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GM Loses Over $49,000 On Every Chevy Volt
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.
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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.
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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.
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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,"
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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.
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As a reminder: presenting the Obama Volt
Chevy Volt - Building a Better Tomorrow from Mister Smith Media on Vimeo.
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I can hardly believe it. 49 grand lost per car??
Fucking epic, you would think you lot were in England. I thought our government were meant to be the stupid fuckers around here?
England AND America, pissing our money up the wall on failed and downright stupid ideas.
May you're shores be blessed with the one eyed scotch cunt gordon broon asap. Seems like you lot need his advice and financial accumen on board.
Forward comrades, for the future.
USD are no longer worth anything, so the "losses" are immaterial. Economy at an inflection point. People no longer doing useful work - even the electric cars being produced to make busy work are undervalued in a system where the value of fiat is collapsing. The strain on the system as people leave the workforce and insist on being cared for in the nanny state will become even more extreme. We have a long way to go, since even Greece hasn't "collapsed" fully. Electric cars will be the least of our worries.
Simple solution:
Government Mandate-- everyone own a Volt and tax them if they don't.
GM
< No real innovation since the Model T.
< I {heart} my SUV.
The answer is that the SUV and the Volt (and all alt-E charge-alikes) are one and the same.
The SUV boom was/is financed on either gubmint-licensed drain-offs of supposed equity on inflated house prices or directly via subprime car lending.
The electric car boondoggle is financed by gubmint-issued loans, credits, direct taxation on viable industry, fangled carbon market channels, transfers from environmental budgets, etc.
There has been no real innovation in the auto industry since the Model T that truly benefits the consumer.
Name any "innovation" but all you get is an assortment of gimmicks daisy-chained to one another in succession through time. The auto industry goes hand-in-hand with the dispersion of the population in the suburban sprawl and all innovation since the Model T is designed towards that specific end.
It's easy to single the Volt out because of Obama's bailout, which I am not a fan of. Not by a long shot.
I wonder how much Ford loses on some of its cutting-edge electric/hybrid vehicles? Because, let's face it, we'd be cheering Ford on for being brave enough to stomach losses if they had a version of the Volt, since they did not take King O's bailout bucks.
I wonder how many losses all the automakers have taken when they introduce new lines of vehicles? I'm thinking of Chrysler who started the minivan craze back in the early 80's. I'm betting the first batch of those that rolled off the line had a lot of costs to amortize. Would it be better if they had just stuck with sedans, coupes, and pickups? Minivan sales over the year suggest otherwise.
To me, the worst taint of all is the taint of a bailout. It discredits any legitimate risk GM takes as they attempt to turn their company around. Maybe they never will, or maybe the stock price will languish $30 below where the govt. needs to sell it just to break even.
The only U.S. electric auto manufacturer with a decent business model (and product) is Tesla Motors. Other than that, the U.S. electric auto industry is dead.
"Tesla says 40% of its Roadsters may catch fire"
http://www.theregister.co.uk/2010/10/07/tesla_roadster_recall/
What return did the egyptians get on their pyramids?
THERE YOU GO AGAIN...
USA is creating new energy technology.
DUH! There is over cost investment to create electric cars.
And do you want VOLT to charge say TESLA $100K which is also losing millions?
STOP THE FAKE REPUBLICAN CROCKODILE TEARS...please we all get your fake act.
New energy tech costs more up front and everyone knows that fact of development.
SOLYNDRA created the first ever curved surface solar panel that was the most efficient ever. But it cost too much.
And CHINA dumped prices on flat surface solar and wipe out the higher cost curved surface. Got thta?
Now stop acting like whining attack Republicans first
and start acting like INTELLECTUALLY HONEST AMERICANS first...
i shouldnt have to pay for you to drive a subsidized vehicle
and who gives a damn about a curved solar panel with the developement of paint on solar panels
curved panel is already behind the curve
GM..The heart beat of Amerika...Now I get it!!
