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

[WalksOnDirt]

All reports but this are saying that GM is breaking even on the Volt, which is pretty believable given its high price. Whether it's profitable or not probably depends on accounting rules. I expect they're really making a small marginal profit, but using Hollywood accounting to turn it into a loss.

Re:This is only temporary

[c6gunner]

OMG they're Killing the Electric Car! AGAIN! I saw a documentary!!11!11ELEVENTY!

Re:This is only temporary

[Pharmboy]

Reminds me of the joke about two guys that selling watermelons on the side of the road. They buy them from farmers for $1, and sell them to customers for $1. The one guys says to the other, "We aren't making any money doing this, you know what we need?" The other replies "Yea, a bigger truck."

Re:This is only temporary

[oldhack]

You know, when I first read Catch-22 - i.e., lose on every unit, but make it up in volume - I thought it was a goofy joke, and it was.

But then I was taught about chip foundry, and realized it made sense perfectly, in a way.

Re:This is only temporary

[kimvette]

On the other hand, the purchasers of GM's most expensive automobiles get treated just as well as the folks who buy a stripped down Cobalt.

I would say they really need to get a handle on what it means to provide quality customer service and how it fosters brand loyalty, but unfortunately there are people who are so blinded by the shiny bowtie that they will put up with the piss-poor after-sale service so GM sort of gets a get out of jail free ticket there. I would like to support American made products, but when "American" cars are made largely of components from Mexico and Canada and merely "assembled" here, and they treat customers like shit, I'm far more interested in European cars.

GM should have been allowed to fail and competitors to bid on the pieces. There are certain models I would love to see owned by companies which don't consider hostility to the customer to be the ideal form of customer service.

Re:This is only temporary

[PopeRatzo]

GM no longer plays by the white mans fiscal rules.

You mean the rules that the top 1 percent of white men made and the rest of us are supposed to abide by?

Tell me, AC, which transnational corporation does play by your "rich white man's rules"?

Re:This is only temporary

[poetmatt]

uh, no.

government subsidies too. don't think they developed this for nothing.

Re:This is only temporary

[sunderland56]

Isn't GM losing money on all of their cars? Isn't that why they needed a massive government bailout??

If you can't make money on the product you've been selling for years, what makes you think you'll make money on something new?

Re:This is only temporary

[arth1]

I would like to support American made products, but when "American" cars are made largely of components from Mexico and Canada and merely "assembled" here, and they treat customers like shit, I'm far more interested in European cars.

In most cases, the "European" cars are just different styling on top of standard michiganipponese chassis and engines, assembled in Indonesia, Malaysia or other low-cost countries from Chinese parts. And the money you pay flowing into American pockets.

If you're lucky, it's a VW designed chassis, but check before you buy -- you're likely to be surprised by how few truly different cars there really are on the market.

Re:This is only temporary

[Martin Blank]

This depends very much on where you buy the car. There are poor-quality BMW dealers, just as there are great-quality Chevrolet dealers. Some hang on by cutting their prices a little below the better dealers, while the better dealers get word-of-mouth advertising. The latter group grows, and the former stagnates or goes out of business. If I'm looking for a car, I'm going to look at the places that have been around for 30 or 40 years first.

Re:This is only temporary

[Martin Blank]

The bailout was intended to get them through the bankruptcy by allowing them to shed obligations that made it impossible to continue doing business as they had. Union contracts were renegotiated, and pension and medical obligations were reduced. It allowed GM to cut the overhead by several thousand dollars per vehicle. The European and Japanese companies building in the US were not hampered by such heavy requirements, and have long been able to undercut GM on costs because of this.

Re:This is only temporary

[oldhack]

Actually the Kia models look pretty damn good. Look'em up.

But anyway, I hope you're wrong, but... you know.

Re:This is only temporary

[Hal_Porter]

GM is a shitty brand and will remain so. the support / warranty is horrible at gm dealerships. the car looks like a 4 door shitbox compared to the sleek demo presented originally. no one is going to buy a $40,000 car which looks like a $20,000 kia made by government motors.

People said that about the Trabant. But I remember how happy were when we finally managed to save up the bribe for a bureaucrat to put our name went on to the twenty year waiting list for one back in 1978.

Re:This is only temporary

[Hal_Porter]

The bailout was intended to get them through the bankruptcy by allowing them to shed obligations that made it impossible to continue doing business as they had. Union contracts were renegotiated, and pension and medical obligations were reduced. It allowed GM to cut the overhead by several thousand dollars per vehicle. The European and Japanese companies building in the US were not hampered by such heavy requirements, and have long been able to undercut GM on costs because of this.

Well that would be a great idea in theory. In practice UAW gives a lot of money to Obama and they weren't likely to get wiped out.

http://www.npr.org/2010/11/15/131328191/reasons-investors-may-want-to-sit-out-gm-s-ipo

The United Auto Workers union has gone from a drag on the company to a part owner. How the new relationship will play out is still unknown.

The UAW owns 17.5 percent of GM right now, and has the option to buy 2.5 percent more before the end of 2015. It could sell stock during the IPO or hunker down and remain a major player.

But arguments over wages will likely start cropping up, and will become even tougher to deal with as GM talks about how financially secure the company is now.

The biggest grumbling among autoworkers is the new two-tier wage system, under which some workers can earn $29 an hour and new hires get only half that. It's a system that makes shareholders and executives happy because it brings labor costs in line with non-unionized workers at Toyota and Honda plants in the South. But it could spell trouble for GM if the new wage system creates unrest with workers.

"It's hard to run a business where some people are making double what others are making for the identical job," Robinson says.

Besides the wage issue, there is mounting pressure on the UAW from its members and from other unions to demand that benefits lost during the auto crisis be restored.

"The three major US (auto) companies are making profits again . we demand that they do right by the workers who have done right by them," Richard Trumka, president of the AFL-CIO, said in a speech at the UAW's major convention last summer. "Because just as there has been shared sacrifice in periods of pain, there must be shared prosperity in periods of gain."

Re:This is only temporary

[WalksOnDirt]

I can't figure out what government subsidies you are referring to. The obvious one is the $7,500 that goes with each car, but I can't believe you expect that to be repaid or something. The early development costs went away in the bankruptcy, so they don't exist as far as new GM is concerned. How the remaining development costs are allocated to each car is a matter for accountants, and can probably be adjusted to create either a profit or a loss for each car.

Re:This is only temporary

[mcrbids]

It's simply amazing how much stupid there is that's been moderated up!

GM isn't a government agency. In case you weren't paying attention, it's being restructured in what really amounts to a form of bankruptcy. It's close to paying back every dime it borrowed, and it's now almost certain that the taxpayers will ultimately pay very little for saving GM. So much for your implied "gubbmint sucks", huh?

Further, not only is GM losing a bit of money on each one sold, this is a good thing! GM is behaving EXACTLY like a start up, delivering an innovative product at a time when it's potentially very useful, and worrying about profits after marketshare and supply channels get streamlined. This is how Amazon became Amazon, how Tesla became Tesla, how Google became Google, how EBay became... you getting the idea yet?

For any virtually ANY truly innovative product, there is always an income gap between initial development and profitability that's usually measured in at least months, and often years. This isn't surprising, it's pretty much a requirement, and if it's not the case, then there's a strong implication that the thing being produced isn't innovative at all!

With the Volt, GM is staking its future on the clean, energy efficient, non-polluting car of the future. Go GM!

Re:This is only temporary

[d6]

>> they can make it up in volume.

No offense, but I think this is the road to bankruptcy. "Old" GM thought that way too. Pre-bailout, they figure losing large per unit was "OK" if it brought more units sold. Profit (at some later date) would follow market share.

If GM was better at math, they would have understood the trailing obligations incurred every time they threw money at the unions (and considered the built in cost penalty per vehicle.) It isn't just now, its' later you need to worry about when negotiating contracts.. for that matter, once they had placed themselves in a position where some models became unprofitable due to overhead, they ought to have quit building them. If you're losing $amount on an already mass produced vehicle, it's a damn neat trick to sell more of them and at a discount and suddenly become profitable.

These guys (GM) are lucky they were "too big to fail".

Re:This is only temporary

[Anonymous Coward]

If you're trying to imply that GM can do whatever it wants fiscally because the US Government owns it, you're wrong. In case you haven't heard, GM had an IPO a week ago and it is now a public company. As a public company, they have a fiduciary duty to be fiscally responsible.

The US is now just a minority shareholder, owning about a third of the shares.

dom

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

[SerpentMage]

Ok now a word from somebody who actually looks at the numbers... I am a quant and run my own money.

1) For the government to come out break even the GM stock price has to hit around 56 (stock has to almost double here).

2) GM behaving like a startup? Excuse while I barf. GM is not behaving like a startup. They are behaving like a financial institution. Look at who is running the show? Look at how they are selling themselves to the financial community. Wait I forgot GM is a car maker!!!

3) Only in the case of GM is there an income gap. Most other companies tend to not have such a huge gap. This is a play by GM to put on a good face that they are "clean" when in fact they are not. Look at the model lineup. They have 4 economical fuel efficient cars. YET they have 5 different Corvette models. Yeah a company that has its priorities straight.

4) GM is not staking its future in clean technology. Look at point 3, and look at their line up. Ford is staking a part of their future on clean cars. Ford is doing the right things. GM is once again putting lipstick on a pig!

Having said all this, it is not impossible to re-engineer GM, but GM has never shown a willingness to do so. GM thinks this little happening as a blip introduced by the market and not by them. Right now GM thinks that they have done everything they and it is smooth sailing from this point on. RIGHT... WRONG! What bothers me is that Ford did real change... They did not take money from the government, and they are going to get hit again below the belt by GM. I just hope the next time GM is let to collapse.

Re:This is only temporary

[dutchwhizzman]

Ehm, no? Most European cars are based on European designed platforms and parts. You are confusing Japanese and Korean cars with European. Incidentally, a lot of of Korean cars are based on European designs as well.

Most parts of every car, including the "US Made" ones, are indeed produced in China, since they have the least environmental laws and the cheapest labor. Your new "green" car is made in decidedly brown plants. Only the assembly is done semi-green.

Re:This is only temporary

[HanzoSpam]

It's close to paying back every dime it borrowed, and it's now almost certain that the taxpayers will ultimately pay very little for saving GM.

BWAHAHAHAHA!!

Who were you calling stupid, sonny?

Re:This is only temporary

[bball99]

you cannot say that we tax payers will ultimately pay very little for saving GM unless you are also saying that you can predict the stock market price of GM shares...

pre-bailout GM bond holders will NEVER get their money back, including many GM retirees - and they are tax payers as well

Re:This is only temporary

[sourcerror]

Well, that sounds like a lot of bullshit. At least the European cars running in Europe are made in Europe, due to tariffs.

Re:This is only temporary

[jayveekay]

In case you weren't paying attention, it's being restructured in what really amounts to a form of bankruptcy. It's close to paying back every dime it borrowed, and it's now almost certain that the taxpayers will ultimately pay very little for saving GM.

GM went bankrupt in 2009. The stockholders of GM were wiped out, they lost 100%. The bondholders of bankrupt GM will get back less than what they were owed, the exact amount is yet to be determined. I'd estimate about 100 billion dollars of wealth was destroyed by GM as a result of the bankruptcy. This was private wealth, not government loans.

The new GM ("NGMCO Inc") that emerged from the bankruptcy of 2009, unburdened of its massive debt, 30% of its workforce, and retiree obligations, and granted new loans from the USA and Canadian governments does look likely to pay back most of that new debt, which is a good thing. It doesn't change the fact that a lot of people lost a lot of money on old GM.

Note that in addition to new GM losing money on every Volt sold, the US Government loses $10000 on every Volt sold (the value of the tax credit).

Re:This is only temporary

[jayveekay]

Well said.

Somehow we've entered a world where the 2 choices Americans have to vote for are:
1. Vote for the party that wants to lower taxes by borrowing 420 billion dollars a year from China, or
2. Vote for the party that wants to lower taxes by borrowing 360 billion dollars a year from China.

These positions are not only fiscally irresponsible/insane, they are morally reprehensible. The standard of living of the average person in China (see FoxConn employee) is substantially less than that of the average American. Why do Americans expect Chinese workers living on a few hundred dollars a month to subsidize the American's purchase of Snuggies (or whatever other unnecessary luxuries Americans want)?

Re:This is only temporary

[Anonymous Coward]

Further, not only is GM losing a bit of money on each one sold, this is a good thing! GM is behaving EXACTLY like a start up, delivering an innovative product at a time when it's potentially very useful, and worrying about profits after marketshare and supply channels get streamlined. This is how Amazon became Amazon, how Tesla became Tesla, how Google became Google, how EBay became... you getting the idea yet?

It should also be noted that Toyota lost money on every Prius sold when they started out (and still could be for all I know). What they gained is knowledge on how to implement things for future cars, and the discovery led to a whole pile of patents in a field that they were trailblazing.

People may want to check out "Who Killed the Electric Car" for a good history on a lot of this. In the early '90s the Detroit Three teamed up with the US government to develop electric and hybrid cars; this spooked Toyota since they were worried they'd be left behind, which is why they started developing what would become the Prius. A few years later the American car companies dropped their partnership with the gov't, but Toyota continued on. Then oil hit $140/barrel a few years later and everyone started freaking out and buying smaller cars (which GM et al didn't really have).

And here we are. Toyota being ahead of most others because they started first, and GM et al playing catch up because they weren't willing to have a Plan B to making bucket loads of money from SUVs. Of course the Big Three didn't bother making small cars because their primary market (the US public) didn't want to buy small cars (so why bother building them?). It's just that Toyota and the other international makers have markets where small cars are popular, so they always have models available.

Re:This is only temporary

[roman_mir]

The tax payers will pay little? Why are they supposed to pay anything to save a company, that's first and that is the main point.

The other point is that the gov't owns GM, the original stock holders got wiped out, the gov't had an IPO to allow the top management of GM to unload their stock (and whoever bought GM stock at those 36-37 dollars is now in the red).

GM WILL go bankrupt again in maybe only 1-2 years, but the gov't will be going bankrupt soon itself, this is clear from the QE2, which is the lending by the Fed to the gov't because nobody else is buying US bonds and long term interest rates are rising.

This entire GM thing is a pyramid, don't be the fool stuck with the hot potato. (and this is true for both, the GM stock and US dollars - bonds.)

Re:This is only temporary

[commodore64_love]

Since nobody reads articles, I'll quote the link:

"About $7 billion of that came in the form of a straight-up, low-interest loan. And about $13 billion came in the form of an escrow account. So how has GM, which lost $38 billion in 2007 even as it sold 9.4 million cars, paid back its debt? It took money from the escrow account to pay back the $7 billion loan."

In other words, GM still owes ~$20 billion to the People.
They lied in their ads when they said they repaid the money.
(Gee... I'm shocked.)

As for losing money on the Volts, I remember hearing the exact-same thing about Priuses when they were introduced. Toyota was supposedly losing ~$5000 on each one but then in 2004 they announced they were "breaking even" and now they are making a nice profit on each one. GM's Volt will follow the same path if it succeeds, or else be a giant waste of money if it fails (like EV1 was).
.

>>>The Leaf is more innovative because it changes how we think about cars. It forces you to actually think about driving, instead of just going because you can.

The Honda Insight & Civic Hybrids were the same deal - made you think about driving to get 60-90 MPG - while the Toyota Prius averaged just 40-50 MPG but also felt like any other car (it was automatic). The Prius sold ~10 times as many units than Honda's hybrids, precisely because customers DON'T want the car to feel different. They want a hybrid that feels just like their old car.

Re:This is only temporary

[Rogerborg]

Well, that's elementary economics, I'm surprised so few people are getting your point.

Also, the current inability of national, regional or local grids to copy with the increased load of charging electric vehicles is also solved by volume. When there's enough of them out there, they'll actually start suck power down the lines, so that the power stations don't have to blow the electrons down the pipes as hard. They can just stick the ends of the cables into barrels of electrons and let siphoning take care of the rest.

Re:This is only temporary

[Rogerborg]

Technically, they're only losing money because their retired employees are refusing to die. It's those selfish geezers who are stealing from the rest of us. What, you want GM to whack them just so your tax bill comes down by 25 cents? That's the kind of solution Hitler would be proud of - I'm disgusted that you even suggested it.

Re:This is only temporary

[gl4ss]

you would have a point IF gm wouldn't have been in the same mess plenty of times before - AND the old gm still has huge, huge debts it will never be able to pay back to the creditors with the worthless properties that were left to it.

anyways, the issue about losing money per car is actually about them paying more for the parts than they're getting from the consumer, per every unit, so if they scaled it up their losses would scale up too.

they were losing money per car per average before this too, if you look in 10 year timespans. proof: they run out of money every 10 years.

Re:This is only temporary

[hackstraw]

Maybe I'm a naysayer, but I fail to see how a coal powered trolly car* is more efficient than an internal combustion engine. Sounds like 1800s to me.

* 57% of the electricity in the US comes from coal, and it is shipped over aluminum and copper wires, very similar to a trolley car.

Re:This is only temporary

[AvitarX]

I agree Ford is a way smarter company, and saw the way things were going early enough to restructure when it didn't have to (well clearly it did have to, as did the others back in the earlier '00s)

Ford has though received quite a bit of government. Help since 2000.

Re:This is only temporary

[Thing 1]

Yes, you're a naysayer. Centralized scrubbing is the answer you're looking for.

Re:This is only temporary

[WindBourne]

With the Volt, GM is staking its future on the clean, energy efficient, non-polluting car of the future.
Great to hear that GM is doing clean, energy efficient, non-polluting.
However, the volt sure as shit is not that car. It is a parallel POS hybrid no different prius and other hybrids. Once Volt switches to pure electric like leaf, then I will consider buying one. Until then, I do not want to inherit all of the maintenance hassles of BOTH types of drives (electric batteries combined with ICE continual maintenance such as oil, plugs, tune-up, belts, etc).
Oh, and the volt is as much electric as my accord is. It has an electrical system, but it still has an ICE in it. Until you have 100% electric all the time, then it is not electric. It is hybrid.

Re:This is only temporary

[Notquitecajun]

Which means that there was little to no point in bailing GM out. The end result was the same, it took more time, and will be a net loss to Americans.

Re:This is only temporary

[blueg3]

To be fair, the foreign interests actually make money off of the loans they extend to the U.S. government.

Re:This is only temporary

[jellomizer]

The 90's their back! But this time in broadband and mobile!

Re:This is only temporary

[swillden]

To be fair, the foreign interests actually make money off of the loans they extend to the U.S. government.

Only if we pay the loans back.

Re:This is only temporary

[blueg3]

We pay the loans back constantly, and they routinely choose to reinvest. Plus, compared to other possible investments, it's extremely low risk.

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:This is only temporary

[Anonymous Coward]

If I take a loan and use it to pay off my loan it doesn't mean I still need to pay back the loan. The way you interpreted the way GM paid back the $7 billion loan implies that I would.

Re:This is only temporary

[swillden]

We pay the loans back constantly, and they routinely choose to reinvest.

We pay the interest on the loans and a tiny bit of the principal, but borrow more than we pay off.

Plus, compared to other possible investments, it's extremely low risk.

Until we realize that we simply can't raise enough money to pay the interest, which is already a significant portion of the entire annual federal debt. At that point, we have to consider either defaulting or intentionally devaluing the dollar as ways to escape the crushing burden -- and the investments become not just risky but actually bad.

Re:This is only temporary

[DavidTC]

It doesn't change the fact that a lot of people lost a lot of money on old GM.

Yes, but that has nothing to do with saving GM at all. GM's mismanagement blew that money up, not the government saving GM from burning entirely to the ground.

What you are saying makes sense, but is not a valid response to 'saving GM will eventually not cost the taxpayers anything'.

GM disintegration cost quite a lot of people quite a lot of money, but there is very little of that you can pin on the government.

Yes, yes, the bankrupcy courts may make different determinations of who got paid what, which, I guess, is the government costing people money(1), but, as you said, that's not even finished yet. And more relevantly, that isn't costing the taxpayers.

1) Which is, frankly, the most idiotic complaint ever. Those debt-holding companies are almost entirely suppliers, and now, thanks to the government, they have someone to supply to and who can pay off the entire debt, and this temporary involuntary loan is a good deal better than, um, getting paid 1/3rd of what GM owes them as GM is dismantled by a bankrupcy court.

Re:This is only temporary

[Geminii]

So they'll be fine once they crank up the kilovolts?

Re:This is only temporary

[mordred99]

To quote my son .. "Wow .. Oh Wow". Lets take these one by one.

