Chevy Volt: Pricing And Capacity Decisions In Response To Government Incentives For The Electric Vehicle Industry

At the end of 2013, executives from General Motors (GM) must make decisions about what production capacity and price to allocate to the Chevrolet Volt electric vehicle considering the costs of supply chain shift necessary to make changes in the assembly process. Concerns about battery life, price, and driving range have influenced most consumers' decisions to continue to purchase conventional fuel vehicles despite the U.S. federal government's implementation of incentives. What must the senior GM team do to balance concerns of cost with the potential social effect of selling a public-interest good such as the Chevy Volt?