’s Volt, for example, was developed and hyped during the gas price spike of 2008 when it seemed almost anyone would pay a hefty premium to ease some of the pinch at the pump. Now though, with gas prices holding steady at around $3, there’s reason to question whether consumers will flock to unproven, expensive vehicles like the Volt, absent a pressing economic incentive to reduce gas consumption. The Freep takes on this topic today, asking with gas prices so low, will anyone buy a Volt? And this is not mere media hype. Bob Lutz fretted about this possibility last year, when he said
If gasoline stays cheap, then the American public says, “I’m not interested in that; I will keep my Tahoe longer.” It puts us in the industry in a position where we are at war with the customer
This would be a depressingly familiar position for GM to find itself in, especially since it would be a product of The General striving to do something different. Gas prices are slowly beginning to go up again, but there’s no sign that this summer will see the kind of energy price volatility that will have the Volt and Cruze (let alone the Nissan Leaf) flying off dealer lots. Do you see gas prices going up soon? How expensive will gas need to be before Americans see cars like the Volt as a mainstream option? What happens to the Volt if gas prices stay level, or even drop? No only are these intrinsically interesting questions, but there’s also lots of money (including lots of taxpayer money) riding on the outcome. What say you?