1) For the government to come out break even the GM stock price has to hit around 56 (stock has to almost double here).

There are 100 different ways GM can pay back the ownership stake that the government has in GM. The easiest way is to buy back the shares of stock the government has in GM. The government does not have to buy them on the open market. GM can buy a few million shares at $50 bucks a share with their profits. They can give them $ for their shares at fair market value to buy them out. The government does not have to sell the stock at 56 dollars to break even - that is just one route (by the way the number is $51.25).

3) Only in the case of GM is there an income gap. Most other companies tend to not have such a huge gap. This is a play by GM to put on a good face that they are "clean" when in fact they are not. Look at the model lineup. They have 4 economical fuel efficient cars. YET they have 5 different Corvette models. Yeah a company that has its priorities straight.

And your oh so mentioned below ford has 24 different models of pick up trucks (www.ford.com/trucks), what is your point? GM has a dedicated plant (bowling green, Kentucky) that makes corevettes. They have different models, based on price range, and is a profitable product line for Chevrolet. You say they have only 4 fuel efficient cars? What is your definition of fuel efficient? More car models getting more than 30 MPG than any one else? GM has that. Better fuel efficiency for similar car models? Check.

GM has Hybrid pickup trucks and large SUVs (as well as smaller). Most other companies don't have that. Yes they don't have a Yaris or Prius or Ford Edge that is hybrid. However they do have the Volt now which they have put a lot of money into and is a game changer. So much that the #4 car maker in the US (Nissan) made a car to combat it with the Leaf. They also have more cars that can do E-85.

Ignoring the facts does not help your case.

4) GM is not staking its future in clean technology. Look at point 3, and look at their line up. Ford is staking a part of their future on clean cars. Ford is doing the right things. GM is once again putting lipstick on a pig!

Not a sigle major car company is betting their future on clean technology. Ford is not betting the future on cleaner technology. I can still buy a pickup truck with the big honking V8 and and 400HP diesel. If they were betting their future on clean technology, they would put a 100 HP Piece of crap engine in the pickup truck to make sure it got 30 MPG. That is betting the future. What you are talking about is incremental gains. Get back to me in 5 years now that GM has lost their heavy debt burden from the Union Retirement Funds and am not paying janitors 45 dollars and how to sleep all day, and we can see who has the better lineup.

>>>>Having said all this, it is not impossible to re-engineer GM, but GM has never shown a willingness to do so. GM thinks this little happening as a blip introduced by the market and not by them. Right now GM thinks that they have done everything they and it is smooth sailing from this point on. RIGHT... WRONG! What bothers me is that Ford did real change... They did not take money from the government, and they are going to get hit again below the belt by GM. I just hope the next time GM is let to collapse.

Re-engineer GM? Re-engineer their lineup? I am confused as to what you are saying. So they have cars which are more fuel efficient than their direct competitors, get more power, are more reliable (JD power and associates), and in the same general ballpark in price. Hmmmm sounds like a winning combination for me.

Why do people not buy American? Simple. Grandpa Joe bought a Chevy in 1974 and he had a problem at 100k miles. Yes they have had problems in the past but people think they cannot change (and apparently you don't either). You have to look at the evidence and make your determinations from there, not from a grudge from 20 years ago from some wrong.

Re:This is only temporary

[mordred99]

You mean they ran out of money before the banking collapse, and got their cash infusion from the private sector rather than the public sector.

Re:This is only temporary

[DavidTC]

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.

Oh, it's worse than that. They can name two programs: Social Security and Medicare.

Which, as anyone who's paying the slightest notice knows, cutting cannot result in less debt.

Social security isn't even part of the budget. Unless they plan on outright stealing all the money the general budget has borrowed, and never pay it back, that can't work.

And they'd have to keep 'social security' removal from paychecks, and then not pay it...aka, raise taxes. But it's a very regressive tax so I'm sure they're fine with that. I'm sure their 'privatize social security bullcrap' includes 'in addition to having people pay into private accounts, keep collecting all those social security taxes and use them to fund the government instead.', although strangely I can't seem to find that documented anywhere.

And Medicare, while technically part of the general budget, is voluntary insurance. So...we're going to cut benefits and hope that people inexplicably keep buying it? Somehow, I suspect they'd stop.

Both Social Security and Medicare are lowering the debt, because we're borrowing from their surplus income instead of China. Yes, yes, at some point in the future, with the rates and payouts where they are, they won't be able to pay for themselves, and at some point even farther, they'll have to start withdrawing from surplus, but that isn't causing any budget problems now, and can't affect the 'deficit problem' the Republicans think is happening now.

The reason for all this, incidentally, is the right's insistence that social programs pay for themselves. So....um...they do. Cutting them can't fix the problem with the general budget, or save any money at all. To repeat: Social. Programs. Pay. For. Themselves.

The Republicans party cannot conceive of raising taxes. (Or even fucking not lowering taxes.) They cannot conceive of cutting spending of things paid out of general revenue, like defense. Those are literally the only way to balance the budget.

And because the Democrats are cowardly fucktards, they've gotten halfway sucked into this mentality also.

Re:This is only temporary

[operagost]

It's close to paying back every dime it borrowed, and it's now almost certain that the taxpayers will ultimately pay very little for saving GM.

Sadly, $9 billion is considered "very little" nowadays. http://www.reuters.com/article/idUSTRE6AH5F320101118

Further, not only is GM losing a bit of money on each one sold, this is a good thing! GM is behaving EXACTLY like a start up, delivering an innovative product at a time when it's potentially very useful, and worrying about profits after marketshare and supply channels get streamlined. This is how Amazon became Amazon, how Tesla became Tesla, how Google became Google, how EBay became... you getting the idea yet?

You forgot pets.com, flooz.com, and a hundred other .bombs.

Re:This is only temporary

[operagost]

FWIW, the US government wasn't buried in debt or routinely running massive deficits until Reagan/Bush Sr.

FDR. Also, LBJ who didn't allocate nearly enough funds for welfare. I mean, the projections for both SSI and LBJ's "War on Poverty" were laughably low.

Then Bush Jr. came along

His middle name(s) differ from his father; thus, not a junior.

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.

Congress authorized both wars. Congress also authorized a 787 billion dollar stimulus that cost more than both wars put together-- with no plan to pay for it either.

(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)

Well now, isn't that a logical, well considered argument to vote Democrat!

Re:This is only temporary

[blueg3]

The majority of U.S. debt isn't really in a form where we really directly pay interest on loans and maintain an outstanding principal. It's primarily in T-bills and T-notes, which mature in 10 years or less. T-bills don't even really pay interest per se -- you buy them at lower-than-face-value and then can redeem them later for face value. We just maintain an outstanding debt by constantly borrowing (in the form of issuing securities) to cover paying our debt.

Sure, it's theoretically possible for us to default, though it's unlikely short of a government overthrow. But default would have such a big impact on the world economy that almost all of your available alternative investments would also be affected. So the risk of Treasury securities relative to the risk of any other possible investment is low. (Some of our biggest investors are also our biggest trade partners, like China. If we're in a position where we can't pay our debts, our economy is so bad that China's export economy will seriously suffer. So the risk of the US defaulting already was affecting them.)

Re:This is only temporary

[thoromyr]

I wanted to add to your point #4: look at GMs compliance with California's requirements. Then look at how much money Tesla (and others) have reported in their statements by selling ZEV credits. For an older discussion of this see http://www.examiner.com/green-transportation-in-national/tesla-openly-admitted-to-zev-credit-sales-an-interesting-2008-letter-to-the-air-resources-board

Neither Honda nor GM appear to have any commitment to producing green vehicles. The volt is far from innovative, but after GM thought they had successfully killed California's efforts to improve emissions standards (see http://www.mindfully.org/Air/GM-Sues-CA-ZEV.htm for an early reference) they recalled and killed their electric vehicle program.

My brother-in-law works at GM and for his (and his family's) sake I hope the company gets its act together and does well. They are, at least, hiring again instead of bleeding talent. But it remains to be seen if it will be correctly managed and pointing at the volt is not the way to instill confidence.

Re:This is only temporary

[SGDarkKnight]

"GM's Volt will follow the same path if it suceeds, or else be a giant waste of money if it fails (like EV1 was)."

I would just like to point out that the EV1 didn't fail, it was killed. There was a number of factors that played against that car from the begining. If you take a look back a few years, you will see the original Volt design was very similar to the EV1. The Volt was designed to run purely on electricity with no gas engine. When I first read that I was as astounded that GM actually released that information. Then, if you notice in the press, there was no more mention of the Volt until it was redesigned with the hybrid engine.

The EV1 was a great design for short distance commutes. The original Volt design was a vast improvement over the EV1 which would have allowed for long distance travel. Why did they go and put a gas engine in it now? I'd like to see a press release describing that reasoning.

Now before anyone goes and tries to say that im simply paraphrasing the documentry "Who Killed the Electric Car", don't get me wrong, that was a real eye opener. But like any documentry, there is always a bias side to the person telling the tale. So for those of you who have seen it, think of it this way... if even a third of what they stated in that documenty was true, then its a very scary thought of the power that oil companies, politians and big business have at crushing any new ideas that threaten the "old" way of doing things.

Re:This is only temporary

[pottymouth]

"They're like the placebo"

Uhhhh no, Placebo's don't triple the national dept in less than 2 years without gaining the people the money was stolen from anything! A placebo is a treatment that has no REAL effect other than from the belief of the patient that it may work because they "believe" (hope and change??) it will work. Try that sometime when stepping in front of a fast moving car. Hope that it will Change direction and see how it works for ya... Yep, that's where we're all at. Standing in front of a fast moving vehicle Hoping it will Change. The Democrats aren't a placebo. They're a 12 gauge shotgun slug to the skull to fix a head ache. Feeling any better?

Re:This is only temporary

[HiMorons]

Yeah, it's really good to have the Government pick winners and losers in the market. That's the right way to do it! The Government should start a task force designed to give out taxpayer money to fund whatever company it deems is failing and has something innovative planned! Oh, and if that company is bankrupt, the Government should bring it back! Nothing ever could go wrong with this plan; in fact, it's foolproof and perfectly fair. Brilliant!!

Re:This is only temporary

[cayenne8]

"And Medicare, while technically part of the general budget, is voluntary insurance. So...we're going to cut benefits and hope that people inexplicably keep buying it? Somehow, I suspect they'd stop."

I didn't know that?!?!?

Well, hell...where do I fill out the form to tell them to stop taking withdrawls from my paycheck to go to Medicare??

If I'd known it was voluntary, I could have saved myself TONS of money in payroll taxes!!

Is Social Security just as voluntary? I'd love to opt out of that one too....

Re:This is only temporary

[afidel]

Heck the fed is already trying to devalue the dollar but the euro is in worse shape so it didn't work.

Re:This is only temporary

[LifesABeach]

The Chinese business called, "Build Your Dreams" sells a similar car for half the price of a Chevy Volt; seems to me that the cost model used by GM smells like fish 3 days in the sun. Warren Buffett invested in BYD, and he doesn't make many money mistakes.

Re:This is only temporary

[Dorkmunder]

calling people names and not giving any data to support your point isn't very effective. Obama cut 122 billion out of the budget compared to the last year of W. Start with that stat please and see where the discussion leads.

Re:This is only temporary

[im_thatoneguy]

You're saying a small 300 pound reciprocating engine is as efficient as an industrial sized turbine?

Re:This is only temporary

[AvitarX]

Apparently I did.

Actually searching only shows them grabbing for some green stimulus type money, thanks for the correction.

Definitely a smartly run company to start the restructuring during the "boom" times, rather than pretend it was all good.

Re:This is only temporary

[DavidTC]

No, that's the other part of Medicare, the part that's funded like social security. That's called FICA, and operates the same as Social Security, and you cannot opt out.

But that tax is practically nothing. That requires ten years of a 1.4% tax. Over your entire life, that might come to $7000.

And, like social security, if we stop Medicare Part A, we'd presumably stop the withholding for it also.

I was talking about the other thing, the actual insurance, which is 2/3rd of Medicare, Medicare parts B and C. (Part D is just nonsense.)

So, yes, if I wished to be more specific I'd have said: Social Security and some of Medicare are funded by a tax specifically for those things, a tax that would presumably be removed if we removed them. The rest of Medicare is funded by voluntary premiums that people would stop signing up to pay if they did not get health care out of it.

Re:This is only temporary

[pottymouth]

Ahahahahahahaha!! LMAO!! He cut 122 billion and added 3 Trillion! In my book adding 3 Trillion and cutting 122 billion still equals adding 2.78 Trillion...

Com'on! Name calling aside you Obamite's really need to pay more attention. By your logic it's ok to steal your Range Rover if I give you a Big Wheel back...

Re:This is only temporary

[drinkypoo]

Absolutely everything in the documentary was true, and it clearly showed that GM killed the EV1, and then they ended with a "conclusion" that blamed everyone including consumers. Pretty hilarious. GM's business model depends on service revenue so they had plenty of reason to want to kill the car, but they were also ready to come to market with a product because they didn't want to be caught flat-footed.

If it weren't for Tesla nobody in the mainstream would even be thinking about selling EVs. And if it weren't for Nissan, nobody would be doing it this soon.

Obviously Big Oil *does* feel threatened by EVs, or we'd all be driving EVs based on the EV-1's NiMH battery technology today... but you can't license it at any price.

Re:This is only temporary

[drinkypoo]

Yes, you're a naysayer. Centralized scrubbing is the answer you're looking for.

Sure, burning coal in a power plant is cleaner than burning it in our cars, if we could even do that. But burning coal in a power plant is dirtier than burning gasoline in modern cars. I personally know someone who used to be employed climbing smokestacks to check emissions, including coal plants. Every single stack he checked was operating in excess of permitted numbers. Every fucking one. Meanwhile, every car made since 1996 throws a code and will fail an emissions test if there is a problem with the emissions equipment, and many vehicles made in the last ten years have emissions that are difficult to detect without a tailpipe probe.

Meanwhile, much of what they're not scrubbing like they're supposed to is radioactive isotopes. In the US alone, more than 2,000 metric tons of Thorium is released into the atmosphere every year just due to coal power generation, which only makes up about the cleanest 50% of our coal use. Hundreds of pounds of fissile Uranium is also emitted every year.

You can sign me up as a naysayer too; coal power is one of the dirtiest industrial processes in the USA, and probably the leading cause of cancer.

Re:This is only temporary

[drinkypoo]

How does that work, specifically? Not doubting you, I'm just hoping for a good read.

Re:This is only temporary

[drinkypoo]

Yeah, that's true just until the Democratic party is in power, then they fulfill that function. In reality, both parties are false! Neither one believes in their stated goals. It's not a real party and a fake party, it's a fake party and another fake party.

Re:This is only temporary

[drinkypoo]

Most European cars are based on European designed platforms and parts.

Hahahaha. You're funny. When Daimler-Benz and Chrysler Corp. merged they engaged in technology transfer. It didn't just go one way. Mercedes reliability is in the toilet, I've never seen recent used Mercedes so cheap as they have become. BMWs, too, it costs more to buy a ten year old accord with a V6 than a ten year old 5-series BMW with the same mileage. And of course, any Volkswagen not built in Wolfsberg is an unremitting pile of shit. In fact, let's talk about VW and Audi; Now VW, Audi, Skoda, and SEAT cars are all based on the same chassis. There is little difference beyond styling and aerodynamics between an Audi TT and a Golf, and ALL of the vehicles under their marque have been or are being redesigned for MORE similarity to reduce the variety of parts that they have to mess with.

Let's also not forget that Ford owned Lamborghini which is now a VW, and also Jaguar which now has far more reliable electrical systems than ever before.

In general European cars are just more shit like everyone else's cars now. In particular the last great Mercedes was a W140 and I'm starting to see W140s show up in non-Euro junkyards like the W116s and W126s have been.

Re:This is only temporary

[drinkypoo]

BMWs are unremitting pieces of shit now, and the only models which hold their value for more than a half-second are Ms and 5-series. Cheap BMWs from 2000 and later are absolutely proliferating CL.

Re:This is only temporary

[afidel]

The fed dumped $559B into treasury bills hoping to weaken the dollar by forcing that money into other currencies, and it worked for a short time but the Ireland crisis caused the market to surge back into the dollar.

Re:This is only temporary

[NateTech]

Yes, the government bailed them out and screwed the hell out of the bondholders and original ticker owners of the stock. Screwing the stockholders, that's normal risk for any company, but screwing the bondholders... that's a whole new set of fancy fake bankruptcy rules.

So yes, they've "paid back" most of the government loan that kept them afloat after the government allowed them to pay the bondholders at a lower than normal rate for any bankruptcy.

Pretty sleazy business.

And even though I agree that any stock can go to zero and you can lose everything, as of right now, the original shareholders of GM stock are going, "WTF?" since there's a whole new ticker symbol and whole new company called "GM" that other people are invested in, making money on all this "good news" about a car that's producing a loss with every unit, but the original shareholders who stuck it out will get the joy of continuing to hold the now virtually worthless, headed for zero, stock of the previous "GM".

So clearly the moral here is that if the government steps in to bail you out, they get paid first, and your original investors are all screwed, no matter what the contract or the prospectus said. The bondholders paid back most of the loan.

If this is what investors get in the "people who have money to invest must be evil rich people, not people who saved and worked hard" world, why invest? The rules of business change at the whim of the Administration. Right now they're printing money to blow up the bubble, with no products being produced underneath the bubble to support it. Very dangerous game. It'll make the "annual" numbers for stock investors look good... until it falls.

Pump and Dump... December and February. All it will take is one world event to crash this house of cards again. Perhaps people will remain euphoric about the horrible fundamentals for no rational reason though, and it'll hold up into real summer growth. We'll see.

Re:This is only temporary

[NateTech]

Well there's at least a few of us out here who also "get it" that any massive uptake of electric cars leads directly to more coal-fired plants and higher prices for electricity as the big electric companies are already whining about what electrics will do to their grids.

But "Coal-Fired Chevy Volt" does have a nice ring to it, doesn't it? That's the phrase I like to use when talking to greenies about that money-losing dog of a product. It gets their attention, but not any deeper thoughts or willingness to actually discuss it or dig for real numbers and pricing estimates.

No one ever wants to do the math.

Re:This is only temporary

[NateTech]

You don't seem to realize that this turned the process on its head.

If the company had been allowed to fail normally, the original stock would have gone to zero, and the bondholders would have perhaps been made whole (or close) by the sale of assets to new companies who would have been able to rebuild GM's VALUABLE divisions into something useful by now. And the Union would have been badly busted or at least had the crap beaten out of them by the process, etc.

That would have been all the things ALL the people who made the decisions... DESERVED.

Instead the government stepped in, "saved" the company with taxpayer fake money printed at the behest of the Treasury and handed out by the Fed, and twisted the rules of business around such that all the investors got screwed, and the people who made the decisions got to keep running their money-loser.

All at the political behest of the Unions who paid off the people voting for the bailout.

And it's so convoluted they can all make whatever wild claims they like, like "We've paid back our loans ahead of schedule" and people will debate that for years.

It's a great deal, if you can get it. Better even than the typical "Bankruptcy Car Wash" that businesses get, but individuals don't.

Re:This is only temporary

[rhalstead]

Wow, they charge $42,000 for a $15,000 plug in electric that's really a hybrid and still lose money.

Re:This is only temporary

[commodore64_love]

>>>If I take a loan and use it to pay off my loan it doesn't mean I still need to pay back the loan

Bzzz. The government gave GM 20 billion - 13 in one account and 7 in another. GM borrowed from Account #1 and paid back the debt on Account #2. ----- Now Account #1 is 20 billion in the hole, where it was originally 13 billion in the hole. Nothing was paid back and GM still owes the taxpayers repayment.

Re:This is only temporary

[DavidTC]

the bondholders would have perhaps been made whole (or close) by the sale of assets to new companies who would have been able to rebuild GM's VALUABLE divisions into something useful by now

No, they wouldn't have. There was no one to buy GM. There was certainly no one to buy it at the level you think there was.

And perhaps more importantly, the bondholders agreed to the exchange they go, which rather implies they knew this, that they knew if GM went into bankrupcy they'd get less than the 20% they got in equity.

Re:This is only temporary

[Schmyz]

They will make it up with Volt ver. 2.0

That's fine...

[Dr. Spork]

It won't be a problem. They can make it up in volume.

Re:That's fine...

[MrEricSir]

The best part about this joke is that it's actually true; if you buy enough of something it gets cheaper, therefore the manufacturing cost drops. So in a way they actually WILL make up for it in volume.

