Is $40,000 too much?

flickr photo credit: Larry Boswell, Chevy Volt Concept

I wrote not long ago about the Volt and the costs of innovation that General Motors decided to accept for its development.
In an article in the Seattle Times, GM's Bob Lutz revealed that the first generation Volt will sell for $40,000, about $10,000 more than originally projected. Lutz went on to say the auto maker will not profit from sales of the car.
Lutz has made it clear that cars like the Volt are the wave of the future. He expects a quarter of all cars sold between 2020 and 2025 to be either electric or hydrogen powered.
Like I explained in my previous post, I'm unsure about the government subsidizing the cost of the vehicle. The United States Congress is looking into tax breaks for those who purchase vehicles like the Volt. I would rather the government take the money and invest it in expanding an alternative fuel infrastructure, such as hydrogen fueling stations. Stations such as these will need to be available once those alternatives become more viable.
I was reading comments from readers over at the Autoblog and one stuck in my mind from Keat. He made the point that as production ramps up, like any new product, the price comes down. Basic economics. Plus, as GM switches gears and produces more fuel efficient vehicles, the Volt will be the auto makers "halo car". It will be the car that set's the stage for GM as the innovator they need to be as we head into a future of sparse yet expensive fuel supplies.