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Reuters: GM Is Losing Nearly $50K on Each Electric Volt

Sep. 10, 2012 12:34pm Becket Adams

General Motors Posts a $50,000 Volt on Each New Volt

In this photo taken Thursday, Aug. 30, 2012, Jim Allison has the electrical cable plugged in charging his Chevy Volt as he discusses his perceptions of the battery-powered car at his Bloomington, Ind. home (AP)

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, yeah, and Volt production has been put on hold at GM’s Detroit-Hamtramck plant.

What we’re trying to say is that it will be a very, very long time (if ever) before GM makes a profit on the Volt.

The problem with the car is that “the Volt is over-engineered and over-priced,” according to Dennis Virag, president of the Michigan-based Automotive Consulting Group.

But hey! If it’s any consolation to GM, Nissan, Honda and Mitsubishi are all having a hard time marketing their electric and hybrid models as well. But even that minor bit of consolation disappears when you consider the fact that Toyota has had great success with its Prius model (meaning it’s possible to have a successful electric-hybrid).

“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,” the Reuters report reads.

“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,” the report adds.

But more than just steep prices, many Americans simply prefer a car that gets better mileage and has the infrastructure in place to help charge and maintain it.

“It’s true, we’re not making money yet” on the Volt, Doug Parks, GM’s vice president of global product programs and the former Volt development chief, told Reuters in an interview. The Volt “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,” he added.

But some analysts disagree with Parks.

“I don’t see how General Motors will ever get its money back on that vehicle,” said Sandy Munro, president of Michigan-based Munro & Associates, which specializes in vehicular analysis.

It currently costs GM “at least” $74K to produce the Volt, including development costs, Munro added.

“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,” Reuters notes.

Again, as stated earlier in this article, with these type of costs tied into the vehicle’s production, it may be a very, very long time (if ever) before GM sees a profit on the Volt.

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This story has been updated.

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Comments (85)

ThePostman
Posted on September 10, 2012 at 1:41pm
America is quietly speaking with its pocketbook – we refuse to buy GM products because we do not believe in government intrusion into our lives. Even at heavily discounted and subsidized prices at GM, Americans are choosing Ford, or any Japanese car. That should say something.

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- Ben__Franklin
  Posted on September 10, 2012 at 1:56pm
  You got it. GM could be giving their vehicles away and I would not get one. I will not purchase ever a Chrysler/Fiat or GM Product again. We have one true American car company left and its Ford. Besides, if you also decide to purchase a Toyota or Honda at this time in our Country – you are supporting hundreds of thousands of American Auto Workers here in the states. You do not have to be a slave to the UAW to be an American Auto Worker. The UAW does not own what those words mean.
  
  Report this comment
- yougottabekidding
  Posted on September 10, 2012 at 2:43pm
  I have never heard any cost for charging these pieces of dung.
  And with the ” necessary rise in the cost of electricity” that his majesty has proclaimed what they will be, or how they will be recharged when there no longer is plentiful electric even at exorbitant prices.
  
  Report this comment
- freenj
  Posted on September 10, 2012 at 2:52pm
  Right now since the economy is hard on my budget, I am not in the market for a new car, and if I were, I agree I would not be looking at GM or Chrysler. Ford or Lincoln yes, never ever GM or Chrysler!
  
  Report this comment
- FREEDOMoverFEAR
  Posted on September 10, 2012 at 3:43pm
  The Postman
  
  GM sales are fine for other small cars, much higher than Ford so I’d disagree with you that American’s are mad about the bailout. They just don’t like the Volt.
  
  Report this comment
- Harmod
  Posted on September 10, 2012 at 4:53pm
  Right now, I am not in the market for a car. But when I next shop for a car, I’m going to be a bit more critical than other people I see commenting here. Not only will I not buy a GM or a Chrysler product, but I’ll avoid Ford as well.
  
  All three employ UAW members, who pay dues to the thug union and support every leftist cause that is destroying our country. To buy their cars is to contribute to my country’s destruction.
  
