REPORT: How the Chevy Volt got its $40,000 price tag, and what GM's going to do about it

It's sort of common wisdom that when the first Chevrolet Volt models become available in General Motors showrooms (or on eBay) in late 2010, they'll be priced at around $40,000. GM hasn't made any official statement declaring this specific price – and for a while there was speculation on which way the ticker would go; would it be $30,000? $35,000? – but for now, $43,000 is the expected average transaction price, and GM will lose money on each Volt at that rate, according to a new story in AdAge.

This is much higher than Bob Lutz's original, off-hand estimate of somewhere in the high $20,000s. How GM went from that very attractive price point to the new $40k number proves that, when it comes to introducing a lot of new technology at once, the road isn't always smooth. Lutz told AdAge that GM engineers are "beavering away" to find ways of cutting costs of the Volt as quickly as possible after launch. Considering the surprising rate at which costs and projected costs escalated during the course of the Volt project – when engineers discovered, for example, that some parts from other GM compact cars wouldn't be able to be used in the Volt – it's got to be a big relief for Lutz and others at GM to see that the path to cost reduction is exactly where numbers climbed up over the past two years. The battery and new technology offer "GM an opportunity to bring the cost down much faster than for a conventional car," AdAge writes. With the electric vehicle market growing, larger suppliers are beginning to get EV-specific parts ready, which will help bring costs down, perhaps to the $30,000 range. The changes might not be ready for Job 1, but who can say no to a cheaper Volt?

[Source: AdAge]