Volt Birth Watch 169: The Price Is Wrong

Having a hard time guessing the value of the Volt showcase? Join the club. Everyone knows what the Volt is by now, namely a four-seat, 230 mpg, extended-range electric sport sedan that’s currently under-budget. But what does that sell for? The closest thing to a consistent answer we’ve heard from GM on this point is zero profit at $40,000 a pop. Which is always quickly followed up with reminders that consumer tax credits will make the crucial difference in transaction prices. But what about those tax credits? EV World‘s Bill Moore relays the following message from an anonymous “former GM executive”

“Assume you will trade in your Prius when the Volt becomes available. The feds will probably put a $20,000 kickback on the price to move them. If they do not, Volt will not make it.”

But consumer-end stimulus isn’t the whole game (although look for the cry to go up soon in congress).Production-end subsidies for everything from an engine plant to battery research are keeping the Volt moving towards the birthing hour. Bloomberg‘s headline couldn’t explain it any better: Obama Battery Grants May Help GM Market Cheaper Electric Cars. GM’s John Lauckner explains:

We’ve already seen significant reductions in the cost of batteries even since the start of the Volt program. At this point, we’re hundreds of dollars below the $1,000 a kwh benchmark

For reference, $1,000 per kwh is the typical current cost for Lithium-ion batteries, according to Southern California Edison’s Electric Transportation Department. But thanks to heavy taxpayer investment in Volt battery suppliers, GM is claiming it can get prices down to $500/kwh in the next 12 to 18 months. Would Toyota VP Irv Miller like to comment on that?

I’ll buy all those batteries that anyone can provide me right now. Our numbers are about three or four times that, so maybe we’re missing something

Well, is he? Ford says the cheapest Li-ions they can find are $700/kwh and are located “in Asia.” Is GM lying or is there some world-class market distortion going on? Pick your poison.