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    Thread: Your Tax Dollars At Work: GM Loses Its Shirts On Every Volt

    1. 09-10-2012 10:02 AM #1

    2. Banned seadoo2006's Avatar
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      09-10-2012 10:08 AM #2
      In before the usual Faux News/Michelle Malkin/Teatard morons show up. OF FREAKING COURSE THE VOLT LOSES MONEY. It's a loss leader into a new technology that needs to be expanded to mainstream acceptance before it makes money. The Gen 1 and most of the Gen 2 Priuses were sold at a loss too.

      This is exactly why car companies (VW, Honda, Toyota, etc etc) rely on government assistance and loans because often times, they need to build and make a car for a loss before people start to buy it and turn a profit.


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      09-10-2012 10:13 AM #3
      I expected a stupid thread from someone with the username "Pretzel Logic." Leaving satisfied.

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      09-10-2012 10:18 AM #4
      TTAC sucks, here's a better article.

      http://money.msn.com/business-news/a...10&id=15536514

      (Reuters) - General Motors Co sold a record number of Chevrolet Volt sedans in August - but that probably isn't a good thing for the automaker's bottom line.

      Nearly two years after the introduction of the path-breaking plug-in hybrid, GM is still losing as much as $49,000 on each Volt it builds, according to estimates provided to Reuters by industry analysts and manufacturing experts.

      Cheap Volt lease offers meant to drive more customers to Chevy showrooms this summer may have pushed that loss even higher. There are some Americans paying just $5,050 to drive around for two years in a vehicle that cost as much as $89,000 to produce.

      And while the loss per vehicle will shrink as more are built and sold, GM is still years away from making money on the Volt, which will soon face new competitors from Ford, Honda and others.
      GM's basic problem is that "the Volt is over-engineered and over-priced," said Dennis Virag, president of the Michigan-based Automotive Consulting Group.

      And in a sign that there may be a wider market problem, Nissan, Honda and Mitsubishi have been struggling to sell their electric and hybrid vehicles, though Toyota's Prius range has been in increasing demand.

      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.

      But the Volt's steep $39,995 base price and its complex technology - the car uses expensive lithium-polymer batteries, sophisticated electronics and an electric motor combined with a gasoline engine - have kept many prospective buyers away from Chevy showrooms.

      Some are put off by the technical challenges of ownership, mainly related to charging the battery. Plug-in hybrids such as the Volt still take hours to fully charge the batteries - a process that can been speeded up a bit with the installation of a $2,000 commercial-grade charger in the garage.

      PLANT SHUTDOWN
      The lack of interest in the car has prevented GM from coming close to its early, optimistic sales projections. Discounted leases as low as $199 a month helped propel Volt sales in August to 2,831, pushing year-to-date sales to 13,500, well below the 40,000 cars that GM originally had hoped to sell in 2012.

      Out in the trenches, even the cheap leases haven't always been effective.
      A Chevrolet dealership that is part of an auto dealer group in Toms River, New Jersey, has sold only one Volt in the last year, said its president Adam Kraushaar. The dealership sells 90 to 100 Chevrolets a month.

      The weak sales are forcing GM to idle the Detroit-Hamtramck assembly plant that makes the Chevrolet Volt for four weeks from September 17, according to plant suppliers and union sources. It is the second time GM has had to call a Volt production halt this year.

      GM acknowledges the Volt continues to lose money, and suggests it might not reach break even until the next-generation model is launched in about three years.

      "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.

      "I don't see how General Motors will ever get its money back on that vehicle," countered Sandy Munro, president of Michigan-based Munro & Associates, which performs detailed tear-down analyses of vehicles and components for global manufacturers and the U.S. government.
      It currently costs GM "at least" $75,000 to build the Volt, including development costs, Munro said. That's nearly twice the base price of the Volt before a $7,500 federal tax credit provided as part of President Barack Obama's green energy policy.

      Other estimates range from $76,000 to $88,000, according to four industry consultants contacted by Reuters. The consultants' companies all have performed work for GM and are familiar with the Volt's development and production. They requested anonymity because of the sensitive nature of their auto industry ties.

