MovieChat Forums > Who Killed the Electric Car? (2006) Discussion > Chevy loses about $30,000 for every Volt...

Chevy loses about $30,000 for every Volt sold

posted 12 years ago by bbagnall
1 reply | jump to latest

GM executives have conceded from the start that they were losing money on the Volt, and that was before the big discounts.

Now the losses could be even higher. It costs $60,000 to $75,000 to build a Volt, including development, manufacturing and raw materials, estimates Sandy Munro, president of Munro & Associates, a Troy, Mich., a company that analyzes vehicle production expenses for automakers. Much of the cost comes from an expensive combination of two power systems — electric and gasoline. With a sticker price of $40,000, minus the $10,000 the company pays in incentives, GM gets roughly $30,000 for every Volt. So it could be losing at least $30,000 per car.

http://www.washingtontimes.com/news/2012/sep/23/chevrolets-volt-sellin g-but-not-at-sticker-price/?page=all

[–] apeweek 12 years ago

...It costs $60,000 to $75,000 to build a Volt, including development, manufacturing and raw materials

This silly number came from a Reuters article. Problem: development costs aren't amortized over a year's worth of cars. They apply to a full run of vehicles over many years. GM exec Bob Lutz explains it this way:

"...That’s like saying that a real estate company that puts up a $10 million building and has rental income of one million the first year is “losing” 9 million dollars, or several hundred thousand per renter."

This disingenuous math would make ANY car look ridiculously unprofitable, not just Volt. Every model car has development costs.

The same Reuters article points out that Volt's actual manufacturing cost is $20k to $30k. So plenty of room for profit.

Plus Volt's development costs will apply to many vehicles which follow it, and use bits and pieces of Volt's drivetrain ideas.

A thorough debunking can be found here:

http://www.forbes.com/sites/boblutz/2012/09/10/the-real-story-on-gms-v olt-costs/