GM Loses Over $49,000 On Every Chevy Volt

Tyler Durden's picture

Watching Phil LeBlow providing Ford with a reacharound this morning reminded us of total farce that is both the forest and the trees of the US auto industry. We have discussed the FUBAR channel-stuffing and the subprime-lending SNAFU but now, as Reuters reports, we see the ugly truth about GM's little baby "the Volt is over-engineered and over-priced". Nearly two years after the introduction of the path-breaking plug-in hybrid, GM is still losing as much as $49,000 on each Volt it builds.

...

Furthermore, there are some Americans paying just $5,050 to drive around for two years in a vehicle that cost as much as $89,000 to produce. And while the loss per vehicle will shrink as more are built and sold, GM is still years away from making money on the Volt, which will soon face new competitors from Ford, Honda and others.

...

The weak sales are forcing GM to idle the Detroit-Hamtramck assembly plant that makes the Chevrolet Volt for four weeks from September 17, according to plant suppliers and union sources. It is the second time GM has had to call a Volt production halt this year.GM acknowledges the Volt continues to lose money, and suggests it might not reach break even until the next-generation model is launched in about three years. "It's true, we're not making money yet" on the Volt, said Doug Parks, GM's vice president of global product programs and the former Volt development chief, in an interview. The car "eventually will make money. As the volume comes up and we get into the Gen 2 car, we're going to turn (the losses) around," Parks said.

...

Estimates on the cost to build a Volt range from $76,000 to $88,000, according to four industry consultants contacted by Reuters with one concluding: "I don't see how General Motors will ever get its money back on that vehicle,"

...

The Obama administration, which engineered a $50-billion taxpayer rescue of GM from bankruptcy in 2009 and has provided more than $5 billion in subsidies for green-car development, praised the Volt as an example of the country's commitment to building more fuel-efficient cars.

...

As a reminder: presenting the Obama Volt

Chevy Volt - Building a Better Tomorrow from Mister Smith Media on Vimeo.

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djsmps's picture

Osama bin Laden is dead and ...

Precious's picture

That's what happens to an auto industry when the decider in chief heads up the manufacturing politburo of the USSA.

Pladizow's picture

Why is there an assumption that GM's goal is to make money?

Obummer will help find every possible way to bankrupt America!

forexskin's picture

gotta love GM logic-

loosing money on every sale, but sure to make it up on volume.

cue Ringo's Law.

GetZeeGold's picture

 

 

 

Dear Government,

 

Please keep my Volt...and just send me a new Corvette.

 

Regards,

GetZee

 

P.S. a red one if it's not too much trouble.

 

BaBaBouy's picture

Salvage...

 

Get Zee valuable Metals out of that cAR ...

{Theres probably more GOLD Grams in that car than in an Olympic GOLD Medal}

Hippocratic Oaf's picture

Post of the day, gold.

I'll take triple black if it's not too much trouble.

Manthong's picture

Can’t you make a case that the Obamamobile Volt is an example of cost for electricity skyrocketing?

LongSoupLine's picture

 

 

Yeah!!...send me a Vet too...

so I can sell it and buy a good German built product.

Element's picture

When dumb deluded people run a crippled ineffiecent state-owned company that makes inappropriate products, and that state has also been systematically undermined by obsessive reactionary 'green' politics and uneconomic legislation and policy decree noise, then those companies are going go broke, in a spectacular way ... sorry, I meant to say ... those tax payers will go broke ... in a spectacular way.

As a far better run and organised private company, from much saner country, will take away their market share, their jobs, and the state's revenues, with great ease.

And so they should.

like, duh

BaBaBouy's picture

JUNK...

 

They are all destined for the FAR-OFF China junk yards, to be scavenged for their METALS...

hedgeless_horseman's picture

 

 

"I don't see how General Motors will ever get its the American citizen's money back on that vehicle."

 

MachoMan's picture

Apparently GM didn't build these volts, therefor it cannot be responsible for the loss.

Cognitive Dissonance's picture

I don't see what the problem is. More debt equals more wealth.

We're just ROLLING in it.

<Just like my dog loves to roll around in his s**t.>

DaveyJones's picture

"the Volt is over-engineered and over-priced"

sounds like the T-Bill

DaveyJones's picture

when you have the same engineers

Thamesford's picture

 

 

Ohm - my. Resistance is not so futile, apparently!

 

Cognitive Dissonance's picture

Nobody ever went broke buying T-Bills...........yet.

The "return" on those T-Bills will soon be reverse-engineered.

BandGap's picture

Over engineered my ass. Those batteries haven't been tested to anywhere close to what they should be. That car should be labelled experimental. You can't sell a car based on a wish, and wishing isn't going to make it so with those batteries.