  Likewise, several of the Japanese auto manufacturers support left-wing political causes here.
  
  So, I’ll buy a Hyundai or a Kia — unless they start dabbling in left-wing politics. If that happens, I suppose I’ll buy a used Yugo.
  
  Report this comment
- Bohump
  Posted on September 10, 2012 at 6:19pm
  Wait till they change the Law, … So you have to Buy one. .. or you go to jail !
  
  Report this comment
- RWCT
  Posted on September 11, 2012 at 8:15am
  According to Liz Warren, Barry only invested in GM, NOT people, since a corp is not people. so the 26 billion LOST, cannot be blamed on the union workers!
  
  Report this comment
- Clive
  Posted on September 11, 2012 at 1:55pm
  GM doesn’t lose 50k per volt sold, jesus.
  Reuters just fails at math, which shouldn’t surprise us.
  
  http://www.ibtimes.com/articles/382612/20120910/general-motors-gm-chevy-volt-cost-losses.htm
  
  Report this comment
- rickc34
  Posted on September 12, 2012 at 10:04am
  Obama and the left will use fuzzy math to cover this one up just like everything else they do.
  
  Report this comment
Jenny Lind
Posted on September 10, 2012 at 1:36pm
During the early 90′s my hubby worked for GM. There were electric cars covered in paper at the old Van Nuys testing center. They couldn’t sell them. So what is the definition of crazy? No different outcome this time, just cost America more.

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sanchezpaulk
Posted on September 10, 2012 at 1:30pm
Prima facia of what the US government tries to force people to buy, it becomes a loss for all. You cannot force change on the free market as it is their own money, not what the US government has borrowed and then given away.

Shut it down, shut it down now.

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moreteaplease
Posted on September 10, 2012 at 1:22pm
“Oh, yeah, and Volt production has been put on hold at GM’s Detroit-Hamtramck plant.”
——————————————————
Pending the outcome of the election? I’m betting that if we hand Obama his eviction notice, the big push to produce deathtraps, like the Volt, in the name of green energy and all of the “save the planet” hokum, will fade into the pages of a disastrous history.

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- ProbIemSoIver
  Posted on September 10, 2012 at 1:40pm
  They don’t call them ******** for nothing.
  
  Whats the update on all the Millions of birds slaughtered by wind turbines.
  
  How about an update on the Delta Smelt. They Shut off a majority of California’s water supply to farmers while the World Supposedly is facing a food shortage.
  
  Are we still paying farmers not to farm ? lol. unreal.
  
  I am tired of these morons and clowns destroying my Country, World and the quality of my life !!!
  
  Report this comment
barber2
Posted on September 10, 2012 at 1:21pm
Remember the Volkswagen ?! Guess the Volt is Comrade Obama’s American ” People’s Wagon.” Probably the Democrats version of the ” Affordable” Car Act !? Just another Democrat economic time bomb . This one on four wheels.

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Detroit paperboy
Posted on September 10, 2012 at 1:15pm
It’s only monopoly money………………………….

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term limits for congress
Posted on September 10, 2012 at 1:12pm
They will make it profitable – the ‘Chicago’ way. Issue government recalls on the competitor’s hybrids and force them to make costsly changes. Force the competitors to use the Volt batteries/electronics. Force competitors to buy their parts from GM.

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LarryXII
Posted on September 10, 2012 at 1:07pm
“I don’t see how General Motors will ever get its money back on that vehicle,” Sandy Munro, president of Michigan-based Munro & Associates, which specialized in vehicular analysis, disagreed.

Should say GM will never get the Taxpayers money back from that vehicle, until Obama’s next stimulus that is.

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SycamoreFan
Posted on September 10, 2012 at 1:02pm
We’re going to take tax payer money to help you build this car, then we will take tax payer money to help people buy the car. Comrade Mikael Gorbachev would be proud.
_____________
77% of Americans say Voter ID laws are a step in the right direction.
Hussein says BACK OFF!

67% of Americans say our country is headed in the wrong direction.
Hussein says FORWARD!

