GM Now Losing $59,000 on Every Chevy Volt Sold

Daniel Greenfield, a Shillman Journalism Fellow at the Freedom Center, is a New York writer focusing on radical Islam. He is completing a book on the international challenges America faces in the 21st century.


Obama-volt

Or to put it another way, you can buy a 2013 BMW M3 with the money lost on each Chevy Volt sold.

General Motors Co. is slashing the price of its plug-in hybrid Chevrolet Volt by $5,000, making it the latest automaker to lower prices of electric vehicles in the face of lagging consumer demand.

The Detroit-based automaker said it will cut the base price 12.5 percent, from $39,995 to $34,995.

Not a big deal, right? We all know the margin must be big enough to absorb a price cut. Not so much.

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, according to estimates provided to Reuters by industry analysts and manufacturing experts. GM on Monday issued a statement disputing the estimates.

Cheap Volt lease offers meant to drive more customers to Chevy showrooms this summer may have pushed that loss even higher. 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.

So GM was already losing more than half the purchase price on each Volt. Now the hole has gotten even deeper. And if there’s another Volt price cut, then the car will be sold at 1/3 of what it costs to make.

Just wait till Government Motors brings us the Yugo. Socialism automobile manufacturing at its finest.

  • Veracious_one

    Chevy should sent the Volt down the Edsel road…..

    • bobbleheadguru

      Why?

      It outsold the Prius year one (when it first launched) and generated over $1,000,000,000 in revenue. Prius is now the #3 nameplate worldwide (several years later). That is not a bad template to follow.

      The world does not just want F-150s.

      • Shawn Willden

        > The world does not just want F-150s.

        And Ford would be pissed if GM were to start selling F-150s.

      • edlarson

        First year sales of the Volt were primarily government fleet sales. I wonder how many of the current Volts are also being sold to Uncle Sam?

        • bobbleheadguru

          GM has publicly stated that Fleet sales were less than 5% of total Chevy Volt Sales. A subset of Fleet Sales are to the government.

        • Randy

          Ive seen many Volts, never saw one with a government plate.

  • DogmaelJones1

    Now, suppose I drive a Volt up north and the battery is exhausted and I come to a dead stop next to a cow pasture, with no plug-in convenience for miles around, and the farmer is laughing his butt off. What then? The farmer could be talked into loaning me a gallon of gas to get to the nearest gas station. But he can’t loan me the voltage to recharge the battery. Yes, plug-in cars are a great idea. Leave it to the government to subsidize it.

    • TDubin

      Volt uses either gas or plugs in to charge battery, so much better in emergency you’ve described than electric-only. You CAN borrow a gallon of gas from the farmer.

      Can’t defend losses until there is a plan to turn to profits and recover that money lost in the future. Many companies do use loss-leaders or lose money on before a product becomes profitable. Some automakers seem to lose money on small, high-mileage cars to moderate their CAFE average so they can sell bigger, high-profit vehicles.

      Maybe put the Volt losses into the category of Marketing (builds GM’s image?) or Government Relations (i.e. lobbying) and it might make sense

      • DogmaelJones1

        Okay. But suppose I forgot to add some gas in case the battery is dead? Still, the same crisis, and I’m not the one laughing my butt off.

        • TDubin

          I think the Volt can move on gas alone until battery has some juice – I’m not a tech, need to check it out, but I think that was part of their plan to alleviate worries about electric-only leaving you stranded. Not necessarily a fan, just looking at why smart people would push the Volt.

          • CowboyUp

            People have their own reasons and interests. So called smart people push socialism too. Come to think of it, a lot of smart people did fall for the man-made global warming hoax.
            I might have fell for it myself, if I hadn’t noticed in ’82 that two of the first ‘scientists’ peddling it were the same ones that wrote a ’73 or 4 paper saying we were causing the onset of an ice age. I noticed they had polar opposite problems with the same cause and the same ‘solutions’. Hmmmm.
            By the late 80s I was more familiar with microwave, satellite, and troposcatter communications. I figured someone clued them in about solar cycles, and the fact that we were coming up on a big solar maximum, so the planet would likely warm up in the near term. By then I also knew that a lot of ‘science’ is junk, and many of our ‘environmental’ groups were set up with seed money from the KGB.
            Topping all that, I’ve seen a lot of health and environmental fads in my lifeltime. It often comes down to someone just trying to make a buck or seeking fame.