#Forward Bitchez
Obama does believe USA citizens are his bichez, except Tea Party!
This is what happens when a smug community organizer basically runs a business. At least he's not making any evil profits eh democrats?
""I don't see how General Motors will ever get its money back on that vehicle."
GM is now Government Motors. Government is a poltiical animal, not an economic one. It panders to economic considerations only as necessary to advance polticial consdierations. Ongoing production of the Volt was a political decision meant to further the religion of Gaia and to foster supprt with Gaia supporters of the current regime.
The goal is not to make the economic investment back, the goal is to make the political investment back, no matter how many air-back Bernanke Bucks (tm) have to be printed to make it happen.
Yeah, lets re-tool all American manufacturing like Obama did GM. Now that's an idea who'se time has come.
What is good for GM is good for America. Yes we can.
I missed the part of the Republicrat platform that discussed the auto industry. Romney's dad made Nash Ramblers, so Romney is probably very qualified in this area.
Soetoro Volt
The Bullshit-Barry-Ass-Clown-Mobile
A loss of 49K per vehicle???
Do tell how many cars they expect to sell per quarter in order to break even.
So nice to see the narrow minded people flock to this thread....
There is a catch-22 playing out...
Either the Volt or some descendent becomes viable or a good chunk of the happy-go-lucky motoring crowd will be immobile in 15-20 years, or, only able to afford enough gas to match current range of the Volt...
So piss on the Volt all you like, but you had better hope that it works or your future will be very different than what you expected....
You are now free to continue with your knee-jerk vitriol.....
I'll be interested to see how Toyota's EV RAV4 with "supposed" 100 mile range before recharge competes with Government Motor's Volts.
I hear ya...and i think most folks in the ZH community recognize the peak of the 'easy energy' curve and the conundrum it brings to a surburban sprawl nation that has developed since WW2.
But is the Volt really the best answer we can come up with?
Govt puts $50Billion into GM & the Volt...is that a true effort to focus on the dilemma or a move of pure political expediency? [I think it is the latter] Our oil/gas subsidy is somewhere between $10 to 50 billion each year (depending on what you want to count like policing oil shipping lanes,etc). We are clearly not serious about the move to efficient vehicles, or any energy usage for the matter, in this country.
Hypothetically: wouldn't it be more effective to reduce the oil subsidies, letting gas go to 7-$10/gallon, then take those subsidy monies and triple the incentives (govt credit of 20+k) on the Volt? Seems that would change behavior. Volt sure would look better at half the out of pocket price w/ super low cost to operate in a expensive gas world, huh? Demand would be there...
(BTW, Same shit goes on with Solar/renewables. We dump $500,000,000.00 total loss on getting some executives rich at Soylandra when we could've used that $$ to double the tax break for us to put the panels on our homes in cost effective fashion and started getting the R&D costs recouped in an overall move to energy independence but no...)
Anyway...i just think its hard not to get worked up when we see a clusterfuck like the Volt being paraded as a legit answer by fuckers with no intention of trying to find an honest solution....
I am not defending the Volt, only pointing out that there will be *many* 1 billion dollar failures before it becomes apparent that the paradigm must change....
BTW, Solyndra was a small fraction of the program and the equivalent of Range Fuels.... funny how you never hear about Range Fuels, eh? Oh, because it was the Republican version of the same basic story....
http://www.bloomberg.com/news/2011-12-02/range-fuels-cellulosic-ethanol-plant-fails-as-u-s-pulls-plug.html
People want the merry little game to continue and it won't because it can't......
Agree...the game won't continue because it can't.
Certainly don't care which side of the red/blue coin someone points to; we can find examples of the lunacy, perpetrated in the name of "new energy", propagated on the public in an effort to obfuscate the truth. It is "the wool that has been pulled over your eyes to keep you from the truth, Neo - That you are a slave" to the easy oil paradigm and all that comes with it. A nation of fossil fools. How much of our time/energy/productivity/money is spent [or more aptly wasted on] policing/defending/subsidizing/encouraging an outdated system of poorly planned communities/roads/education/nutrition?? Far too much. This merry little game shouldn't and can't continue...
