Tesla's advantage, and GM reportedly losing as much as $49K per Volt

[rogbmw]

It is interesting to see that most of us are so excited about Tesla and the Model S, especially when GM is having problems with the general public's perception of the Volt:

http://bottomline.nbcnews.com/_news/2012/09/10/13780299-gm-losing-as-much-as-49000-per-volt-sold?lite

 

[jkirkebo]

It is interesting to see that most of us are so excited about Tesla and the Model S, especially when GM is having problems with the general public's perception of the Volt:

http://bottomline.nbcnews.com/_news/2012/09/10/13780299-gm-losing-as-much-as-49000-per-volt-sold?lite

"It currently costs GM "at least" $75,000 to build the Volt, including development costs, Munro said. "

Yeah right. It's all in the development cost. You could just as easily say that the first Volt cost 1.2 billion dollars to build and they make money on all the Volts after that. This article is just putting a spin on things, making it sound like GM is losing more money the more Volts they sell. The truth is of course quite the opposite.

 

[ElSupreme]

"It currently costs GM "at least" $75,000 to build the Volt, including development costs, Munro said. "

Yeah right. It's all in the development cost. You could just as easily say that the first Volt cost 1.2 billion dollars to build and they make money on all the Volts after that. This article is just putting a spin on things, making it sound like GM is losing more money the more Volts they sell. The truth is of course quite the opposite.

Yeah these articles come out all the time. This would only be true if GM stopped making the Volt today (and even then they would be able to sell some inventory to lower this number). In reality GM will be able to use the Volt drive train for 10s of years to come with only small incremental improvements. After GM sells another 100,000+ Volts (or Volt derived cars) in the next 5 years that cost goes way down.

Hell I would hate to see how much the 20-50 Model Ss have cost! :scared:

 

[Doug_G]

"It currently costs GM "at least" $75,000 to build the Volt, including development costs, Munro said. "

Yeah right. It's all in the development cost. You could just as easily say that the first Volt cost 1.2 billion dollars to build and they make money on all the Volts after that. This article is just putting a spin on things, making it sound like GM is losing more money the more Volts they sell. The truth is of course quite the opposite.

Right. You could make the exact same argument about every product ever made. One month into selling the first iPhone they could have said, "those iPhones cost $2000 each; they're losing money hand over fist!"

 

[rogbmw]

Hell I would hate to see how much the 20-50 Model Ss have cost! :scared:

I know what you mean. I just thought it was in interesting article and the discussion on how few they are selling - especially when Tesla has such a long waiting list while GM can't sell many Volts.

 

[ekwng]

I think Tesla is doing the right thing - Produce top notch EVs to hit the premium sector first, then move down. People in such sector usually wouldn't mind paying extra for better everything to support a lifestyle they like, and of course a quick charger ;-) More importantly, Tesla has a big "WOW" factor.

If Volt is for "mass market", people in the sector usually need more time to see what others are doing...whether any trade-offs would worth it...any real day-one dollar saving etc etc...and no "WOW"! It would take much longer for GM to reach the critical mass they want.

2 cents

 

[ChadS]

I just thought it was in interesting article and the discussion on how few they are selling - especially when Tesla has such a long waiting list while GM can't sell many Volts.

GM sold 2,831 Volts last month. That's a rate of almost 34k units per year; higher than Tesla's highest projection for the Model S. They're selling more Volts than Corvettes. They're selling more Volts than Toyota sold Priuii when they were new. True, they aren't selling as many as some projection said, but I don't think "GM can't sell many Volts" is justified.

And the numbers would clearly be much higher if it wasn't for all of the negative press and misperceptions. I can't believe how many people I talk to that think the Volt has a 35 mile range limitation (they don't realize it has a gas engine). Or that have NO IDEA how much money they could save on fuel if they had one (they typically underestimate by a factor of about 4, so they don't realize long-term costs are similar to a Civic or Jetta). Or that think it drives like an econobox. It's MUCH nicer to drive than my Prius, and it would use an awful lot less gas if I had one; but the last few Prius buyers I spoke to hadn't even looked at the Volt.

The Volt has ridiculously high owner satisfaction ratings. It's a very nice car (not as nice as the Model S; but it costs a lot less); people just hate it because they've never ridden in and one and they've heard a lot of bad press like this so they assume the worst about it. As more get on the roads, and more people get rides in friends' Volts, I think sales will go up nicely. Well, PHEV sales anyway; I don't know that they'll all be Volts as there is a lot of PHEV competition coming out soon.

 

[daniel]

An article on Yahoo that I cited in the Volt thread said that lease prices are so low now that some drivers are getting the Volt for two years for a total of $5,050. That's going to cost GM big if those drivers don't buy the car at the end of the lease. And with the lease so cheap, and the depreciation, they'll have little incentive. I've criticized GM for pricing the Volt so high, but now they seem to be giving them away to boost sales numbers.

 

[brianman]

drivers are getting the Volt for two years for a total of $5,050.

Wow. I've paid more than that for a desktop computer. It was a good one but...

 

[Doug_G]

And the numbers would clearly be much higher if it wasn't for all of the negative press and misperceptions.