Surprised there haven't been more problems but maybe that's the blessing of these sale levels.

Never One Roach's picture

It's obviously Bush's fault.

sessinpo's picture

Excellent post Pladizow.

It leads to my thought that the right is failing in their feeble attempt to fight socialism. And there is always the thought that the right isn't actually against socialism, they are only against the democrats in control of it.

It would seem to me if the republicans really realized what Obama was doing, the republicans would be up in arms much more.

Canadian Dirtlump's picture

The Volt was on the books before Berri became their puppet ( puppet squared I guess, as he himself is a puppet ). To me that article is misleading however you have a confluence of political feces including:

 

  •  the volt originally as a political turd making it more appealing for the governent.
  •  the grotesque manner in which the loss of value has been passed on to the taxpayer (versus chrysler which was paying 14-20% interest).
  •  The way the E/V platform was a goal of the administration and the volt fit in perfectly.
  •  The failure of the E/V as a current central sales theme.

 

This is just another car on the crony capitalist fail train, albeit a prominent one.

mickeyman's picture

It's called fuhrerprinzip

FL_Conservative's picture

Don't worry about the losses.  GM will make it up in volume.

DaveyJones's picture

I feel the same way about vomit - Margaux Hemmingway

markar's picture

If there was any volume, rest assured they would offshore production to China.

DCFusor's picture

Hope not (GM being dead, again), I own one, and if they really cost that much to make, it's not obvious looking at the car and internals.  Of course, this is total BS, and probably includes all the NRE...if you don't know what that is, then you're not qualified to make a comment.

All the more reason to own one, actually, since "someone else" paid all that, and all I  had to pay was sticker - plus buy some solar panels so I drive for free from now on (or at least for the 8 year full warranty).

Got the tax break too, bitchez.  If this were a trade (and of course, it is) my making it would make me a hero here except for all the ridiculous GM-hate.

In fact, I traded in a Camaro (2010, SS) for it, which I bought by shorting GM *after* they announced a probable bankruptcy.  Thanks UAW!  (who else would have been stupid enough to be long then?).

Calling it an Obama car is just stupid lack of fact checking.  The concept was shown in 2006, and that was after a lot of development had been done...

what losers with an agenda your writers are.  Fuck, there's enough truth that's bad enough without faking it.  And...what payoff did we get for the same subsidies we gave Chrysler - where's their electric?  Why don't  we hate them?

Bunch of morons - bitchez.

 

malikai's picture

I think you made a great trade. Don't mind the haters. If I was there and in the market for a car, I'd have taken one of those subsidymobiles for a try too. After all, you just got some of your tax money back.

It is a shitty deal for the country, though. You can't ignore that fact.

Ricky Bobby's picture

DC it is good that the UAW can find some tempory work for its laid off members. By the way how many of your fellow brothers are qualified to be sock puppets.

Overfed's picture

I'd still buy the tried and proven Prius for half the $$, and buy PMs with the difference.

Dr. Kenneth Noisewater's picture

I agree!  I paid net 40k for a car worth 80k or more given the tech, tooling, etc.

 

Also, people are expecting tooling and R&D costs to be recouped in 1 year?  What kind of moron expects that?  If you look at the breakdown the Volt actually costs around $24k to build excluding the sunk costs (most of which got stuck on Old GM in the bankrupcy, so on paper Volt is actually profitable at 40k).

 

Plus, getting that sweet 7.5k subsidy was nice, as usually the Feds fuck me for about $15-20k per year.  Additionally, I pay at most 4 cents per mile for American power, and blended with cheap public charging it's more like 2 cents per mile.  So far, the Volt has exceeded my expectations, except for the digital OnStar stuff.

insanelysane's picture

OnStar just helps the government track you better.  When more people start driving electric cars the government is not going to like all of the monies collected via gasoline tax.  They will use the On Star to know how many miles you drove and more importantly where so they can tax you and then divvy up the tax based on which jurisdictions you were driving in.

DCFusor's picture

The onstar humans are ok, the rest kinda sucks.  I get google maps downloaded into the onstar on board and that works well.  The voice recog on the built in phone kinda stinks, but I'm used to voice recog stinking and know how to make all the things it's supposed to recognize sound unique enough to make it work.  You'd think that the ford Sync which everyone hated (but at least they've done upgrades on) would have attracted more hate here, but...this isn't rational, it's ZeroHedge.

You'd think on a site that understands flow vs amount when it's the fed, they'd understand that channel stuffing (which is done in all industries that use distributers) has kind of a limit - the amount of parking lot that exists to stuff.  And they're not real full now.

Fact checking, just in case you didn't know, Tyler, includes more than just looking at what other so-called journalists print. It's a damn echo chamber, not journalism.

