Lutz: GM is OK with losing money on the Volt for a while
According to Bob Lutz, General Motors has known how to make a hybrid for years, but held off of building one because they projected that they would lose as much as $250 million per year building them. What they hadn't counted on, though, was that a huge perception gap would grow in the public eye between GM's technological know-how versus Toyota's, a gap that would end up costing the company much, much more than $250 per year. So Lutz is now clear they won't make that mistake again. "We won't make a dime on this car [the Volt] for years, and the board is OK with that." The unanswered questions remain: just how much is the Volt going to cost, and how much of a loss will GM take on each one? The answers to those important questions will surely make or break the future of the range-extended plug-in hybrid project from GM.
[Source: The Detroit News]
Reader Comments (Page 1 of 1)
rgseidl 4:55PM (3/20/2008)
What losing money on this means of course is that GM will have to sell even more gas guzzlers for a while to subsidize sales of the ultra-frugal Volt.
For the first few years of sales, the aggregate impact on GM's CAFE numbers will be neutral at best. Like Toyota's Prius before it, the Volt is literally a marketing vehicle.
There's a chance that demand will be strong enough for GM to break even after a number of years purely because of economies of scale. They're betting that American consumers always want the full E-REV version and eschew Toyota's more conservative PHEV concept that fires up the gas engine much sooner (cp. full vs. mild hybrid).
European and Japanese consumers seem to prefer incremental improvements.
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not again 7:22PM (3/20/2008)
It's all pointing downhill. HOW could you lose money on a car that has SO MUCH DEMAND??? OH I know why, because they're using the outdated mass production model and mentality. And why in the world would they take 4 years to make the Volt when they already had electric drivetrains in 96? uhh.. answer is simple, they don't want it to succeed. Nice PR stunt Lutz. Go sell some volts for a few years to image up GM and then cut them out for supposedly "not being profitable" scheme is all too clear and forseeable.
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Cervus 9:19PM (3/20/2008)
Notagain:
What makes you think that the electric drivetrain they developed for the EV1 is in any way applicable engineering-wise to a series hybrid like the Volt? There is so much new technology loaded into this car, including crash safety specifications that the EV1 did not have to meet.
Obviously you know nothing about the auto industry. Factory tooling isn't cheap. Labor isn't cheap. The batteries the Volt's supposed to get are untested for this application... and you guessed it... aren't going to be cheap either, especially for the first few years. Remember, even the Prius was a money loser for years before Toyota's costs came down enough for them to turn a profit. I suspect this is why we haven't seen a new Prius model since 2004, and won't until 2009. They had to make the money back on their investment.
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Chris M 9:54PM (3/20/2008)
Cervus: GM will most likely use an AC induction motor and controller similar to the one in the EV1, and I wouldn't be at all suprised if it was identical. They will likely revive the electric A/C used by the EV1 as well.
The biggest difference will be the battery pack, and most of the delays are with testing and development for the new LiIon batteries.
While the Volt will look different than the EV1, (4 seats instead of 2) aerodynamic considerations might cause the production Volt to more closely resemble the EV1 than the original concept model.
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mike 7:27AM (3/21/2008)
>> I suspect this is why we haven't seen a new Prius model since 2004, and won't until 2009. They had to make the money back on their investment.
Cervus, I wish GM had felt the same way about the EV1.
If the EV1 were still on the market they would have owned that market today.
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Mike Z 9:08AM (3/21/2008)
Chris Said
"They will likely revive the electric A/C used by the EV1 as well."
From what I heard the A/C on the EV-1 was terrible and almost useless on a hot day.
"If the EV1 were still on the market they would have owned that market today."
I keep saying this, the EV-1 is not a viable car, it was a expensive Honda Insight, it would of been canceled without question due to lack of refinement. Personally I would not pay the projected for an EV-1 if it was offered for sale. You could likely buy a Prius and a lifetime supply of gasoline for less.
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Tim 10:03AM (3/21/2008)
If free advertising and a HUGE PR boost is considered "losing money" then the entire advertising industry is in trouble. Then again, telling everyone that you’re loosing money because you care about them and the environment... that's priceless.
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mike 10:18AM (3/21/2008)
The EV1 didn't have to be so expensive to produce.
1) They could have build a Real Assembly Line
2) They could have attempted to sell it Nationally
3) They didn't have to build it with an aluminum frame: Honda Fit for example.
Come on we all know, they didn't want that car to sell.
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mike 10:42AM (3/21/2008)
Is this the start of the dingel boondoggle?
Doesn't ethanol have the 7x multiplier?
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Conspriacy theory 5:26PM (3/21/2008)
Lutz is so full it he forgot how to wipe. The Tahoe Hybrid was going to be priced in the middle of the already "re'cock'ulous" Tahoe Prices.
REMEMBER?
http://www.autobloggreen.com/2007/10/29/gm-two-mode-hybrid-suvs-to-start-at-about-40-000/
He already has now problem with 35,000 to 40,000
http://www.gm-volt.com/2008/02/11/chevy-volt-to-cost-about-35000/
My money Says production under 5,000. price over 40,000. Not for sale until model year 2011.
Complete failure.
To little, to much and to late, respectively
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