Well, assuming anyone will buy a Volt.

Re:That's fine...

[definate]

Yes, and no. While most production have economies of scale, without more information we can't be certain if this one does. This requires technology specific information, and business specific information, as to whether they're setup to have economies of scale.

Given this is a new process, it is entirely possible that they are not setup for this.

Without more information, we won't know. However, given they are a desired car, this car has benefits for the rest of the company, and GM has competent management, then we can assume they know all this, and would scale up production if possible.

So, in all likelihood they're telling the truth, or they are really stupid.

Re:That's fine...

[blackraven14250]

Buying batteries for 10,000 cars seems very likely to have no issues with "too small of a scale".

Re:That's fine...

[jnmontario]

Problem is, if they follow the same approach as the EV-1, then they don't want the volume and intend to tank the line. I don't want to seem like a tinfoil hat conspiracist, but I don't see any real marketing on the Volt - not like they did on the Saturn line, or really any other GM-made vehicle. It smells suspiciously like intended failure at this point. 1) Let's claim gross loss-per-vehicle. We won't make it obvious it was somebody from the company saying it, but we'll allude to it. 2) Let's not market-the-hell out of it like we do our other cars 3) Let's pull the vehicle once we get sympathy for our losses once our lobbyists have softened up congress.

Re:That's fine...

[LordKronos]

Please tell me you are kidding, right? We aren't just talking about a bulk discount. We are talking about a battery that, as far as I know, is made specifically for this vehicle (as there aren't any off-the-shelf batteries for this capacity, operating conditions, etc). That means there is a huge overhead specifically for these 10,000 batteries.

Re:That's fine...

[Shakrai]

but I don't see any real marketing on the Volt

Who do you market it to? Who is the target audience for a $41,000 EV? I can't spend that much on a vehicle, plain and simple. Many (most?) Americans are in the same boat. The vast majority of those that can spend that much are going to spend it on luxury rather than green.

The Volt will sell itself to the small minority of people who want to buy it. You aren't going to reach them with TV commercials.

Re:That's fine...

[PopeRatzo]

Of course.

Does anyone here think that Apple made money on each of the first batch of iPhones that were made?

Re:That's fine...

[kimvette]

1) Let's claim gross loss-per-vehicle. We won't make it obvious it was somebody from the company saying it, but we'll allude to it.

No problem! Creative accounting practices can do that. Just assign all the engineering costs to one brand by using their engineering group and claim that marque is losing money, and use the produced "IP" in other brands under the GM umbrella, don't let that brand use their own designs for new product so that the brand's product line goes very stale and sales become very sluggish, then either close or sell the brand. Wait a second, that sounds like what they did with Saab!

GM did it before and can do it again.

2) Let's not market-the-hell out of it like we do our other cars

Or, market the product as more upscale or higher end than it really is, and slap a ridiculous MSRP on it. Now, people who actually research the deals will find it doesn't actually sell at MSRP but many thousands less, but the folks reading consumer reports and the car rags and see the (few) TV commercials will never know that the selling price is no where remotely close to MSRP/sticker.

3) Let's pull the vehicle once we get sympathy for our losses once our lobbyists have softened up congress.

We (the taxpayers) bailed them out, then it's to creative accounting, crappy product and then whine for another bailout in the future when no one wants their shit because they are "too big to fail" and the execs still get their obscene bonuses. We trained them to expect it!

Re:That's fine...

[RobertM1968]

Please tell me you are kidding, right? We aren't just talking about a bulk discount. We are talking about a battery that, as far as I know, is made specifically for this vehicle (as there aren't any off-the-shelf batteries for this capacity, operating conditions, etc). That means there is a huge overhead specifically for these 10,000 batteries.

I suspect you mean the generic cells that Panasonic is making for the Volt? Casings, electronics, etc, are one thing. But the battery cells are truly not that (or any) different from others of their class.

And there's new technologies (including silicon based) that will supplant them before long... or so we are promised.

Re:That's fine...

[Anonymous Coward]

10,000 Volts???

That's just shocking.

Re:That's fine...

[Martin Blank]

The first run is going to sell out regardless of advertising. There's also a $7500 federal tax credit available, and some states will chip in with their own incentives. In at least some parts of California, buyers can get the entire cost of the charging stations (including installation) refunded. Bringing the price down to the $33K mark makes it much more affordable.

Re:That's fine...

[plague911]

lol i hope your joking because that cant be further from the truth.

Re:That's fine...

[plague911]

That information is out there :) There is even a hit of it in the blurb. Batteries are very much an economics of scale technology. I do not understand for the life of me why you would pretend the information is not out there but there is loads of research into this.

Re:That's fine...

[definate]

Given I work in the very area you're talking about, I doubt the information is out there. The hints in the blurb aren't anything you can go by, to definitely judge a company.

Internally each company based on when they invested in the technology, how much they invested, what their estimated capacity was, what their estimated time to obscolescence was, will have different economies of scale for even IDENTICAL technology. Hell, a company which has 2 plants which produce the same IDENTICAL components, would have 2 different economies of scale for each plant.

Additionally, with the sensitivity to the variables, even researchers who attempt to estimate how much/and what a company should be investing in, and what the resulting economies of scale is, would likely vary immensly.

So, I'm sorry, but it is a far more complicated problem than you've suggested.

Re:That's fine...

[Shakrai]

There's also a $7500 federal tax credit available

If it's such a great idea why do I need to subsidize it with my tax dollars?

Re:That's fine...

[jvin248]

100,000 copies per year is typical for general economics to work out for a car company.

Suppliers don't like to make parts for vehicles less than 30-50,000 copies. They love it if a vehicle hits 250,000 per year (provided they can make some profit on each unit). Their costs become the car manufacturer's costs.

All electric vehicle batteries will be a long term cost problem. Lithium has a limited supply (only a few countries actually have mines, and recycling becomes problematic) and so as vehicle demand ramps up the costs for the limited commodity will go up.

GM's solution to the consumer's 'range anxiety' by having the small conventional gasoline engine is brilliant and will make ultimate real consumer sales beyond the 'poser actors' that own a dozen SUVs and want to appear green.

... yeah, I work in the automotive industry.

Re:That's fine...

[blackraven14250]

Man, I was talking about it having some economy of scale, not ZERO economies of scale. This isn't a Lamborghini with a run of ~200 per year, where you can't expect any sort of discount. Especially since the batteries aren't exactly 100% made for this specific car.

Re:That's fine...

[drainbramage]

Only if the volume goes to 11.

Re:That's fine...

[Martin Blank]

I'm not justifying it. I'm just pointing out what's there, and that it's more likely to make it available to the middle class.

Re:That's fine...

[rufty_tufty]

So all they need to up their rate of production is put them through a transformer.

Checking the local electronics catalogue they're only a few $ for one that will give me 100V from 10V so it looks like I have their production problems solved!

Re:That's fine...

[jnmontario]

You market it to the same people that have a Lexus, Saab, Infinity etc... The interior of the Volt is just as luxurious as any of the aforementioned vehicles afaik from looking at the website. You see a metric crap-ton of ads for Lexus' on TV, I haven't seen ONE for the Volt yet. I stand by my case, with proper advertising, the Volt would sell just like any large production model would, it's curious as to why Volt isn't really being advertised.

Re:That's fine...

[afidel]

Actually LG's making the cells for the Volt and production costs should come down in 2012 when their Michigan plant opens.

Re:That's fine...

[RobertM1968]

Oops, thanks... I was thinking the Toyota/Tesla/Panasonic deal for some reason... either that or some mention by Panasonic that they intended to make replaceable battery packs for everyone interested. Thanks for the fix!

Re:That's fine...

[riverat1]

The idea is that you are priming the pump.

Al Gore is not going to be happy to hear this

[xmas2003]

Reality bites ... although yea, the hope is eventually costs will come down, especially with volume. BTW, are those batteries somehow recycled at end-of-life?

Re:Al Gore is not going to be happy to hear this

[icebraining]

http://www.hybridcars.com/environment/birth-industry-recycle-lithium-auto-batteries-26047.html

Not Surprising

[pookemon]

You lose money on every product until you've sold enough to pay off the retooling process, the design process and to force the price of new materials/parts to drop. If you spend $1,000,000,000 developing a product that you sell for $50k then you will make a loss to start with - no matter what.

So why is this news? (Slashvertisement anyone?)

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.

Re:Not Surprising

[bigdavex]

You lose money on every product until you've sold enough to pay off the retooling process, the design process and to force the price of new materials/parts to drop.

Yes, but that's not what "loses money on every Volt it sells" means. That phrase means that they're taking a loss on each marginal unit completely ignoring the fixed costs. What you're describing is, "GM hasn't yet recouped its development costs."

Re:Not Surprising

[definate]

GM developed the platform in Australia which most of their cars run on around the world. This is why they all have similar configurations, and feel/look the same. Despite the fact that they source parts from the same/similar suppliers, and keep branding consistent. At the time it was a huge undertaking and Holden (GM's Australian Subsidiary), released a movie called 6 Billion Dollar Baby, which was about the development of the platform and how it had cost Holden (not sure about GM, overall), an estimated 6 Billion Dollars to the release date.

http://www.google.com.au/search?q=Holden+6+billion+dollar+baby

This was likely capitalized and will be depreciated over a very long time.

Re:Not Surprising

[pookemon]

From TFA

Every major automaker spends billions of dollars a year on research and development costs. And they know that when they launch certain new technologies, they will lose money for some years before costs fall and volumes rise to let economies of scale make a particular new feature or technology profitable.

That almost sounds like what I wrote. And, in case you missed it:

You lose money on every product until you've sold enough to pay off the retooling process, the design process and to force the price of new materials/parts to drop

Re:Not Surprising

[dakameleon]

That it was developed here is was likely due to the R&D tax incentives, which allowed R&D costs to be written off tax bills at 45%, which given the corporate tax rate is 30% meant R&D spending was very effective. That is, until June 2010 at least - since July, the laws have limited this to companies with turnover of less than $20 million. Note this applied for wholy-owned subsidiaries of foreign corporations too.

In any case, this depends entirely on whether this is talking about total cost on the back of 10,000 produced and R&D done, or whether they're losing money on a per-unit basis. Not that they should can it just because the first production run is not profitable, but it certainly limits the ability to spend on other things until the Volt starts at least covering its own costs. If it's the same in 2 years they'll definitely be looking at a significant write-down.

Re:Not Surprising

[PopeRatzo]

So why is this news?

Because it gets the anti-US government teabaggers all a-hootin' and a-hollerin', and thus it is considered "news".

Of course they will lose money on each Volt sold.

When Apple came out with the iPhone, it was "losing money" on each one sold, too. Then, after a while, it wasn't.

Same thing with every new drug that hits the market. Same thing with the Kinect and the PS3 and the XBox, and.. well it's the same thing with every new product that comes out. Do you think that the first iPad that was sold covered the cost of Apple's R&D? Well, maybe that's a bad example because Apple didn't really do any "R&D", but it certainly did cover the cost of that went into the shiny design.

Re:Not Surprising

[MobyDisk]

Except GM isn't making you sign a 2-year contract to buy expensive gas. Apple makes their money from the app store, and from their contract with AT&T.

Well, maybe that's a bad example because Apple didn't really do any "R&D", but it certainly did cover the cost of that went into the shiny design.

That's is R&D.

Re:Not Surprising

[jdigriz]

Pick different example. iPhone Mk 1 cost 600 dollars. iPhone 4 costs 200 dollars. Apple wasn't losing money even at the beginning. Now the Xbox, that's a good example.

Re:Not Surprising

[ScentCone]

Bad analogies. Unlike phones (where there are companion services and licensing deals to sell), and unlike game consoles (where there is a huge, high-margin follow-up market in software and services), GM won't be selling the electricity that powers these cars. There is a structural defect in the price, and they know they can't sell them if they charge enough to pay for the batteries. This is, indeed, a political thing.

Re:Not Surprising

[fodder69]

That's not what the article says though (sigh, read TFA).

Even if the battery pack costs 12,000, that still leaves 28,000 to build a car around that battery pack. Considering it is a pretty basic car beyond that, I highly doubt they are losing money on a per unit basis.

And computers used to cost millions of dollars

[Enry]

This whole 'new technology is pricey and scary' has to stop. It's new, it's expensive, we get it.

Someone (GE in this case) will step up and start buying. As production increases, volume drives the cost down. Technology improvements drive the cost down even further.

It stinks that GM is losing money on these, but they're putting the effort into it, and I have to applaud them for it. Then again, didn't the PS3 and Xbox 360 cost more to make at launch time than they were selling for? Maybe GM is on to something...

Re:And computers used to cost millions of dollars

[tirefire]

It stinks that GM is losing money on these, but they're putting the effort into it, and I have to applaud them for it. Then again, didn't the PS3 and Xbox 360 cost more to make at launch time than they were selling for? Maybe GM is on to something...

(emphasis mine)

Oh, they're on to something, alright. GM is "too big to fail". This makes it easy for them to start risky, costly ventures, because they'll either succeed and make GM rich, or the gov't will bail GM out with more loans until GM is profitable again.

Re:And computers used to cost millions of dollars

[longacre]

didn't the PS3 and Xbox 360 cost more to make at launch time than they were selling for?

GM should have built an augmented reality gaming system into the windshield so they could make up the loss by selling new software.

Re:And computers used to cost millions of dollars

[jmorris42]

> Then again, didn't the PS3 and Xbox 360 cost more to make at launch time than they were selling for? Maybe GM is on to something...

It made economic sense for Microsoft and Sony to sell at a loss because there was other revenue streams available to make up the initial loss. They get about $10 per game sold even if it isn't one of their own. Lose $100 on the console, sell ten games over the life of it and you are good. Factor in that they KNOW the production cost will drop quickly and it makes more sense. Finally add in the battle for market share angle and it makes enough economic sense that the shareholders aren't going to want blood and souls at the next stockholders' meeting.

None of those arguments are available to GM pissing away tax dollars subsidizing yuppies who want bragging rights for being greener than thou. Selling a Volt today at a loss doesn't open up any future revenue streams. The biggest cost is batteries and they are going to slowly drop in cost whether GM build the Volt now or when they are economically viable. And unless you count the market share of unprofitable green cars (ALL hybrids are currently selling at a loss with the possible recent exception of the Prius) as something valuable there isn't a market share building angle to justify it. It is pure politics.

Re:And computers used to cost millions of dollars

[rsborg]

Apple deals with this chicken-egg problem by going to part manufacturers and offers them a deal they can't refuse with prices that allow Apple to create the product at a decent price.

Obviously, their attention to detail and hype-machine allow them to actually meet or exceed their sales targets.

Were GM to create a vehicle that had such attention to detail and if they had a cash hoard with which they could not be reliant on the bank-sharks, then they might be able to use this strategy to create such a compelling vehicle that people would fulfill the marketing.

Re:And computers used to cost millions of dollars

[Anonymous Coward]

Privatize the profits; socialize the losses.

The American Way - according to the politically connected.

Anyone who blames one party over another for this is a complete moron and a partisan stooge.

Re:And computers used to cost millions of dollars

[chrb]

Then again, didn't the PS3 and Xbox 360 cost more to make at launch time than they were selling for?

Exactly this. Each PS3 originally cost an estimated $690.23 New technology is expensive. Over time, economies of scale and other cost reductions take hold, and products get cheaper. Having paid $x billions of dollars for design+factories+retooling+manufacturing, yes, it costs, and initial sales do not meet costs - that's why we have the economics concept of a breakeven point.

Re:And computers used to cost millions of dollars

[Almost-Retired]

One thing that no one has acknowledged so far in this discussion, is just how tight a grip on GM's gonads the Chinese have, a grip that gets ever tighter as the Chinese cut back on their Lithium exports because they need more and more of it themselves.

We do have, here in the US, some promising Lithium deposits, but only one mine, now nearly abandoned, has actually been slightly developed. Bringing these online and producing the usable Lithium to build these batteries with will take an estimated 10 years if the industry is left to its own devices.

This is clearly a place where some federal dollars to underwrite the cost of machinery etc to get this up to speed in say 3 years, would be taxpayer monies very well spent as it will remove one of the bigger hammers the Chinese are holding over our heads.

That may have a bearing on why we are still in Afghanistan since there is millions of tons of ore just waiting for a willing worker to shovel it into his donkey cart and get it to where we can load it on a boat without the Taliban blowing everyone all to hell. Since that, while attractive, is not a good bet for the Afghan workers lifespan, we'd be far better off to develop our own known reserves, which I'm told are actually quite considerable.

Why its not being done as we speak, is fscking beyond me.

--
Cheers, Gene
"There are four boxes to be used in defense of liberty:
  soap, ballot, jury, and ammo. Please use in that order."
-Ed Howdershelt (Author)
Q: How many IBM CPU's does it take to do a logical right shift?
A: 33. 1 to hold the bits and 32 to push the register.

Re:And computers used to cost millions of dollars

[MBCook]

I doubt the Prius made money when it was first released, at least in Japan. At a certain point, GM will have to learn to design and build electric cars. It may make sense for GM to get this learning experience going, so that they won't be far behind Nissan and will be ahead of some of the other manufactures because they'll be on generation 2 or 3 when Honda is on generation 1. This will also get their name out there. For a long time, Toyota was hybrid car. Honda had one, but it didn't sell as well and didn't get the mind share. Heck, despite the fact many people sell them, Toyota is still the hybrid car thanks to the Prius, just to a lesser degree.

If GM hadn't needed a bailout, I think people would be applauding the move. It's risk taking, trying to move forward past what they've been doing for 50+ years. The problem is it's not their money anymore so people are unhappy with them risking it.

I wasn't a fan of the GM bailout. I would have liked to see them split up and sold out to other car makers or something else. I'm just not sure GM needed to keep being GM.

That said, I think this is a good move. While they are risking money, they are taking risks. The Volt is interesting, and if they just spent the next 10 years waiting for other manufacturers to make electric cars common, they'd just be wasting a big opportunity. Getting ahead of this market could be quite a bit easier than taking back a big chunk of the normal ICE car market. Plus they are only selling/making 10,000. It's not like they are starting with 200,000. It's a good toe-dip start.

Re:And computers used to cost millions of dollars

[CityZen]

They just need to figure out a way such that only properly GM-licensed car mats, seat covers, etc. will work on the Volt. :-)

Cars actually offer tons of revenue streams (accessories, service/maintenance, financing, insurance, gasoline, etc.). The problem is that most of these have numerous providers. They're doing all they can to make service/maintenance first-party only, though...

Re:And computers used to cost millions of dollars

[Jeremi]

or the gov't will bail GM out with more loans until GM is profitable again

... or not. From what I've seen, the political will to bail out anyone has been tapped out for at least the next 5-10 years.

Re:And computers used to cost millions of dollars

[Shakrai]

From what I've seen, the political will to bail out anyone has been tapped out for at least the next 5-10 years.

Who needs political will when the Fed can just issue you lines of credit behind closed doors?

Re:And computers used to cost millions of dollars

[Enry]

You are aware that the GM bailout wiped out the existing shareholders, right? The situation wasn't nearly so fortunate for GM's former owners as your glib analysis would suggest.

Common shareholders. The govt's shares and likely institutional investors kept theirs - IIRC, the government is due to make a profit on their investment into GM.

Re:And computers used to cost millions of dollars

[LordKronos]

Privatize the profits; socialize the losses.

Uhhhhh, you do understand how LOANS works, don't you?

Re:And computers used to cost millions of dollars

[Urza9814]

Sony didn't need bailouts for the PS3, which took several years to become profitable...

If you're a big enough company, you can sell your newest products at a loss for a while. Although I'm not sure where GM plans to make up the cost...as PS3 was obviously getting it back in games and accessories...GM probably gets some from accessories, parts, service, etc, but I can't imagine it's that much. But then again, if the losses aren't _that_ big, it could just be worth it for the good PR for a while. And for being one of the first out there. I'd say the Volt is probably the best electric car on the market right now, and building that kind of a brand will be better than any advertising campaign in 10 years or so.

Re:And computers used to cost millions of dollars

[dakameleon]

Apple designs the container to hold a bunch of commodity parts, and sells it with a big fat margin - the Volt does not have commodity parts in an industry only just starting to retool to parts usable in a hybrid, and cannot afford to sell at a big margin due to its target market and functions provided. Doesn't matter how much hype, people aren't going to shell out twice as much for a car that doesn't provide them with twice the benefit.

