GM: battery rental payments weekly, might cost the same as gas
We told you GM plans to sell you the Volt and rent the battery to keep costs down. We have a few more details on the plan from Nick Reilly, the president of General Motors Asia Pacific, at the APEC summit in Australia. Nick says the payments will be weekly and cost about the same as gas. So, the operating costs for the Volt won't be much different than a normal gas car. I wonder why they went for weekly payments? Anyway, here are the comments:
- "It looks as if it is going to cost a lot more to buy a car like this, however the fuel economy is enormous"
- "People won't buy a full car. They will buy a car and rent or lease the battery and the cost of leasing the battery will be the same as, or less than, the cost they're paying today for petrol. So the motoring costs of an electric vehicle don't necessarily have to be much higher than the cost of today's vehicles"
- "Before we were saying it will be an awfully long time before we can get the costs down so people can afford it, but actually if you offset the fuel costs, people can afford it."
[Source: Drive.com.au]
Reader Comments (Page 1 of 2)
Paul 11:13AM (9/06/2007)
Wha?
This is the stupidest thing I've come across in a while. Let me get this straight. Pay a monthly car payment to GMAC and a WEEKLY battery payment to GM AND then I have to plug the thing in and pay a monthly payment to the power company (oh, not to mention the money to keep the range extender's tanks topped off). This is STUPID and I hope it isn't actually set in stone. I don't like the idea of a battery rental to begin with, but if they can't roll it in to a financing payment this is going to be a flop of enormous proportions. Hmm, it's as if they're trying to kill the electric car...
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Benson Leung 11:17AM (9/06/2007)
So we're still talking about a $30K cost upfront, and then a few hundred dollars a month in rental costs for the battery? Plus any fuel you want to put in, plus cost of electricity? What happens if you miss a payment?
At least with a conventional car, if you don't want to drive it around one month, your fuel costs will go down. If you drive less, your cost of ownership goes down.
When will we be able to 100% own a car like this so we don't have to deal with this battery rental nonsense?
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Chris 11:19AM (9/06/2007)
Wait... if the battery rental is as much as gas would have been and you still have to pay for the electricity to charge it, aren't you loosing on this deal. If Battery Rental==Gas Cost then Battery+Charging>Gas. Outside of the obvious emissions reduction, where's the financial incentive to buy this new vehicle over one that has a similar price with excellent gas mileage(say Prius for example)? In my opinion, they will have to make the Battery Rental+Charging cost at least equal to (and preferably less than) the average gas cost (for similar size/performance vehicles) to make this work.
They still haven't addressed what happens if you don't pay the battery rent... I guess they can always use OnStar to disable the battery.
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Griffon 11:35AM (9/06/2007)
Wow, in one press release my interest completely plummeted, that is the lamest model that I think I have ever heard, no way they can get inertia with that... guess they are tying to still birth this like the EV.
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Dave 11:40AM (9/06/2007)
One thought. If you rent, you will have NO warranty issues and likely would get a full replacement free of charge if you start to lose range. I'd pay MONTHLY for that...if reasonable. Weekly is RETARDED. The administrative costs alone of keeping up with that will kill GM, let alone the electric car.
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Petri 11:41AM (9/06/2007)
Looks like we are better of with a JAVLON from Milesautomotive if it is coming next year... Even it supposty have "only" 150 mile range it would be better than Volt-concept. Batteries are of course included in the price of JAVLON which is supposty be between $29,000-$31,000.
(No battery renting fees)
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Dave Z 11:45AM (9/06/2007)
Agreed this is a bad idea. The battery is part of the car. Sell the whole car or lease the whole car. You won't fool anyone into thinking the car is less expensive by leasing part of it and selling them the rest.
If they can't hit their price target of under $30K, why not just increase electric motor/controller output a little and make the first e-flex model a $40K+ Cadillac?
Then release the Volt a few years later once battery costs come down.
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OhmExcited 12:06PM (9/06/2007)
That plan stinks to high heaven. I would rather lease the whole car.
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kert 12:02PM (9/06/2007)
one point. if it was originally budgetted to be 30K with batteries upfont payment, and now it looks like it wont come together...
I'd expect the initial battery cost estimate to be deducted from the car cost. What was it again, 16KwH battery pack ? At $500/KwH bulk price of current lithiums, thats $30K-$8K = $22K for the car. Less if they estimated the battery to cost more, which they should have with all the conditioning and balancing electronics built in.
At $20K it would not be a bad deal, maybe.
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Lascelles Linton 12:02PM (9/06/2007)
I have been thinking about the what if I don't pay scenario. I bet they just turn off the battery with Onstar or something. Weekly payments may be explained if it's pay if you use the battery. I don't know. Nothing official but that's what it feels like to me.
I still think it's a good idea. The car may start in the low, mid twenties. Sure, you probably lose the advantage of low operating costs with this model but you get range and a very clean car. I think there is a lot of people out there that will pay for that.
