Green Room

General Motors is Alive…Car Company loses $49,000 For Every Volt Produced

posted at 7:22 am on September 11, 2012 by

Whew! Thank God I got in before the 38 mile mark

Even a $7,500 government bribe couldn’t curb this catastrophic financial loss.  Becket Adams at The Blaze wrote on September 10 that “General Motors posts a $49,000 loss for each new Volt plug-in hybrid it produces, Reuters reports. You know what this means, right? It means that for each new Chevy Volt, the taxpayer bailed out company loses what the average American makes in a year. And on top of that, rock bottom lease offers made during the summer may have inflated the above number. According to the report, some motorists paid only $5K to drive around in a new $80K Volt for two years.”

Oh yes, GM is alive!

Let’s see what’s wrong with the car.  According to Lloyd Billingsley at MyGovCost.org, the car:

can travel only 38 miles on battery before it needs a plug-in. The sales slump has prompted General Motors to halt Volt production for a month, the second time this has happened. Problems with Volt go beyond its limited range. The electric motor does not pollute, it is true, but the electrical plant that charges the battery does generate emissions. That reality does not show up in federal incentives. Neither does the reality that the electrical grid was not constructed for the charging demands of electric cars. These tend to be charged at night, when alternative sources such as solar and wind are not effective. Batteries do not last forever and disposal can be a problem. Likewise, biofuels enjoy federal incentives but also have an environmental downside.

Furthermore, “Government investment needs to spur technological development, not simply entrench and institutionalize first-generation efforts to ‘green’ the car culture, explains Dr. Amy Kaleita.”  Billingsley concludes that “spurring technological development, and making better use of our own energy reserves, would be a better plan than $7.5 billion in wasted subsidies for a policy and product Americans aren’t buying.”

Amen brother.

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It’s in the public interest.

tom daschle concerned on September 11, 2012 at 8:28 AM

I think we need to be fair about the difference between average cost and marginal cost. Any new product is going to have huge average cost since that cost includes the initial cost of start up materials and infrastructure. The more important question is the marginal cost that is applied as more and more products come off the assembly line.

Do we have information modeling the marginal cost of each Volt?

PackerBronco on September 11, 2012 at 10:16 AM

Wait a minute. How can General Motors be alive? As Elizabeth Warren told us last week, “Corporations are not people. People have hearts, they have kids, they get jobs, they get sick, they cry, they dance. They live, they love, and they die.” GM is a corporation, not a person, right? So how can it be “alive” like a person?

J.S.K. on September 11, 2012 at 10:25 AM

Do we have information modeling the marginal cost of each Volt?

PackerBronco on September 11, 2012 at 10:16 AM

At present, the retooling and other costs that factor into that are about half the total cost of the car. There are a lot of parts in the car that are unique to this model, not the least of which is their incredibly complex battery.

So when (if?) GM sells enough cars to bring that down… taxpayers will still be losing about $9000 on the car, plus the $7500 federal incentive, plus the difference whenever a car is leased rather than sold.

The Schaef on September 11, 2012 at 10:52 AM

Not counting fixed and sunk costs, each Volt costs GM about $30K to make, so each individual Volt is profitable. To be honest, it usually costs about a billion dollars to bring an all new conventionally powered car to the market. If there are new engines or transmissions involved, add another half billion or more. That’s just what it costs to design and engineer the car and get the factory ready for production. The fact that GM only put in about $1.2 billion into developing the Volt is very impressive when you consider that they had to develop an entirely novel drivetrain.

I really wish my fellow conservatives would stop unfairly maligning the Volt as a fire hazard. No Chevy Volts in customer hands have caught fire. A single, one, 1, uno, Volt caught fire is a government testing facility three weeks after a side pole impact and rollover test. Meanwhile at least 8 customer owned MINIs have caught fire spontaneously, and BMW, Ford and other manufacturers have active recalls for actual fire hazards involving hundreds of thousands of cars. There are at least 200,000 vehicle fires every year in the US. About 800 of those in the last year were spontaneous, igniting while parked. Not one of them was a Chevy Volt.

The truth is that if NHTSA tested all cars in the same state that they tested the Volt, which was fully charged, they’d have fires all the time. With gasoline powered cars they drain the fuel tank before the crash test and even disconnect the starter battery.

Interestingly, lost in the news about how much GM is losing on the Volt program (Toyota lost plenty on the first generation Prius and your grocery store sells you your Thanksgiving turkey at a loss too – the idea is that the enterprise is profitable, not every individual product) is the fact that head to head at least some Toyota Prius customers prefer the Volt. The Prius is the number one trade in on the Volt. The fact that Prius owners are willing to trade up to the more expensive Volt shows that at the least, that car’s target market is impressed with it.

rokemronnie on September 11, 2012 at 11:45 AM

Another Hot Air article about the Volt. Your opening sentence makes it clear you don’t even understand the car you are writing about.

GM is making a healthy profit in the US and that is despite any losses related to the Volt. GMs losses are in Europe and over the next year you can expect some serious restructuring there. Hot Air has made up it’s mind that the Volt and electric cars generally are worthless but it actually makes sense to develop this technology now. GMs fastest growing market is China and to remain competitive in that market they will need to have electric cars to sell there.

Hating the Volt and the technology it represents is not conservative. Hot Air is running circles around itself trying to poo poo the car and GM and it is just misplaced partisan bunk.

lexhamfox on September 11, 2012 at 12:16 PM

Hating the Volt and the technology it represents is not conservative. Hot Air is running circles around itself trying to poo poo the car and GM and it is just misplaced partisan bunk.

lexhamfox on September 11, 2012 at 12:16 PM

I don’t hate the Volt, I do hate the fact that I’ve paid for a car that I don’t get to ride much less own.

PackerBronco on September 11, 2012 at 3:16 PM

GM is making a healthy profit in the US and that is despite any losses related to the Volt

they’re still in debt – they still owe “more than half the $50 billion in federal funds it received when the combination of the recession and its costly union contracts drove it into bankruptcy. And its lending arm, GMAC (now Ally Financial), still owes $14.5 billion.” – http://news.investors.com/ibd-editorials/043012-609777-general-motors-not-really-repaying-taxpayer-bailout.htm

And yes, I do think the volt is worthless – http://newsbusters.org/blogs/seton-motley/2012/07/17/media-fail-chevy-volt-makes-gm-no-money-costs-taxpayers-hundreds-thous

Matt Vespa on September 11, 2012 at 4:13 PM

Ahhhhhhh….GM…. Government Motors

Roflmao

donabernathy on September 11, 2012 at 10:39 PM