I point out the Red-Blue thing as it should be very clear that 90% of what passes for wisdom in the posts here is nothing more than partisan bullshit....
Not to mention that $49,000 figure includes all the R&D required averaged over ~20,000 unit... In other words, using numbers to feed an insatiable confirmation bias....
Losses don't matter anymore in a total Fiat system.
There is no penalty for producting a disasterous product if your losses will be bailed out with freshly printed counterfeit money.
The GM story is the story of the depression - how stupid fools mis-read a depression as a recession thatnks to some hokey cokey monetarism.
In previous recessions, factories, builders etc. would take advantage of cheap labour and up their production (supply side) and in every case the recession 'ended' after less than 2 years and the customers returned - meaning the recession was turned to their advantage.
The problem is this isn't a recession - it's a depression - but they built and built anyway - now after 4 years the customers have still not returned and "whaddyaknow" - turns out these companies are starting to fold. Only the biggest and those with the biggest backers will survive this one.
If you look at GM they are selling cars at a loss in anticipation of the crisis being over soon and a return to real growth.
I laugh at such idiotic bum-foolery.
They will get what they deserve in the end - torn limb from limb by an angry (and by then rational) public.
You can see the same mistake being made all over the world - by companies, by Governments and by individuals. Stupidity has no prejudice.
I said a 10 year depression (at least) in 2008 - and I'm still saying it now. So why are some politicians (both sides of the Atlantic) getting away with STILL predicting an end when they originally predicted a 2 year crisis?
Has the world stopped to stare into the headlights?
$49000 a Volt eh. Wel that cost them about $300000 then since they built (or is it sold) about six of em.
edit
Raise taxes to make up for difference. Done.
What is everyone talking about, sounds like a bargain, might have to pick up a few... after a bicycle, horse, and kayak.
I lose money on every car, but make it up on volume.
spat some coffee there
Let me see if I have this right. It costs $80k to build a Volt and I can drive one for 2 years for $5k? Wait just a minute, I'll be right back in a few...
That's exactly what I did. I have a Volt and it's an arbitrage dream. Trading is trading.
after all costs cash flow positive. It has passed the acid test...my wife took it and gave me our Hyundai Sonata.
Kawasaki Ninja Bitchez!
It is funny. One can make an existing internal combustion engine car in to electric for about $5000 - $8000 !!!!
And this is an entire new market niche that no of the BIG car makers would want to talk or even think about, for it will cut through their "green" plans as hot knife through butter :)
Educate yourself:
http://knoxev.org/download/eaaflyer-evconversions.pdf
http://en.wikibooks.org/wiki/Electric_Vehicle_Conversion
http://www.youtube.com/watch?v=k62FzVuSF58
let's read an article from someone who knows what the hell he is talking about, this article is junk.
The real deal is value the breakeven after a few more years of selling this product, I dont own it, but I sure as hell would rather gift money to american workers than the scum international banking libor rigging scum.
I like to boost my volt to 500kV and with the addition of the flux capacitor, holy shite does it rip a hole in spacetime. Thank you GM.
As Holman Jenkins has pointed out, "electric" cars run on coal.
They'll make it up on volume... What would Henry Ford do?
A 1967 Shelby Mustang in British Racing Green - now that's a car!
"It's true, we're not making money yet," but the Volt will "eventually will make money.
..... didn't we see this statement 20 years ago????:
"It's true, we're not making money yet," but the SATURN will "eventually will make money.
Losing money is winning when using Obama Math
Who is GM's accountant? I lost $50 billion in profits because DDT prevented cockroaches from developing thumbs and alcoholism when my broker said they would. I would like them to help me with my taxes.
Tesla cars are prettier.