GM: Sales of Volt hinge on petrol prices

General Motors Co.`s hopes of selling large numbers of its plug-in Volt electric car to U.S. drivers may hinge on gasoline prices, a company official said.

The Detroit-based carmaker needs to attract consumers beyond the "early adopters" that will be the car`s first buyers next year, Britta Gross, director of GM`s global energy systems and infrastructure commercialization project, said in Los Angeles yesterday.

"Thousands of these vehicles will initially fly out of the showroom, but that doesn`t have any impact on anything," Gross said during the Bloomberg LP Cars & Fuels conference.

"You have got to penetrate the mainstream, and that`s where this becomes very important - what`s happening with gasoline prices."

GM is counting on the Volt to revive interest in its products after emerging from bankruptcy this year. Unless gasoline prices rise, customers may be deterred by the car`s estimated retail price of at least $40,000, compared with the average price of less than $30,000 for new cars in the United States.



Tesla Motors Inc.`s Roadster, currently the only highway-legal battery car sold in the United States, costs more than $109,000. Nissan Motor Co.`s Leaf electric hatchback, set to go on sale next year, will be priced in the high $20,000 range, based on comments from chief executive officer Carlos Ghosn. That doesn`t include a monthly lease cost of at least $100 for the vehicle`s lithium-ion battery pack.

Ghosn has said battery-powered cars may account for 10 percent of global auto sales by 2020, up from less than 1 percent currently.

For most consumers, fuel price will influence the decision to buy an electric car, said Menahem Anderman, president of consulting firm Advanced Automotive Batteries.

"At $8 per gallon, the problem is solved," Anderman said in Los Angeles.

"The problem is we are at $2.75, and the politicians aren`t going to tax it more because it would cause too many complaints."

The average U.S. price of a gallon (3.6 liters) of gasoline yesterday was $2.627, down 36 percent from a peak of $4.114 in July 2008, according to the AAA Daily Fuel Gauge Report web site.

"Consumers start moving when there`s fuel-price volatility," GM`s Gross said.

"Then they don`t know where the top is, it`s very frightening."

Fuel-price fluctuations have been reflected in shifting demand for gasoline-electric hybrid cars including Toyota Motor Corp.`s Prius, currently the top-selling alternative-fuel vehicle in the United States, according to Jeremy Anwyl, chief executive of Edmunds.com, an automotive data service in Santa Monica, California.

"There is a huge correlation between shifts in gas prices and interest in alternative-fuel vehicles," Anwyl said at the Los Angeles conference.

The U.S. provides a federal tax credit of $7,500 for the purchase of a battery car, and more incentives may be needed to wean drivers from gasoline power to electricity, said Robert Bienenfeld, Honda Motor Co.`s U.S. senior manager for environment and energy strategy.

"That`s really important is that the government come up with market-affecting incentives and support that can transform the market," Bienenfeld said.

"At very cheap gasoline prices, it`s going to be very hard to move the public to any of these alternatives." (Bloomberg)