Someone is out of touch.

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- thibx
  Posted on September 10, 2012 at 1:12pm
  lying corrupt God hating, Israel hating, queer loving demonuts headed up by oboma
  
  Report this comment
SamIamTwo
Posted on September 10, 2012 at 1:02pm
I bet that is a conservative figure. Prob much higher. Typically coos have two sets of books. One is optimistic (they show you that one) and the other is pessimistic (reality with the hopes of getting well).

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bannedfromCNN
Posted on September 10, 2012 at 1:01pm
Soetoro must have been ‘absent’ and not ‘present’ the day economics were taught.

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- barber2
  Posted on September 10, 2012 at 1:25pm
  Soetoro was mentored in Communism by Davis. That was his early economics exposure. Maybe why the later course of studies of the Obama records are hidden from view.
  
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jackact
Posted on September 10, 2012 at 1:01pm
Please someone tell President Kardashian that he bailed out the UAW and their pension plans….and obviously NOT the auto industry.
At $20@ share GM stock value has depreciated 60% since President Kardashian ‘took charge’
:(

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- freenj
  Posted on September 10, 2012 at 1:17pm
  Right now $23.20 and down 17 cents. Big loss absolutely correct.
  GM should have gone bankrupt and probably will 2-3 years down the road.
  
  Report this comment
- Anonymous T. Irrelevant
  Posted on September 10, 2012 at 1:40pm
  Not only that, but GM. and Tom Hanks LIED to America that they paid back the loans they owed to us.
  They still owe something like 38 Billion on the bailout for the car division and 17 Billion on the lending division. They looked us square in the eye and LIED to us. I guess that’s the Obamucrat way. Lie with a smile on your face, all the while thinking of other ways to screw you. NOW, they are about to go bankrupt again. This time, they can do it like everyone else.
  
  Report this comment
valleyfever
Posted on September 10, 2012 at 1:00pm
Educated in the American school system the American consumer/taxpayer/Obama voter probably thnks that this math makes sense. Of course that isn’t the same math that got us to the moon but it sure sounds good, just like all the government’s employment statistics do. If you know fifth grade math you know it is all lies.

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00gabooga
Posted on September 10, 2012 at 12:56pm
I’m never buying a GM product again after this whole debacle, hybrid or otherwise. I would have had more respect for them if they had gone through a bankruptcy restructuring instead of caving in to the unions.

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- thibx
  Posted on September 10, 2012 at 1:16pm
  i would not take one if it was free and i hate unions. corrupt politians and unions destroy.
  
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coyote1hell
Posted on September 10, 2012 at 12:51pm
Another one of Big “(o)’s fool projects…with your Money…and not a shovel in sight…Good-Bye Barry…..

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RANGER1965
Posted on September 10, 2012 at 12:48pm
Proof once again that despite the goverment’s fervent hopes, and dreams, their’s still no such thing; as a free lunch.

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- SCREW-WINDOWS
  Posted on September 10, 2012 at 3:36pm
  GM is dead they just have not come to terms about it yet because unions eat their own.
  
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Daniel4
Posted on September 10, 2012 at 12:48pm
If I promise NEVER to buy a Chevy Volt, will Government Motors pay me $24,5000.00? This would cut their loss per car by 50%..

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Cabo King
Posted on September 10, 2012 at 12:48pm
Gm and Ge two of the worst companys on this planet…..pay no taxes and run by union thugs and propped up by tax payers bailout money!!!! shame on us…thanks Obummer

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commonsenseguy
Posted on September 10, 2012 at 12:48pm
but why obama said it was going to sell like hot cakes and we all know if he says it, it is the truth why do you thing he gave us all that bail out money not because we needed it,because he wants us to us it to help get him reelected and to help us when we can not keep our union workers on the line, he has our backs and he will force America to buy and drive this piece of crap car he is god ya know he can fix anything with executive orders,

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- SCREW-WINDOWS
  Posted on September 10, 2012 at 3:42pm
  To keep up with demand I think they could shrink the work force down to 2.
  
