Does the Chevy Volt need federal support to make money?



  1. 0 Votes

    We have no idea, because the Chevy Volt has not yet made it to market. The first models available for retail sale are expected to hit the showroom floors by the end of 2010. GM expects the Volt to sell for about $40,000, and the $7,500 tax credit specified by law in 2008 as part of the Emergency Economic Stabilization Act is expected to be a big incentive. In Canada a similar tax credit is being offered up to $10,000. Could the Volt be profitable without tax credits? We have know way of knowing, but I suspect that the plug-in hybrid vehicle’s fate will depend ultimately more on whether it’s economically feasible rather than how many tax credits the government gives away. The simple truth is a hybrid car will not sell unless it’s practical for the majority of its drivers. The Volt’s electric charge can reportedly satisfy the demands of 75% of US commuters, who drive on average of 33 miles a day. If that’s true and if the price is right, and it’s ultimately cheaper to drive a Volt than a usual gasoline-powered car, it will probably be successful, at least as much as the Toyota Prius. I don’t think federal subsidies are going to make a lot of difference in the long run, but they may help jump-start interest in the car at the outset, while it is struggling to get traction in the US auto market.

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