We Knew It Was Bad -- Just Not This Bad --

Updates

September 24, 2012: more of the same.

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.  [Plus opportunity cost.]

September 11, 2012: Forbes analysis -- 

I was surprised to read Ben Klayman’s piece on alleged astronomical per-unit losses on the Chevrolet “Volt.” Ben is usually a solid professional who checks his facts.The statement that GM “loses” over $40K per Volt is preposterous. What the “analyst” in whom poor Ben Klayman placed his faith has done is to divide the total development cost and plant investment by the number of Volts produced thus far.  

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. 

And, yes, if after one year the building has no tenants and none on the horizon, the real estate company has lost not only $9 million but also the opportunity cost. Opportunity cost: money not allocated to profitable real estate deals. Of course, if the building has some resale value, all is not lost; and there are tax considerations. The same with the manufacturing facilities for the Volt.

It should be noted that GM will shut down the Volt assembly line, temporarily, for production to catch up with demand.

Later, 4:30 pm: wow, for a story that I thought was a throwaway, the Volt story has been all over the news today. Now GM is disputing Reuters numbers, saying that with every Volt sold, the Reuters numbers are "more" wrong. It's going to take a lot of Volts to "average" that $89,000 down to $20,000. Remember, they are leasing some of those cars for less than $5,000/2 years with that monthly $169 lease that was reported earlier.

Later, 4:00 pm: wow, when it rains, it pours. Articles everywhere today about the cost of the Volt. My first link at the original post appears to have been an "abridged" edition of the original Reuters story which contained a lot more information. The comments are as interesting, if not more interesting, that the story itself. I think the new question is how long will GM continue to sell the Volt in its present configuration. Even Apple/Steve Jobs knew when it was time to "kill" the Newton, technology way ahead of its time, but not ready for prime time.

Later, 12:30 pm: I was going to leave this post alone, but I got a great comment from a reader that I wanted to post, but it was inappropriate for language content. For some reason, he thought the EV technology was "great."

I have no dog in this fight. I don't drive electric cars; I don't own electric cars; I don't own shares in GM. All I'm doing is providing a bit of transparency for those who are interested in electric cars.

So, here's a first-hand account of one's experience with charging electric cars.

I've recently had two plug-in cars. The first was a Fisker Karma, a beautiful $100,000 performance-tuned car with 30-mile all-electric driving range, after which it ran on gasoline power. And thank goodness it could.  

The second was a Mitsubishi (MMTOF) i-MiEv, an all-electric car with a roughly 60 mile range. In that case, the headaches started with the car itself. Sorry, Mitsubishi but the i-MiEV is awful. It's ugly, uncomfortable, and it performs like a dog sled in the desert.  

If you live in a city and are thinking about making the leap to a fully electric car, I recommend carrying a large bottle of Tylenol in the center console because your headaches will be epic.

The story at the link is priceless.

Original Post

Link here.

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, ...  

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 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.

The all-electric Ford Focus: 76-mile range.

The lease offers refer to $169/month (at the second link above).