A recent report from Reuters says that General Motors is losing as much as $49,000 on every Chevrolet Volt that it makes. The automaker, however, is disputing those claims.
Charged up over Chevrolet Volt
GM sold 2,831 Volts in August. That is more than in any other month of its two-year history. However, according to Reuters, with an estimated $1.2 billion invested into the plug-in hybrid vehicle, it still has not made enough in sales to pay for itself, and likely will not do so for several more years.
Dennis Virag, president of the Michigan-based Automotive Consulting Group, said:
“The Volt is over-engineered and over-priced.”
The Volt’s base cost is nearly $40,000, putting it out of the price range of many potential buyers. Volt’s cheap summer lease program, meant to drive sales, may have added to the problem, exacerbating the loss. Some have been driving new Volts for the price of vehicles bought from used car dealerships.
According to NBC News:
“Some Americans paying just $5,050 to drive around for two years in a vehicle that cost as much as $89,000 to produce.”
The loss per vehicle will decrease with time, as more Volts are sold. But Reuters predicts that will be no time soon.
Automaker disputes claims
General Motors, however, is disputing Reuter’s estimates, calling them “grossly wrong.”
The automakers says the development costs are traditionally spread out over the the entire run of any given model. Since the Volt is still being made, those calculations are premature.
While GM admits it is losing money on the Volt, it would not reveal its own numbers on the matter. It said only that its investment will see fruit over the long haul.
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GM said in a statement:
“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.”
Right wing politicians have dubbed the Volt “the Obama mobile” because of tax money spent on green car incentives and the Volt’s relatively low rate of sales. However, the Volt was shown as a concept in 2007, two years before Obama’s inauguration.
State Representative Tom McMillin, (R-Mich.) said of the Obama Administration and the Volt:
“It just goes to show there are certain folks that will spend anything to get their vision of what people should do. It’s a glaring example of the failure of central planning trying to force citizens to purchase something they may not want.”