  Report this comment
floridareader
Posted on September 10, 2012 at 12:46pm
GM is alive!!!!, or so Joe Bidenopoluos says

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- commonsenseguy
  Posted on September 10, 2012 at 12:55pm
  they may be alive but only because they are on life support,we need to pull the plug we all know they will never be the same no matter if they start showing improvement we need to put them out of their misery i mean our misery { the taxpayers }
  
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- Gonzo
  Posted on September 10, 2012 at 1:10pm
  You could keep a steam locomotive company alive by handing them $60 billion. You could keep the Pony Express going with $60 billion. It’s not hard when you have unlimited accesss to other people’s money.
  
  Report this comment
- commonsenseguy
  Posted on September 10, 2012 at 1:15pm
  @gonzo, the government could give me a half of a half of a half of half of 60 billion and i could live on easy street man i could go fishing everyday , wow my wife would love the fact that i was not at home bugging her everyday, o well wishful thinking she will just have to continue to put of me another 25 plus years,
  
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- floridareader
  Posted on September 10, 2012 at 1:19pm
  @ Common, That is exactly my point. Just like you now, I have said the same thing in other posts regarding the life support that keeps GM breathing.
  
  Report this comment
repairsea
Posted on September 10, 2012 at 12:45pm
Then stop making them or figure out how the Japanese succeeded. Remember, int he 60s, the Japanese use to come to the US to our design colleges to learn industrial design because their products were failures. The US was the best. We can be great again if we vote out these socialist.

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Gonzo
Posted on September 10, 2012 at 12:41pm
That’s OK, we’ll just hand them another $60 billion to make up for their losses.

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- commonsenseguy
  Posted on September 10, 2012 at 12:51pm
  and for obamas reelection bid, @gonzo, just came back from fishing did pretty good, now i must go to work and make up for playing this morning,was still fun and well worth it, have a great day.
  
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bpodlesnik
Posted on September 10, 2012 at 12:39pm
To be fair, Toyota was losing money on every Prius they sold before they eventually made profit. Now they sell like hotcakes and you can’t go a day without seeing one.

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- Charybdis
  Posted on September 10, 2012 at 12:47pm
  Yeah, but what were the production vs. base costs of the Prius? I suspect they were far closer. And with Toyota, you didn’t have the bad blood that now exists between free-market Americans and the bailed-out, government-owned GM. There are many people who will never buy another GM car out of principle, regardless of value.
  
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- My Two Cents
  Posted on September 10, 2012 at 12:47pm
  To be fair, Toyota did it with their own money.
  
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- OhioRifleman
  Posted on September 10, 2012 at 12:48pm
  I wonder where you live, I haven’t seen one Prius in, well, ever. Not one.
  
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- bpodlesnik
  Posted on September 10, 2012 at 1:00pm
  @Chary,
  
  I totally agree, just was trying to let the uneducated know that a car can still be successful later in the long haul while losing money right away.
  
  @My Two Cents,
  
  Actually Toyota did receive incentives from their government to help the Prius.
  
  @Ohio,
  
  Do you live in a cardboard box? I live in the backwoods of PA and still have seen MANY Prius’s.
  
  Report this comment
- OhioRifleman
  Posted on September 10, 2012 at 1:16pm
  @ Bpole
  
  No cardboard boxes involved in my housing arrangements. Maybe I’m not looking in the right area, or for the right form factor, but I’m just not seeing them in my area (south central Ohio). I certainly don’t know anyone that owns one.
  
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- Gonzo
  Posted on September 10, 2012 at 1:36pm
  The Volt will do better in Obama’s second term, when gasoline is $8 a gallon.
  
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teddrunk
Posted on September 10, 2012 at 12:39pm
Ah, liberal financial genius at work again. A product that costs you 50K each to sell.

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- Gonzo
  Posted on September 10, 2012 at 3:02pm
  It cost us, the US tax payer 50K each.
  
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cubber
Posted on September 10, 2012 at 12:39pm
Free enterprise???

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