Just a few days ago we warned of the surging incentives among auto makers [4] - and the diminishing benefits of that margin compression. It seems GM, not to be outdone by its peers, has stepped up with a hefty $5,000 discount for the Chevy Volt with demand for electric vehicles (EV) low, and falling lower, and manufacturers desperate to try anything to try and increase sales. Normally, after a couple of years of underperforming sales a manufacturer would pull its car from the market, however EV manufacturers are under pressure to keep struggling along, partly due to regulations in California (the largest car market in the US) that require all major manufacturers to offer a minimum number of Zero-Emission Vehicles. Unintended consequences once again appearing amid government regulation and cheap credit.
Via OilPrice.com [5],
General Motors has decided to offer potential buyers of the Chevrolet Volt as much as $5,000 to incentivise them into making a purchase. Demand for electric vehicles is low, and falling lower, and manufacturers such as GM and Nissan are desperate to try anything to try and increase sales.
GM has already reduced the price of the Volt so some doubt that performing the same trick again will help to boost sales, although Nissan experienced some success when it cut the price of the Leaf battery electric vehicle earlier in the year.
When first released onto the market nearly three years ago, expectations were high for the Volt and Leaf, but they have consistently failed to meet their sales targets, in fact only a few battery electric vehicles have actually come close to achieving their targets, the Tesla Model S being the obvious example.
Normally, after a couple of years of underperforming sales a manufacturer would pull its car from the market, however EV manufacturers are under pressure to keep struggling along, partly due to regulations in California (the largest car market in the US) that require all major manufacturers to offer a minimum number of Zero-Emission Vehicles.
NBC News explains that with this latest incentive offer form GM, you could pick up a Chevy Volt for as little as $28,495. Base price for the car is $39,995, but GM offers $5,000 off any 2013 model, and $4,000 off any 2013 model. Customers can also receive an extra $1,000 if they are currently leasing a non-GM car; they also qualify for a $7,500 tax credit from the government, and another $1,500 credit from the state.