Re:And computers used to cost millions of dollars

[dakameleon]

Not at all. The PS3 hardware might have cost more than the retail price, but its software certainly didn't, and nor did its accessories, all of which contributed to the overall revenue stream. GM does not have the luxury of selling the Volt with a linked product that provides it with a revenue stream irrespective of the original unit cost.

Re:And computers used to cost millions of dollars

[PopeRatzo]

GM is "too big to fail"

You miss the point. Here in America, everyone making more than $250,000 per year is "too big to fail".

You know who's not too big to fail? Everyone else. They want grandma to work until she's 70 so the Koch Brothers don't have to pay an extra few percent of their billions in profits.

I just learned today that in the TARP bailouts, the banks were made completely whole. Think about this. That means they received from the government 100 cents on the dollar. Think about that. No attempt was made to say "OK, you lost your shirts, but we want to keep you going, so how much will it take to keep you in business?" No, what was said was, "Here's every single penny you lost" (and in AIG's case, "Here's an extra 50 billion for Lehman Brothers, just because").

The surprising part is that they even bother to hold elections or convene congress any more. I understand that it's just theater now, but still, every dollar they spend to make it look like we're a sovereign nation is another dollar that doesn't go into the pockets of the most powerful corporations.

Same thing over in Europe, I understand. Being a more mature society though, there are some people fighting back, literally. At this point, it's really the only way. The only thing that will get the autocrats' attention is a disruption in profits, so it's obvious what we're going to have to do.

Re:And computers used to cost millions of dollars

[PopeRatzo]

Anyone who blames one party over another for this is a complete moron and a partisan stooge.

And anyone who can't identify which of the politicians are enabling this situation is deaf, dumb and blind.

Listen to yesterday's interview with Vermont's Senator Bernie Sanders. He's not part of the problem. Now go listen to the statement yesterday by Kentucky's Senator Mitch McConnell about how they're going to hold everyone hostage until they can get tax breaks for people who don't need them, don't deserve them, and in many cases don't want them. Now check their voting records. Now tell me all politicians are the same.

Re:And computers used to cost millions of dollars

[PopeRatzo]

the political will to bail out anyone has been tapped out for at least the next 5-10 years.

You're dreaming. Just wait until the huge lump of botched foreclosures and commercial defaults hits the books. The "new congressional majority" will fall all over themselves making sure the banks get 100 cents on the dollar for their losses.

Re:And computers used to cost millions of dollars

[Attila Dimedici]

You do not recall correctly. The government is due to lose approximately half of the money that they gave/loaned/whatever other word you want to use for it to GM.

Re:And computers used to cost millions of dollars

[Attila Dimedici]

Actually, it might make sense for GM to sell the Volt at a loss (not that I think it does, but it might). When Toyota started selling the Prius, they were losing money on every car they sold. At the time, GM had decided not to build hybrids for that very reason (they would lose money on every car they sold). Toyota sold the Prius as a loss leader. They did not start making a profit on the Prius until sometime between 2006-2008 (and I'm not sure that covered the losses they were taking on it before them).

Re:And computers used to cost millions of dollars

[DerekLyons]

Then again, didn't the PS3 and Xbox 360 cost more to make at launch time than they were selling for? Maybe GM is on to something...

It made economic sense for Microsoft and Sony to sell at a loss because there was other revenue streams available to make up the initial loss.

I don't know about your planet, but here on Earth GM sells a lot more than just Volts.

Re:And computers used to cost millions of dollars

[Enry]

I found one article that said the govt would get everything back from GM, but I figure the WSJ would be a better source.

Looks like we're both (currently) wrong. Most of this depends on what GM's stock price does as the US sells its shares, but on paper, it's a 20% loss.

Re:And computers used to cost millions of dollars

[hrvatska]

Considering that GM went bankrupt and its shareholders and bondholders lost their entire investment, and the CEO was canned, along with a lot of executives, I'm not sure how privatizing the profits worked in this particular situation. At this point it seems plausible that the federal government will at least break even on the GM bailout, perhaps even turning a profit.

Re:And computers used to cost millions of dollars

[Osgeld]

well its not really new, there have been electic cars since there was cars, it was very economical for local delivery trucks and what not post war war I

my problem with it is, what has GM done since WWI to actually improve it? its still a basic electric motor and a fuckton of heavy batteries that suck a blistering amount of wattage out of the wall

  it has better range yes, but at a much less of a load capacity from 1920

this is new and innovative? GM is a failure, and has been for 20+ years

I have been on the side of let them fail, cause shit man they will anyway were just pissing away a unimaginable amount of money to delay it

Re:And computers used to cost millions of dollars

[rsborg]

Apple designs the container to hold a bunch of commodity parts, and sells it with a big fat margin

If they're so commodity, why do the sell so well? Perhaps it's the engineering in putting those parts together? Maybe some of those parts are not really "commodities" (ie, SSD blades in MB Air).

As I understand the mobo is custom Apple design in a Macbook, and the A4 chip is also completely custom design.

Besides, the Volt, a series hybrid, has had many predecessors. The Li batteries are being used almost all EV and recent HEV cars. I think the ultimate tragedy is that they only planned to make 10,000 of them.

Can GM ever get past the culture that led to their burying of all those EV1s?

Re:And computers used to cost millions of dollars

[FooGoo]

I wonder if any of the $16 Billion the Fed lent GE was tagged for buying those Volts. So government money is used to make the cars and then government money is used to buy them. Seems like the government is paying twice for the same thing.

Re:And computers used to cost millions of dollars

[stdarg]

I just learned today that in the TARP bailouts, the banks were made completely whole.

I read plenty of news about major losses at banks in the last few years. Are you suggesting the losses came only from non-troubled assets?

The surprising part is that they even bother to hold elections or convene congress any more. I understand that it's just theater now, but still, every dollar they spend to make it look like we're a sovereign nation is another dollar that doesn't go into the pockets of the most powerful corporations.

It's weird, I totally agree with you but we seem to hold different groups responsible. You blame corporations? It makes no sense to me. It's the politicians who enable the corporations, not the other way around. And the politicians don't stop there, they sell out to anybody for even the smallest gain, even for their egos. Look at the absolute garbage revealed by wikileaks for instance. There is an international club of politicians who scratch each others' backs, lie outrageously to the public (making it very difficult to even fantasize about holding them accountable), and back each other completely. And the consequences are lives, not just dollars for corporations. It's so much more serious than some companies who made easy money on bailout funds.

Re:And computers used to cost millions of dollars

[stdarg]

Are you suggesting GM currently sells or plans to sell services directly related to the Volt that will generate more revenue? The part you left out of your quote of GP tied the loss on the console directly to increased revenue from games *played on the console*. What's the analogous revenue stream for the Volt? Will GM start getting a share of electricity revenue from power companies?

Re:And computers used to cost millions of dollars

[DerekLyons]

No, I'm not suggesting that. I'm suggesting the OP is an idiot for assuming that Sony and Microsoft's model was the only one. Learn to read and think you blithering idiot.

Re:And computers used to cost millions of dollars

[Sky Cry]

None of those arguments are available to GM pissing away tax dollars subsidizing yuppies who want bragging rights for being greener than thou.

Perhaps they are preparing the market. First of all, selling more Volts now will put pressure on the development of infrastructure to accommodate this type of car, which in turn will result in more people willing to buy it later, when the car is profitable. Second, being the market leader means the infrastructure will be accommodated primarily to your car, not a competitor's. People will be more likely to choose your car because of this and the competitors will have to adapt to your car, making it more expensive for them to produce their cars. There are many other smaller benefits to being the first one to fill the market with a new type of product.

Re:And computers used to cost millions of dollars

[Raenex]

Uhhhhh, you do understand how LOANS works, don't you?

First off, only a fraction of the tens of billions sent GM's way was in the form of loans. The rest was exchanged for stock. GM then touted that they paid back these loans, but they didn't tout that it was through the non-loan bailout money, not through profits:

http://www.politifact.com/truth-o-meter/statements/2010/apr/27/ed-whitacre/ceo-says-gm-has-repaid-government-loans-full/

Second, a loan is a risk. If GM fails, then that money is gone. Third, the government is finding new ways to hide losses:

http://www.bostonherald.com/news/opinion/editorials/view.bg?articleid=1294504

Re:And computers used to cost millions of dollars

[jayveekay]

Listen to yesterday's interview with Vermont's Senator Bernie Sanders. He's not part of the problem. Now go listen to the statement yesterday by Kentucky's Senator Mitch McConnell about how they're going to hold everyone hostage until they can get tax breaks for people who don't need them, don't deserve them, and in many cases don't want them. Now check their voting records. Now tell me all politicians are the same.

Both parties want tax cuts that Americans don't need or deserve. Claiming that Americans need the Bush Tax Cuts can be disproved by looking at the fact that Americans were able to live prior to the Bush Tax Cuts.

Do most Americans want tax cuts? Sure. Just like most children want to stuff their faces with candy and ice cream. Sometimes you need a parent to say "No, you can't have that, you've had too much of that already and more would be bad for you."

In a democracy, where do you find the parents? While the Republicans are the more irrational and irresponsible party today, the Democrats aren't exactly full of mature and wise statesmen who are making responsible fiscal policy for the best long term interests of the country. The Bush Tax Cuts were passed when the CBO did a 10 year projection of massive surpluses, and so the Republicans said the government should cut taxes because times were so good. Now the Dems and Repubs are saying that the tax cuts are needed because times are so bad.

Taxes go up next year, it will hurt. Living with a 32 inch TV instead of a branch new 50 inch, or driving a $15k car instead of a $30k car, or renting an apartment instead of buying a house is not life-ending. Take the pain, such that your children's children don't have to suffer (as much) for your excessive consumption.

Re:And computers used to cost millions of dollars

[kmac06]

tax breaks for people who don't need them, don't deserve them, and in many cases don't want them

When someone earns, or really creates, some amount of wealth, that person is the sole entity that deserves that wealth. Whether or not they need it is irrelevant. Taxes are only morally acceptable when they go to fund a legitimate role of government.

If anyone doesn't want a tax cut, they are free to send more money to the US Treasury department.

Re:And computers used to cost millions of dollars

[ScentCone]

didn't the PS3 and Xbox 360 cost more to make at launch time than they were selling for? Maybe GM is on to something...

GM won't be selling the electricity that makes these vehicles useful, in the way that Sony and Microsoft make money off of the sale of what the PS3 and Xbox are actually all about: after the fact software and services. Once GM loses money by not charging enough to pay for the batteries they're using, that money is lost forever. This is all a PR stunt designed to make the use of tax dollars feel less capricious and (in the case of the way the GM bailout was crafted specifically to screw investors and to give huge paybacks to politically active labor unions) to provide political cover.

Re:And computers used to cost millions of dollars

[makomk]

Maybe some of those parts are not really "commodities" (ie, SSD blades in MB Air).

The Flash chips and SSD controller chips and other components are all commodities. (In fact, I think there's even a futures market for Flash chips.) The cost of the PCB and assembly is very small compared to the cost of the commodity parts, and there's a wide variety of interchangeable suppliers for those.

Most of the expensive bits in the GM Volt - the transmission, the batteries, etc - are expensive custom-made parts.

Re:And computers used to cost millions of dollars

[Enry]

Believe me, the government doesn't like paying twice for the same thing. Bad. Things. Happen.

Re:And computers used to cost millions of dollars

[ndavis]

It stinks that GM is losing money on these, but they're putting the effort into it, and I have to applaud them for it. Then again, didn't the PS3 and Xbox 360 cost more to make at launch time than they were selling for? Maybe GM is on to something...

(emphasis mine) Oh, they're on to something, alright. GM is "too big to fail". This makes it easy for them to start risky, costly ventures, because they'll either succeed and make GM rich, or the gov't will bail GM out with more loans until GM is profitable again.

I have to chime in the reason PS3 and Xbox 360 were sold at a loss was to bring in customers as they made money from the games being sold.

GM made this car not for sales but to bring people into the dealerships and hopefully purchase a Cruze which they do make a profit on. This is no different then the Halo cars that some car companies have to get people excited about the brand. It is the same as what Toyota did with the Prius and what Honda failed to do with the Insight.

I'm hoping this works out so people will buy Chevy products that are profitable but only time will tell.

Also for those mad that GM was bailed out you think the economy is bad now imagine how bad it would be with a few million extra people unemployeed and never mind the issues this would have caused with all the other automotive companies with how they all use the same suppliers. Toyota, Ford, BMW,...etc would have all had massive problems as suppliers went under and the development money GM supplied dried up. GM was too big to fail and I do feel they need to shink down. My other thought was that Chrysler should have died and been sold off which would have helped all the other car companies out but I guess you can't pick favorites in the auto world unlike finance.

Re:And computers used to cost millions of dollars

[fodder69]

The point of taxes is that they fund the operations of a country that enables you to earn said wealth. Without the functions of government, I'd just beat your ass and take said money.

Oh, wait we are talking about money which in itself is some kind of government scheme.

I presume you only accept payments for your services in chickens or some other tangible goods instead of this socialist scheme of "money".

Re:And computers used to cost millions of dollars

[kmac06]

What enables me to earn wealth is the natural ability of a human being, in the presence of a society that allows individuals to fulfill that potential. Government is not the creator of this society (it is, in fact, created by the people), only the appointed protector of it. Government of course has legitimate functions, but taking wealth from the people who created it and handing it out to others is not one of them.

Re:And computers used to cost millions of dollars

[HiMorons]

You're an arrogant prick. Americans don't deserve their own money? Americans are like children trying to eat candy? Ah, but you're the responsible parent taking peoples hard earned income and pissing it away on things like this. Soon morons like you won't be in charge and we'll all be better off.

Re:And computers used to cost millions of dollars

[stdarg]

Wow, you're pretty upset. You should read your post again though.. if anything you reinforced OP's assumptions.

Let me spell it out for you: OP said Microsoft and Sony sell a lot more than just a console. The losses on the console are made up by profits on the other items.

You said... GM sells a lot more than just Volts. That's parallel to OP's argument.

See how you are not contradicting OP's assumptions, but actually reinforcing them? Maybe you accidentally deleted a sentence before posting?

The key item that you missed, twice now, is what I said in my post. Sony and Microsoft's profits from other items are tied indirectly to the console. GM does sell more than just the Volt... but they would make the same profit on those other items even if the Volt was canceled.

Re:And computers used to cost millions of dollars

[PopeRatzo]

When someone earns, or really creates, some amount of wealth, that person is the sole entity that deserves that wealth.

You show me someone in the US who made their wealth completely on their own with their own hard work and ingenuity, and we can consider that statement.

Pick anyone in the US who's making more than $250k. Now drop them in the Sudan or Dominican Republic and see how well they do.

If you're a success in the US, it's in great part because of the stable society, rule of law, infrastructure, and financial system. The richer you are, the more you make use of those "commons", from the highway system to national defense.

Remember, the tax package passed by the Dems in the House yesterday gave a tax cut to everyone not just those making less than 250k. The 4% tax increase that would occur if the cuts were not extended only apply to the money made after the first $250k. This is why the progressive income tax is the fairest way to do it.

The immoral thing would be to give tax cuts to the top 2% at a time when we're fighting 2 wars and 9% of the workers are unemployed. All we're talking about here is going back to the tax rates that were in place during the 90's, when the top 2% did very very well.

It's immoral to expect grandma to work until age 70 just so the richest few can avoid paying their fair share.

Re:And computers used to cost millions of dollars

[PopeRatzo]

What enables me to earn wealth is the natural ability of a human being

You're dreaming.

What enables you to earn wealth is living in a society that makes it easy for you. And for that, you are required to pay certain dues, based upon the extent to which you have made use of the social and governmental structures.

Without the courts to enforce your contracts for example, there would be a lot fewer rich folks.

Re:And computers used to cost millions of dollars

[PopeRatzo]

It's the politicians who enable the corporations

Now you know that's not true. How do you think congress became a millionaires' club? Who do you think finances elections?

We now have corporations that are bigger and more powerful than all but a handful of countries. When a corporation that has more money than the GDP of Belgium comes calling, a politician will jump to its tune.

Look at the election last month. The money spent by corporations anonymously funding issue ads was more than the DNC and the RNC combined. Do you think George Bush/Dick Cheney become president without the oil companies? Money is the fuel the political engine runs on, and the money comes from corporations. Even if there were more money coming from individual donors giving $10 or $20, who do you think a politician is going to be more beholden to, 500 donors giving $10 each or one donor giving $5000?

Now that the limits have been removed from corporate money in elections, it cannot be said that "it's the politicians that enable the corporations" rather than the other way 'round.

The only hope we have to avoid disaster is public funding of, and strict limits on, election financing. Unfortunately, there's a segment of the most powerful who believe that our Constitution is both a suicide pact and a license to steal.

Re:And computers used to cost millions of dollars

[stdarg]

Now you know that's not true. How do you think congress became a millionaires' club? Who do you think finances elections?

Doesn't matter. Once you're elected you have a choice in every vote you make. Someone did you a favor and if you don't repay it you won't get *re*elected? Okay, so what. It's still the politician who is saying "I personally choose to support so-and-so corporation over the interests of the people, for my own gain in the future."

We now have corporations that are bigger and more powerful than all but a handful of countries. When a corporation that has more money than the GDP of Belgium comes calling, a politician will jump to its tune.

The corporations you're referring to are bigger than any person or small group of people, and they do nobody's bidding. Sure GE is bigger than many countries... so... what is their agenda? Who does it benefit? You think Big Shareholder #1, #2, #3, #4, #5, #6, ..., #1449, #1450 (all still richer than me and you put together) are alllll in agreement and all getting the same kickbacks and special deals in exchange for some sort of inefficiency? (And if it's not an inefficiency then it's not hurting anybody..) There's a natural balance right there. If the top dog is getting a kickback, it's at the expense of everybody else.

Now that the limits have been removed from corporate money in elections, it cannot be said that "it's the politicians that enable the corporations" rather than the other way 'round.

Who put those limits in the law in the first place? Who removed them? Who has the power to raise taxes, pass laws, make today' legal actions tomorrow's crimes?

The only hope we have to avoid disaster is public funding of, and strict limits on, election financing.

Of course it's not a conflict of interest to have the government be the sole financier of government elections.

Price vs gasoline.

[olsmeister]

If gasoline were to suddenly become significantly more expensive, the asking price could be adjusted accordingly.

Re:Price vs gasoline.

[Meshach]

If gasoline were to suddenly become significantly more expensive, the asking price could be adjusted accordingly.

If people have not changed their driving habits given where the prices are now I do not see any more increases changing those habits.

Re:Price vs gasoline.

[Stiletto]

Wait for $20/gal gasoline and watch driving habits change.

Re:Price vs gasoline.

[Black Gold Alchemist]

Wait for $20/gal gasoline and watch driving habits change.

By riding motorcycles with no emissions controls.

Re:Price vs gasoline.

[Meshach]

Wait for $20/gal gasoline and watch driving habits change.

That would change driving habits. But any change that people can absorb will not change anything. Gasoline will not go up to $20/gal. But it will go to $5-8/gal and people will give up other things to afford it. Our society is addicted to the convenience of vehicles.

Re:Price vs gasoline.

[dgatwood]

Won't happen. You're boiling a frog. Increases occur incrementally, so people just learn to deal with the new normal. If you saw gas prices double overnight, it would change driving habits (and would make the cost of food, clothing, and pretty much everything else go way up, too), but that's not likely to happen. Gradual change? It changes car buying habits far more than driving habits, and even then, only if the increase is fairly rapid as it was during most of the second Bush administration.

Re:Price vs gasoline.

[MightyYar]

If people have not changed their driving habits given where the prices are now I do not see any more increases changing those habits.

Gas is hovering around $3/gallon... that's pretty cheap - or at least not high by historical standards. But anyway, people DID change their habits. Back in 2007-08, gas was near $4/gallon and SUV sales went through the floor.

Re:Price vs gasoline.

[Jeremi]

Our society is addicted to the convenience of vehicles.

True, but that doesn't mean society is addicted to gasoline. If and when non-gasoline-powered vehicles become cheaper than gas vehicles to purchase and run, people will switch. It's not as if people care (much) what their car is running on under the hood, what they care about is that it gets them where they want to go.

Re:Price vs gasoline.

[Anonymous Coward]

I would say we already have evidence that as much as $4/gallon causes a noticeable change in driving habits. And a more noticeable change in gasoline consumption.

Citation: http://online.wsj.com/article/SB123957686061311925.html

Re:Price vs gasoline.

