GM offers big price cut on Chevy Volt

[wercal]

32. Numbers

Lets run the numbers:

A completely loaded Chevy Cruz is $23,550..and a reduced price Volt, after subsidy is $27,495....so the gap in price is $3,945.

First let's pause and look at the $7,500 subsidy. It is a refundable tax credit. This means that your federal income tax burden would have to be at least $7,500 for you to take advantage of the entire credit...so you need to make around $80k and not have a lot of kids to be paying that king of tax bill.

Assuming you do, how many miles would it take to make up the gap. Assuming gas is $3.60/gallon, and the Cruz gets 29 mpg, and you pay $0.12 per kwh and it takes 14 kwh to charge and go 40 miles...that's 48,028 miles.

Ok, lets assume your employer lets you charge for free...you costs are cut in half, so the breakover is 24,000 miles. Now, lets assume that you drive it 80 miles a day for 6 days a week, that's 50 weeks.

Not bad. I have neglected the slightly higher cost of ownership (higher insurance and personal property taxes, since the car is worth more), but not bad. Now it doubles if your employer doesn't give you free juice, to around 2 years...and the entire thing would double again, if you compared it to a stripped Cruz at $19,500 - to 4 years.

So the numbers greatly depend on what you would buy as an alternative. For me, there is way too much that is not known about the Volt's resale value. I have seen reports that it should be high...but I am skeptical. The battery is a major component, and I think it will make used car buyers think twice about buying a Volt. Time will tell.