GE Asterisk on Record Volt Sales Deserves Asterisk (Update 1)

Analysts have also pointed to sales of the Nissan Leaf, down 29% for the past two consecutive months, as a sign that all is not well among U.S. consumers when it comes to the electric car market.

However, the "inorganic source of demand," from GE and the trend in Leaf sales didn't reflect what was simply a good month for the Volt in March, once GM broke out the retail vs. fleet numbers on a conference call with analysts and the media.

Fleet vehicle purchasers are often the leaders in adoption of high-cost vehicles since these vehicles are able to reduce operating expenses. While broad consumer adoption of the Volt will be a key to its long-term success, at this point in the sales cycle downplaying fleet purchases like the GE agreement can push too far in a direction suggesting the entire story hinges on the retail market.

One car analyst who could not be quoted for compliance reasons said of the March sales, "I just drove back from Maine and saw four Volts on the highway. Fox News is even running positive stuff on the Volt, so the general tone as related to the Volt being a political punching bag has been improving."

Republicans have even been able to position electric cars as an end market for the natural gas power plant and nuclear power industries.

The analyst also said the struggles of the Nissan Leaf don't take away from the Volt rebound, since the Leaf has a more limited market due to its limited range of 80 miles before needing to be recharged. True electric is a tougher sell than plug-in hybrid.

Stifel added in a research report on Tuesday, "It appears the fears around the NHTSA Volt fire investigation have subsided. Leaf sales on the other hand have been stagnating over the past several months, with total sales coming in below 1,000 units every month since September 2011, and remain well below the June 2011 record of 1,708 units ... Sales data to date suggests that in North America, the PHEV platform, given no range anxiety concerns, may be the better investment."

The overall sales picture for the Volt is still complicated by GM's ambitious sales target. Based on the record month, GM could sell close to 25,000 Volts in North America in 2012 if it keeps up a pace of 2,000 vehicles. Add to that a European backlog of 7,000, and the Volt could grow sales by 300% in 2012 (up from 10,000). However, that would still fall far short of GM's original goal of selling 45,000 Volts in North America this year.