NEW YORK (CNNMoney.com) -- General Motors announced the final price of its Chevrolet Volt electric car Tuesday afternoon, but it's the lease rate that will probably be most interesting to consumers.
The purchase price for a Volt will start at $41,000. The vehicle qualifies for a $7,500 federal tax credit, for an effective price of about $33,500.
GM will lease the Volt for about $350 a month for 36 months with $2,500 due at signing. The price includes 5 years of GM's OnStar service.
GM will only sell about 10,000 Volts in its first year of production, which begins at the end of 2010 and they will initially be available only in California, New York, Michigan, Connecticut, Texas, New Jersey and the Washington, D.C. area.
A website at getmyvolt.com will include a Volt dealer locator. Interested customers can also call 888-VOLT-4-YOU (888-865-8496) with questions, GM said.
Powered by a lithium-ion battery pack, the Volt will be capable of traveling up to 40 miles on purely electric power. For driving beyond 40 miles, the Volt will have a four-cylinder gasoline engine that will generate electricity to power the wheels.
The lease rate for the Volt makes it competitive with Nissan's electric compact car, the Leaf. The Leaf is a purely electric vehicle with an up to 100 mile range. Unlike the Volt, the Leaf has no gasoline motor as a backup. The Leaf's purchase price is lower at about $33,000 before tax incentives. Lease rates for the Leaf will be about the same as for the Volt.
The Volt's purchase price, even after tax incentives, isn't a real bargain, said Jesse Toprak, an analyst with the auto pricing website Truecar.com.
"I don't think that is attractive, by itself," Toprak said, "but the lease payments they're putting out, that opens it up to virtually everybody in America."
The difference in purchase price between the Nissan and GM cars is more than satisfied by the Volt's greater flexibility, though, said James Bell, chief market analyst for Kelley Blue Book's automotive website KBB.com.
"The Leaf is not really a replacement vehicle for most households," he said, "whereas the Volt can be."
GM's head of marketing, Joel Ewanick, told CNNMoney.com he expects more customers to lease the vehicle than to buy it.
GM recently announced that it will guarantee the Volt's lithium ion battery for eight years or 100,000 miles as a way of alleviating concerns that customers might have about the battery.
"With the battery warranty that we just announced, we're confident that Volt's going to have a high resale value," GM spokesman David Darovitz said. That's why the lease rate can be so low, he said. A lease covers only the portion of the car's value that it loses over the term of the lease -- not the entire value of the car -- plus financing costs.
At the same time that GM announced its pricing strategy for the Volt, Nissan announced that its Leaf electric car will match GM's 8-year/100,000 mile battery warranty. Nissan also announced the first states in which the Leaf will be sold: California, Washington, Oregon, Arizona and Tennessee. Leaf sales will begin in other states shortly thereafter.
Pricing for the Volt isn't a terribly critical business decision for GM, Toprak said, since the car is expected to lose money, anyway, during its initial run. It's really an image-making "halo car" for GM.
Volkswagen is planning to start recalling millions of diesel vehicles in January, and the work will take a year to complete. More
Japan might be holding off on stimulus for now, but economists expect policies to change by the end of the month. More
For years, Microsoft has said that its Surface tablets would replace traditional laptops, but Tuesday it announced its first ever laptop: the Surface Book. More
Smarties, a Halloween candy staple, have been around for 66 years. Three Millennial women are revolutionizing it. More
The city council of the District of Columbia is weighing a new proposal that would mandate up to 16 weeks of paid family leave for family bonding or a serious personal or family medical issue. More