      Parks declined to comment on specific costs related to the Volt.

      The independent cost estimates obtained by Reuters factor in GM's initial investment in development of the Volt and its key components, as well as new tooling for battery, stamping, assembly and supplier plants - a price tag that totals "a little over" $1 billion, Parks said. Independent estimates put it at $1.2 billion, a figure that does not include sales, marketing and related corporate costs.

      Spread out over the 21,500 Volts that GM has sold since the car's introduction in December 2010, the development and tooling costs average just under $56,000 per car. That figure will, of course, come down as more Volts are sold.

      The actual cost to build the Volt is estimated to be an additional $20,000 to $32,000 per vehicle, according to Munro and the other industry consultants.

      The production cost estimates are considerably higher than those for the Chevrolet Cruze, the Volt's conventional gasoline-engine sister car, which Munro estimates at $12,000 to $15,000 per vehicle.

      Production costs typically include such items as parts, material, labor and the cost to run the factory, according to manufacturing expert Ron Harbour, who heads the North American Automotive Practice at Michigan-based consultant Oliver Wyman.

      COST PENALTIES
      The Volt costs more to build for several reasons, mostly related to the car's richer content, complex technology and still-low sales and production volumes.

      The basic model has a higher level of equipment and features than the Cruze, which is assembled in Lordstown, Ohio, and has a starting sales price of $17,925. The Volt also has a number of unique parts, including the battery pack, the electric motor and the power electronics.
      Some of GM's suppliers also impose cost penalties on the automaker because the Volt's production volume remains well below projections.

      Still, as the company wrestles with how to drive down costs and increase showroom traffic, Parks said the Volt is an important car for GM in other respects.

      "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. Those include the Cruze and such future cars as the 2014 Cadillac ELR hybrid.

      The same risky strategy - gambling on relatively untested technology - drove massive investments by Toyota Motor Corp in the Prius hybrid and Nissan Motor Co in the Leaf electric car.
      Toyota said it now makes a profit on the Prius, which was introduced in the United States in 2000 and is now in its third generation. Sales of the Prius hybrid, which comes in four different versions priced as low as $19,745, have almost doubled so far this year to 164,408.

      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.

      Toyota's unveiling of the original Prius caught U.S. automakers off guard. GM, then under the leadership of Rick Wagoner and Bob Lutz, decided it needed a "leapfrog" product to tackle Toyota and unveiled the Volt concept to considerable fanfare at the 2007 Detroit auto show.

      The car entered production in the fall of 2010 as the first U.S. gasoline-electric hybrid that could be recharged by plugging the car into any electrical outlet. The Obama administration, which engineered a $50-billion taxpayer rescue of GM from bankruptcy in 2009 and has provided more than $5 billion in subsidies for green-car development, praised the Volt as an example of the country's commitment to building more fuel-efficient cars.

      NEXT-GENERATION CAR
      GM's investment in the Volt has so far been a fraction of the $5 billion that Nissan said it is spending to develop and tool global production of the Leaf and its associated technologies and the reported $10 billion or more that Toyota has plowed into the Prius and various derivatives over the past decade.

      But there will inevitably be more development costs for future generations of GM plug-ins and it could still could be years before GM sells enough Volts to bring the cost down to break even.
      The average per-car costs for development and tooling will drop as sales volume rises. But GM will need to sell 120,000 Volts before the per-vehicle cost reaches $10,000 - and that may not occur during the projected five-year life cycle of the first-generation Volt.

      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.

      One obvious way to pull down costs is to push up volume - but GM is paying a hefty price to do so.

      The automaker just ended a special Volt lease program that offered customers a low monthly payment of $279 a month for two years, with some high-volume dealers dropping the payment to $199 a month after receiving incentive money from GM, with down payments as low as $250. The company said about two-thirds of Volt customers in July and August leased their vehicles, compared with about 40 percent earlier this year.

      Before GM resorted to discounting Volt leases, sales were averaging just over 1,500 cars a month. A huge part of that reason was consumer push back over the price, according to Virag of Automotive Consulting.

      Volt's nearest competitor, the Prius, is priced at $24,795, with a newer version, the Prius Plug-In, starting at $32,795.

