Chevy Volt Gas Savings: Myths and Reality
There has been much written and said about the operating costs of the Chevy Volt. Proponents and critics have both been a bit deceptive on claims about just how much the Volt can save or cost you by mostly running on an electric charge before switching to gas. Snopes.com gives a fairly accurate picture of the true fuel savings in a recent analysis.
First, it is important to recognize that true operating cost consists of depreciation, insurance and maintenance as well as energy consumption. The high cost of the Volt puts it at an immediate disadvantage to conventionally powered vehicles. Even after federal and state tax giveaways, the vehicle costs about $15,000 more than comparable gas-powered cars. It is unlikely that the car will hold much of its value considering that improvements should be made in alternate vehicle technology (thus making the Volt obsolete within years) and the battery is expected to begin depleting well before year 8. Current cost estimates for battery replacement are about $8,000. The battery has an 8 year / 100,000 mile warranty so General Motors may be incurring the costs to replace batteries as owners approach year 8.
So, what can you actually save on gas costs for the Volt? According to Snopes, it cost an average of $1.70 in electricity cost to charge the car. That sounds reasonable. Snopes only gives the Volt an electric range of 25 miles, which seems like it is on the low end of estimates. I would guess the average range, under a variety of conditions, to be closer to 30 to 35 miles. Many small fuel efficient vehicles will get about that many miles per gallon, so you can essentially save a gallon of gas a day.
What has not been calculated by those discussing the gas savings for the Volt is the gas usage by the car even when in battery mode. GM and the media have been pretty quiet about the fact that, under certain conditions, the Volt will use gas during the initial battery phase. Probably not much, but some cost should be added for the additional gas usage. Also, the vehicle requires premium fuel which costs about 7 or 8 percent more than regular, another fact ignored by the media.
Disregarding the gas used in initial battery phase as well as the higher cost of premium fuel and using $3.70 a gallon for gas the simple math gives us a savings of about $2 a day. That is under pretty much optimal conditions. This is not fuzzy math, just a basic calculation that is easy to understand. How is it that proponents are claiming that so much can be saved by buying a Volt?
There have been many dubious claims circulated that hyped the potential for the Volt. Jay Leno, who owns about a hundred exotic cars, supposedly only drives a Chevy Volt and has gone at least 12,000 miles on a tank of gas. Highly unlikely. Crony corporation, General Electric, claims it is buying 12,000 Chevy Volts and forcing all employees to drive them so that they can save money. Really? Does anyone believe that GE is spending about $480 million to save $2 a day in gas for each vehicle? GE has also told employees that they can run the cars on gas only, further evidence that GE's decision to buy Volts is a blatant example of crony capitalism.
There are lots of other comments made by those who claim to own Volts who say they are saving so much money. I don't know what their motivations are, but anyone who wants to save $2 a day by spending an extra $15,000 does not have a very keen sense for investing.
Some commentators on the right have made misrepresentations as well, such as the Volt running out of charge in a tunnel, as if this caused the vehicle to be stuck. While this is not fair, the majority of reporting on the Volt by the mainstream media has been overwhelmingly positive with false claims of popularity and technological wonder regarding the car. How technologically advanced is a car that has a power source that takes 12 hours to charge only to have the capacity of one gallon of gas? And why are taxpayers footing the bill?
There is a perfect climate for deceit regarding GM and the Chevy Volt. President Obama has campaigned on the perceived success of the Volt and GM and the media seems to be intent on helping with his reelection bid. The blatant crony capitalism displayed by GE in buying thousands of Volts as elections approach and as they are rewarded by getting the contracts to sell charging stations is being ignored by the media. Also, GM spends billions of dollars a year marketing its vehicles and TV networks are major recipients. While some lesser viewed shows attempt to expose some of the corruption, prime time shows on major networks, some of which are otherwise fair and balanced, seem to be ignoring the crony capitalism story.
Time will tell if the media coverage on the Chevy Volt and other Government Motors' happenings will allow for a fair debate. Based on initial media criticisms of Republicans who objected to the UAW favored, contract law trampling GM bankruptcy process, odds are against it.
Mark Modica is an NLPC Associate Fellow.