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Sticker Shock for Government Motors: The Chevy Volt

Written by Gary North on September 11, 2012

General Motors, the bankrupt firm that was resurrected from the dead by the Obama Administration, is proving to be a vampire. Its Volt automobile costs $88,000 to make. It sells for under $40,000.

That’s a loss of $48,000 per vehicle.

How does the firm expect to make a profit? Volume!

These numbers are disputed by GM. But GM has yet to go public with its numbers, along with a detailed breakdown of these costs.

You can lease a Volt for about $5,000 for two years.

Then try to sell it. Surprise!

There will be more electric cars. Nissan and Honda are ready to invade this high-loss market.

GM’s quandary is how to increase sales volume so that it can spread its estimated $1.2-billion investment in the Volt over more vehicles while reducing manufacturing and component costs – which will be difficult to bring down until sales increase.

Its other problem is how to compete with the Toyota Prius.

It takes hours to re-charge a Volt. You can speed this up with a $2,000 commercial professional charger.

It has sold about 13,000 Volts this year. It had projected 40,000 sales in 2012. That is unlikely.

One New Jersey Chevy distributorship has sold just one Volt over the past 12 months. It sells 90 to 100 Chevies per month.

The Detroit-Hamtrack plant that makes Volts has been shut down in September. This is the second time it has halted sales this year.

“It’s true, we’re not making money yet” on the Volt, said Doug Parks, GM’s vice president of global product programs and the former Volt development chief, in an interview. The car “eventually will make money. As the volume comes up and we get into the Gen 2 car, we’re going to turn (the losses) around,” Parks said.

Spoken like a faithful employee of a company bailed out by taxpayers.

Parks declined to comment on specific costs related to the Volt. This, I understand.

“It wasn’t conceived as a way to make tons of money,” he said. “It was a big dip in the technology pool for GM. We’ve learned a boatload of stuff that we’re deploying on other models,” Parks said.

A few taxpayers have learned a boatload of stuff about bailing out a dead car company. But there is much to be done to get the story to more taxpayers.

In contrast is the Toyota Prius, which has been on the market for 12 years, and which sells for under $25,000. Its sales are up to 164,000 so far this year.

Other such vehicles haven’t done nearly as well. Nissan’s pure-electric Leaf, which debuted at the same time as the Volt and retails for $36,050, has sold just 4,228 this year, while the Honda Insight, which has the lowest starting price of any hybrid in the U.S. at $19,290, has sales this year of only 4,801. The Mitsubishi i, an even smaller electric car priced from $29,975, is in even worse shape, with only 403 sales.

Volt is dead in the water. So are taxpayers’ hopes of ever getting out of this deal at a profit.

Parks said the company also is continuously reducing production costs on the current Volt and its successor. “There is a strong push on the cost of the Gen 2 to get the car to make money and to be more affordable . . . Virtually every component in the next-gen car is going to be cheaper,” he said.

But it will still be facing the Prius, which is in its third generation, and will be in its fourth before the Volt is in its second.

This says it all.

Continue Reading on www.dispatch.com

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8 thoughts on “Sticker Shock for Government Motors: The Chevy Volt

  1. just give the chimp dick-tater a little more time and he will give them more tax payers money

  2. barb patton says:

    The ayatollah barack hussein obama has many many organizations, thugs, unions and rich donors to appease and he will once again bail out the bankrupt companies again and again and again, there is no stopping him and he will continue to bleed the middle class taxpayer of this and various banks and green companies. He is a thug and must be stopped. When is his payback going to come? WAKE UP AMERICA

  3. If people in America would stop buying foreign then maybe American Companies can make a profit. Toyota has never made a profit on Prius. When you buy Toyota 80% of the money goes to Japan. So blame the poor economy on your selves.

  4. Only at a government-owned car manufacturer could the taxpayers be given a bill of $48,000 for each car they sell to an individual! What is wrong in this country!

    Our congress is nothing but 535 co-conspirators, enabling a rogue administration that is hurling our country into bankruptcy.
    Unlimited power has been given to a skinny, black foreigner, that was ushered into the presidency by both parties and a shadow government.

    Purge Washington!

  5. The electric car is not ready for the street… Everything in the car is mature off-the-shelf tech, except the power source. No electric car will sell enough units to make sense unless one of two things happens… A battery capable of powering the car for 350 miles, then recharging in 10 minutes…. or a fuel cell stack that doesn't cost more than a house and can stand up to automotive conditions. Both of those are still in the labs…. so there's no point it deploying a product until more work is done on power…

  6. A friend has a new Camry Hybrid. He loves it since it is quiet, smooth and powerful and he used 3 tanks of gas to go 2,000 miles. He drove up just as the transport arrived. He got to see the actual sticker before the dealer stuck a few thou above and beyond so he paid $24,800 for it loaded out. I didn’t think to ask him why he didn’t spend another $15,000 or more and get a Volt, good looking things that they are.

  7. Ron, you are a democrat obama drone. You can only blame this country's economic disaster on the democrat party led by the marxist-muslim-dictator obama, and no one else. Obama is responsible for wasting tax payer money on his car companies with tax payer money. The volt car costs $98,000 to make and obama sells it for $50,000. This is a $48,000 loss. Obama still owes the tax payer billions, not including the bankrupt green companies he bought. Only the ignorant, which you one of are, has forgotten that obama has surrounded himself with 40+ communist and marxist czars to engineer our financial collapse. Obama's foreign policy is appeasement. To remove your total ignorance ron, start listening to Rush Limbaugh and Mark Levin.

  8. The most plausible solution for electric vehicles is a swappable battery solution being implemented by Shai Agassi of Better Place. They own the battery, you charge it mostly at home at night, but when you need more range, you go to what looks like a car wash and a robot swaps in a fully charged battery. I can't imagine any other scheme will win out because Agassi's solution addresses all the negatives of electric vehicles and there are many pluses. You can listen to his presentation here: http://fora.tv/2009/07/22/The_Electric_Horizon_Sh… or download just the audio on iTunes. Worth the time.