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$41,000 For The Chevy Volt? Sounds Right To Me.

I honestly laid in bed last night thinking about the Chevy Volt’s $41k price tag. Seriously. When I got the press release shortly before it crossed the wire yesterday, the price seemed about right for a first-gen Voltec vehicle. The $350 lease program looked even better. I was already totally sold on the Volt after driving an early mule over a year ago and the price tag didn’t even bother me one bit. It’s not like I planned on buying one, but I could see where GM was coming from.

Then my post went up at 12:00 pm yesterday and quickly filled with commentors railing against the $41,000 price tag. That was followed by nearly every national news program claiming the Volt’s price invokes a bit of sticker shock. I thought, “Did these people really think the Volt was going to be the same price as a Malibu?” Apparently.

But then Rush Limbaugh opened-up on the Volt today and two things became clear. One, many people including Rush (and previously Letterman) do not fundamentally understand the Volt’s capabilities. I believe most consumers expected the Volt to be a mass-market vehicle and an instant hit in a sort of iPhone way. Yeah, that’s just not how the auto industry works.

I guess part of my acceptance of the $41k price is that I have GM in my blood. The Internet would call me a GM fanboy, but it’s something a little more deep. I’m more of a GM loyalist — being born, raised and still living within minutes of GM’s long-forgotten birthplace — Flint, MI (70 miles from Detroit). This is the place where under the leadership of Billy Durant, a bunch of separate automakers joined together and formed General Motors starting with Buick in 1908. It’s now a sorry remnant of its storied past, but things are getting better, partly because of the Volt.

GM is spending $230 million in Flint, primarily to retool one of the old factories into the manufacturing facility for the Chevy Volt and Cruze’s 1.4L gasoline engine. The Volt’s battery pack is being developed and  made across the state in Holland, Michigan. It’s safe to say that everyone around here is pulling for the Volt.

But if I set aside all the feelings I have about GM, I still believe that $41k is the right price for the first-gen Volt. Even without the tax credit worth up to $7500, most of the initial 10,000 available Volts will be snatched up at full retail. People are buying luxury cars right now and it’s undeniable that the Volt will give the Prius a run for its celebrity clientèle.

Bloomberg reported a few weeks ago about the state of luxury autos right now; BMW, Mercedes, and Audi simply cannot keep up with the demand. While I’ll be the first to counter that point by saying that a Chevy isn’t an Audi, the report clearly states that people have money to spend on cars. The $7,500 tax credit President Bush approved (Sorry, Rush, this isn’t Obama’s tax credit) back in the recession of 2008 is just a bonus for the first round of buyers.

With a price tag of $41k, GM is clearly targeting this higher-end market. The Chevy Volt isn’t a car for the masses — at least it isn’t yet — and that’s fine. It doesn’t need to be. The Volt isn’t a consumer electronic like the iPad. It’s a car and its story isn’t finished within the first month of sales.

General Motors isn’t just in the business of selling one vehicle. The once king of automakers originally earned that title by developing many similar vehicle’s around common platforms and powertrains. This practice, along with the “it’s good ’nuff” attitude, is one of the main reasons for its demise as well, but the Volt’s powertrain, named Voltec, isn’t the overused 3800 engine used by countless Buicks, Chevys, Pontaics, and Oldsmobiles for two decades. It’s one of the keys to General Motor’s future.

There’s no way to tell how much R&D went into the Volt, but it’s probably safe to say that it was far more than the average vehicle. Rest assured that the entire investment isn’t riding on this one car (two if you count its European twin, the Opel Ampera), but rather on the multitude of vehicles that will share the same underpinnings and electric powerplant.

GM already showed off a few such vehicles like the Cadillac Converj sports coupe concept and the production-bound MPV5 crossover. Those are just the beginning, too. The Volt is the first model in what is sure to be a large line-up of extended-range electric vehicles with the same electric motor backed by a gasoline-powered generator.

Part of the reason for the Volt’s higher initial price than, say, the Leaf is that the Volt’s essentially the first of its kind to be designed with mass production in mind. Simply put, it’s an electric vehicle with a range of 40 miles that also has a small gasoline engine that will recharge the batteries until it runs out of gas — supposedly another 260 miles. Think of it as a hybrid with the powerplants in different roles. In a traditional hybrid like the Prius, the gasoline motor always runs, with the small electric one playing back-up during acceleration — but it always uses gasoline where the Volt doesn’t because the electric motor is the primary powerplant.

This is what sets the Volt apart from other alternative vehicles. There really isn’t any limitations as technically it can be used primarily on electric mode for trips less than 40 miles. (The gas generator might still pop on to regulate the climate if it gets too hot or cold while the Volt’s parked, though.) But then the Volt can also drive as far as you want as long as there’s gas in the tank. Sure, it’s not the best at either as many EVs have longer range and estimates peg the Volt’s gas mileage around 50mpg, but the real story is that it does both, which no other vehicle can claim. Well, maybe the coach-built Fisker Karma but that also carries a $87k pricetag.

$41,000 is a lot of money for a vehicle that many thought would be the savior of General Motors. But the Volt doesn’t have to be a breakaway hit for it to be success in GM’s eyes. The Prius will no doubt outsell it for years and the same probably goes for the Nissan Leaf. But GM’s in this for the long run and the Volt is just the beginning.

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$41,000 For The Chevy Volt? Sounds Right To Me.