      Parks said the sales pitch for the Volt was "difficult" because of the sticker price and the car's technical complexity. But the discounted leases have helped lure more non-GM buyers into Chevy showrooms. Their number-one trade-in: Toyota Prius.

      Raymond Chevrolet, in suburban Chicago, sells an average 1,000 Chevys a month, including three to seven Volts. Dealership president Mark Scarpelli said that "some people who like the concept of an electric vehicle find it cost-prohibitive."

    5. 09-10-2012 10:22 AM #5
      I'd love to buy a volt.

      They have a good $249/mo lease right now that is so tempting.
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      09-10-2012 10:23 AM #6
      Quote Originally Posted by seadoo2006 View Post
      In before the usual Faux News/Michelle Malkin/Teatard morons show up. OF FREAKING COURSE THE VOLT LOSES MONEY. It's a loss leader into a new technology that needs to be expanded to mainstream acceptance before it makes money. The Gen 1 and most of the Gen 2 Priuses were sold at a loss too.

      This is exactly why car companies (VW, Honda, Toyota, etc etc) rely on government assistance and loans because often times, they need to build and make a car for a loss before people start to buy it and turn a profit.

      That level of loss is pretty hardcore though. The numbers tossed around when the Prius/Insight were new were just over $10k, and it still took a long time and a ton of sales to turn that around. I'm very skeptical GM will be able to create the demand for the product that Toyota has for the Prius, and that's the only way they can attempt to dig their way out.

      GM's facing penalties from their suppliers for overstating sales volumes.

      The Volt program is facing a much bigger challenge than your typical early production run losses, I think you're being naive to dismiss it so quickly.

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      09-10-2012 10:29 AM #7
      Quote Originally Posted by Shomegrown View Post
      That level of loss is pretty hardcore though. The numbers tossed around when the Prius/Insight were new were just over $10k, and it still took a long time and a ton of sales to turn that around. I'm very skeptical GM will be able to create the demand for the product that Toyota has for the Prius, and that's the only way they can attempt to dig their way out.

      GM's facing penalties from their suppliers for overstating sales volumes.

      The Volt program is facing a much bigger challenge than your typical early production run losses, I think you're being naive to dismiss it so quickly.
      Bob Lutz and current GM management have said that they expect profitability in the Gen 2 Volt and the application of the technology into different models. Is this for sure? I don't know and I don't think any of us truly know, but I have my faith that an automaker that has invested this much into a technology that, let's face it, only GM is really championing, would be looking for profitability any way they can.

      $40k is a large bullet to swallow for a Prius-esque car from GM and yes, I think they may have missed the mark on that one ($30-35k and put the tech into the new Impala would've been a far better option.)

      That being said, there is a large segment of this population who, like their views on the President, are willing to do whatever it takes to see it fail. GMs hurdle is found in winning the public opinion back to their favor, not with the technology itself.

      It's going to be a sad, sad day in motoring if the Volt goes down as a failure though, because truly, this is the hybridization technique that will eventually win people over (plug-in hybrid for the first 40-100 miles and then a gas engine to take over if added range is needed).

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      09-10-2012 10:40 AM #8
      Quote Originally Posted by seadoo2006 View Post
      Bob Lutz and current GM management have said that they expect profitability in the Gen 2 Volt and the application of the technology into different models.
      They also told suppliers they were going to sell 100k+ of these a year. Then that went to 80k. Then 40k. And now we're on target for 20k. Something tells me their profitablity calculations may need some tweaking too.

      Damned if they do, damned if they don't. Don't get me wrong, I like the Volt and respect what they've done. I'm definitely not a hater on this one and don't care at all about the political aspect. I'm just saying it's going to take a near miracle to make this one turn the corner and get out of the red.

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      09-10-2012 10:45 AM #9
      Quote Originally Posted by Shomegrown View Post
      That level of loss is pretty hardcore though. The numbers tossed around when the Prius/Insight were new were just over $10k, and it still took a long time and a ton of sales to turn that around.
      These numbers are based off of taking the total development and tooling costs and spreading them over only the cars sold to date. That's an asinine method of calculating costs until the day when the last Volt has been sold.

