There was an article yesterday from Reuters saying that GM is losing up to $49,000 on each Volt that they sell, and that it costs about $89,000 to produce one.
You have to read the article carefully to realize that they are including the development cost, over a billion dollars, in the price by dividing one billion dollars by the number of Volts that have sold. By this logic, if I invest $500,000 and open a new McDonalds I will be losing thousands of dollars on every hamburger I sell, at least for the first few days, weeks, months and more.
Bob Lutz was head of GM when the Volt was conceived and brought to production — he’s the “Father of the Volt”. He had a pointed response to the Reuters article. Among other things, he called their statements “preposterous”. He claims that the Volt is near or slightly better than break-even based on production costs, and that things will improve a lot with future generations and new vehicles taking advantage of the technology.
3 responses so far ↓
1 Richard // Sep 13, 2012 at 7:37 am
I read that article and came to the same conclusion. Where did this guy learn accounting? The only item of concern I saw was that their sales were considerably below projections. However, given the skewing of the rest of the article, I’m not sure I trust those numbers either.
2 Daryl // Sep 13, 2012 at 11:12 am
Sales have been slower than anticipated (or hoped), but better than the article suggests. GM set a record in August with 2831 Volts sold, and that doesn’t include the considerable sales in Europe (under the name Opel Ampera) and Australia (Holden Volt).
They are selling more Volts than Corvettes, though they sell about 10 times as many Cruzes.
3 Donna // Sep 16, 2012 at 8:33 pm
I think they just need better marketing from satisfied owners. You, Daryl, should make a point of telling people how much you like yours. Or you should blog about it! 😉
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