The Chevrolet Volt, the first mass-market electric vehicle from General Motors Co., will have a sticker price starting at $41,000 when it hits showrooms this year, but it was the attractive lease offer that the automaker announced Tuesday that grabbed the attention of industry analysts.
Chevrolet plans to offer a lease program on the Volt with a monthly payment as low as $350 for 36 months plus $2,500 due at lease signing, a deal that could speed up adoption of the new generation of automobiles by making them competitive with traditional gasoline-powered vehicles.
In December, the all-electric Nissan Leaf hatchback is slated to go on sale starting at $32,780. But it too will have a lease deal: $349 a month for three years with an initial $1,999 customer payment.
Shoppers often compare vehicles based on the monthly payments, so getting leases down in the range of similar offers from gas-powered cars "will make these more attractive for the consumer and increase sales," said Xavier Mosquet, a senior partner with Boston Consulting Group in Detroit.
The leases also make sense for consumers looking to jump into new technology such as the electric vehicles coming on line this year, analysts said.
"The lease payment really opens the Volt to the mass market beyond early adopters," said Jesse Toprak, an analyst at TrueCar Inc., a Santa Monica auto sales and pricing information company.
Consumers who lease limit their risk because they will be able to return the cars to the automaker after three years if they don't perform as expected or have reliability problems, he said. Such a deal protects early adopters from paying a high sticker price for a car that might have a poor resale value because of its performance.
For those who would rather buy the car, a $7,500 federal tax credit designed to accelerate entry of electric vehicles into the marketplace will reduce the cost of a Volt to $33,500.
The tax credit also applies to the Nissan Leaf. But the Leaf could be eligible for an additional $5,000 rebate pending results of emission tests, said Johanna Levine, air pollution specialist with the California Air Resources Board in Sacramento. Together, the government subsidies could lower the base price for the standard Leaf to $20,280 in California.
Chevrolet said it did not put the Volt through the testing because it would have delayed the launch of the car. Nissan has said its Leaf will qualify for the rebate.
The sticker price of the hybrid Toyota Prius, the current favorite of gasoline misers and eco-drivers, ranges from $22,150 to $28,820, depending on the trim level and equipment. Depending on the region, a Prius lease starts at $199 for 36 months and $1,999 in drive-off expenses.
The Volt will be initially sold in California, New York, Michigan, Connecticut, Texas, New Jersey and the Washington, D.C., area, regions where there is a growing power-charging infrastructure for electric vehicles.
The car comes with a kit that will allow drivers to plug the vehicle into a standard electric socket, though it will take about 10 hours to fully charge. Owners who upgrade a circuit to 240 volts could charge the Volt in four hours, said John Hughes, Volt marketing manager.
Although both the Volt and the Leaf are called electric cars, they use different power systems. The Leaf is an all-electric vehicle with a range of 70 to 120 miles, depending on driving conditions, with zero emissions. It is powered by a lithium-ion battery pack that will allow the Leaf to reach a top speed of 90 mph.
Nissan estimates the Leaf's five-year operating cost will be $1,800, compared with $6,000 for a gas-powered car.
The Volt is propelled by an electric motor that is also powered by a lithium-ion battery. That gives the sedan an all-electric range of about 40 miles, gas and emissions free. But the Volt also has a 1.4-liter four-cylinder gasoline engine.
When the car runs out of electricity, the gas engine kicks in and works as a generator, supplying electricity to the motor. The car can reach 60 mph in just under nine seconds and has a top speed of 100 mph.
This design extends the range of the Volt by about 300 miles, according to GM, but it also means the car burns gasoline. GM expects that many buyers will be able to make their daily commutes or errand runs within the 40 miles, or will be able to recharge while at work and that many will only rarely use the gasoline-powered generator.
Because of the engine, the Air Resources Board considers the Volt a light-duty plug-in hybrid electric vehicle rather than a pure electric, zero-emissions auto.
Hughes said the extended range of the Volt addresses the biggest consumer concern about electric vehicles — driving range — and is a marketing advantage over the Leaf.
The Volt "gives you the ability to drive just on electricity, but you also have range confidence. You are never going to worry about your battery charging down in traffic or on a very hot day. You won't have to turn off the air conditioning to preserve electricity," he said.
There is a market for both cars, said James Bell, an analyst with Kelley Blue Book, the auto pricing information company.
"We are just at the very beginning of the learning curve for selling electric vehicles and how people will use them and decide between different propulsion choices," he said.
For electric vehicle fans looking to go upscale, the Tesla Roadster, a sports car, is already on the market. Tesla Motors asks $109,000 for the two-seat speedster, before tax credits and rebates.