        • bobbleheadguru

          Suppose you forgot to put gas in your yestertech internal combustion engine? What then?

          Either way you have to get a gallon of gas. What is the difference?

        • John Braeking

          The battery never goes ‘dead’. Propulsion is all electric for the most part with the gas generator supplying electricity to keep the battery at it’s lower level of charge until you can recharge. Technically, you could drive on gas without ever charging the battery. But, that would defeat the design purpose of using grid electricity (at 1/6 the cost of gas) most of the time.

        • visitor

          Seriously? Are you trying or this is how you are?

        • Shawn Willden

          What happens if you forgot to put gas in your current vehicle?

      • CowboyUp

        It’s just another profit destroying government distortion of the market. By forcing something that clearly isn’t ready, the government is giving the vehicles a bad reputation and wasting resources that could be used to develop them. They’re putting off the day, and maybe even killing off the chance that it will ever come. A good economy can fund a lot of research, bad economy can’t.

    • Volt Owner

      It also has gas dip-shit

      • CowboyUp

        At least he wasn’t dumb enough to buy a volt.

        • bobbleheadguru

          1. Volt has the highest satisfaction in its class two years in a row from JD Power.

          2. Volt has the highest “would buy again” percentage of ANY car two years in a row. Source: Consumer Reports.

          3. An average Volt driver gets about 120MPG, 273 ft-lbs of torque, 360 mile total range and a 100MPH top speed. If you drive 15,000 miles per year, that is $1900/year saved in gas v. a 25MPG car. The effective cost of a Volt is now $27,500… about $3000 LESS than the average new car.

          Who is dumb again?

          • CowboyUp

            Obviously you. If it was such a great deal it wouldn’t have to be subsidized. You can prattle all the pr bs you want, but the subsidies and the fact that the company loses so much money on it exposes reality.

          • bobbleheadguru

            1. A tax credit is different than a subsidy… And the “George W Bush $7500 EV Tax Credit of 2008″ was passed by a GOP president 3 full years before the Chevy Volt was introduced nationally (11.01.2011).

            2. By your logic, why does the real estate industry need to be propped up (mortgage interest deduction)?

            Also, why does Big Oil need to get $30,000,000,000 per YEAR in corporate welfare? Why does that industry need to get propped up?

            “Pennies” go to EVs for the “$100 Bills” that go to Big Oil. Why no concern about that?

            Let us eliminate the “W EV Tax Credit” and Corporate Welfare to Big Oil. If that happened, the Chevy Volt would actually come out ahead.

          • CowboyUp

            The government makes around four times what the oil companies do off every gallon of gas. Lets just eliminate the special taxes on gas, and you’re volt is left in the dust again.

            Oil companies don’t get welfare btw, they get the same write offs and deductions for equipment purchases every other company gets.

            Feel free to keep deluding yourself, if it makes you feel better. But reality is, when electric cars are a good deal they’ll sell themselves.

    • bobbleheadguru

      The range of a Volt is 360 miles. A Volt Driver could drive past about 150 farms in those miles (depending on the state).

      What then?

      • DogmaelJones1

        Why do you people keep coming up with the Volt’s “good points,” when Greenfield makes clear in his article that the thing is a product of the GM bailout, that the whole thing is a subsidized, fascist “government-business” travesty, that the only possible beneficiaries of the bailout are unionized autoworkers, half of whom are paid full pay with benefits we taxpaying serfs can’t afford, without having to expend an ounce of mental or physical labor except in poker games in the union hall?

        • bobbleheadguru

          The whole point of the car is to have zero range anxiety. Use whatever you want, electricity or gas… the Volt will take it.