      Spread out over the 21,500 Volts that GM has sold since the car's introduction in December 2010, the development and tooling costs average just under $56,000 per car. That figure will, of course, come down as more Volts are sold.
      Quote Originally Posted by Captain 'Murica! View Post
      What if my idea is to go faster around a track than your idea?

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    10. 09-10-2012 10:46 AM #10
      This article would never have been written it the car in question was the ZR1.



      A lot of 'halo' cars are loss leaders for their respective manufacturers. Look at the bath Mercedes took from the Maybach line. I seem to recall Toyota losing money on Lexus for quite some time as well.
      Last edited by tgodbout; 09-10-2012 at 10:48 AM.

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      09-10-2012 10:47 AM #11
      Quote Originally Posted by tgodbout View Post
      This article would never have been written it the car in question was the ZR1.

      A lot of 'halo' cars are loss leaders for their respective manufacturers. Look at the bath Mercedes took from the Maybach line. I seem to recall Toyota losing money on Lexus for quite some time as well.
      Yep ... not to mention I think VW was losing money on the Veyron at an almost 4:1 basis ... $1.5 million car sold at a $5.6 million loss.

    12. 09-10-2012 10:52 AM #12
      I know you guys have a love affar with the ne GM and see any article the "may" paint it in a bad light as flambait, however, You can't compare GM's venture with the Volt with Toyota's venture into Lexus or any other company doing the same sort of thing. Apples to Oranges.

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      09-10-2012 10:54 AM #13
      It wasn't that long ago it was the government of Japan subsidizing and Toyota producing Priuses at a loss, before forming the lessons learned into a profitable second generation. Unless you think Toyota championing the Prius was a stupid move in hindsight, I'd give GM some time to get the Volt formula to work.

      Cheap leases may have a cost to them, but getting 2000+ units on the road each month, increasing visibility, and spreading word of mouth about the product is something that will help them at this stage of the game.

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      09-10-2012 10:56 AM #14
      Quote Originally Posted by Chmeeee View Post
      These numbers are based off of taking the total development and tooling costs and spreading them over only the cars sold to date. That's an asinine method of calculating costs until the day when the last Volt has been sold.
      Well duh. You need to take that into context.

      But you don't need to crunch many numbers to see the sales volumes required to get anywhere near profit on the gen 1 Volt are basically impossible. And carrying that loss forward, it would tank the gen 2 Volt as well.

      In other words, it took Toyota like 10 years to make profit out of the Prius and they had a much better start than GM has with the Volt financially.

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      09-10-2012 10:57 AM #15
      Quote Originally Posted by surefooted View Post
      or any other company doing the same sort of thing. Apples to Oranges.
      So, comparing one company doing on ething to other companies doing the same thing is apples to oranges? Not sure I follow that logic?

      Companies sometimes have loss leaders that get new tech or newbrands or halo cars into th epublic eye.

      Most of the reason GM is selling too few Volts happens to be the crap politics that surround it. Lease rates are attractive enough that the 40k "purhcase price" is irellevant. But the "Government Motors" and "Obama car" crap ARE relevant to its sales figures. It's keeping people that would be well served by the car away.

      BTW, how's the Leaf doing? And the Mitsubishi electric car?
      I love cars, but the problem is they are like schroedinger's hobby. They're always in a quantum superstate of being both awesome and a huge waste of time and money... until observation momentarily forces them into one state or another.

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      09-10-2012 10:58 AM #16
      Looking at it from the point of view of someone who likes to drive, I have to say both the Plug-in Prius and the Volt both come up a little short. My usage is perfect for a plug-in car. I do most of my driving under 20 miles per day, so I'd be 100 % electric. I'd probably install solar panels to provide the entire amount for my car and my house, so it would be looking pretty good.

      But I want a car that both drives nicely and has pretty versatile cargo space for long trips. I can't see plug-in technology failing in the long run, and GM needs to have the cars out there to gain experience.

      Neither of the articles is talking about the marginal cost to produce one more Volt. I doubt GM is publishing that number, which is dependent on factory utilization anyway. I think I'd be doing exactly what GM is doing, keeping the factory going at maximum efficiency and providing sufficient incentives to sell that number of cars.

