Depreciation versus sales numbers

I read that Chevy has used up about half of their allotment of full-value Federal Tax Credits. If Chevy sells 30k Bolts a year then right around the three year mark a new Bolt will start costing a lot more. I cannot recall the exact decline in the tax credit curve and I realize it won't go away immediately but decline in value gradually. All the same, a Bolt bought today may well hold value well today. My cost today is, let's say, $37,495. My tax credit if I can use it all is $7500, making my out of pocket the $29,995 (makes me sound like Earl Scheib, don't it?). That same vehicle, three years hence, will cost more out of pocket, making my used Bolt a better bargain, since it's residual value should be boosted somewhat by the used-versus-new value at that time.

I had to think this through and of course much of this depends on continuation of both EV tax policy (we don't even know that Congress won't kill the tax credit outright), and market demand for the Bolt. This also makes we wonder what the lease terms forecast in terms of residual value and how the credit plays into valuation. I'm not a lessor so if anyone who is and who has thought about what that might imply, I'd be delighted to be a good listened.

It makes a good story, but technological advances and declining manufacturing costs are going to work against it.

When GM announce they were paying $145/kWh for their battery, they also announced the expected future prices, and how they expected them to decline. Yes, that's a lot of expectations, but still something to consider.

Consider this graph:



Source:
http://insideevs.com/gm-chevrolet-bolt-for-2016-145kwh-cell-cost-volt-margin-improves-3500/

Right around the time that the tax credit expires, battery prices will be falling too. It could end up that GM actually lowers the Bolt's MSRP in line with the tax credit so that the cost to the buyer stays about the same.

It would be ideal if the MSRP came down at the same time the tax incentive credits or no longer available but I'll believe it when I see it

Fargoneandout said:

If Chevy sells 30k Bolts a year then right around the three year mark a new Bolt will start costing a lot more.

Click to expand...

Don't forget that Volts and Spark EVs also count towards GM's 200,000 EV sales number. This means that GM may hit 200K more like 2 years from now instead of 3.

tgreene said:

Fargoneandout said:

If Chevy sells 30k Bolts a year then right around the three year mark a new Bolt will start costing a lot more.

Click to expand...

Don't forget that Volts and Spark EVs also count towards GM's 200,000 EV sales number. This means that GM may hit 200K more like 2 years from now instead of 3.

Click to expand...

Last time I ran the numbers, GM was at ~112K total sales. That doesn't count December since they haven't reported sales numbers yet. For the last 6 months, the Volt has been selling about 2000 a month, or about 24K for the year, so you can probably safely inflate that number to ~114K. That leaves ~86K units to sell. If the Bolt sells 30K this year, and the Volt 24K, that leaves about 32K for 2018. Which means they'll hit the phaseout number in the first or second quarter of 2018.