This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

About That Chevy Volt Price Cut

Stocks in this article: GM TSLA TM HMC

NEW YORK ( TheStreet) -- In a perfect example of lazy journalism, every single news outlet has reported overnight that General Motors (GM) cut the base price of the Chevrolet Volt from $40,000 to $35,000.

Practically speaking, nobody who bought a Volt over the last year should feel cheated.

Why?

If Mr. and Ms. Journalist had done their homework, they would have known that ever since August 2012 -- one year ago -- GM had already offered close to $5,000 off every Volt sold, or implied in attractive $199/month lease offers. In other words, by cutting the base MSRP from $40,000 to $35,000, GM is merely codifying what had been the real-world price for the past year.

Of course, we can discuss until the end of time why Volt sales aren't higher -- at any price. That's not the point here. Volt sales have gone from very small in 2011 (under 8,000) to approximately 30,000 world-wide in 2012. At the current rate, 2013 doesn't look like it will be a big increase over 2012, and perhaps it will be almost flat.

That's obviously a disappointment. At some point a couple of years ago, GM said it hoped it would 60,000 world-wide in 2013, 45,000 of whom in the US. Tesla learned from this mistake of setting high expectations, saying nothing and letting the world be amazed at an estimated 21,000 sales in 2013. Worked wonders for Tesla (TSLA) stock.

It is easy to see why the Chevy Volt is barely selling more than the Tesla Model S: Gasoline prices remain not too far around $4 per gallon, and other gasoline/diesel cars are becoming ever-more efficient. For example, a 2014 BMW 328 diesel yields 37 miles per gallon and the 2014 Mercedes GLK 250 diesel yields 28 MPG -- and that's a four-wheel drive SUV.

Further down the stack, you can buy a Chevrolet Cruze diesel and get a combined 33 MPG, or go with the easiest and most proven of fuel-efficient of choices: Toyota (TM) Prius for about $25,000 base price, yielding 50 MPG on regular gasoline.

I have been arguing for years that electric cars are unlikely to be sold rationally on cost advantages, except perhaps if you take into consideration long-term maintenance advantages. Electric cars need to be sold on a superior driving experience -- quiet, smooth ride with gobbles of torque. Once you have driven one, you won't go back.

1 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 18,030.21 +6.04 0.03%
S&P 500 2,081.88 -0.29 -0.01%
NASDAQ 4,773.4720 +8.0480 0.17%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs