One of the hottest issues of discussion regarding the Volt is its price to consumers.

As many here are aware, Tesla unveiled it Model S 4 door sedan last week. It's hard to argue that the pure electric car isn't beautiful, and perhaps more remarkable is that such a design actually achieved a CD of 0.265.

An argument that may be more difficult to swallow is that the car is affordable. That, however, is what Tesla CEO Elon Musk claims in a newsletter he sent out after the unveiling.

"The anticipated base price of the Model S is $49,900 after a federal tax credit of $7,500," said Musk.  "The company has not released options pricing."  So that price is for the 160 mile model, not the 230 or 300 mile upgrades.

He contends though that "the anticipated sticker price doesn't tell the full story,  it's a better value than much cheaper cars."

"The ownership cost of Model S, if you were to lease and then account for the much lower cost of electricity vs. gasoline at a likely future cost of $4 per gallon, is similar to a gasoline car with a sticker price of about $35,000. That's why we're positive this car will be the preferred choice of savvy consumers."

Musk adds "Model S costs roughly $5 to drive 230 miles--a bargain, even if gasoline were $1 per gallon."

So confident is Tesla that these cars will sell, they intend to produce 20,000 per year beginning in October 2011 as long as their department of energy loans come through.  And that's in the setting of a lot of stiff electric competition at the time they roll of the line, including by then a lot of Volts.

What happens if we apply Mr. Musk's logic to the Volt?  Assume the Volt is priced at $37,400 (Wagoner said mid to high 30s).  I chose this number because it is exactly in-between the mid and high 30s, and applying the $7500 tax credit the car would effectively cost $29,900, breaching the magic 30K barrier which would make a lot of marketing sense. Now, if we  apply the same ratio Musk gives, the Volt then costs $20,930.

Do you agree with Mr. Musk?

Source (Tesla)