Are the Volt Price Tag and Dealer Markups Justifiable?

Analysts and market gurus are still discussing General Motors’ pricing of its Chevy Volt plug-in electric vehicle, and now discussion is turning to dealer pricing. One Chevy dealer will be charging almost twice the MSRP for the car, and it’s certain that more dealers will do the same due to the growing excitement over the new car, which is only months away from arriving on showroom floors.

Many have criticized the automaker for making the Volt so expensive and essentially making it impossible for many in middle and lower income groups to purchase the car. However, some say the price is absolutely fair. Rebecca Lindland, IHS Automotive analyst is of this opinion. She says, “The Volt is one of the first modern-day electric vehicles. The products that change our lives always cost more at first.”

There’s no doubt the Volt is fascinating many. It addresses one of the biggest concerns drivers have about driving a battery-powered vehicle: “What happens if the battery dies and I am left stranded?” The Volt has an internal charging mechanism; this makes it the only electric car that won’t stop when the batteries are dead. The car will go 40 miles on stored electricity from a plug-in charge. For trips over that distance, the car’s generator will make enough electricity to last until the next charge.

The prevailing opinion is that those who love to buy the latest gadgets as soon as they are available will be more than willing to pay well over the MSRP.

Dealers are free to charge what they wish and MSRP is, after all, only a suggested price from the auto manufacturer. Auto Observer received an email from a dealer in California who wrote, “Demand is going to far exceed supply for this vehicle. Initially our asking price for the Volt is going to be MSRP plus $20,000.”

Auto Observer senior editor Bill Visnic said, “Dealers know they can get the extra $20,000 for this car. They’re not pulling the number out of thin air. And the $350-a-month lease is a great deal.”

Some say that criticism of GM’s pricing of the Volt is coming from the same people who refer to General Motors as “Government Motors” and call into question the need to speed up the IPO process to rid GM of government ownership. There’s no way for GM to convince investors to buy stock at an IPO if they aren’t showing strength and profit.

Jim Hall of 2953 analytics said of the Volt, “The car is expensive and GM is supposed to make money. If they want GM to give the car away, they should stop complaining about government ownership.”

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