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      09-10-2012 10:59 AM #17
      Quote Originally Posted by surefooted View Post
      I know you guys have a love affar with the ne GM and see any article the "may" paint it in a bad light as flambait, however, You can't compare GM's venture with the Volt with Toyota's venture into Lexus or any other company doing the same sort of thing. Apples to Oranges.
      Because? And if your answer is "because tax dollars" I'm about as small government as it gets and they waste a ton of money on far less deserving projects.

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      09-10-2012 11:01 AM #18
      Quote Originally Posted by surefooted View Post
      I know you guys have a love affar with the ne GM and see any article the "may" paint it in a bad light as flambait, however, You can't compare GM's venture with the Volt with Toyota's venture into Lexus or any other company doing the same sort of thing. Apples to Oranges.
      Careful. You're on thin ice when you hint criticism of the Volt and the TCL brethren that fap to it.

      And rule #1... as long as we're on the topic of falling short of expectations.

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      sprayed it on, waited some time, and proceeded to go at it with a scraper, some pliers, and a lot of f-ing hard work.

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      09-10-2012 11:02 AM #19
      GM is damned if they do and damned if they don't. If they're out front on technology, they lose money. If they wait for it to be profitable on a per-unit basis, they're the "same old GM" that is too conservative to innovate.
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    20. 09-10-2012 11:08 AM #20
      First, we as car enthusiasts are, in many ways, obligated to give new cars with new technology a chance. And the Volt is in EVERY way, new technology.

      THere is simply nothing else like it on the market, period. Yes, Toyota paved the way with the Prius, but if you will recall, when the first gen Prius came out, it was even MORE of a gamble than the Volt was because there had never been a hybrid car that made sense up to that point. THe only reason the Prius took off is because people gave it a chance, and fuel costs went up. Do you really think Toyota made money on the first Prius, or even the wildly popular second gen?

      Now, I own a Prius, and have driven many Volts. The Volt is the Prius technology, bumped to the next level. It takes the Prius concept and expands on it, and its genius engineering.

      We need to give the Volt time...a LOT of time. I don't think 10 years is unreasonable for this tech to catch on, but it WILL catch on with these fuel prices because it makes perfect sense. It is the next evolution of The Car, and I firmly believe you will start seeing electrification in many more vehicles once the technology comes down in price.

      Volt Gen 2 will see the Cadillac ELR, and some other body styles to share the cost. I also wouldn't mind seeing a less expensive Volt with a series hybrid drivetrain like the Prius, to compete on that level.

      In short, let the naysayers bitch. Go drive a Volt...you WILL be impressed. I was.
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      09-10-2012 11:08 AM #21
      Quote Originally Posted by Blonde Guy View Post
      Looking at it from the point of view of someone who likes to drive, I have to say both the Plug-in Prius and the Volt both come up a little short.

      But I want a car that both drives nicely and has pretty versatile cargo space for long trips.
      Have you driven a Volt? It drives quite nicely, and is more than reasonably quick.
      I love cars, but the problem is they are like schroedinger's hobby. They're always in a quantum superstate of being both awesome and a huge waste of time and money... until observation momentarily forces them into one state or another.

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      09-10-2012 11:08 AM #22
      I've read articles on the Volt where anti-Obama dealership owners were refusing to stock or sell Volts. Politics have certainly impacted this car's sales, but I also think that the relatively low cost of fuel is hampering its sales as well. Electric cars in general don't really represent a good ROI for your average consumer. I love the idea of electric cars, and would love to be gifted a Volt, Fisker, or Tesla, but I don't think I could justify buying one. I take a train to work, but even if I was to drive the full 35 miles or so, a standard 4 cylinder family sedan could make the roundtrip commute and only use 2 gallons of gas a day. A $26K Malibu or $20K Cruze delivering mid to high thirties on the highway are viable in-family deterents against buying the Volt.

