General Motors is stopping production of the Chevy Volt and European sibling Opel Ampera for five weeks due to slow sales.
“Even with sales up in February over January, we are still seeking to align our production with demand,” said GM spokesman Chris Lee.
GM told the 1,300 employees building Volts at its Detroit Hamtramck plant that they will be laid off from March 19 to April 23.
Chevrolet sold 1,023 Volts in the U.S. in February and 1,626 so far this year. In 2011, it sold 7,671 — short of its initial goal of 10,000, and GM had planned to expand production of the $40,000 plug-in, extended-range electric car to 60,000 this year, with 45,000 for sale in the U.S.
“The fact that GM is now facing an oversupply of Volts suggests that consumer demand is just not that strong for these vehicles,” comments Dr. Lacey Plache, chief economist for auto research site Edmunds.com. “The price premium on the Volt just doesn’t make economic sense for the average consumer when there are so many fuel-efficient gasoline-powered cars available, typically for thousands of dollars less.”
The Volt is a technological “halo” car for GM, but also has been a political target. Critics have pointed to its price tag and the federal subsidy of $7,500 plus state subsidies for people to buy one. They charge that the average buyer has a $170,000 household income and doesn’t need to have a new-car purchase subsidized.
Sales also took a hit last fall when the National Highway Traffic Safety Administration opened a probe into why two Volts burst into flames days or weeks after severe NHTSA crash testing. NHTSA later deemed the Volt safe, meanwhile GM on Jan. 5 said it would improve the battery structure and coolant system.
But the NHTSA probe, too, became a political issue when critics in Congress alleged that the Obama administration delayed public disclosure of the fires — the first was in the spring of 2011 — because of its efforts to promote electric cars and because the government still owns a stake in GM.
The company tried to stay out of the political fight. “We did not design the Volt to become a political punching bag, and that’s what it’s become,” CEO Dan Akerson told a congressional hearing on Jan. 25.