Why The Chevy Volt Is Attracting Wealthy Buyers
The average household income for owners of the extended-range hybrid is $175,000
But for now, the car is mostly the province of the wealthy. General Motors, which makes the Volt, said Monday that the average income of Volt buyers is a whopping $175,000 a year. That rarefied space is usually reserved for buyers of German luxury cars.
"The Volt appeals to an affluent, progressive demographic," says Bill Visnic, senior editor for Edmunds.com "It's rare. It's hard to get one. ... It's the same reason that people buy the really rare exotic cars: Because other people can't have one."
GM hopes that the battery technology offered in the Chevy Volt catches on with the public so much that it can scale up production, making hundreds of thousands and driving down the cost of the expensive lithium-ion batteries. The batteries drive the Volt to be a $39,145 to $42,085 car before a $7,500 tax credit, so lower battery costs would make the car a bit more affordable.
That the Volt is attracting the fat-wallet brigade is not all together surprising. A lot of wealthy car owners have opted to buy the Toyota Prius because of its high fuel economy -- 50 mpg in combined highway and city driving. The Prius has become a badge of environmental honor for suburban families, singles and celebrities such as Larry David, Jodi Foster and Brad Pitt.
Rob Peterson, spokesman for GM, says about 20% of people who buy a Volt trade in a luxury car, and another 20% trade in a Prius. The people purchasing Volts now are early adopters, he says, who are comfortable taking risks.
"They tend to have a higher income level as well," he says. "It's more of a lifestyle of taking risks and trying to be first that got them into that upper echelon in the first place."
What makes the Volt special?
It is an extended range electric vehicle. The four seat hatchback can travel up to about 37 miles on an electric charge. At that point, a gas powered motor kicks in and powers the battery to keep the car moving. In theory, if one drives less than 40 miles per day, the car would consume almost no gas on a daily basis, while instead drawing power from the electric grid. If owners are smart, they charge up overnight when electric rates are cheapest.
When running on gas, the car gets about 37 mpg combined.
The idea of an "extended range electric vehicle" is brand new to the consumer as the Volt went on sale less than a year ago. Toyota is in process of launching an plug-in extended range Prius that will go up to about five or six miles on pure electric. Nissan has an electric vehicle, the Leaf, out now for less than a year.
The Volt is surrounded by much controversy. GM has sold 4,495 Volts to retail customers this year, selling a few hundred per month in just 6 markets. It will build 10,000 by the end of 2011, with thousands of those earmarked to act as dealer demonstration vehicles as the distribution rolls out. GM says it has gradually increased production of the car, while planning a more robust production plan of 60,000 a year in 2012. It has also said a Cadillac Extended-Range EV is in the works.
Why is it controversial?
Many pundits object to the $7,500 tax credit needed to make the car somewhat affordable and competitively priced. Typical is Mark Modica, an associate fellow of the National Legal and Policy Center who wrote a screed against the Volt last month calling the car a "fiasco."
Critics like Modica, shock-jock Rush Limbaugh and conservative writer George Will, for example, have complained about the Volt, calling for the government to stop subsidizing development of such vehicles and allowing them to sink or swim with the public without tax-payer subsidy.
But that position belies the idea that the government has a role in trying to engineer changes in citizen behavior. Conservatives, of course, don't believe that is the province of government.
Through laws and taxation, though, the government has made it clear that it is trying to deter smoking in the workplace and public places such as bars and restaurants. By the same token, the government is vested in trying to establish a marketplace for electric and extended range vehicles by pushing up Corporate Average Fuel Economy standards, making low-interest loans to automakers to develop electric vehicles and tax incentives to consumers to buy them since the batteries drive the cost up. The end game is to decrease reliance on fossil fuels to power cars and trucks, and create cleaner burning vehicles.
Some of the opposition to electric vehicles stems from an analysis of the cleanliness of our electric power, which is generated mostly from coal in the U.S. But critics who charge we are all wasting time and money forget that if a society opts for perfect conditions across all energy sectors and costs, nothing will get done. Related industries must move in parallel, if at different speeds, courses of progress. As more electric vehicles circulate, more charging stations will proliferate. As the number of EV proliferates, there should be even more pressure on utilities to adopt cleaner technologies to create power.
There is a cottage industry dedicated to opposing, and even ridiculing, electric vehicles, hybrids and natural gas vehicles. In a politically charged environment where "green" vehicles are often identified with liberal "tree-huggers" and conservatives are attacking government spending of all kinds, the Volt and other EVs are easy targets.
View Photo Gallery: Chevrolet Volt
How does the Volt drive?
The driving experience of the Volt has been lauded by numerous media outlets, including AOL Autos and Translogic. The car also won 2011 North American Car of the Year, an award voted on by fifty U.S., Canadian and Mexican journalists.
The Volt has the highest customer satisfaction of any GM vehicle in the last year. Buyers are early adopters of new technology who are enthusiastic about being part of a movement of change.
AOL Auto Editor-in-Chief David Kiley recently commented on the website's Facebook page that he was able to do a 90 mile commute to his office in a Volt while traveling on gas for only 20 miles of the journey, recharging during the day. Some are buying a Volt as a second car for their families so that multiple drivers can choose the Volt on a given day to optimize the electric range of the car. The gas motor in the car eliminates so-called range anxiety that comes with driving pure electric cars (What if I run out of juice and can't recharge?).
Compare Volt to ???
According to GM, 20% of Volt buyers are owners of luxury cars, with another 20% coming out of Toyota Prius.
"The Volt has comparative drive train dynamic to some luxury vehicles," says Volt communications director Rob Peterson.
Some reviewers compare the car, after tax credits, to a loaded Chevy Cruze, which costs about $10,000 less than the Volt after tax credits.
But that may be a false comparison. The technology and driving experience could well be compared with a Volvo C30, the loaded version of which is about $32,000 or very close to the Volt after rebate. The same goes for the Audi A3.
Compare a Chevy to a German lux brand? BMW of North America President Jim O'Donnell last August told AOL Autos, "We are very impressed with the Volt ... it's surprising that they didn't make it a Cadillac instead of a Chevy."
No wonder the wealthy are buying them.
Contributing: Ross Kenneth Urken, AOL Autos associated editor
- Cars that are the most likely to be in accidents
- Why you should consider a certified used car
- Find and compare 2017 Models