GM Reportedly Losing $49,000 on Every Chevy Volt It Sells
Dismal sales, screaming lease deals lead to losses, but will that always be the case?
Summer was ostensibly a good season for the Chevrolet Volt: Dealerships pushed more than 2,500 cars off their lots in August, making it a record sales month for the electric vehicle. The success was in part due to screaming lease deals. Reuters reports that the car is putting just a $5,050 dent in the wallets of some lessors over two years. But it costs General Motors up to $89,000 to produce a single Volt, and with every one it sells, Reuters calculates the automaker reportedly loses up to $49,000. Here's why:
I remember when the Prius and Insight were introduced.
They didn't sell.
The technology was fairly simple compared to the Volt but almost as revolutionary for production vehicles. Now, every major manufacturer offers a hybrid version but only Honda offers a dedicated production hybrid outside of Toyota.
The revolution promulgated by the Volt is to truly find a way to stop using gas. My car has a 12 gallon gas tank and I fill it every 300 miles or so. Volt owners fill their little 10 gallon tanks, on average, every 1,000 miles. Remarkable. Nothing compares to it. Nothing.
Sales?
The Volt beats the Ford Fusion and Lincoln MKZ hybrids, combined.
The Volt beats every Honda hybrid, combined.
Total up Mercedes, Nissan, Porsche, BMW, Volkswagen, Hyundai, Kia, Acura, Infinity, and so on, and the Volt beat them in hybrid sales.
Only two companies, in their entirety of hybrid sales, beat the Volt in sales: Toyota/Lexus and, well, believe it or not, GM.
Trashing the Volt is shortsighted.
The trail being blazed belongs entirely to GM for the patents, the quality, and more important than anything else, the future of personal transportation for Americans.
The author of this article belongs cooking fast food.
Here is an idea: ditch expensive hybrids and start building more clean diesels, and do not jack up the prices just because they have a diesel engine -- it does not cost more to produce a diesel, since a diesel actually has LESS parts than a gasoline equivalent, since the engine is simpler.
Here is another idea: boycott any and all goods which are made in China.
Here is yet another idea: a few more jobs in the auto industry are not going to save the economy; bringing back manufacturing, all of manufacturing back to the United States will.
This has absolutely nothing whatsoever to do with any government of any country! It has to do with the following two things:
a) for decades, economics professors taught their students to always go to the lowest bidder "cutting cost is a good thing";
b) those students, which became managers, did exactly what they were taught to do with selfish self-promotion as the main motivator, and without considering the long term impact of outsourcing one's entire economy system to other countries.
Counter example: the Swiss did exactly the opposite: kept virtually all manufacturing in Switzerland, and what they do not produce, they import from the European Union, but only when they absolutely have to, and levy heavy customs duties on that which they import; as a consequence, funds constantly circulate inside of the country, instead of constantly pouring out of it. The Swiss' wages are almost double what they are in the United States, yet Switzerland is slightly less than twice the size of New Jersey, and has about 42 times less population. The Swiss franc was until recently worth more than the United States dollar, until the Swiss national bank intervened and forcefully devalued it. How do the Swiss do that?
The answer is very simple: they do not outsource, even if it is cheaper to do so. They will not sell their own out, because they understand that in the long term, that would affect them too.
"You can't blame the manufacturers for moving production to other countries"
Ooohhh yes I can, not only can I blame them, I know how it all works because I experienced first hand the corruption and the questionable deals and selfish politics that go on! It is the "management mafia". And they literally are like the mafia, only taken to the next level of sophistication.
I know how it works; I was there, in the very heart of it. Those people are selfish, corrupt, and greedy, and have no consideration for long term future, or for the well being of their fellows, or even the companies whose interest they are supposed to be serving and protecting. They are not even bright enough to consider the long term consequences of their actions, which is why we have no industry any more. Too self absorbed, you see, to consider well being of anybody but themselves. Managers are the plague of our society and the number one danger to our country. They are like metastised cancer. Parasites.
How much more outsourcing do you have to live through to believe it? How much poorer must people around you become, for you to realize what is taking place?
Jobs left this country because it costs too much to make things here. Obviously us Americans are not going to take a pay cut to get the jobs back so the government needs to provide tax breaks or other incentives to these companies to make manufacturing come back to life.
You can't blame the manufacturers for moving production to other countries, they are in business to make money and in some cases, such as with GM and Ford, union greed caused those companies to start manufacturing in foreign countries.
Another way to get more jobs here is to stop voting for politicians that want to give amnesty to the millions of illegal immigrants in this country, thus keeping millions of jobs from US citizens. I don't blame these people for coming here, any of us would do the same thing if we were in their shoes, I blame politicians like Obama that cater to them just to get votes and without regard to the AMERICAN jobless situation. If you voted for him, or are about to again, YOU are what's wrong with this economy, not people that are buying imported cars, that's a drop in the bucket when it comes to our economic problems.
Hey, what ever happened to the 250k per volt cost estimate these same characters spewed about back in march ?
Oh that’s right GM sold a few more cars, so now its down to 49k.
Please explain to me again why the volt needs to amortize its development cost in a single season instead of over 20 years like every other car on the market?
I understand that the Volt development is a risky strategy for Gm — gambling on relatively untested technology always is. But hey they are in that business. No risk no reward.
I guess now they also have to add in the risk that a few anti GM /Auto bailout nuts, angry at the GM Volts success, will spend money on a Nonsensical rambling press releases on Reuters.
But why did you pick this up? Slow news day? Looking for internet hits? Repeating a paid political piece does not do you justice.
A Reuters report Monday said GM's plug-in hybrid GM, though, disputed the contention, saying Reuters' research "is grossly wrong" and accusing the news agency of bad math. The automaker said the news agency incorrectly "allocated product development costs across the number of Volts sold instead of allocating across the lifetime volume of the program, which is how business operates.”
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