    23. 09-10-2012 11:11 AM #23
      Quote Originally Posted by Blonde Guy View Post

      But I want a car that both drives nicely and has pretty versatile cargo space for long trips. I can't see plug-in technology failing in the long run, and GM needs to have the cars out there to gain experience.
      .
      You really need to drive a Volt.

      It is NOT appliance like at ALL. In fact, it does a pretty darn good sport sedan impression. And it has plenty of room for a small family.
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    24. 09-10-2012 11:12 AM #24
      Quote Originally Posted by whitejeep1989 View Post
      I've read articles on the Volt where anti-Obama dealership owners were refusing to stock or sell Volts. Politics have certainly impacted this car's sales, but I also think that the relatively low cost of fuel is hampering its sales as well. Electric cars in general don't really represent a good ROI for your average consumer. I love the idea of electric cars, and would love to be gifted a Volt, Fisker, or Tesla, but I don't think I could justify buying one. I take a train to work, but even if I was to drive the full 35 miles or so, a standard 4 cylinder family sedan could make the roundtrip commute and only use 2 gallons of gas a day. A $26K Malibu or $20K Cruze delivering mid to high thirties on the highway are viable in-family deterents against buying the Volt.

      Not against a Prius. We got ours for under $25,000 and its equipped in some ways better than a top of the line Cruze. And we can easilly...EASILLY double the fuel economy over the Cruze.
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      09-10-2012 11:16 AM #25
      Quote Originally Posted by GolfVIDriver View Post
      Not against a Prius. We got ours for under $25,000 and its equipped in some ways better than a top of the line Cruze. And we can easilly...EASILLY double the fuel economy over the Cruze.
      A standard Prius and Volt are two different technologies, thus two different prices.

      The plug-in Prius and Volt are more closely matched in technology and pricepoint.

      I was comparing the $35K-$40K price of the Volt against sub-$30K ICE vehicles.

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      09-10-2012 11:17 AM #26
      Quote Originally Posted by GolfVIDriver View Post
      You really need to drive a Volt.

      It is NOT appliance like at ALL. In fact, it does a pretty darn good sport sedan impression. And it has plenty of room for a small family.
      This gives me high hopes for the Caddy ELR, which I assume will be lighter than the 4 door Volt.

    27. Member Slipstream's Avatar
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      09-10-2012 11:27 AM #27
      Quote Originally Posted by Black R View Post
      I'd love to buy a volt.

      They have a good $249/mo lease right now that is so tempting.
      I have to admit, this deal even has ME curious (and I hate sedans). Why in the hell isn't GM marketing the hell out of this though? So many people lease other 4-door sedans of the same size/form, that would be happy to pick up a car that may never need gas for their 10-15 mile round-trip commute. Most people I talk to think the Volt costs entirely too much, if they've even heard of it at all.
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    28. 09-10-2012 11:29 AM #28
      I have to agree - I just drove one and loved it. Much quicker and better handling than I expected. My biggest concern is the almost useless trunk. I am hoping that the rumors of a volt wagon/MPV in the future are true.

      BTW, if you use the same logic regardind losing money per vehicle - how much $$ per Passat is VW losing right now? If you use the same math as the article you need to take the entire cost of the new factory in TN and spread it out over each vehicle sold.

    29. 09-10-2012 11:50 AM #29
      Quote Originally Posted by whitejeep1989 View Post
      A standard Prius and Volt are two different technologies, thus two different prices.

      The plug-in Prius and Volt are more closely matched in technology and pricepoint.

      I was comparing the $35K-$40K price of the Volt against sub-$30K ICE vehicles.
      Different, but similar. There is a place for hybrids in your arguement, and I was just pointing it out.

      I made the same mistake when we were car shopping, and we ended up trying a Prius by accident.

      There needs to me more cars like the Prius. I wish the Volt were a bit bigger, and a bit cheaper, so it competed with the regular Prius. I'd have bought it.
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      09-10-2012 12:16 PM #30
      Quote Originally Posted by Shomegrown View Post
      TTAC sucks, here's a better article.
      GM is still losing as much as $49,000 on each Volt it builds, according to estimates provided to Reuters by industry analysts and manufacturing experts.
      I assume this number is based on the number they estimate and noted in the same article a few paragraphs down ($75k) which supposedly includes total investment.