[BasilBrush]

Actually frogs do jump out of water as it gets too hot for them. And as cigarette prices have escalated over the years, more and more people have given them up. As you say, car buying habits will tend to change first before journey lengths. But they'll both change over time as fuel becomes more expensive, however gradually it happens.

Re:Price vs gasoline.

[Black Gold Alchemist]

Yeah, I fail.

Re:Price vs gasoline.

[RealGrouchy]

Considering the gasoline cost savings are based on a number of years of not buying gas, I'd expect the price would already take into account the increase in gasoline prices.

Now what about the increase in electricity prices?

- RG>

Re:Price vs gasoline.

[dgatwood]

Yes, I know that the frog thing is dubious. It's just an expression.

Regarding your smoking analogy, I think you're missing a few very important reasons for smoking cessation in that theory:

• Smoking causes lung cancer, emphysema, and contributes significantly to heart attack and stroke risk. A lot of the people who quit smoking did so because they want to live.
• Cigarettes are disproportionately bought by the poor, so sales are affected more by small increases in price. Gasoline is bought disproportionately by the middle class (the poor are less likely to have a car, and the rich are less likely to have to drive to work on a daily basis), so sales are not significantly affected by price.
• You don't have to smoke a cigarette to get to work.

That last one is the most important reason why driving habits won't change much. The vast majority of driving is not voluntary. Thus, short of either moving to a house closer to work (which isn't always feasible in two-earner households) or quitting your job and getting a closer job (which isn't always feasible, either), you pretty much have to drive when you have to drive.

Another problematic theory is that higher gas prices will encourage carpooling. Most people don't want to carpool with strangers, so carpooling really only works if you happen to know someone who not only works near your work, but also lives near your house. Frankly, most people for whom carpooling would be convenient have already started carpooling, and most of the other people on the roads (again, with the possible exception of the working poor) are unlikely to start regardless of gas prices.

And lest you suggest public transportation, practical considerations make that unlikely. I live one town over from my workplace in a major metropolitan area. The nearest bus stop is about two long blocks from my house, and at the other end, two blocks from my workplace. It takes about 12 minutes to drive to work. On a bad day, it's 15 minutes door-to-door. By bus, it takes up to an hour and a half, with a third of your travel time on foot. That's approaching eight times as long. In fact, according to Google, it would only take two hours to walk, and that's free. It just doesn't make sense to take mass transit except for long trips, and even then, only on routes with limited stops.

And no matter how much gas prices go up, mass transit will never be dramatically cheaper. That's a $4.00 bus route versus approximately $1.50 in gasoline. Yes, once you factor in wear and tear on the car, it's a little more expensive, but only about a dollar more than the cost of the bus. There's simply no way for public transit in most places to be more than about 20-25% cheaper than an individual vehicle with a single rider, nor for it to be even remotely comparable in terms of speed.

Thus, at basically any feasible price, it does not make sense unless it is your only option (that is to say, you don't own a car or don't have a license). Even for the poor, it doesn't make sense because a $500 beater car probably costs about two bucks less for that same trip even after factoring in wear and tear....

Thus, gasoline prices are unlikely to have any significant impact on individual driving habits beyond possibly reducing leisure travel, and at most, that will only shave off a few percentage points. It will, however, result in greater reduction of small businesses; the big box retailers will find ways to be more efficient at trucking products from place to place, thus compounding the benefits of having large networks of stores.

Re:Price vs gasoline.

[BasilBrush]

Sure, the health affects had some effect on smoking decline. Then again global warming will have some effect on fuel use decline.

And sure you don't need cigarettes to get to work. Then again, fuel isn't physically addictive.

No, of course they aren't the same. No analogy is ever the same. But they both have price elasticity.

That last one is the most important reason why driving habits won't change much. The vast majority of driving is not voluntary. Thus, short of either moving to a house closer to work (which isn't always feasible in two-earner households) or quitting your job and getting a closer job (which isn't always feasible, either), you pretty much have to drive when you have to drive.

Of course people are unlikely to move specifically for fuel purposes. But people move jobs or home every once in a while anyway. When they do so, distance between the two, and possible routes form part of the choice. As fuel gets more expensive, it'll form a more important part of the choice. As fuel gets less affordable, the population's homes and workplaces will get closer to each other. Just as they grew further apart with the availability of easy and cheap travel a few decades ago.

The way the world is always changes over time. It's just a matter of working out which way it will change. It certainly doesn't stay the same.

Re:Price vs gasoline.

[TooMuchToDo]

I bet you the price of gas would approach 10-15 dollars a gallon. India and China have what, 1.5 billion people? That's a lot of internal combustion engine vehicles.

Re:Price vs gasoline.

[Viceice]

I know you're kidding, but where I come from, this actually happens. It's illegal but you do see a couple riding a 100cc moped with 3 young children in between on the road sometimes.

Re:Price vs gasoline.

[MightyYar]

Inflation does include energy... but it also includes everything else, too! It is a hard problem, but oil holds up well compared to other commodities. I won't touch gold because I think it's a bubble, but historically they ARE highly correlated.

Alternative, natural energy source solution.

[maxrate]

Electric eels.

Re:Alternative, natural energy source solution.

[compro01]

Think they'd provide enough power for a hovercraft? ;)

Re:Alternative, natural energy source solution.

[stockard]

Nope, but there *is* enough for a Christmas Tree. :) http://www.reuters.com/news/video?videoId=72584

Re:Alternative, natural energy source solution.

[rossdee]

Only if it was full of them. There would be no room for a driver or cargo.

Re:Alternative, natural energy source solution.

[arth1]

Only unfiltered.

If we care about GM, we'd stop buying them

[shanipribadi]

If we care about GM, then we should not buy Volt from them. Every Volt we buy causes GM to lose money, so if we don't buy any Volt (boycott them) then GM won't lose any money, hence a nett positive for them. Yay on a more serious note, I don't see why GM would market a car that causes them to lose money. How can they recoup their investment? From selling battery replacement or services? anyone care to explain?

Re:If we care about GM, we'd stop buying them

[unity100]

read first few posts in this thread.

Re:If we care about GM, we'd stop buying them

[khallow]

They're probably tossing a bone to their government part-owners. A token green program looks good for Washington politicians and is cheap for what GM gets out of it.

Re:If we care about GM, we'd stop buying them

[maxrate]

Providing the same shit service they give to anyone who buys a new car and has trouble with them. They sell you a warranty that doesn't cover anything. Purchased 3 GM's (2 brand new - all, 'high end' GM) - always problems with the dealership doing a poor job on repairs/warranty work/etc. I'm done buying anything GM.

Re:If we care about GM, we'd stop buying them

[clarkkent09]

You don't have to make a profit when you are too big to fail and your controlling shareholder is the US government.

Re:If we care about GM, we'd stop buying them

[larry bagina]

their business model is to give away cards and sell t-shirts and coffee cups at lectures.

Re:If we care about GM, we'd stop buying them

[raodin]

It is right there in the summary... they're selling at a loss now, but they're betting on component prices coming down. Presumably as a result of volume ramping up and the tech maturing.

Re:If we care about GM, we'd stop buying them

[phoebus1553]

There was something like this going on with hybrid Altimas too. The 'Synergy drive' models were using Toyota's technology and they had to pay them each time they sold a vehicle. There was a dealer that told me that they were losing money every time they sold one, but they did it anyway to get credit for making a LEV in places like California where there's some rules about that stuff... ask a Californian what they are, I don't know exactly. They wouldn't let you order them in places that didn't care, like N. Dakota or Minnesota, the only way they get here is used.

I'm guessing there's some sort of regulatory shenanigans like that going on here too, aside from saying HEY! We made an electric car!

Re:If we care about GM, we'd stop buying them

[El_Oscuro]

Service depends on the dealership much more than the make. You must have had a shitty one. My dad did too - with a Toyota. Less than 15k miles on his new Corolla and it is affected by the engine oil sludge. They said "well, our records show that you didn't change the oil, so it is your fault, so it is not covered under warranty. And you need a new engine". My dad produced receipts from the scheduled oil changes he had performed by his mechanic, but the dealer and/or Toyota refused to honor the warranty claim. He had his mechanic clean out the motor for about $500 and has been able to keep it from blowing by using synthetic and changing it every 2,500 miles.

I bought a new Chevy S-10 about the same time and didn't have any problems for the first 2 1/2 years until the front brake pads started wearing out. At about 2 weeks before my 3 year warranty was to expire I took it into Midas for new brake pads (they are not normally covered under warranty). Midas said there seemed to be a problem with the brake caliper as well, and I should take it to the dealer. If I was lucky, they might cover some of it under warranty. I took it to the dealer, and not only did they cover everything, but provided a free rental car as well.

Re:If we care about GM, we'd stop buying them

[Fluffeh]

You don't have to make a profit when you are too big to fail and your controlling shareholder is the US government.

I am no economist, but from what I see, the US economy is falling apart at each seam, national debt is skyrocketing and the government seems to be interested only in very expensive field trips. I wonder who will bail out the US? It is too big to fail, but what happens when it does?

Re:If we care about GM, we'd stop buying them

[Anonymous Coward]

Except I'm fairly sure that the US government is no longer the majority shareholder....

http://heraldbulletin.com/breakingnews/x1284835998/GM-launching-IPO-ending-government-majority-stake

There is NO socialist plot. The government bought GM shares to push some money into the company with an eye toward selling the stock off to recoup the investment. They have been doing so. The US government has said repeatedly that they will sell that stock. Buying stock was far better than just throwing the money away, yet somehow many Americans are outraged.

Re:If we care about GM, we'd stop buying them

[fishbowl]

Stories like this are strange to me. ("Keep it from blowing?")

My 1991 Volvo has more than 250,000 miles on it. I change the oil more or less when and if I remember to do it. It doesn't run any differently than it did ten years ago. It doesn't look like much, but I easily keep up with the "luxury pack" on the freeway, can accelerate from a freeway cruising speed, it handles corners like the nice European car that it is/was, and to really replace it is going to be a very expensive proposition, because I really don't want to trade down to a lesser car, be it a new car or just newer than my 20 year old Volvo.

Then I hear stories like yours where you have catastrophic failures within a couple of miles, and it kinda makes me scratch my head.

GM loses money?

[horatio]

GM Loses Money On Every Volt Built

Technically, sure. In reality, because the government owns GM, the tax payers lose money on every Volt. Labor unions made off like bandits at the recent IPO, so I guess someone wins.

Here is my other problem: where do the tree huggers think the electricity to power these "zero-emissions" vehicles comes from? Magic unicorns? No, usually fossil fuel burning power plants, along with all the associated loss of energy down the transmission lines etc along the way. Oh right, and we can't build clean(er) power plants like nuclear because the same environmentalists, w/ their friends 'OMG teh nukeclear!' alarmists, tie up everything in so much red tape it isn't worth it. Like the Prius, this isn't about the environment. It is about status, and acting like you're so much better than your filthy neighbors driving that BIG OIL powered global-warming causing piece of crap.

Re:GM loses money?

[presidenteloco]

Where will we get the electric power?

1. Slap a massive carbon tax on fossil fuel electricity production.

2. Wind farms all up the Eastern seaboard

3. Solar all over e.g Nevada

4. Look up the Sahara Solar Breeder project.

By the way, you might consider substituting
"those who care about Earth's ecosystems and
humanity's future" for the term "environmentalists"
in your post.
And of course substitute "those who don't give a rat's@ss for Earth's ecosystems or humanity's future" for those proud transam owners and other non-environmentalists of whom you speak.

Truth in Labelling, I say!

Re:GM loses money?

[Chris Burke]

The electricity has to come from somewhere, and the same tree huggers who like to see these 'friendly' vehicles are also the same tree huggers demanding that the filthy smoke belching evil coal burning plants be closed - with no real viable alternative methods of producing electricity for their electric cars.

Um, yes, because coal plants are nasty too. The awesome thing about electric cars is that you can have them powered by coal today for a modest improvement in environmental damage, and then if the coal plant is replaced with something better, then your car automagically becomes "greener". Without having to replace the entire vehicle fleet again.

And sure some tree huggers are against them, but this tree hugger thinks fission is a very viable method of producing electricity.

But even in the meantime, electric cars are better. And the tree huggers do not have the power to shut down coal plants if there is nothing to replace them. So I'm not sure why you're worried.

Re:GM loses money?

[Black Gold Alchemist]

DOE estimates average of 1.3 lbs CO2 per kWh. Coal (the worst CO2 emitter) emits 2.1 lbs CO2 per kWh. Electric cars get between 4 and 10 miles per kWh. Worst case, that means 0.5 pounds of CO2 per mile. 1 gallon = 19.4 lbs of CO2. So, that's around 38 mpg CO2 emissions equivalent in the absolute worst case scenario. In the average case, we are looking at around 59.7 MPG. Diesel emits more CO2 than gasoline, by a factor of about 1.15. So, worst case is 43.7 MPG diesel, and average is 68.7 MPG diesel. These numbers are EPA testing of Tesla roadster and Rav4EV.

Re:GM loses money?

[DarkOx]

The thing is even as someone who is decidedly convinced that Global Climate change is a hoax or at least that it is caused by human industry and not simply a natural phenomena I still would rather us all drive electric cars. Oil is the major cause of wealth being exported from this country. It happens in two ways firstly its a imported commodity and second it causes us to have to play world police for the middle east; and that is insanely expensive.

Coal on the other hand can in fact be very clean with the latest technology. Personally I think C02 emissions should probably be our nations LAST concern right now but even if you don't there are ways to manage it with modern coal plants. Greens really need stop trying to ban coal and push for migration to clean coal tech. Unless you are one of those that wants to see humanity return to a subsistence life style you can't as a practical matter ignore coal in America. We have a domestic supply that many predict could meet our entire energy needs for nearly 800 years! Not leveraging a resource like that is just stupid. So yea lets use the electric car so coal can again power our transportation.

Re:GM loses money?

[Notquitecajun]

Except that the production of electric cars tends to use highly toxic materials and burn a TON of energy in transporting materials to final assembly.

Re:GM loses money?

[Chris Burke]

So does the production of regular cars, especially in transportation energy. The battery pack adds more (assuming it's a hybrid that also requires a traditional lead-acid battery), but that delta is easily made up for and then some by the advantages of centralized energy generation and pollution controls.

Re:GM loses money?

[fodder69]

I sort of agree with you, but clean coal is a bit of a myth too.

The point is that we go to electric cars, we can do pollution control in a central location (ie. cheaper) plus there are alternatives to cola. For example, all of my electricity comes from the nuclear power plant down the road. Other places it could come from solar or wind.

But it's the taxpayers that bailed them out

[Francofille]

After you "borrow" billions of dollars from taxpayers you kind of have a responsibility to use your second chance wisely.

They have a proven track record of running a business which cannot support itself.

Make a pure ev

[presidenteloco]

That would save them the cost of the engine and all it's secondary components (cooling system, exhaust system, etc etc)

Re:Make a pure ev

[Black Gold Alchemist]

And have a bigger, more expensive battery pack, as well as range issues.

They're using the razor model

[noidentity]

Sell the car at a loss, make up for it by selling the electricity at a markup. Er, wait...

Re:They're using the razor model

[DudemanX]

No, they'll make the money back in all the games they'll sell for it.

It's just a loss leader...

[Aphrika]

Nothing new in manufacturing really, but it might be the first time it's been seen in production cars I suspect. You make a bunch at a loss initially, tweak the technology, the manufacturing process, streamline the design and eventually you start making a profit on them.

In some situations, those early losses will be spun back into R&D costs on the budget and targeted as profit that has to be made on future units.

Hopefully they'll stick with it and start driving costs down so that the technology can be made cheaper and is more efficient, rather than pulling the plug (no pun intended) and giving up on it.

Re:It's just a loss leader...

[Attila Dimedici]

No it is not the first time we have seen this with production cars. Toyota did not start making a profit on the Prius until sometime in the 2006-2008 time frame.

Re:It's just a loss leader...

[sheddd]

U agree, in a free market. They're making these things because of quotas, cap on trade, etc. Very inefficient; stop all these dumbass laws regulating the auto industry and tax oil products.

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.

Re:This no big deal

[martin-boundary]

Losing money is never a big deal when you are guaranteed to be bailed out no matter what and no matter how much.

Re:This no big deal

[Sepultura]

It's also a well known fact that automakers make money on reselling the tech they've developed with their R&D. That's how Toyota learned to quickly turn a profit with the Prius development - most, if not all, hybrids on the road today license at least some technology from Toyota, developed through their Prius program.

And this is not a new development with so-called high tech cars. VW's been licensing their diesel designs for what seems like aeons with great success.

Re:This no big deal

[cdrguru]

Do not forget that Toyota kept extending the battery warranty to ensure that there was a resale market for the Prius. This had to cost them significantly. The problem is a Prius with a worn-out battery is worthless because the battery (still) costs more than the car is worth. So Toyota sidestepped this by extending the battery warranty several times to be something like 10 years. So you could have two owners before the car was scrapped.

Without a resale market, the Prius wouldn't be selling at all today. It might be profitable, but with a 10-year battery warranty it is going to cost Toyota at least $5000 a car in battery replacement during the life of the car. I can't imagine there is an extra $5000 in the price of the car for this. So over the life of the car, Toyota is probably still losing money on it.

Ahh, union labor ...

[The AtomicPunk]

... is there anything you can't screw up?

Re:Ahh, union labor ...

[mcgrew]

Ah, Atomic Punk, CEO. Is there anything you can't get wrong?

What's the matter, the union won't let you join? You can thank the union movement for paid vacations, holidays, weekends off, 40 hour work weeks, workplace safety, time and a half overtime pay, management's inability to fire you without cause, etc etc etc.

Anybody who doesn't own a business and is against unions either has been in a REALLY bad union (there are some) or is just stupid.

So the Volt business model LITERALLY is:

[CaptainPatent]

Step 1) Sell the car at a loss.
Step 2) ...
Step 3) Profit!!!

Wow...

Re:So the Volt business model LITERALLY is:

[glwtta]

Step 1) Sell the car at a loss.
Step 2) Establish your brand in a new market segment
Step 3) Profit!!!

It's a pretty common strategy, really.

Re:So the Volt business model LITERALLY is:

[osgeek]

Well, I know your missing steps:

Step 1) Sell the car at a loss.
Step 2a) Renege on pension and compensation commitments to employees over the past 30 years.
Step 2b) Pad the books with taxpayer money to let you IPO and to help your stock price go up.
Step 3) Profit!!! **

** for the executives' compensation packages

In the Red vs Negative Margin

[Chris Burke]

If you spend $1,000,000,000 developing a product that you sell for $50k then you will make a loss to start with - no matter what.

That's not what this is about. This is not about fixed or one-time costs. This is about gross margins on each item sold. That means the delta between what you can sell a given instance of the product for, and what it cost to make that particular instance above and beyond any expenses already incurred.

If you spend $1bil to develop a product and tool the factor etc, then prior to making or selling any product you are $1bil in the red. You have lost this amount of money even if you never sell a single product. So this cost alone cannot be used to say that you lose money on every item sold.

If, in addition to those costs, building an instance of the product costs $40k in labor, materials, and energy and you sell it for $50k, then you have a gross margin of $10k, and after the sale your total balance for the project is $999,990,000. You have made $10k on the sale. Sell enough product at this margin, and you'll eventually pay off the R&D expenses and the project as a whole will be in the black.

If, on the other hand, it costs $60k to build that product and you sell it for $50k, then your gross margin is $-10k, and your balance after the sale is $1,000,010,000. You have lost $10k on the sale. Every product you sell is actually costing you more money, not making you money. Unless costs are cut or prices raised, you can never pay back the expenses, because every sale simply costs you more money.

That is what it means to say "GM loses money on every Volt built".

However, TFA itself seems to be slightly confused on this distinction, and does not provide any link to the actual alleged quote. If Doug Park actually said that they are going to lose money on every Volt sold, then the 'gross margin' sense is what he meant. If he said that they don't expect the Volt (as in the project) to be profitable for several years, then that most likely means they are selling the Volt for a profit and hope to make back their expenses in several years.

Re:In the Red vs Negative Margin

[blackraven14250]

If, on the other hand, it costs $60k to build that product and you sell it for $50k, then your gross margin is $-10k, and your balance after the sale is $1,000,010,000. You have lost $10k on the sale. Every product you sell is actually costing you more money, not making you money. Unless costs are cut or prices raised, you can never pay back the expenses, because every sale simply costs you more money.

They could also produce it as an introduction of all-electric cars for the mass audience, with the intent of pretty much using it as a gigantic ad campaign for GM's long term future, and to get people to associate electric cars with GM rather than let someone else take that spot (as they did with quite a few other labels in the past 20 years, like "reliable" and "hybrid").

