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GM sets Volt lease at $350 per month

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GM sets Volt lease at $350 per month

Nissan to match GM deal, warranty in battery-driven Leaf

Robert Snell / The Detroit News

General Motors Co. likely convinced some shoppers to buy the Chevrolet Volt by unveiling a $41,000 price tag and three-year, $350-a-month lease on Tuesday, analysts said.

GM executives answered the long-lingering price question at the Plug-In 2010 conference in San Jose, Calif., gave a peek at the Volt's marketing strategy and explained how customers can order the vehicle, which initially will be in short supply.

The lease deal ensures the Volt will be comparably priced with its closest competitor, the all-electric Nissan Leaf, whose monthly lease price starts at $349. The Volt lease price includes a $2,500 down payment while the retail price falls to $33,500 after applying a $7,500 federal tax credit.

The lease deal and retail price should comfort consumers who might be worried about buying a new vehicle that relies on expensive, new lithium-ion batteries, analysts said. Particularly when combined with an extended eight-year, 100,000-mile powertrain warranty.

"This announcement should help shift some hand raisers to check writers," said James Bell, executive market analyst for Kelley Blue Book's kbb.com.

While the Volt lease price will be comparable to the Leaf, GM is trying to distinguish the two vehicles in consumers' minds. The Leaf relies solely on a battery and has a range of 100 miles, while the Volt will travel up to 40 miles on electric power and will have a range of 300 additional miles on its gasoline engine.

"The strategy for the Volt will be that it's more car than electric," said Joel Ewanick, GM's vice president of U.S. marketing. "People are looking for a real car. People do not want to be stranded on their way home from work."

The Volt's engine kicks in after its lithium-ion battery is drained by about 70 percent to sustain the battery's remaining charge, which will keep the car running for several hundred additional miles.

The Volt's battery will be backed by an eight-year, 100,000-mile warranty on the battery pack.

On Tuesday, Nissan Motor Co. said the Leaf would have an identical warranty.

GM has created a website, www.getmyvolt.com, which will let customers start placing orders immediately with dealers in launch markets.

The Volt initially will be sold late this year in Michigan, California, New York, New Jersey, Connecticut, Texas and Washington, D.C., before a national rollout 12 to 18 months later.

The website will let consumers register to buy the vehicle and track the progress of being on a waiting list to receive their vehicle.

A buyer who lives in another state can order a Volt from a dealer in one of the launch markets but will have to travel to that state to pick up the vehicle. The lease price is only available initially to buyers who live in the launch markets.

"GM's pricing strategy is a bold one that will reward the company if it works because it means the Volt likely will be sold for something close to what it costs to build and won't be straining GM's red-ink supply," John O'Dell, senior editor at auto research site GreenCarAdvisor.com, wrote today.

GM plans to produce 10,000 Volts for the 2011 model year, eventually expanding to as many as 30,000.

"There is going to be a period of time when we have excess demand and when it is going to be difficult to meet that demand," Ewanick said. "If customers know where they are in line, it takes a lot of anxiety away."

The tax credit is available for the first 200,000 electric vehicles made by GM. The tax credit is not deducted when a buyer purchases a Volt. Instead, buyers must apply for the credit.

From The Detroit News: http://www.detnews.com/article/20100728/AUTO01/7280333/1148/auto01/GM-sets-Volt-lease-at-$350-per-month#ixzz0uyodOmB0

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