Chevy Volt Sales Expectations Might Be Optimistic

The Chevy Volt works well as a car and delivers on its promise of a greener transportation solution, but as a business venture, things look less well. Spurred on by strong demand, GM has repeatedly announced new plans to build more and more, but you have to wonder if the $41,000 car would sell so well if it didn’t benefit from government tax incentives.

Last week, General Motors CEO Dan Akerson stated that he intends to sell 25,000 Volts this year, followed by 120,000 units in 2012. The optimistic figure for next year is double the original 60,000 units forecast, while the 2011 increase looks astronomical compared to the original expectation of 10,000 cars.

A recent look at the US auto market by analysts at TrueCar showed that there is currently no car priced over $41,000 that sells at such a high volume. There is one exception, the Ford F-series pickup that crosses that price threshold in some heavy-duty variants.

The US government is currently offering a $7,500 tax credit, but that only applies to the first 200,000 vehicles made by the manufacturer. So if GM hits the Volt’s sales target, the car will return to its full price sometime in 2013. By comparison, Toyota only managed to top 120,000 Prius sales a year three time, and that only happened when the car market was growing and gas prices were high.

Akerson hopes to keep Volt prices down even after the tax incentives end. But a recent AutomotiveNews article suggests this is an uphill battle, as the rare-earth elements needed to build the car are likely to cost more in the future.