Re:In the Red vs Negative Margin

[c6gunner]

They could also produce it as an introduction of all-electric cars for the mass audience, with the intent of pretty much using it as a gigantic ad campaign for GM's long term future

Yep, I'm pretty sure that's exactly what they're banking on. These next few years are crucial for automakers because whoever gets established as The Electric Car Maker will have a huge advantage over the coming decades. Not to mention that getting a jump on the technology will likely put the quality of their products ahead of the competition. If they can get established in the market now, they'll be raking in the cash for a long time to come.

Re:In the Red vs Negative Margin

[afidel]

Almost as important is if they build up a large patent portfolio, because then they can rake in money even if they never make another electric vehicle themselves. For instance I wouldn't be surprised at all if Toyota make as much or more on licensing their hybrid technology as they do on the Prius since it's used in tons of models from other manufacturers.

Re:In the Red vs Negative Margin

[wrook]

If they are actually losing money on these cars, I can't quite figure out their logic. I assume that they expect that their actions will lead to lower costs from their suppliers. Then eventually the costs will be low enough to start making money. But if this is the case then they are paying for the entire industry. Their competitors can come in late to the game and benefit from GM's investment without having to make a similar investment themselves. So in other words, the only advantage GM would have would be the recognition of being "first to the market", but they will be saddled with both the cost of doing so and the inevitable bugs that crop up from being first. It's a bit like Apple's Newton. They paid for all the innovation, while Palm made all the profit.

Wait, did I just make a computer analogy in a car thread?

They Make It Back on Software Sales & Support

[sanman2]

It's the razorblade model - you buy it, and they hold a razorblade to your b*lls

Re:People lose money on every car they buy

[CaptainPatent]

Paying for gasoline when they can just as easily use a battery and save tons of money over the lifetime of the car.

That's kind of a short-sighted economic summary.

For instance, the extra gasoline cost of a 30 MPG car over an electric car is around $9000 after 100,000. I'd say this is about the limit to the reliability of a gasoline car.

With that being said there are many more factors which would make electric cars more or less advantageous. For instance:
How much more does a battery conversion or battery-powered car currently cost? The Volt's Hybrid-grade batteries are already (currently) $16,000 and a pure-electric car would need at least that equivalent. How much more or less maintenance will an all electric car need? They may not need oil changes (depending on design) but if the battery or electric motor has far more or less life than an average car engine, that can vastly tilt the equation. What is the longest trip that you plan to take and do you have 2-10 hours to take a break every couple hundred miles? Refueling a gasoline car takes much less time than charging an electric car so if you intend to go 200+ miles in a single trip, you will either need to rent a gas car, buy a hybrid, or buy another full gasoline car. The all-electric solution only remains ideal for short and mid commuters.

I'm not saying all-electric could never be a good solution, but just because it's electric does not mean you'll save money.

Re:Next question

[Black Gold Alchemist]

Who is building all the new power generating plants we'll need when millions of drivers have electric cars? Now is the time to start. You can't build those plants overnight.

No one is, because no one needs to. Four big EV denier myths:

More electricity needed - debunked. Here's the link to the original Oak Ridge Nation Laboratory Report (currently down).

More global warming - not true. DOE estimates average of 1.3 lbs CO2 per kWh. Coal (the worst CO2 emitter) emits 2.1 lbs CO2 per kWh. Electric cars get between 4 and 10 miles per kWh. Worst case, that means 0.5 pounds of CO2 per mile. 1 gallon = 19.4 lbs of CO2. So, that's around 38 mpg CO2 emissions equivalent in the absolute worst case scenario. In the average case, we are looking at around 59.7 MPG. Diesel emits more CO2 than gasoline, by a factor of about 1.15. So, worst case is 43.7 MPG diesel, and average is 68.7 MPG diesel. These numbers are EPA testing of Tesla roadster and Rav4EV.

Rare lithium - peak lithium is a Li.

Toxic batteries - lithium-ion is largely non-toxic. Tesla was working on recycling before the cars even hit the streets. Lead acid (which is toxic) is 97% recycled.

Ummm ...

[damn_registrars]

Back on planet earth, the UAW actually bought a portion of GM. Why would they intentionally screw up the profits of GM when they have their own money invested in it? After all, you can't extract money from a company that doesn't exist...

Re:Ummm ...

[MightyYar]

After all, you can't extract money from a company that doesn't exist...

For a sad example of exactly this, see United Airlines. Once employee owned, a bankruptcy took care of that.

Re:Ummm ...

[bell.colin]

BOUGHT?

I guess you missed the part where the govt. "illegally" bypassed the bankruptcy laws/courts and "Gave" the UAW their ownership of GM shares (who were very generous with political contributions of the politicians making the decisions) As well as themselves a 60% slice using "Our" money.

And regardless of their "former" CEO's pathetic attempt at a "we're fine" commercial, they did NOT pay back their bail-out money!

Re:Ummm ...

[TooMuchToDo]

I'd rather the bondholders lose the money than the federal government shelling out for the UAW pensions and healthcare costs in the event GM had failed. You are aware that failed corporations can dumpt their pension systems on the US Pension Guarantee system, right? Investing =! riskless.

Re:Ummm ...

[khallow]

I'd rather the bondholders lose the money than the federal government shelling out for the UAW pensions and healthcare costs in the event GM had failed.

The federal government didn't have to shell out for UAW pensions or health care. That makes this a false dilemma.

Re:Ummm ...

[TooMuchToDo]

If GM had failed, yes, they would have:

http://www.pbgc.gov/

Also, with unemployment unofficially at almost 19% (between unemployed, under-employed, and discouraged workers), I'd argue it was cheaper to prop GM up and wipe out bondholders than it would've been to provide social safety net services to 3-4 million people in the auto supply chain who would have been affected by the collapse of GM.

I'm not happy myself about the GM bailout, as I own a shitload of Tesla and Toyota stock and believe in free market competition, but I also understand protecting people's jobs in the worst recession since the Great Depression.

The world, it ain't black and white.

Re:Ummm ...

[khallow]

If GM had failed, yes, they would have:

Well, how about that. Still might be cheaper since the pension/health care problem is just going to grow and GM isn't going to get any better without a continued stream of public funding.

I'm not happy myself about the GM bailout, as I own a shitload of Tesla and Toyota stock and believe in free market competition, but I also understand protecting people's jobs in the worst recession since the Great Depression.

The only problem is that we'll never know how many people lost their jobs so UAW employees could keep theirs. I think the current high unemployment is in no small part due to the uncertainty generated by the GM/Chrysler bailouts and similar measures in Washington that increased hiring uncertainty as well as providing incentives to shed jobs rather than get saddled with unexpected liability.

Re:Ummm ...

[TooMuchToDo]

The only problem is that we'll never know how many people lost their jobs so UAW employees could keep theirs. I think the current high unemployment is in no small part due to the uncertainty generated by the GM/Chrysler bailouts and similar measures in Washington that increased hiring uncertainty as well as providing incentives to shed jobs rather than get saddled with unexpected liability.

True to a point, but no one lost their jobs because bondholders were wiped out. Make a good decision with the info you have now, not the best decision with perfect information you have later (if you can even make a perfect decision.

Also, we have high unemployment for a simple reason: reduced baseline demand. For the last decade, consumption has been fueled by fake wealth from both the stock bubble and the real estate bubble. That consumption is gone, leaving only what I would call the "true" level of consumption. Until people pay off their debts, and thereby free up disposable income, consumption will be down preventing negating the need to hire people.

Re:Ummm ...

[khallow]

True to a point, but no one lost their jobs because bondholders were wiped out.

I wouldn't make that statement. Lending by bondholders helps employ people, either directly or by building capital that employs people. When the bond market crashes, that cuts everyone's willingness to lend money and in turn reduces employment. When bondholders are unfairly screwed, as in the GM/Chrysler bankruptcies, that aggravates the problem by inserting a new risk into the lending market, namely, that government will upend the law in order to reward some politically connected party.

Vital stats

[Twinbee]

Some vital stats:

* Gas/petrol usually costs about 15 cents per mile. This (and other electric cars presumably) will cost just under 4 cents per mile (based on current electricity costs), so the overall cost is only 4x cheaper (I was hoping for a full 10x or even 100x cheaper, but it's still good).

* It takes 10 hours to do a full recharge to do a full 40 mile recharge on 120 volt, but only 4 hours with a 240 volt supply. Maybe America et al. should switch to the 240v power like Europe to get faster charging (our kettles boil in half the time too). I'm not sure if anyone in the world has 480 volt mains, but that sounds as though it could be useful.

Most info obtained from here: http://gm-volt.com/chevy-volt-faqs

Re:Vital stats

[damn_registrars]

like Europe to get faster charging (our kettles boil in half the time too)

Wow, you mean natural gas burns hotter over on your side of the pond? Now I really need to get over there...

Re:Vital stats

[Burdell]

Gas/petrol usually costs about 15 cents per mile.

Not for a comparable vehicle. I just paid $2.799/gallon for gas; at that price, 15 cents per mile means you are only getting 18.7 miles per gallon. The Volt is supposed to get double that on its gas engine, so call it 7.5 cents per mile.

This (and other electric cars presumably) will cost just under 4 cents per mile (based on current electricity costs)

The site you referenced doesn't say the actual power requirements, but if you charged on a typical household 120V outlet, you will typically be limited to about 1500 watts, so you'd use 15kWh to drive between 25 and 50 miles. I have relatively low power rates where I live at 9.012 cents per kWh, which would mean the cost per mile would be between 2.7 and 5.4 cents per mile (3.38 cents/mile at the target 40 mile range). So, you're now down to about half the cost per mile.

Gas prices will probably go up, but so will electricity prices. If plug-in electric vehicles become widespread, the "last-mile" part of the power grid is going to have similar problems to the "last-mile" part of residential Internet. It was built with certain assumptions (that have held true for decades in the case of power) that could change rapidly. A plug-in car could come close to doubling the power usage of a typical home, and the distribution system can't handle double the load (even if the generating stations can).

Re:Vital stats

[greerga]

US power is 240V (+120V and -120V) to the building, it's just usually split in half (+120V with ground and -120V with ground) for the outlets. Our appliances (electric ovens, dryers, etc.) run on 240V. There is a car company selling charging units for 240V here, just have to wire it up properly.

Re:Vital stats

[greerga]

Er, I should say neutral rather than ground there.

Re:Vital stats

[TooMuchToDo]

Electric kettle.

Re:Vital stats

[TooMuchToDo]

The price of oil will go up due to inelastic demand and falling reserves. Even if the price of electricity *does* go up (I get time-of-day metering from ComEd, I charge my Tesla Roadster for $0.01/KwH between midnight and 5am), it's easy to add more generating capacity than to try to find more oil reserves.

Re:Vital stats

[penguinchris]

I suspect the reason many people in the US don't know about electric kettles, immersion heaters, etc. (besides the fact that we don't drink tea as much and that the parent was joking) is because they basically don't work at 110 volts! "Half the time" the GP Said... yeah right, try ten times as long, if it ever boils at all.

You can buy these kinds of things in the US - I've seen them in stores - but it's not a kitchen staple like in the UK. More likely, if anyone in the US has one it's shoved in the back of the cupboard and forgotten.

Re:Vital stats

[damn_registrars]

That was actually a joke. Yes, I know you can use electricity in various ways to heat water. You can also use fire to heat water (and some people over here do that).

Admittedly, the joke wasn't very good. OK, it was pretty terrible, really.

3 words:

[Dexter Herbivore]

Economy of scale.

GM versus Sony

[damn_registrars]

We may recall that when the PS3 first came out Sony was losing money on each unit sold. That didn't exactly bring down Sony in the process; nor did it cause people to scream out that it was the result of some great conspiracy.

Re:GM versus Sony

[santax]

Yes, but those are 2 totally different businesses. Sony, like MS, took the loss on the hardware knowing that the average ps3-owner would buy 3 to 4 games a year. That is where the profit was made. And this was all calculated from the start. Now, not to many buyers of a car will buy 4 sets of tires each year and when they do, there is no guaranty that they will buy them from your company or from another brand. Unlike the console where you have to sign contracts and hand over license fees to even make a game for it.

Re:GM versus Sony

[WildBlueYonder]

That's a bad analogy because Sony's entire electronic gaming division has been hemorrhaging money ever since the PS3 hit the market. In their case the "sell hardware at a loss, make up for it in games" hasn't worked for them. Microsoft is a much better example, as the game division has made a profit on both the Xbox and Xbox 360, even though they started selling both consoles at a loss.

how much pollution from making the battery?

[Dan667]

if making the battery is more toxic than operating a regular car for 20 years it seems like this is the wrong direction. Honestly it still seems like fuel cells are a better option to pursue.

Re:how much pollution from making the battery?

[spitzak]

If making the battery kills a kitten then making these cars will kill more kittens than not making them. Won't you please think of the kittens?!

Not Temporary, Microeconomics is stubborn

[Kurofuneparry]

You're misreading the difference between constant costs (overhead) and variable costs (production costs). Volume only works if you can get the variable costs (the costs of producing each item) below the profit of selling each item.

Economies of scale (making each item cheaper to produce by producing more) doesn't work for the Volt: the batteries have a constant cost and making more only makes them MORE expensive if anything. This is because the resources to make them are limited and increasing demand causes prices to increase.

Therefore they can't overcome the cost penalty by making it up in volume. This move only makes sense for GM if the practice and market establishment of selling now will later be useful for them when making the cars is profitable. There's another explanation: the owners of GM are pushing this for political reasons. Considering the rhetoric about making them make cleaner cars when the bailout occurred, it would be a conspiracy theory to NOT believe that the government had a hand in this.

Then again.... I'm an idiot.....

Re:Not Temporary, Microeconomics is stubborn

[guyminuslife]

No, it wouldn't be a conspiracy theory to not believe in a conspiracy. Unless that were the conspiracy. My question is, who is behind this conspiracy to make us believe that there's a conspiracy? Clearly they're doing it to draw attention away from the truth of their non-conspiracy. Perhaps this GM bailout could have absolutely nothing to do with the Illuminati and the Freemasons. Maybe the Volt isn't a coverup for the Kennedy assassination. Once you go down the rabbit hole...you'll probably find rabbits.

Re:Not Temporary, Microeconomics is stubborn

[plague911]

You are right you are in idiot. The batteries do not have a constant cost. They have a decreasing cost as even damn blurb said so "price of consumer lithium-ion cells has fallen 6 to 8 percent annually since their 1989 launchprice of consumer lithium-ion cells has fallen 6 to 8 percent annually since their 1989 launch" Seriously wtf did you put any effort in your ideas at all?

Re:Not Temporary, Microeconomics is stubborn

[Jeffrey_Walsh VA]

As they increase sales volume they will negotiate a lower price for the batteries and other specialized components, which can be made more cheaply because those manufacturers are seeing higher volumes.

Re:Not Temporary, Microeconomics is stubborn

[timeOday]

There is an obvious precedent here: the Prius. It was sold at a loss for the first few years, but lately has been highly profitable, and they keep making it cheaper to manufacture year after year.

MANY businesses and product lines lose money at first.

Re:Not Temporary, Microeconomics is stubborn

[dsanfte]

That's six to eight percent, annually. If you're going to lecture someone, please get it right.

Re:Not Temporary, Microeconomics is stubborn

[BenJCarter]

The Government has had a hand in GM and most other Big Businesses for quite some time. How do you think congressmen and senators get money for re-election?

Re:Not Temporary, Microeconomics is stubborn

[TheKidWho]

6-8% annually

I don't think you know what that means.

Re:Not Temporary, Microeconomics is stubborn

[Reality Master 101]

Oops. :)

Re:Not Temporary, Microeconomics is stubborn

[nauseum_dot]

I don't know how the above was modded Insightful.

The batteries are a variable cost, much like the steel to make the car, the tires on the car, the labor that is used to build each car, etc. The cost is associated with each car built. Constant costs are fixed costs. These would be the costs associated with the plant the cars are built in, the robotics used to build the cars, the building maintenance of the plant, etc.

Let's think of it another way: If the Chevy was to make 10,001 Volts, they would have to purchase 1 more battery pack to go in that extra car (technically, although it does run on gas only).

I think you are mistaking marginal costs and constant costs. Marginal costs are costs associated with making extra units or adding production. A great example is if Chevy took the same plant and decided to make 12,000 Volts. This likely means that they would have to pay overtime and/or add another shift to the plant. This is the additional marginal costs. Marginal costs are often associated with labor because there is only so much work a person can do before they have diminishing returns (get tired and do less work). That being said, goal of every profit driven company is to match its marginal costs with its marginal revenue (i.e. for the additional cost of adding one more unit equals the additional $ in profit of making that exact unit~). This is the point when a company has reached maximum profitability, after this it makes sense to add capacity usually via additional fixed costs, which creates a new average total cost, a new average variable cost, and a new average marginal costs. Marginal costs are hard to conceptualize because they exist in reality but we look at them abstractly and only exist for an exact set of parameters; most companies and people don't think along these lines, they think of adding production capacity, when we can't squeeze any more production out the existing facilities and labor.

Thanks for taking me back to college! It is nice to finally use my econ degree for something!

http://tutor2u.net/economics/revision-notes/a2-micro-supply-shortrun-costs.html

Re:Not Temporary, Microeconomics is stubborn

[fast turtle]

No us turtles don't like Rabbit Holes. They're not roomy enough, which is why we prefer sewers.

Re:Not Temporary, Microeconomics is stubborn

[bkaul01]

There's another explanation: the owners of GM are pushing this for political reasons. Considering the rhetoric about making them make cleaner cars when the bailout occurred, it would be a conspiracy theory to NOT believe that the government had a hand in this.

Your first explanation of economies of scale not being applicable and GM taking a loss now to enable future profits is spot-on. This government conspiracy bit is not. GM told us what their strategy was way back in 2007 when they announced the Volt (in pre-government-bailout days): They want to get to where the vehicles aren't a pollution-emitting device so that they don't have to deal with all the EPA regulations. If they can displace the problem to electricity generation companies, that makes good business sense for them. They'll take a loss now to develop the technology that will benefit them later.

I have serious doubts as to the likelihood of their strategy succeeding to that extent: I think liquid fuels will remain the dominant energy source for vehicles for the foreseeable future, as they have major fundamental advantages (energy density, ease of refueling, infrastructure, etc.), especially given the significant improvements in engine efficiency that are being realized with new technologies (e.g. Ford's EcoBoost engines now; maybe things like HCCI and waste heat recovery systems in the future). But GM's big enough to pursue multiple technology paths at the same time, and it makes business sense for them to establish a leadership position in the EV market if there's a reasonable chance of it ever becoming profitable, even if it remains a niche market and doesn't displace the ICE as the dominant transportation power source.

Re:Not Temporary, Microeconomics is stubborn

[the phantom]

Not to mention the fact that the Prius was a loss-leader. People who were in the general Prius demographic but couldn't afford one (or who wanted more leg room, or more seats, or something else) were lured to Toyota lots, and ended up driving off with Corollas or Camries, which do make money.

Re:Not Temporary, Microeconomics is stubborn

[Slashdot Parent]

As they increase sales volume they will negotiate a lower price for the batteries and other specialized components, which can be made more cheaply because those manufacturers are seeing higher volumes.

Not necessarily true. It depends on why the price of the batteries is high (which I have not bothered to research because I do not care that much).

If the high prices are due to lack of economies of scale, as you suggest, then price may decrease as production volume increases.

However, if the high price is due to scarce raw materials, increasing production volume will cause prices to skyrocket as the scarce raw material supply is depleted.

Re:Not Temporary, Microeconomics is stubborn

[StikyPad]

Toyota produces a lot more hybrids than just the Prius, so either all of their hybrids are loss leaders or, more likely, they're not really losing money on hybrid sales at all.

Re:Not Temporary, Microeconomics is stubborn

[deapbluesea]

They have a decreasing cost as even damn blurb said so "price of consumer lithium-ion cells has fallen 6 to 8 percent annually since their 1989 launchprice of consumer lithium-ion cells has fallen 6 to 8 percent annually since their 1989 launch"

You're confusing price per unit with price over time. The cost of batteries is decreasing over time, but the per unit price is constant. In other words, if GM makes 1000 batteries at $8000/unit, they couldn't produce 100000 batteries for any less than $8000/unit. No matter how many batteries they produce on a given day, each battery will still cost the same, ergo constant.