Most of these "wizards" evidendly haven't tried to actually run a business that sells something that mainly sells in springime, with union workers (or any other kind) who expect year-round jobs.  And plants that cost money to sit there when no operating - especially if you build them so big they can make the peak sales month volume in that month.  That's just not how it's done.

I suspect most here are either infantile (the ones that aren't know I'm not talking about them) or only paper pushing screwballs who never have to make anything real, or run an actual payroll.

I love my Volt, I like the way GM compensated for the pretty high sales price by loading it up with all the luxury features that don't cost them much to add, but usually are expensive options in the showroom.  It's a neat car.  The most agile in city driving I've ever experienced, and it gets my rural mountain driving done fine too.  I've spent zero on power co electrticity, since I'm off the grid anyhow, and used 18.5 gallong in 5987 miles, some of that on purpose to make sure I break in the ICE.

But, if people here want bad deals from other manufacturers, or lousy looking, noisy, cheap, bad handling, econobox cars, let'em buy a prius - they are what they are, some people like them.  They get good mileage too.  Just not as good.

Must really piss off the GM haters that this is such a leapfrog tech that everyone else has hired away their engineering team to make copies - from BMW to Mercedes, to VIA motors.

So, we can remind them when they buy one of them, who it's a copy from - the Volt.

There's a reason last months Volt sales were record - and 3 times the Leaf sales, and also more than the Prius for the same time in the market if you look back to their second year availability.

Cash talks, this ZH here's all bullshit, so I'm walkin'.

Junk away losers - do you think I give a half-shit?  Do you go collect likes like they meant something of value to anyone with an iq above room temp?  Fine for ya.  Drivel to me.

patb's picture

DCFusor,

 

I really, really like the Volt, it's interesting technology, but Here are my concerns with it.

1) The IC engine is overly integrated with the primary propulsion, I think that's a problem in the prius, too,  multi port transmissions and

extra clutches are just maintainance problems waiting to happen.

2) The Volt lacks an offboard takeout inverter mode.  If the Volt were designed to feed power to the grid or house, then it could serve to handle peak loads, and still let your Solar PV or Wind Turbine handle average loads.  

3) The price point is a little high, if you look at the Plug in Prius vs the Volt, you see, A line between Range, Cost that Volt, Prius plug in, Fiskar, are all exploring.

I bought a used 2010 Honda INsight because at the time my car was dying and I needed something then.  I love the Volt and can't wait to pick up one that's Second generation or buy one used.

 

I think the BS about GM losing $80K per Volt is just that.  The NRE, particularly the tooling and Battery engineering is Program costs, the key is are they hitting their sales numbers, and is the car generating Buzz and Halo.

 

When the Prius came out, Toyota was losing $10K/car and GM wasn't willing to lose $100Million investing into their Hybrid.

it was a "Big Mistake" according to Bob Lutz.  http://priuschat.com/threads/gm-not-making-hybrid-a-mistake-so-says-lutz...

 

Rick Wagoner says killing the EV1 was the biggest mistake of his career.  http://articles.latimes.com/2009/mar/31/business/fi-gm-cars31

 

Had GM kept up the EV1 and released a version with a small generator that would serve as a range extender, the car would have sold well. a 2 seater with decent performance, great aero and a gas augmented range of 200 miles, would have challenged the Prius

early off the blocks.

 

It will take a few years for the Volt to pay for it's investment, but, lots of technology struggles at first, and the Plug in Prius, Plug in Accord, Tesla S and Roadster, Fiskar Karma all argue that GM is right.

 

I am probably not a good volt target right now, my backyard is kind of small but, I think the Volt will prove to command it's niche much as the Prius is starting to become Toyotas biggest seller.

 

My Uncle is a big Detroit Exec and he said "Electric Cars aren't Selling", and I said "If you count Hybrids, Electrics are now the 3 biggest seller by platform. All a plug in Hybrid is a Hybrid with a bigger abttery and a small charger. All that's happening now is the

Range is increasing and the charger rates are picking up  

 

As Hybrids get bigger and Badder, the world will change.

Dr. Kenneth Noisewater's picture

"1) The IC engine is overly integrated with the primary propulsion, I think that's a problem in the prius, too,  multi port transmissions and

extra clutches are just maintainance problems waiting to happen."

 

Disagree.  The IC only kicks in when the battery is depleted, and operates either serially (at speeds below say 55mph) or in an efficient clutched-in mode at speeds 55mph and above.  The computers control when the clutches engage, and have total control over the motor/engine RPMs so theoretically they can do RPM matching and minimize wear when engaging.

 

"3) The price point is a little high, if you look at the Plug in Prius vs the Volt, you see, A line between Range, Cost that Volt, Prius plug in, Fiskar, are all exploring."