Just yesterday someone said to me, "I heard the Volt is pretty awful."

My response was, "Not at all. I've driven one. It's actually a pretty decent car." They looked skeptical.

 

[jerry33]

Wow. I've paid more than that for a desktop computer. It was a good one but...

Make that a lot more.

 

[pete8314]

Cheap journalism, this article seems to have been picked up by a lot of 'reputable' outlets (Reuters, Forbes) that should know better. Any R&D costs will be amortized across a number of years, and potentially for GM, across a number of existing product lines, not all of the technology in the Volt is PHEV-related. The article is littered with so many other half-truths it's not really worth the time to read it. Unfortunately, many people will just read the headline, think the Volt is a lemon, and move on, whereas the truth is the complete opposite. Some nice snippets:

Plug-in hybrids such as the Volt still take hours to fully charge the batteries - a process that can be speeded up a bit with the installation of a $2,000 commercial-grade charger in the garage

Actually the charge time can be halved, and the cost of the charger is subsidized, generally to less than $500

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

They're retooling part of the plant, and have been working additional hours to make up for the closure

The Volt also has a number of unique parts [over the Cruze], including the battery pack, the electric motor and the power electronics

Well, yes...and most of the interior and body panels.

And so on. The GM statement can be found here.

 

[rolosrevenge]

An article on Yahoo that I cited in the Volt thread said that lease prices are so low now that some drivers are getting the Volt for two years for a total of $5,050. That's going to cost GM big if those drivers don't buy the car at the end of the lease. And with the lease so cheap, and the depreciation, they'll have little incentive. I've criticized GM for pricing the Volt so high, but now they seem to be giving them away to boost sales numbers.

If this is true, I may just sell my A6, put half of the money towards a Model S, and drive a Volt around for 2 years. I'll serious check this out.

 

[GSP]

Cheap journalism, this article seems to have been picked up by a lot of 'reputable' outlets (Reuters, Forbes) that should know better. Any R&D costs will be amortized across a number of years, and potentially for GM, across a number of existing product lines, not all of the technology in the Volt is PHEV-related. The article is littered with so many other half-truths it's not really worth the time to read

The GM statement can be found here.

Well put. Bob Lutz's more colorful response here:

The Real Story On GM's Volt Costs - Forbes

GSP

 

[CapitalistOppressor]

Typical poor analysis pushed by interests which are biased against electric propulsion. It's not the end of the world, and it's a pale shadow of the pushback Volt was receiving 9 months ago. It didn't even attempt to claim that driving a Volt is akin to self-immolation.

As to the leases that GM has been offering, they are astounding. When you factor in your gas savings you are basically getting the car for free. GM is going to take a bit of a hit on this, but I think its still a smart move. The marginal loss is minor compared to the investment they have made (as is so helpfully pointed out in the article) while the payoff is huge.

GM badly needs 30-40k Volts on the road with happy drivers raving about it to their friends. No amount of advertising is going to overcome opposition at this point, so their best move is to put butts into Volt and let word of mouth work its magic to start breaking down the real barriers that they face.

For that matter, the barriers are not just their customers, but their dealers. Most Volt sales (at least anecdotally) have been coming from a small minority of dealers who have actually been making an attempt to effectively sell it. The recent lease promotions have involved huge incentives to dealers to sell the car. They need to continue that and get their sales force mobilized to actually push the product.

 

[pete8314]

For that matter, the barriers are not just their customers, but their dealers. Most Volt sales (at least anecdotally) have been coming from a small minority of dealers who have actually been making an attempt to effectively sell it. The recent lease promotions have involved huge incentives to dealers to sell the car. They need to continue that and get their sales force mobilized to actually push the product.

This is true. I'm sure there's plenty of Chevy salespeople not remotely interested in selling anything less than a V8. I had the misfortune of stepping into my local Chevy dealer about a year ago, and it was like going back 20 years. The rep would only talk to me, not my wife, and although smoking has been banned for a long time, you'd never know it from the state of the waiting room. I know not all Chevy dealers are like that, but I would imagine some of the Volts biggest cynics are on the dealership floors, and without those guys on board, you've got no chance. The cheap leases and massive dealer incentives will help move product, but will not fix the attitude.

If I could pick one up on a 2yr lease for $5k, I'd take one now, use it for 6 months til my S is ready, then pass it on to my wife. As long as we have one 'big car' between us, we'll be fine.

 

[stopcrazypp]

Well put. Bob Lutz's more colorful response here:
The Real Story On GM's Volt Costs - Forbes
GSP

Lutz said what I wanted to say. The people who did the math and wrote the original article are completely ignorant about how the finances work in the auto industry. They counted development and tooling into the costs using the currently sold volume, which is completely wrong, as development/tooling costs must be amortized over the ENTIRE planned volume that those costs cover. And in the case of the Volt, it covers more than one car (the ELR will be the second one).

I'm sure there's plenty of Chevy salespeople not remotely interested in selling anything less than a V8.

This is a problem with any of the plug-ins. I've heard it's mainly the same with the Leaf (esp. once you stray from the areas occupied by "greenies"). It makes sense why Tesla built their own stores.