Re:Not Temporary, Microeconomics is stubborn

[agbinfo]

The batteries do not have a constant cost. They have a decreasing cost as even damn blurb said so "price of consumer lithium-ion cells has fallen 6 to 8 percent annually since their 1989 launch price of consumer lithium-ion cells has fallen 6 to 8 percent annually since their 1989 launch" Seriously wtf did you put any effort in your ideas at all?

The cost decrease is over time and not necessarily based on volume. The cost decrease over time is probably due in part to volume but there's a part of the decrease that's due to research and development in producing these batteries.

Re:Not Temporary, Microeconomics is stubborn

[guyminuslife]

Mock turtles.

Re:Not Temporary, Microeconomics is stubborn

[the phantom]

Was, not is, a loss leader. At the time that Toyota first started producing the Prius, it was a loss leader. Now they have the technology in more vehicles, and the price of making hybrids has come down. My understanding is that the Prius has been profitable for several years now.

Re:Not Temporary, Microeconomics is stubborn

[BraksDad]

Thank You! Now I don't have to write this.

Re:Not Temporary, Microeconomics is stubborn

[Schmyz]

I can see it now...Volt designer linked to 2nd man on grassy knoll !!!!!!!!!!!!!!!!!!!!!

Re:Not Temporary, Microeconomics is stubborn

[Narcogen]

>

Economies of scale (making each item cheaper to produce by producing more) doesn't work for the Volt: the batteries have a constant cost and making more only makes them MORE expensive if anything. This is because the resources to make them are limited and increasing demand causes prices to increase.

Therefore they can't overcome the cost penalty by making it up in volume. This move only makes sense for GM if the practice and market establishment of selling now will later be useful for them when making the cars is profitable.

You're ignoring the cost structure of the battery supplier. You're assuming that the price per unit is the same for an order of 10,000 units as it is for 100,000 units or more, and that's almost assuredly false.

The bottom line here is that GM is refusing to take a risk and commit to selling the Volt as a mass market automobile. If they were to manufacture a few hundred thousand they could very likely get a discount on the battery-- but if they can't move those cars they'll have to discount them or write them off. They're taking a smaller gamble on a smaller production run, and either hoping to have a small loss but at least demonstrate that the product can be sold in the marketplace, or raising the price to cover the higher per unit cost for parts like the battery.

That's what Tesla did as well-- making and selling their expensive, low production run roadster before attempting a mass market sedan.

Re:Not Temporary, Microeconomics is stubborn

[plague911]

No. No I am not. Indeed R&D can sometimes lower costs however. There is however the is a much higher correlation to the total number of a unit produced of just about any product. The general rule of thumb that I know of is a doubling of net units produced results in around a 20% reduction in manufacturing costs and a 10% reduction in raw material costs.

You know who else lost money on every car?

[Man On Pink Corner]

Japanese manufacturers such as Toyota/Lexus and Honda. They've been selling hybrids worldwide for around ten years now, and you can bet that they, too, lost money on every sale for at least the first few years. In doing so, they bought themselves ten years to refine their processes, tooling, and supply chains, iron out bugs, and discover (and patent) non-obvious efficiencies and improvements.

Meanwhile, the American auto manufacturers chose to stick with the same old profit-heavy SUVs, elderly sedans, and rental-grade compacts they'd been selling for the past twenty years.

The history of alternate-fuel technology is yet another demonstration of US companies' skill at trading the next decade's earnings for the next quarter's. I have zero sympathy for Chevrolet and whatever learning curve they (and their customers) are about to climb with the Volt, because with any competent management in place they would already have several years' experience manufacturing these cars by now.

Good thing they're "too big to fail," I guess.

Re:You know who else lost money on every car?

[AJWM]

trading the next decade's earnings for the next quarter's

Lovely turn of phrase, and far too true.

Re:You know who else lost money on every car?

[ImABanker]

Any link? I suspect that those cars had a negative average cost - taking into account fixed overhead, sales, general and administrative, depreciation, etc. The difference here is that they are earning negative variable margin. In my world, there's a constant joke when you come across a product line with a negative variable margin: people like to joke, "yeah, but you make it up volume." Here, people don't have the same sense of irony. Perhaps if we close our eyes and concentrate, we can wish it to be economically feasible.

Re:People lose money on every car they buy

[blackraven14250]

I doubt the Volt is using "hybrid-grade" batteries. A Prius is about $4,000 to change for the end consumer. Plus, the Volt isn't a parallel hybrid like everything else on the road today - it's full electric until it drains the batteries completely, and only then does it turn on the gas engine. That means it needs much more battery capacity than a Prius, which currently can't drive over 20 mph without turning on the gas engine, and whose upcoming plug-in incarnation is going to only be able to go 12 miles on electric only, vs the Volt's 35 miles. Further, that's proven by the kWh ratings of the cars. The Volt is 16 kWh and 10.4 usable, while the Prius is 1.3 kWh.

Re:Skeptical

[Ismellpoop]

You might even do both things in different news stories.
Like suck and blow?
At the same time?

Re:Well if it wasn't a "hyrbrid"...

[Shakrai]

You forgot: - the car would be useless for trips exceeding 30mph, thus it would be a toy for rich people who want to think they are helping instead of being a fully functional automobile

Re:People lose money on every car they buy

[MightyYar]

Show me an economically viable electric car, and I think I'll buy it.

What the Volt is about

[amightywind]

Let's face it. The Volt is about Obama's vanity, the UAW's greed, and the green lobby's delusions. GM will be ruined again in 5 years. I should say the shareholders. The slugos who work there have the full backing of the US government. If you own the new GM stock you are a fool.

Some thoughts

[transami]

They could have cut battery costs by a large margin by using Nickel-metal hydride.

Did they use any carbon fiber components to cut down the weight?

How about front-ending the battery with a super capacitor for greater energy efficiency and better regenerative braking?

Re:Some thoughts

[Black Gold Alchemist]

Nickel-metal hydride.

Better, but would likely suffer from shorter cycle life. Now a nickel-iron on the other hand...

Did they use any carbon fiber components to cut down the weight?

I hope not. Carbon fiber is expensive, and according to the EPA, saving 100 pounds is a 1% increase in fuel economy. With the electric system getting them a 70-80 increase, saving a few pounds here and there is not worth it.

How about front-ending the battery with a super capacitor for greater energy efficiency and better regenerative braking?

Regen gains you about a ten percent range increase. The system is already really efficient. You don't need nor want to spend money to make it more efficient.

Their business model is to..

[mswhippingboy]

make the money off of the games they sell, not off of the units they produce... uh wait..

Re:Wait for it ...

[Anonymous Coward]

Slashdot liberals will come to tell us how the conservatives will blame Obama even if they haven't in 3 ... 2 ... 1 ...

Comment removed

[account_deleted]

Comment removed based on user account deletion

Automotive losses.

[Random Luck]

Toyota lost money on every Prius for years. It is the price for new technology until economies of scale and public acceptance kick in.

Re:Next question

[Black Gold Alchemist]

Yep. My goal is to expand this post a bit, and then copy and paste into every misinformed anti-electric car post on /. Feel free to do the same for other websites. Let me know if you think of any more expanding I could do.

EVs are the first chance in a long time to dramatically improve air quality because a car itself can't be made "green" but the energy source can be made renewable if it is from a single large supplier.

Not entirely. If the car is directly solar powered, or if it is powered by a nuclear reactor, or some kind of "free energy" thing, then it's green.

GM only profits from FINANCING not manufacturing.

[Bob_Who]

Wake up America, this ain't the industrial age of capitalism any more. Its all about the FINANCING of high ticket items. You may think interest fees are low, but in today's bullshit economy its the ONLY real chance that corporations can get your money after they eliminate the competition in the marketplace. GM will make you pay on the bottom line, not on the sticker, but on the clock. Wake up and smell the rip off.

Re:Next question

[darkchubs]

dude.... ++; wait, here ++; you deserve it.

Did Rush Limbaugh post this article?

[cryfreedomlove]

He seems to have a total boner for railing against the Volt. Not that I listen to him....

Welfare car

[mrmeval]

Why should I buy a welfare car?

Re:They Make It Back on Software Sales & Suppo

[nschubach]

Screw your cows, why do my ducks have to be threatened?

Re:They Make It Back on Software Sales & Suppo

[davester666]

No! GM is counting on future video game sales, just like Sony/Microsoft/Nintento to make their profit.

As well as OnStar signups...

10,000 Volts will be built in 2011...

[jenningsthecat]

Gee - is that, like, 10 kilovolts?

Just like piracy, right?

[AcidPenguin9873]

Do you think that the first iPad that was sold covered the cost of Apple's R&D?

I hate to hijack this thread, but since you said that I feel compelled. I agree with you completely, yet all the pro-piracy "information wants to be free" Slashdotters [1] say that amortizing the R&D/design costs over the sale of multiple copies of a piece of IP - a song, a book, a piece of software, a movie - is not a good business model and that it needs to change. Other than medieval-style patronage by wealthy groups to do their bidding, I don't see how anyone expects to recoup millions or billions of R&D/creation cost of the first copy of the IP if they can't amortize that cost over multiple sales.

[1] I looked at some of your post history and you seem to favor a reasonable copyright term (15-20 years) so I don't think you fall into that category, so don't take this as any sort of attack.

Re:Just like piracy, right?

[PopeRatzo]

I don't see how anyone expects to recoup millions or billions of R&D/creation cost of the first copy of the IP if they can't amortize that cost over multiple sales.

Make the work unique, is the answer.

I sell my music on commission, the same way an artist or sculptor would take commissions for new work. When I sell it, I sell the "IP" too. The only thing I retain is attribution. If the buyer wants to duplicate and sell it, fine by me. I don't expect a week's work to pay me for a decade.

Good ideas aren't as hard to come by as some people would think.

Re:Next question

[sznupi]

Maybe more like - people are just horrible in thinking on large scales; their small car is obviously so much more benign than enormous powerplant...

Another way it could go wrong (again, mostly because of large scales hiding it) is a variant of Jevons paradox. Cars being used much more leniently / "oh but my car is so 'green' after all". Which in itself doesn't have to be so bad.

However, it might set a bad example for many places throughout the world which will have few EVs, at best, for quite some time. In many of them there are some amounts of (post)colonial mentality / equating success with outwards habits, results of it at best (even if misguided, even if it's largely a case of copying of mistakes)

Re:Meet the new GM same as the old GM

[fishbowl]

Some people (like you and me, apparently) have great luck with cars that thrive on neglect. Other people seem to have a knack for getting cars that basically fall apart or blow up on them soon after driving off the lot.

240 volts

[Compaqt]

Actual (most) US homes do have 240 volt service. They just use it only for the water heater and clothes dryer.

You could probably have an electrician hook up a 240 volt outlet for your car, too.

GM's on the wrong track. Better Place will fix it.

[MikShapi]

GM, not unlike Toyota with its Prius, have tried solving a systemic problem - infrastructure to support mass deployment of EVs - from the car up.

If all human efforts to date can be belived, this simply can't be done.

What both GM and Toyota ended up with is a car that's more expensive than the ICE equivalent, and in the case of all plugin cars, whose distribution is capped and cannot scale because there just isn't enough electricity to go around to power everyone's car charge at 8AM and 5PM without massive investment in the grid that's not forthcoming.

This doesn't mean the problem can't be solved, or isn't being solved. In actual fact, it already has been.
Better Place has approached the same problem as a systemic problem, solving it from the infrastructure down, rather than from the car up.

In a nutshell, they roll out the infrastructure, they own the batteries, and they sell miles like cell/mobile-phone companies sell minutes.
This is not as bad as it sounds. We pay in two ways for a car - at the shop, and at the pump.

Better Place's idea is to take the same money at "the pump" as an ICE car would require. That "same petrol money (per mile)" - which we're already used to spending every week - is enough to:
[a] Pay for 100% clean energy.
[b] Pay for the battery, whose price drops off the car price, making the car 10K$+ cheaper.
[c] Cross-subsidize the parts or even all of the car on a long-term plan. "Free iPhone on a 3 Year Plan", the "Corolla Version".
[d] Make profit

Yes, that petrol money we're paying is enough to pay for the kilometers AND cover the car lease.

Don't jump if the idea of someone making a profit off your back offends you. That holds for the current system equally well, and unlike BPL, the Saudi Sheiks don't send you a cashback to pay for your car.

Not only that but the smart charging nature of the grid solution completely sidesteps the "everyone plugs in at 8AM and 5PM" problem by flattening the charge curve to accommodate the grid limitations of current infrastructure.

Plus, they have a "battery swap" system so if your battery is depleted and you want to "refill quickly" you just drive in and get it swapped by something that resembles a carwash for... no extra charge.
This is not just a "my battery doesn't hold that much charge no more, please swap" solution. It also gives you access to new battery technology as it comes out without the need to re-buy the car, and more importantly, solves the range problem.
Range, after all, is limited by the deployment of gas/petrol stations, not just the size of your tank.
Better place is putting the swap stations on roads and charge spots at home, work and retail, before they start selling the plans - much like you'd expect AT&T to put up the towers before they come trying to sell you a phone.

How far from reality is all this? Here's the good bit.

It's here.

Israel is Country #1 and going retail in the next few months. They have already enough cars pre-sold to make Better Place profitable from day 1.
Denmark is #2, 6 months on their Heels and Australia is #3, starting rollout out in a year or so, with Hawaii in the 'soon' mix as well.
Tokyo (who has a 70,000 taxi fleet - the world's biggest) has been running a pilot with 24/7-driving taxis powered by BP's battery swap system for months now.

Renault has geared up to mass-produce compatible cars. Large family sedans, not little city-cars. Better Place also sealed deals with Chery in china, with General Electric for the charge spots, got 700mil$+ in VC money from banks in the middle of the GFC.
They got good tax incentives in Israel and outstanding ones in Denmark (still no word on tax incentives Down Under).

BPL also dropped that they're in discussions with about 30 governments in the world.

It's looking VERY rosy for the EV. Just not because of half-measures a-la Volt.

As a sidenote, my money is in Lithium mines. If this flies, and it seems there's nothing to stop it, if we bunch up all laptop, prius, iphone and camera batteries in the world into one very big battery mountain, we're going to need about 4-5 of these mountains in the next 5-10 years. Demand will outstrip capacity in 4 years or so. Watch this space.

Re:GM only profits from FINANCING not manufacturin

[Animats]

Its all about the FINANCING of high ticket items. GM will make you pay ...

Historically, yes. But not currently. GM sold off General Motors Acceptance Corporation (which is now Ally Financial) between 2006 and 2010, because they needed the cash. GM wanted to bring that operation back under their control, but couldn't afford it. They bought AmeriCredit, a small Texas bank active in "subprime auto lending" last October 1, and renamed it "GM Financial", but so far, it's not a big player in GM auto financing. The dealers are mostly using Ally.

The bailout, though, worked; GM is alive and well and rapidly paying off the U.S. Government.

I just want the battery

[DCFusor]

For my home solar power system, if they're any good. I already have a 2010 Camaro SS that drives just fine, thanks, and even gets decent mileage if you drive sanely (not that I do, but I commute from home, to, well, home so I don't burn much gas).

That is, if the batteries really give the cycle counts they claim, which I kind of doubt based on similar usage of smaller ones in my hand power tools. GM's really going to be up a creek if they don't last an awful long time, since they probably cost more to replace than whatever part of the above mentioned Camaro breaks first.

If I had one -- there'd be no further demand on the grid, since I've been off it since about 1982, thanks. It works well for me.
It would be a nice place to store some of the excess power my large solar PV array makes.

Re:I just want the battery

[tibit]

Many battery-powered implements, such as cordless phones and tools, implement next to no battery management. It is only fairly recent that brands like Makita or Milwaukee offer battery packs where each cell is monitored, and presumably can be bypassed to prevent overcharging or over-discharging. An EV will have networked individual cell monitors that include shunts to bypass dead cells, and overcharged or under-discharged cells.

It's very unfortunate: most low-end cordless tools (and other cordless devices) treat the multicell battery as a unit, and charge/discharge with no regard for individual cell's well-being. It only takes one overstressed cell to make the whole pack useless then! And you're lucky when they correctly charge that compound battery to begin with.

And yes, there are some absolutely insane designs. I'll give two concrete examples from the U.S. market. #1: the ~$13 Black-and-Decker cordless 9.6v screwdriver/drill that essentially charges the Ni-Cd battery with a current-limited trickle. The pack lasted about 6 months. #2: the otherwise very nice Summer 900MHz cordless video baby monitor. The portable receiver has a rechargeable battery, and the manual helpfully advises that you should only plug it in overnight and use it unplugged during the day to prevent overcharging the battery and shortening its file. Because Ni-Cd charger chips that handle all aspects of the charging are so hard to come by. It just makes me cringe.

Re:I just want the battery

[dtmos]

The Prius battery state of charge is controlled by a dedicated MCU -- dedicated largely to maximize the life of the battery. (It's located in the battery compartment.) It keeps the battery between 45 and 75 percent charged under nearly all circumstances. It's about as far removed from the charging system of a hand power tool as it is possible to get.

Of course, a pure EV is likely to make larger demands on its battery than the Prius, but the point remains that intelligent control of the battery's state of charge greatly extends battery life.

Re:I just want the battery

[DCFusor]

I have Makitas here in the shop. Sorry, 2 years max, and only running them down about once a month tops, if that. 25 cycles, $100 battery. And both they and the Ryobi I have (much worse) have uP controls, thermistor temp sensors and so on (but not individual cell monitoring. I'm an EE's EE, and aware of all this -- I designed body worn prosthetics among other things and have been fighting this issue since the first NiCds. It's gotten better, but not enough by a very long way.

Re:I just want the battery

[tibit]

Is the Makita you have the one that got a multi-pin signal connector (in a yellow shroud) on the Li-Ion battery pack in addition to the large end-of-string terminals?

I still think that cell monitoring is only good to an extent: you can certainly prevent over[dis]charging of a cell, but you cannot balance out the charge in the cells. To do the latter takes a shunt across each cell. Every EV with lithium batteries has it; it's not like it'd have to be expensive. What's an N-mosfet in series with a P-mosfet going to cost, especially that they don't have to carry full load current. To keep dissipation low while doing partial shunting, the shunt can be chopped. When a cell goes dead, it can be shunted permanently. What's a few dozen milliohms between friends ;)

Every battery pack I've ever had and did a post-mortem on (a dozen or so), that had a half-decent charger, would have a single cell fail, rendering the whole pack useless, while the other cells had plenty of useful capacity left. This is for both Ni-Cd and Ni-MH packs. I didn't have a lithium pack die on me yet that wasn't covered by Apple warranty (lucky me, I guess) -- thus no fiddling with the innards.

To add a bit more

[dbIII]

The main point of electric cars has often been to shift the pollution from the street corner to a big power plant with scrubbers/bag filters/precipitators/whatever and a whopping big stack that dumps everything left at a height where nobody is breathing it. Even for horrible cases like being powered by wet brown high sulphur coal without pollution controls it's still a lot less pollution at street level than an ordinary car. That's the main reason why California with its smog filled cities has been interested in them for a long time.

When will you people wake up?

[ArchieBunker]

and finally realize the amount energy stored in a ton (literally) of even the latest batteries is nowhere close to a gallon of gasoline. I've said it before and I'll say it again. Until we get cold fusion there will be no widespread use of electric cars.

Not temporary

[mozumder]

Not everything models around economies of scale, especially in tech. For example, Intel can't make chips for cheaper, without introducing new technology that may or may not happen.

They really should reserve the Volt for luxury automobiles. A Mercedes S550 would be much better vehicle with a quiet all-electric drive, instead of the noisy gas-system. Plus, at $100k each, they can afford a more expensive/longer-ranged/powerful set of batteries than something like the Volt.

For GM, I'd like to see a Vette with lots of electric power.

Re:Not temporary

[TooMuchToDo]

You mean how Tesla funded it's R&D with those who were willing to part with $100K-$150K for a sports car, which is now funding their drivetrain for vehicles between $25-50K (Tesla Model S and Toyota's new electric RAV4)?

Re:Not temporary

[afidel]

Actually, yes even chips have economies of scale. The more units you sell the less the R&D cost per unit is and hence the more profitable you are overall. Also if you have sufficient demand you can build a (very expensive) plant with larger wafer size which again brings down the per unit cost. It's why Intel managed to stay in the game through the P4 era despite the fact that AMD made a better product.

hybrids make sense for a portion of the populace

[Chirs]

If you do a lot of stop-and-go urban driving, hybrids are great. Taxi drivers love them.