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Lou Grinzo 2:52PM (9/06/2007)
Notice that it says the cost in 2010 will be the same as what people are paying NOW for gasoline. Does anyone here think that in three years gasoline will cost what it does today? Or do you think that with OPEC happily putting the squeeze on importers, and major producers like Mexico, the UK, and Norway already seeing declining output that it will cost a lot more?
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beelzabush666 1:04PM (9/06/2007)
Some of you dont seem to realize the cost of the batteries. The upfront price has to be somewhat in line with median new car pricing if they are to sell a profitable volume. Life Cycle costs are less important to the typical buyer than the price they've got to pay. Nimh is cheaper than Lead Acid right now on a life cycle basis. You dont see a switch from LA to Nimh. Look up some info about lithium while you're at it. Its not that plentiful, there isnt near enough of it to equip millions of cars with lithium battery power. GM has no money to lose. They've go to bring this off and make some money doing it. Just my two cents.
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KC 1:04PM (9/06/2007)
So how long is the lease on the battery? Is it indefinite? Or is a lease to own scenario where you eventually own the dead battery?
If you pay the lease for 5 years @ `the cost of gas per week (using $40/week) you end up paying ` $10000 for the battery
Plus, it's not like that lease is the only operating cost. As others have mentioned, there is the cost of electricity and you still need to put gas in the thing as well.
Operating costs with this model could end up being double that of a conventional gas powered vehicle in it's target price range.
They will not move their targeted 60K units with that kind of pricing scheme. People will be turned off because it comes across as deceptive when you look at the sticker price of the car and then you add in that 'extra costs' later.
Better to turn the volt into a Tesla code name vaporware - er, I mean 'whitestar' competitor and target the luxury $50K + market.
Add in some premium leather and brushed aluminum accents inside, and some chrome accents and LED head and tail lamps outside, position it above the Camaro and charge full price with no leased battery option.
Position it as a high power, performance vehicle that delivers better millage then a prius in a segment dominated by V8s and they may have shot.
Putting it in a segment dominated by fuel efficient 4 cylinders, and by the time the volt actually launches, extremely fuel efficient clean diesels will be readily available in North America and you have no advantage over the other cars in the segment with the proposed leased battery business model.
This lease the battery idea is going to be the death of whole the E-Flex platform it look like.
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rgseidl 1:44PM (9/06/2007)
So, instead of paying a lot of money to the the oil company, you pay a lot to the car company plus some to your utility and some more to the oil company.
If you lease anything, you're really just paying the lessor a risk premium over and above the asset depreciation rate. That may shore up GM's profit model but it also increases your total cost of ownership over the lifetime of the vehicle.
I suspect the overlap between potential early adopters of PHEV technology and the subprime housing market is anyhow very small. If you can't afford to shell out an extra $20,000+ up front for the battery pack, you should probably just stick with a frugal ICE-powered sedan until battery prices come down as production volumes go up.
That's not meant to be elitist, it's just that too many Americans already get themselves into more consumer debt and fixed cashflow obligations than they can really afford to service when APR rates rise. Living above your means has a way of blowing up in your face eventually.
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Greg 2:07PM (9/06/2007)
One of the negatives GM had on the EV1 was the fact that they were all leased, and when GM got ready to take them back the buyer had no recourse. What happens when you've bought a Volt, but GM decides to take back the batteries?
I tend to agree with others here; if leasing the batteries brings the cost of the car down to $20k then it might work (especially if it includes replacement batteries down the road). But if we're talking $30k plus a never-ending battery fee, there's no financial motivation for the consumer to make the switch.
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david 2:13PM (9/06/2007)
Most of you are missing the point. I am not looking for a car like the Volt to save me money. I am looking for a car that I can afford and that does not rely on oil and has no emissions. If it means leasing batteries along with buying a $30K car sign me up. Otherwise my only other reasonable option is what a $90K roaster. People like me who are in it for the environmental reasons will buy these cars until mass production allows the prices to come down. If you're looking for a car that costs you less money than ride a bike, drive a motorcyle, or buy the smart.
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Jack 3:54PM (9/06/2007)
Two words, GM: No thanks.
Roll the cost of the battery into a monthly payment. This weekly payment hassle ain't gonna fly.
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Mike Weston 4:10PM (9/06/2007)
Weekly would be pretty stupid, and if the fee is the same regardless of how many miles you drove (like the vacation scenario where it sits for a couple of weeks), that sucks too.
I'm not actually totally against a battery rental model if it seems fair, though. I guess we have to wait to see the real details.
In the meantime I expect to buy a Vectrix.
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Gordio 7:57PM (9/06/2007)
I think this is dumb. My philosophy is living green is a "luxury" lifestyle. I find it faulty for GM to try to make this car affordable to everyone. No one who is planning to drive an electric car expects an electric car to have a low price tag. Why is GM fixing something that isn't broke?
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Tim 5:08PM (9/06/2007)
Well, there's always the jetta tdi...
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