Driving Directions: Getting There Green

The Chevy Volt's Price: Check the Subsidies

chevrolet volt and jim motavalli

The author with his Volt on a chilly day in Connecticut. (Mary Ann Masarech photo)

In its first two months on the market, General Motors sold just under 700 Chevy Volts, but the pace is quite likely to pick up quickly as people get the measure of this ultra-cool $41,000 plug-in hybrid. In the early sweepstakes, the Volt was running well ahead of the Nissan Leaf, but the first numbers have more to do with logistics (getting the cars delivered) than any consumer demand.

I spent four days with the Volt last week, and loved it, though my loan coincided with a cold snap and lots of snow and ice on the east coast. That meant the 25 to 50 miles of all-electric range was definitely at the lower end of that scale-I averaged 28 miles on a charge. And since the car has so many useful apps that spit out information, I can tell you that, in 200 miles of driving, I used 3.3 gallons of gasoline and achieved 60 mpg. It's massively fun to drive: fast, tight handling, super-quiet and always well-behaved.

The Volt has a premium feel to it, which is appropriate since it costs $41,000. Or is it less than that? Because the Volt is eligible for a $7,500 federal tax credit, your actual bottom line is more like a not-so-bad $33,500.

But keep in mind that the price depends on when you buy the car. The meter is ticking, because the vaunted tax credit runs out after 200,000 General Motors EVs (only the Volt at this point) are sold. It's hard to predict the Volt's sales volume at this point, but the company is slowly ramping up production. What was originally a 30,000 target for 2012 has now grown to a not-confirmed 120,000. The car, now in just six states (plus the District of Columbia), will go national by the fourth quarter of this year, much faster than originally intended. That means, especially if GM rolls out more EVs, it could reach the 200,000 volume level pretty quickly-and then no more lucrative subsidies.

Tesla, which has sold about 1,500 cars so far, isn't worried about this, but GM is and should be. That's why it's backing a bill introduced by Senator Carl Levin (D-MI) in the Senate (and his brother Sander in the House) that would raise the ceiling to 500,000. "Raising the cap on this credit will help carmakers reach the demand and production scale necessary for long-term viability," said Carl Levin.

President Obama wants to reach a million plug-in vehicles by 2015, and the subsidies are kind of important to make that happen. Levin's colleague in the Senate, Debbie Stabenow (also D-MI) wants to turn the $7,500 credit into a direct cash payment to car dealers-so you really would pay $33,500 for a Volt. That would be a big help, but the bill's chances are a bit cloudy at the moment.

State subsidies matter, too. California has an incredibly good direct payment for EVs, $5,000 per car, but given the state's perilous finances it may not last all that long. The Volt didn't initially qualify for that cash because its exhaust wasn't clean enough, but GM is ramping up a new Volt for 2012 or 2013 with a 10-year/150,000-mile warranty (it's eight years now) that will make the cut. For $5,000 off, GM would jump through flaming hoops. Combine that with the federal tax incentive and Californians can buy a $28,500 Volt. But the big question remains: Will there be any money in the pot by 2013?

Jim Motavalli

Jim Motavalli

Jim Motavalli is a senior writer at E/The Environmental Magazine, a regular contributor to the New York Times and author most recently of Naked in the Woods: Joseph Knowles and the Legacy of Frontier Fakery.
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