      1) I can't say anymore than this: Somebody is pulling numbers deep from the dark regions of his/her intestinal tract.

      2) To try to roll in ALL of the investment on the Volt only into the estimates of the Volt "losses" are stupid considering a lot of the most important investment was in the R&D/engineering (product & process) will be used to help other non-Volt products like the Spark EV and whatever else they come out with that are non-Volt-related.

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      09-10-2012 12:25 PM #31
      Quote Originally Posted by Shomegrown View Post
      They also told suppliers they were going to sell 100k+ of these a year. Then that went to 80k. Then 40k. And now we're on target for 20k. Something tells me their profitablity calculations may need some tweaking too.

      Damned if they do, damned if they don't. Don't get me wrong, I like the Volt and respect what they've done. I'm definitely not a hater on this one and don't care at all about the political aspect. I'm just saying it's going to take a near miracle to make this one turn the corner and get out of the red.
      You know well that in this industry... there are (2) groups of product planning (volume) people:
      1) Those that have a clue.
      2) Those that need Betty Ford.

      The original estimates for Volt were pretty spot-on. The recent numbers... well, I'll leave that to those who made them up (i.e. People were excited about the generally good responses from media.).

      But the real issue is what amount of $$$ was actually wasted on buying processes to make such lofty numbers. And that depends on the MFG process design one chooses.

      In my world... an upgrade had to be made eventually as the speed to market required a process that could not handle the volume demands (realistic) that were expected. The next process design provided the extra volume and (and this is very common with processes) in order to go a step beyond that to even more lofty numbers is mainly a matter of throwing bodies (operators) at it (i.e. hiring people when and if the time comes). On top of that... at least half or more of the equipment used in MFG today is commodity/off the shelf and will be retooled to live on for the next project. In summary... the value of what was invested was there (i.e. A very efficient strategy was made to not further negatively impact the piece cost of an already $$$ vehicle.). That's a good thing.

      That's putting it as delicately and vaguely as I can put it without getting in trouble.
      Last edited by uncleho; 09-10-2012 at 12:28 PM.

    32. Member compy222's Avatar
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      09-10-2012 12:27 PM #32
      if i had a shorter commute i'd do it. the tech just isn't quite there or cheap enough yet. it's a great concept and cool car, but it needs time to make it all work. gas is still a little too cheap for it to work. if you saw 5/gallon, i think this would be a very different story.
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      09-10-2012 12:33 PM #33
      Quote Originally Posted by DMACK View Post
      There going to lose more money if it turns a new leaf. lol

      Wait till the desert gets ahold of them.
      Maybe you didn't realize it, but the Volt comes with active cooling. Liquid cooling. Actually a separate cooling circuit than what cools the engine.

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      09-10-2012 01:21 PM #34
      Quote Originally Posted by SSLByron View Post
      GM is damned if they do and damned if they don't. If they're out front on technology, they lose money. If they wait for it to be profitable on a per-unit basis, they're the "same old GM" that is too conservative to innovate.
      Fortunately GM does get some good press every now and again.
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      09-10-2012 03:14 PM #35
      From the horse's mouth...

      GM Response to Reuters Story on Chevrolet Volt Development Costs
      2012-09-10

      DETROIT – Reuters' estimate of the current loss per unit for each Volt sold is grossly wrong, in part because the reporters allocated product development costs across the number of Volts sold instead of allocating across the lifetime volume of the program, which is how business operates. The Reuters' numbers become more wrong with each Volt sold.

      In addition, our core research into battery cells, battery packs, controls, electric motors, regenerative braking and other technologies has applications across multiple current and future products, which will help spread costs over a much higher volume, thereby reducing manufacturing and purchasing costs. This will eventually lead to profitability for the Volt and future electrified vehicles.

      Every investment in technology that GM makes is designed to have a payoff for our customers, to meet future regulatory requirements and add to the bottom line. The Volt is no different, even if it takes longer to become profitable.

      GM is at the forefront of the electrification of the automobile because we are developing innovative technologies and building an enthusiastic – and growing – customer base for vehicles like the Volt.

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