GM Loses Money On Every Volt Built

thecarchik writes "Doug Parks, vehicle line executive for the 2011 Chevrolet Volt, GM's range-extended electric vehicle, confirmed Tuesday that the company loses money on every Volt it sells. The expensive 16-kilowatt-hour battery pack, which likely costs GM somewhere between $8,000 and $12,000, is clearly too expensive to let the company build hundreds of thousands of Volts right away. Just 10,000 Volts will be built in 2011, though GM is working to increase that number. GM plans to chip away incrementally to lower the costs of the specialized components in the Volt, especially the power electronics. The price of consumer lithium-ion cells has fallen 6 to 8 percent annually since their 1989 launch; the large-format cells in automotive packs seem likely to follow the same curve and as costs are lowered the Volt may stop being a loss for the company."

Comments

This is only temporary

[BadAnalogyGuy]

This is only an issue in lower volume production runs.

Although they can never overcome the cost penalty associated with each vehicle, they can make it up in volume.

Re:This is only temporary

[The Master Control P]

This got modded +5, Insightful? Good grief, Charlie Brown.

FWIW, the US government wasn't buried in debt or routinely running massive deficits until Reagan/Bush Sr. Then Bush Jr. came along and for the first time ever the government was stupid enough to start wars (which are really quite expensive) with not only no plan to pay for them, but while cutting taxes at the same time. Today, the same people who voted for the likes of Dick "deficits don't matter" Cheney are screaming bloody murder about "Obama's deficit spending" with no apparent comprehension of how surreal this and their other behaviors are.

Meanwhile, Congress (at the behest of the party of "fiscally responsibility") is deciding whether to saddle us with $3.6T or $4.2T of further debt by extending the Bush tax cuts for the next 10 years. The same titans of responsibility absolutely refuse to consider the idea of paying off our debt with taxes, but can't seem to name anything that consumes more than .1 percent of the federal budget when pressed for programs to cut.

(I consider the modern Republican party to be nothing more than a scam that seeks power for the explicit purpose of perverting the United States into some combination of theocracy and corporate plutocracy. I hold the Democrats in marginally less contempt; At least they generally offer the people a reacharound while they're screwing us)

Re:This is only temporary

[jollyreaper]

(I consider the modern Republican party to be nothing more than a scam that seeks power for the explicit purpose of perverting the United States into some combination of theocracy and corporate plutocracy. I hold the Democrats in marginally less contempt; At least they generally offer the people a reacharound while they're screwing us)

The Democratic Party exists to occupy the space that would otherwise be taken by a real opposition party. They're like the placebo thermostat building maintenance installs in the office so the workers can think that they're adjusting the temperature and quit complaining.

Re:Not Surprising

[PixelJaded]

Obviously you've never worked in a highly competitive mass-market industry. $1 billion R&D / tooling cost is pretty normal for a mass market GM vehicle platform. If you're selling 1+ million vehicles at $50k then $1,000,000,000 is chump change. If you spend $100 million on development / tooling you'll either lose out badly on unit costs, lose out badly on quality or both against someone like Toyota, GM, Ford, Volkswagen, etc. who are plowing the $1+ billion necessary into each platform. This is not news purely because GM went into the volt expecting to lose money the first few years. Its not the million vehicles they sell over the next few years that they care about (that's tiny compared to their pure petrol / diesel volume), its the several million hybrids or all-electric vehicles they expect to be selling every year by 2020 that they're focusing on.

This no big deal

[Howard Roark]

It's a well known fact that all hybrids lose money at first. Toyota lost something like $5000 on each early model Prius. This will all work out.