          Your argument starts with a basic “blinders on” confusion about the car that implies that the car can only go 35 miles…Which is like saying your car only goes 35miles, because you put a 2 gallon of gas into it (even though it has a 14 gallon tank).

          If you need the “government-business” argument, then look to the “George W Bush $7500 EV Tax Credit of 2008″. The Volt launched nationally on 11.01.2011, three full years before W signed this tax credit and well before the current president.

          …and by the way, the only president to have purchased a Volt is George H W Bush (last April).

          Q: Why not “Government-Business” stress about the $30,000,000,000 PER YEAR that goes to Big Oil Corporate Welfare?

          A: “Not in the talking points… pay no attention to the ‘$100 bills’ that go to Dictator Fuel. Instead, let us focus on the ‘pennies’ that go to EVs as part of the George W Bush EV Tax credit and call it a ‘government-business’ travesty and blame the current administration.”

        • Mikike

          Well South Korea used to be a bloody dictatorship, everything was a top down system, and lots of Koreans still has that mind set, see Asiana’s accident. And yet Korea, China, and countries like Germany, south Africa ,chile give a prof that states, politicians can be effective dictators of economic matters, even when we universally reject this notion.

  • locomotive1

    I see a photo of a Volt being sat in by a dolt who has less in his head than a bolt.
    GM isn’t losing the money. It is their former investors and now the taxpayer that are losing.

  • bobbleheadguru

    Sorry, facts don’t fit these “talking points to minions”.

    LAST YEAR it cost about $25-30K to build a Volt. They sold on average at about $38-40K. The gross margin was a solid ~$10K+. They likely lowered that number by about 10-15% this year.

    There is tooling and R & D associated with the Volt as with any major new industrial product. It was about $1B (though some propagandists tried to boost that number to “eleventy billion” or other random large number) and could be reasonable amortized for 6-10 years across multiple product lines (1. Volt, 2. ELR, 3. eAssist, 4. Spark EV).

    But why use real math, when propaganda math sounds so much more worse?

    The problem with talking points to minions is that people who think still outnumber those minions. In fact they are turned off so much by the propaganda that they turn to the other side. Proof: 11.06.2012.

    How absurd is the propaganda? Lets us look at an example of this hoodwinking:
    It would be like Mr. Greenfield building a bridge designed to last for decades for $100M. I could stop by one day and watch only 100 cars pass and then declare “Greenfield’s boondoggle costs and astounding $1,000,000 per car!” Fair?

    • John Braeking

      The R&D is spread across the entire fleet. All of the electric brake boosters, electric power steering, electric A/C etc are fitted to all cars/trucks with start/stop technology.

      New tech trickles down to every model eventually. Disc brakes, direct fuel injection, safety air bags, crush zones, high strength passenger cockpits, etc all started out in high end (expensive) cars.

      • bobbleheadguru

        Exactly. Not a coincidence that MPG on high volume, profitable, large Chevys and Buicks equipped with eAssist went up 30% year over year. eAssist is a derivative technology of the Volt. That kind of increase is unprecedented in GM.

        GM is finally doing the right thing by building an ecosystem of high MPG cars.

        it is not much different than using the Corvette or NASCAR to push the limits of performance and then applying that to other cars.

  • Not An Idiot

    Whoever wrote this obviously knows nothing of the government bailout. The government isn’t running this company. The company is making strategic decisions for the future for when you know oil cost $10 a gallon and people can’t afford it. Stop being ignorant and realize this has more to do with long term growth than anything the government is pushing.

  • NDHawk

    Your facts are wrong. It was wrong when first reported by Reuters and is even more wrong now. The 49k that Reuters used included the total fixed costs of R&D. You see, the thing about fixed costs is that you don’t have to pay it again for every car you sell. What they meant to say is that at the time of the article, the volt had lost 49k per car that they had already sold. By now they have sold about another 30k cars, with each costing an additional 24k to 30k in production costs (this info came from the same Reuters article). So since the Volt sells for more than that amount, they are actually reducing the amount they have lost with each car they sell.