Using a 5 percent interest rate (similar to new-car finance rates), $88 per month for 120 months (10 years) would finance an additional $8,297 at the time of purchase.
This is nowhere near enough to pay the $20,000 premium ($12,500 with tax credit) necessary to upgrade to a Volt.
Limited battery range is at the forefront of concerns.
The Chevy Volt, for instance, receives 93 miles-per-gallon equivalent (MPGe) in electric-only mode, 37 MPG in gasoline-only mode, and a “combined composite” rating of 60 MPG.
Several states have additional consumer rebates for electric vehicles.
The Energy Independence and Security Act of 2007 established the Advanced Technology Vehicle Manufacturing program, a billion direct loan program aimed at generating automotive and manufacturing green jobs and reaching the Administration’s goal of higher standards for advanced technology vehicles.
Even factoring in the environmental benefits by pricing the reduction of carbon dioxide (CO2) emissions, the Volt is still not a good purchase.
Estimates on the price of CO2 fall in the range of to per ton.
The Projections Despite the government’s best attempt to promote electric vehicles; the market has been reluctant to respond. Power and Associates projects sales of HEVs and PHEVs will reach 1.67 million units by 2020 and account for nearly 10 percent of the market share.
In the United States, sales of HEVs and PHEVs accounted for only 2.8 percent of vehicles sold in 2009, and that number is expected to drop to 2.5 percent for 2010—less than 300,000 units. This includes the Administration’s purchase of nearly one-fourth of Ford and General Motors hybrid vehicles since President Obama took office. The long-term projections for hybrids are slightly more promising, but not so for battery electric vehicles. BEV sales, however, will make up less than 1 percent of all vehicles sold in 2020 at just over 100,000 units. Obstacles The primary reason for low electric vehicle demand is cost.