If you're doing a lot of highway driving, a diesel will likely do better.

why did I sell NiMH patent to Texaco, why did I se

[Locutus]

why did I sell NiMH patent to Texaco
why did I sell NiMH patent to Texaco
why did I sell NiMH patent to Texaco
why did I sell NiMH patent to Texaco

I wonder how many times GM executives thought about this question once they started working on the EV2^h^h^hVolt.

for some background, GM sold their majority stake in the NiMH patent to Texaco around the time they were crushing the EV1:
http://pppad.blogspot.com/2007/05/nimh-held-hostage-by-chevron-texaco.html

I also read that the 16KWh Li battery used in the Volt can only be run to about 50% so only 8KWh are usable. A 400lb NiMH made of EV-95 batteries would provide 12KWh and provide more power because they could be run down much lower than 50%. Shoulda, coulda, woulda GM is run by idiots.

LoB

Re:Next question

[HanzoSpam]

Yep. My goal is to expand this post a bit, and then copy and paste into every misinformed anti-electric car post on /. Feel free to do the same for other websites.

Don't forget to include this!

Re:They Make It Back on Software Sales & Suppo

[Vernes]

Thanks, this image now keeps floating before my mind's eye.
And my testis seem bend on crawling up into my chest cavity.

Factor in milage quotas....

[Dr. Zed]

Auto makers in the US are required to keep the average mileage of their vehicles below a certain standard. This means that, to produce a lot of inefficient vehicles (trucks, SUVs, etc.) they need to produce a quantity of fuel efficient vehicles.

Producing vehicles that use 0 gallons per mile has the added benefit of allowing them to make more gas hogs. This probably isn't a huge part of the reason they made the volt, but it would be a contributing reason.

Staying relevant and in the press would be another factor.

Agoracentric model

[Iffie]

Its called glaring incompetence. But in today's society we are all kept alive with energy we don't replace. We have lost our mutual value and GM shows how disgusting the theatricals can get about the 'imposibility of the transition'. Oil = money and we all need oil because of freaking moronoic lying scumbag companies like GM. We need a localized energy, food and skill autonomous patchwork of commuities to develop asap. That or we will all run into the peak oil wall of death in our massive Chevy Volt.

for the past 50 years, GM HAS LOST MONEY ON EVERY

[gl4ss]

for the past 50 years, GM HAS LOST MONEY ON EVERY car they've done. that's why they needed to shuffle debts out via government deal.

volt is just the poster child.

Volt

[Ogive17]

I saw 4 Volts driving south on I-75 in Ohio on Wednesday, they were moving along at a pretty good pace (70-75mph). Far enough from Detroit that they were probably testing the gas engine.

But more on topic, I think the Volt is a good step forward but even if it is selling at a loss, it's too expensive for what the vehicle offers. It's not a big car (smaller than my TSX, which admittedly doesn't have much room in the back for adults), looks like it would be cramped for anyone in the back seat. $40,000 is a big price tag for a car that is designed for city commuting. What happens in 2-3 years when the battery doesn't have the same capacity as it did brand new? Regardless of what they say you can get out of it, we all know batteries almost never live up to expectation. Who is going to be happy about paying $5000 for a new car battery?

Just replace lithium with arsenic

[michelcolman]

They can call it the GM Mono!

Re:People lose money on every car they buy

[dtmos]

The ICE of the Prius is required only when speeds exceed 42 mph. Below that, it will maintain a constant speed using only electric power until the battery discharges (at which time the ICE restarts, the battery recharges, and the cycle repeats -- especially if the driver uses an off throttle shift to put it back into electric mode). At 40 mph one can go a mile or so on level ground without using the ICE, solely on electric power.

Re:Next question

[sourcerror]

It's really nice that we'll have lower overall pollution, but you'll still need those new powerplants instead of ICEs. Even the article you metaquoted said so.

"The report found that the need for added generation would be most critical by 2030, when hybrids have been on the market for some time and become a larger percentage of the automobiles Americans drive. In the worst-case scenario—if all hybrid owners charged their vehicles at 5 p.m., at six kilowatts of power—up to 160 large power plants would be needed nationwide to supply the extra electricity, and the demand would reduce the reserve power margins for a particular region's system.

The best-case scenario occurs when vehicles are plugged in after 10 p.m., when the electric load on the system is at a minimum and the wholesale price for energy is least expensive. Depending on the power demand per household, charging vehicles after 10 p.m. would require, at lower demand levels, no additional power generation or, in higher-demand projections, just eight additional power plants nationwide. "

The Volt isn't all that innovative

[Shivetya]

I don't understand why so many think it is. It is too heavily compromised in its current state. For anyone who has been in one its interior is craptastic, as in stuff that should not have ever been allowed out the door. While the view from the front seats is OK provided you get the charcoal interior, if your in the back seats you would swear your in the cheapest econo box on the planet.

Throw in an overly complex system which has arisen because they could not get the original idea to work but had to get it out the door now. As in, if they had pushed it back another year then we might not have three planetary gear sets, three separate cooling/heating loops, etc. Let alone having the gas engine drive the wheels directly which it can do over 40mph.

The Leaf is more innovative because it changes how we think about cars. It forces you to actually think about driving, instead of just going because you can. The Volt is not because it doesn't require you to actually change your habits. It lets you have your "feel good I am an ENVIRONMENTALIST" smugness without actually having to do it. You would do more for the environment and your walled by buying the Cruze HF model, which gets 40mpg on the highway all the time and 30 in the city and costs around 20k.

The only reason GM can sell these at a loss is because the tax payer poured enough money into them to keep them afloat. Worse the tax payer is further keeping them afloat by subsidizing the purchase of each Volt sold. People bitch about hand outs and for some reason turn a blind eye to this boondoggle? Get real. So we now are handing money over to the 100k per year crowd and feeling good about it? Even after the $7500 credit it is not an inexpensive car, so the majority of middle class will only see this in the parking lot at work; usually on reserved spots or those with someone's initials, or at the dealer ship.

GM isn't behaving like a start up, they are behaving like the banks did a few years ago (specifically Fannie Mae). They know they can never go under because the US will step in and make it all all right. There are also reports out already that they may actually not be losing ANY money on this car at 41K.

Re:The Volt isn't all that innovative

[operagost]

The Leaf is more innovative because it changes how we think about cars. It forces you to actually think about driving, instead of just going because you can.

The thinking happens before the purchase. Once I buy a vehicle, it should become a tool. I shouldn't have to ponder the impact of my driving on a daily basis, as if transportation was a religion.

Re: lithium is the 25th most abundant element

[ledow]

I have no idea about lithium but just a common-sense reasoning would provide some (plausible) explanations: The lithium isn't in the right form, it isn't pure enough, it's not found in large enough concentrations, mining it is not commercially viable until lithium is a lot rarer, there are mining hazards associated with extracting lithium ores (lithium-ore-dust is incredibly bad for you), maybe there's an artificial scarcity that can't be overcome on the international markets (e.g. Diamonds) etc.

Lithium isn't a "thing" that you can get out of rocks and put into pharmaceuticals or batteries. There are isotopes, molecules, extractions, filtrations, reactions, and all sorts. For a start, pure lithium ignites extremely easily and has to be stored in oil. How does that sit with the 230bn tonnes of lithium in seawater? Most of the world's gold is in seawater, that doesn't mean it's anywhere near practical to extract it from there, or that it'll be a pure gold element and not some isotope (I'd say oxide but that's not always relevant to gold, however lithium has all sorts of oxidation and other derivatives).

Carbon is everywhere, so I can just use a pencil lead to make my girlfriend's wedding ring? In theory, yes. In practice, it costs VASTLY more than just hoping someone in South Africa will hit a particularly nice-sized gemstone in a rock somewhere.

The largest lithium mine in the world produces 7,400 tonnes per year. To me, that sounds TINY and you'd probably need a whole mine just to keep one car manufacturer supplied with lithium-ion batteries. Not everything is as clear-cut as weighing the world and saying there's plenty left. By that count, there's enough oil to keep us going for centuries when, in fact, it's probably much sooner than that that we have to start raises prices to make it basically a luxury, not a commodity.

Re:Technically that's not true

[Curmudgeonlyoldbloke]

The taxpayer's what?

80% of that energy is lost by burning

[Anonymous Coward]

80% of that energy is lost by burning. So you have to reduce the power available in a gallon of petrol by 80%.

Then you have to realise that one reason for 150bhp engines is so that when your engine is at idle and you want to start off, you have enough torque without revving the engine massively to actually start the car. 50bhp is plenty to get to any legal speed in the US or most of Europe. The remaining 100bhp is so the car can actually move from standing still. An electric engine doesn't need that 100bhp because it can have maximum torque from 0rpm.

Which means you don't need as big an engine, nor all that complex and heavy gearing and transmission.

Also, when you brake, your engine doesn't create petrol to put in your tank. So you have to reduce the power in that gallon of gas again unless you never brake until you get to your destination...

When will people realise this?

Never, because they have a hard-on over hating anything ecological because they're trained to think it communistic.

Analysis is everything

[wmeyer]

Obviously, very few developers study economics, and perhaps of those who did, they bought into the Keynesian theories. Most of the comments here demonstrate massive ignorance of economic reality. The Volt is yet another of those "we do it because it makes us feel virtuous" projects. And the sign of another government bailout to come.

These massive battery packs present massive problems, none of which will be resolved at tolerable cost by forcing production. This is another technology whose time has not yet--and may never--come. Buy high, sell low, and make it up in volume plus government handouts. At this rate, with more and more of our income taken to prop up failures, none of us will be able to afford a Volt anyway.

Re:GM only profits from FINANCING not manufacturin

[ErikZ]

Last I checked, they're paying off the government with loan money they haven't spent yet.

Are they solidly in the black?

This reminds me of...

[hesaigo999ca]

This reminds me of the program running in india for 1 laptop per child, where they wanted to get a laptop made for 100$ to be able to sell to all children, something like that, and India rejected it saying it was too expensive, 100$ was not something all households could afford, so they were about to can the project( project lead by those invested in making millions from this....of which many designers took a crack at...) as they were all not budging from their respective perches. Then the students from India university, took it upon themselves to design a new tablet, of which retail costs about 35$ to make, and uses a flash card for a hard drive, imagine the ingenuity of being able to come up with that idea!

So the program will go ahead because the students went and found cheaper ways to make things work, and cheaper parts then where the original designers were looking for....of course when I hear this, I think how many closed door meetings happened to try a run a deal where the HDD will be supplied by x company and they will make $$ profits, instead of looking at this as a non profit program, and just sell the mats for cost + maybe a small %.....makes me gag.

I am sure again this is ford not going through all the right R&D to find the best mats and best ways, but more so making it quick for the public. Why can SONY and M$ force themselves to sell PS3 and XBox at a loss, because they know they will make it up in games being sold, so likewise ford should consider they will make it up in charging stations sold to their public, or accessories...
something like that

Of course they will say they are loosing money,

[Grand Facade]

To continue to receive the government grants, subsidies, and tax breaks.

By releasing this statement, I'd guess they are bucking for more $.

As long as Uncle Sugar is handing out food coupons they will dip into that trough.

And that trough is such good stuff that I'm sure there are employees who's only job is to leverage to keep that trough full.

I have seen companies run similar programs (ugh excuse me, maintain the appearance of running a program) just to be able to continue to dip in that trough.

Re:Next question

[Notquitecajun]

What about transportation of the materials to final assembly; or their mining and production?

Corvette, Dirty?

[TheNinjaroach]

They have 4 economical fuel efficient cars. YET they have 5 different Corvette models.

You do realize that the level of horsepower found in Corvettes is by highly efficient engine designs, right? Did you know that most Corvettes achieve 30+ MPG on the freeway? Sure, those V8s can suck gas when pushed to their limits but they are very good at taking small sips for everyday driving.

Re:Corvette, Dirty?

[sac13]

You do realize that the level of horsepower found in Corvettes is by highly efficient engine designs, right? Did you know that most Corvettes achieve 30+ MPG on the freeway? Sure, those V8s can suck gas when pushed to their limits but they are very good at taking small sips for everyday driving.

30+ does sound respectable until you realize you're looking at a 2 seater. If GM were working on a 2 seater like the Smart Fortwo, I think you could make an argument about their commitment to making efficient vehicles. And, something tells me the Corvette fleet's real world mileage probably isn't getting the 30+ mpg potential.

Re:Corvette, Dirty?

[drinkypoo]

Actually, when have you EVER seen a corvette going fast? They're fucking ticket magnets. Most of the guys who are driving them are old men who can't pull hard Gs any more anyway, so they're never really driven hard.

I did actually see evidence of a vette that HAD been driven fast about two years ago, the ONLY time I'd seen such evidence. It was on Soda Bay Road in Kelseyville, California, near the Konocti Harbor Resort (which is now closed.) I came around the corner at normal speed and in the middle of the road there was a corvette with a ditch up the middle of the hood where it had been driven up on by a three quarter ton pickup. The pickup had been pulled off to the side of the road where it sat undamaged. The 'vette driver had obviously decided to cross the center line by more than half and the truck driver was obviously unable or unwilling to stop before making major modifications to the corvette.

About a year ago I saw some evidence of someone TRYING to drive fast. I was driving from Hopland to Lakeport on the 175, the "Hopland Grade". I had about six hundred pounds of cargo and myself in a 1993 Impreza, the kind with the 101hp 1.8 liter. The lineup involved a civic, an accord V6, myself, and then a C6 corvette. The civic held us back for about five miles of sharp turns before the bitch would pull over. Then the accord slopped himself around, more or less staying in the lane, but after only about a mile he got out of my way. I thought about pulling over and just letting the vette go by but... nah. So I downshifted my little slush box (in manual mode it's surprisingly responsive) and took off like a scalded cat. I stayed entirely within my lane because the road is dangerous enough under the best of conditions, but he didn't. And he didn't get to catch me until I let him. I doubt I was over the speed limit at any point because it is 55 and the road is possibly the twistiest section of highway of any length anywhere in California. He STILL couldn't stay in his lane, and those cars have traction and stability control. And he couldn't catch me even using the whole fucking highway.

Virtually nobody who can or will drive actually buys a corvette. They are buying a luxury muscle car. In recent years it has become a sports car (since the C5 it can actually handle and no longer produces lift at speeds over 100 mph) but it's still typically driven like a muscle car.

I'm sure there are plenty of exceptions who are taking their vettes to the track. They are in the minority.

In other words, it's a loss leader

[sean.peters]

I think that's pretty plausible, actually. Also, something the GP doesn't point out - even if the Volt isn't profitable in the gross margin sense now, it's quite possible that it will become so. As economies of scale begin to kick in for the suppliers, the price for components is likely to drop - so that even if GM is losing money on every car today, that situation may well turn around as sales increase.

Oh, right

[sean.peters]

Of course, it's a given that the workers are at fault here, because it's unpossible that management could have screwed it up. Give me a fucking break.

You have a strange definition of reliability

[sean.peters]

For instance, the extra gasoline cost of a 30 MPG car over an electric car is around $9000 after 100,000. I'd say this is about the limit to the reliability of a gasoline car.

My 1986 F-150 ran for well over 225k miles. My 1999 F-150 is currently at 178k and still going strong. And I doubt I'm especially unusual here.

Just because people CHOOSE to replace their vehicles after 100k miles doesn't mean that's as long as they can run.

Government Motors loses money....

[pottymouth]

So where corrupt union officials failed the US Government has succeeded. Toss out the CEO and replace him with an Obamite, place key union officials in charge of corporate finances (paying them off with stolen tax money before REAL investors) and force the company to ramp up production of a vehicle whose time (and technology) has not yet come whose market is as imaginary as the Hollywood image that's been created.

The destruction of an auto mobile company 1, 2, 3. Henry Ford should have been so effective...

Re:They Make It Back on Software Sales & Suppo

[operagost]

And future taxpayer bailouts.

Selling volts ?

[ballpoint]

It must be difficult to make a profit on selling volts, because you never know how many ampères your customers are going to pull and for how long. Now, selling joules, or watts by the hour, seems a better business model to me.

Re:They Make It Back on Software Sales & Suppo

[cayenne8]

"As well as OnStar signups..."

About the only GM car I'd have would be a vette...and if I ever got one of those again, first thing I'd do is rip out the fscking OnStar system.

I was shocked last year when looking at them...and asked the salesman if I could order a car without the OnStar option, he said with a puzzled look "No..it comes stock on all models".

When did they start doing that? I sure don't want them to be able to monitor conversations in my car...send a disable signal (or someone else to do it if they learn to hack into the system...etc).

Re:People lose money on every car they buy

[blackraven14250]

Which is still much less than the Volt, which goes up to 35 miles (according to recent reports) at a top speed of 100mph without turning on the ICE, and has 10 times the total charge potential of the Prius. That's not going to be "hybrid grade batteries".

It won't stop them

[Shivetya]

because they know they will be bailed out again.

Just like its bad to have banks to big to fail its bad to have an industry leader who is too big to let them fail.

Contracts come up next year, should be fun to watch

Re:Plenty of people will buy them

[iamhassi]

"I am still predicting plenty will buy a volt, the prius has already proven that a large portion of the population is bad at math."

At least the Volt makes financial sense as long as you don't usually drive too much further than 40 miles a day, but even if I drove 80 miles a day I calculate I'd still fill up less than once a week.

Re:People lose money on every car they buy

[dtmos]

That's not going to be "hybrid grade batteries".

To be sure; I wasn't taking a position in the discussion, only correcting a factual error.

I guess while I'm at it (in for a penny, in for a pound...), the Volt isn't "full electric until it drains the batteries completely." The state-of-charge software in the car limits the discharge to 25% of capacity (and the charge to 90% of capacity) to optimize the life of the battery. All battery-driven cars of which I am aware, including the Prius, control the battery state-of-charge in a similar way, for a similar reason.

But your overall point is valid -- the differing requirements on pure-EV and hybrid batteries make for very different battery designs. There are many, many differences between the Volt and Prius batteries -- starting with chemistry: The Volt's is Li-ion while the Prius' is NiMH.

Re:Next question

[wrook]

I don't want to be critical because generally I agree with you, but I wonder if these numbers are correct for the practical case.

For instance, batteries are not 100% efficient. A Lithion ion battery is 80-90% efficient, so only 80-90% of the energy you put into the batter can be used. It also has a self discharge rate of 8-15% per month depending on temperature. So if you leave it sitting around, without driving it, it loses energy. Electricity can't be delivered 100% efficiently either (although this is also true of gasoline).

I don't have time to run all the numbers, but it seems to me that your figures could be off by as much as 20%. It is still a very valid point that electricity is competitive with gasoline for CO2 emissions, but I think the specific numbers are more difficult to calculate than you imply.

Re:Next question

[bored]

More electricity needed - debunked [futurepundit.com]. Here's the link to the original [ornl.gov] Oak Ridge Nation Laboratory Report (currently down).

That whole article is a neat piece of fantasy math. It makes the assumption that no-one will charge any of those cars during the day. Furthermore, from what I understand their estimates were based on something like a plug-in prius, where the majority of the energy continues to come from the gasoline engine.

Consider this, there are a _LOT_ of places in the US, that you cannot currently install instant hot-water heaters because the neighborhood the house is in is already running at capacity. Also, do you remember the fact that every couple of years some part of the country experiences blackouts due to weather (to hot/cold)? What happens when enough cars get plugged in during daylight hours to drive the average up 5% at 5PM?

The bottom line is that new power plants or power storage systems _WILL_ be required, but that won't be the primary problem. The problem with widespread use is going to be all the people trying to upgrade their 100A electric service to 200A or more. This will result in major expenses rewiring neighborhoods, and running high voltage power lines.

Re:Next question

[Black Gold Alchemist]

Those numbers already take into account battery and charger inefficiencies. They are wall outlet to road efficiencies. The EPA numbers are plant to wall outlet. Plant to wall outlet and wall outlet to road is powerplant to road. Still, the numbers are going to be off, up to 30% of fuel economy is due to the driver.

REVENGE of Electric Car Documentary

[Eclipse-now]

Ok, so while we're all discussing electric cars, please please please get all your online mates to click "LIKE" on the Facebook page of this documentary so that they'll release the trailer! I'm getting desperate! (You couldn't tell?)

http://www.facebook.com/revengeoftheelectriccar

Re:They Make It Back on Software Sales & Suppo

[slick7]

Troll it may be, however, it's probably closer to the truth than most people wish to believe.

Re:They Make It Back on Software Sales & Suppo

[Schmyz]

Its a GM product produced in the Microsoft Windows concept. LOL