 

Early adopters get the shaft, and as a lot of haters whinge, the high price point is still too low to cover all of the R&D and tooling that got written off during the bankrupcy.  The "unique" electric powertrain and associated batteries add probably 10k to the final cost (though GM quotes a replacement battery currently at 3k assuming you turn in your current battery), and that will only come down as battery tech improves and R&D + tooling get amortized over a larger pool of hardware and electrified drivetrains gain economies of scale.

 

I doubt there will be a $30k EREV from GM that's a Volt, but in 5-10 years I could see the EREV platform available in a number of different existing lines as a $5-10k option, with the Volt being either a mini-brand or branching out with a number of models such as MPV/CUV and 2-seater Chevy equivalent ELR (perhaps Volt SS?).

patb's picture

DCFusor,

 

I really, really like the Volt, it's interesting technology, but Here are my concerns with it.

1) The IC engine is overly integrated with the primary propulsion, I think that's a problem in the prius, too,  multi port transmissions and

extra clutches are just maintainance problems waiting to happen.

2) The Volt lacks an offboard takeout inverter mode.  If the Volt were designed to feed power to the grid or house, then it could serve to handle peak loads, and still let your Solar PV or Wind Turbine handle average loads.  

3) The price point is a little high, if you look at the Plug in Prius vs the Volt, you see, A line between Range, Cost that Volt, Prius plug in, Fiskar, are all exploring.

I bought a used 2010 Honda INsight because at the time my car was dying and I needed something then.  I love the Volt and can't wait to pick up one that's Second generation or buy one used.

 

I think the BS about GM losing $80K per Volt is just that.  The NRE, particularly the tooling and Battery engineering is Program costs, the key is are they hitting their sales numbers, and is the car generating Buzz and Halo.

 

When the Prius came out, Toyota was losing $10K/car and GM wasn't willing to lose $100Million investing into their Hybrid.

it was a "Big Mistake" according to Bob Lutz.  http://priuschat.com/threads/gm-not-making-hybrid-a-mistake-so-says-lutz...

 

Rick Wagoner says killing the EV1 was the biggest mistake of his career.  http://articles.latimes.com/2009/mar/31/business/fi-gm-cars31

 

Had GM kept up the EV1 and released a version with a small generator that would serve as a range extender, the car would have sold well. a 2 seater with decent performance, great aero and a gas augmented range of 200 miles, would have challenged the Prius

early off the blocks.

 

It will take a few years for the Volt to pay for it's investment, but, lots of technology struggles at first, and the Plug in Prius, Plug in Accord, Tesla S and Roadster, Fiskar Karma all argue that GM is right.

 

I am probably not a good volt target right now, my backyard is kind of small but, I think the Volt will prove to command it's niche much as the Prius is starting to become Toyotas biggest seller.

 

My Uncle is a big Detroit Exec and he said "Electric Cars aren't Selling", and I said "If you count Hybrids, Electrics are now the 3 biggest seller by platform. All a plug in Hybrid is a Hybrid with a bigger abttery and a small charger. All that's happening now is the

Range is increasing and the charger rates are picking up  

 

As Hybrids get bigger and Badder, the world will change.

Blankenstein's picture

Even if the car was a concept shown in 2006, it would have never made it to production if GM wasn't bailed out by the gooberment.  Also, taking a car from concept to full production requires ample amounts of time and money.  

patb's picture

shit happens, get over it.

BTW, the Feds bailed out Chrysler Twice, Lockheed in the 70's, 

http://en.wikipedia.org/wiki/Bailout

and lots of other companies

Blankenstein's picture

No reason to be upset about the bank bailouts with taxpayer money or any of their 0% Fed loans either then I guess.  ZH or any other non-propagandist website should just fold, because you know, shit happens. 

dirtbagger's picture

DCFuson -

Don't you know these posters hate facts even more than science.  An experimental electric car - Oh my God, must be the fault of that facist, socialist, nazi, communist Obama.  

Has anyone ever heard of research and development.  In the world of new experiments, failure is typically the end result.    VOLT is relatively new hybrid concept and it is doubtful that it will ever be profitable.  All electric cars are going to have issues until there is a breakthrough in battery/energy storage.  Guess there should never be any R&D again.  Let's skip the Middle Ages and go right Back to the Dark Ages.

Winston Churchill's picture

The drawbacks and problems with battery operated anything have been known for 130

years.An enormous ammount of money has been spent over that time on R & D.

The same flaws remain in spite of it.

Banging your head against a brick wall rarely topples it.

Its not different this time.

patb's picture

It's all a matter of price point.

Battery $/KWH are falling steadily.

Motor $/KW are rising.

It's all in the data.