The Chevy Volt price announcement was widely anticipated. JMRosenfeld/Flicker photo.

You can buy a Chevy Volt electric car when it begins production at the end of this year for $41,000. The price of the Chevy Volt is more than the new Nissan Leaf. But Chevrolet said the Volt’s greater range gives it an advantage. And a federal electric car tax credit of $7,500 for electric vehicles brings the Volt’s price down to a more reasonable $33,500. Plus, Volt drivers can opt for a three-year lease at $350 a month after a $2,500 down payment.

Is the Chevy Volt priced to be popular?

The price announcements for the Volt and its electric car rival, the Nissan Leaf, have been highly anticipated. The Washington Post reports that one of the main obstacles to producing affordable electric cars for the mass market has been the cost of making the large, heavy batteries needed to get them down the road. The White House administration has committed billions of dollars to develop electric cars and batteries. During the 2008 presidential campaign, Obama pledged to put 1 million electric cars on the road by 2015. Whether he succeeds could depend on whether the Leaf and the Volt are priced low enough with the help of the electric car tax credit to rapidly achieve popularity.

Chevy Volt outruns Nissan Leaf

Powered by a lithium-ion battery pack, the Volt can travel up to 40 miles on purely electric power. The Nissan Leaf has a range of 70-120 miles before it needs to be parked and plugged in. For driving beyond 40 miles, the Volt’s four-cylinder gasoline engine generates the electricity to power the engine for a total range of about 300 miles without a charge. CNNMoney.com reports that GM recently announced it will guarantee the Volt’s lithium ion battery for eight years or 100,000 miles to put customers at ease about the enormous cost of replacing the Chevy Volt’s battery, which weighs about 400 pounds and will cost thousands of dollars to replace.

“No other automaker offers an electrically driven vehicle that can be your everyday driver, to take you wherever, whenever.”
Joel Ewanick, vice president of U.S. marketing for General Motors

Chevy Volt plugs into the wall socket

Starting later this fall, the Chevy Volt will only be sold in California, New York, Michigan, Connecticut, Texas, New Jersey and the Washington, D.C., area. The Los Angeles Times reports that these are regions of the country where there is a growing power charging infrastructure for electric vehicles, as well as where local and state governments provide extra incentives for electric vehicle purchases. The Volt comes with a kit that will allow drivers to plug the car into a standard electric socket, where it will charge in about 10 hours. Owners who upgrade to 240 volts could charge the Volt in four hours.

The TSLA stock zoomed out of the gate, but is Tesla itself going to stay afloat? Image from Flickr.

This morning, the tech-heavy Nasdaq stock exchange added TSLA. Tesla Motors, a seven-year old electric car company, launched its IPO this morning. The stock opened and is trading above expectations, but will it be enough to keep the company afloat?

TSLA launches IPO

Based in Palo Alto, Calif., Tesla Motors launched its initial public offering on Nasdaq today with a $17-per-share price. Already today, more than 13 million shares have been sold. Original estimates put opening bids for TSLA stock at between $11 and $13 per share.

IPO helps Tesla get money now

Tesla Motors is a company, founded in 2003 that is focused on making high-end electric vehicles. TSLA has released a few vehicles, but the price has been of concern. The company has never been profitable — it lost more than $200 million just last year. In order to continue development on the planned sub-$50,000 electric sedan, Tesla needed cash quick. With the IPO of TSLA, Toyota Motors invested $50 million in the company. The U.S. Government has also given Tesla a $465 million easy cash loan.

Growing competition in the electric car market

When Tesla Motors was first founded, the competition in the electric car market was mostly theoretical. Tesla Motors has garnered some very high-profile support with its $109,000 electric roadster — but the company needs a mass-market vehicle to be financially solvent. While they are hoping that the Tesla Model S will clock in at about $50,000 after tax credits, it will not be the only affordable electric vehicle. The Nissan Leaf gets one-third the expected range of the Model S, at only 100 miles. At half the price of the Model S, though, Nissan is already selling out pre-orders. The Chevy Volt is an electric car that has a gasoline back-up and is expected to go for about $25,000.

TSLA stock expectations

With a high stock price at the IPO and high expectations of performance, some investors are drooling over Tesla’s stock (as well as its cars). The company has made great strides for electric vehicles in the past seven years, but as an investor, it might be important to sit back and take a close look at the company. Growing competition and high start-up costs, as well as a niche market vehicle, mean that TSLA may be facing an uphill battle to profitability.