Chevy Volt will cost GM $750 milllion
by Jeremy Korzeniewski on Dec 9th 2008 at 8:01PM 
We've heard time and again that it's really expensive to develop a hybrid, electric car or extended-range electric car. Chevy's upcoming Volt not only has a battery large enough to allow an announce range of 40 miles in electric-only mode, but it also uses a brand new engine design that's not used in that exact form in any other platform. You might imagine, then, that the Volt will be even more pricey to design than the average EV. You'd be right. According to the business plan that GM submitted to Congress, the Volt program will cost nearly $750 million to develop before it's all said and done. To top it all off, the car won't be profitable for at least the first few years that it is in production thanks to the high cost of its battery.
Still, GM seems to have learned an important lesson as it fell far behind in hybrid technology, which was another extremely expensive bit of kit to create and the court of public opinion has dictated that the cost is worth it. So, despite the fact that The General won't make any money on the Volt until around 2016, don't expect the automaker to put the brakes on the program any time soon.
[Source: CNN]
Reader Comments (Page 1 of 2)
sh 8:13PM (12/09/2008)
What? No greenie comments on GM's efforts?
Not surprising.
I'm throughly convinced that you won't be happy until all manufacturing efforts are out-of-sight, out-of-mind in some third world country.
That way you can laud the efforts of those like John Goodwin and Elon Musk who builds cars only celebrities can afford.
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GoodCheer 8:44PM (12/09/2008)
sh: I think by reading (and commenting no less) on this site, you're a greenie too.
Andrew 9:34PM (12/09/2008)
Also sh, us "greenie's" are just not as glued to ABG as you think...maybe wait more than 13 minutes after the blog posting before calling us quiet.
jharlan 10:25PM (12/09/2008)
PHEVs will be the answer until e storage technology catches up. Then it will be capacitor powered EVs. Diesel, Flex, Fuel cell, and Hydrogen, all will go by the wayside because diesel and flex have a carbon footprint and fuel cell and hydrogen infrastructure problems are too expensive to solve. We will suffer having hydrogen shoved down our throats because the oil companies can produce it, and they have the money to influence our government (we have the best government money can buy).
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Hank 9:00PM (12/09/2008)
Relatively speaking, that's pretty cheap. The 1986 Ford Taurus (a real game-changer at the time) was a $3 billion gamble. That's $5,602,676,985.63 inflation adjusted to 2007 dollars (the calculator I used didn't go to 2008 yet).
Not bad, then, the price of the Volt.
http://www.caranddriver.com/reviews/hot_lists/high_performance/best_worst_lists/1986_10best_cars_10best_cars/1986_ford_taurus_mercury_sable_10best_cars
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PeekOyle 10:08PM (12/09/2008)
I know this has been said many times before.
But GM lost something like 30+ billion last financial yr.
Now they are spending 750million on a game changing vehicle that will save the company.
Sounds like a bargain to me.
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Chris M 10:13PM (12/09/2008)
The reason GM won't turn a profit for the first few years is that they will have to pay back the amortized cost of development. After all, it took about 6 years (1997 - 2003) for Toyota to pay off the development cost of the Prius and start turning a profit on them - but look at Toyota now!
Contrary to the myth, Toyota never sold the Prius for less than the cost of materials and labor to assemble them. I suspect the same will be true for the Volt.
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Torbjorn 11:28PM (12/09/2008)
I have yet to see how americans can afford the VOLT. It is going to be out of reach from many Americans. Even if the vehicle does get 100+ mpg, it will not beat the economical side of a smaller sedan with a new price around 15k. The Honda insight is more of a game a game changer at this stage until the price of batteries comes down and the VOLT's price with it. I don't know anyone whom is going to plop down the asking price of the VOLT. Do you??? And why???
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UH2L 12:31AM (12/10/2008)
And the Tesla roadster is practical and affordable?
BoneHeadOtto 8:00AM (12/10/2008)
Hell the Prius is out of reach for most americans. So are diesel powered F-150s. But i see plenty of people in both.
sh 11:38PM (12/09/2008)
GoodCheer -- lol.
Andrew, just an observation... it appears to me that the comments come down like rain in the negative Volt posts and the seas remain pretty quiet on the positive ones (and, by the way, referencing the preceding post -- the GM article does not have the word "betraying" in it -- an intentional journalistic misquote from Reuters and echoed there).
jharlan - Green technology will never provide the economical impact of petroleum. Get over it.
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mmstowes 12:13AM (12/10/2008)
Having witnessed first hand a currently undocumented revolution in green technology, I feel confident in my assertion that--and don't take this the wrong way--people shouldn't make factless claims based on assumptions you drew together from other people's factless assumptions. It's a factless assumption because even the experts are making assumptions based on things they don't actually know. They attempt to use past and current facts to predict future behaviors, however, you can't account for the unexpected because...well...you don't expect it.
I cannot speak on what I was shown (and drove) other than to say...the petrol companies ain't gonna be very happy. The scale of this breakthrough is absolutely massive and the impact is far more immediate than any current technology available. You'll have to wait to hear about it though. I hear one of the Japanese companies have been looking through patents and stealing people's EV technology and certain people don't want theirs being stolen. Shouldn't be much of a surprise who, though. *rolleyes*
That said, I'm REALLY looking forward to test driving a Volt and I'm hoping GM pulls through with it, even if I don't necessarily agree with bailing them out.
sh 2:37AM (12/10/2008)
Don't get me wrong.
I think little putt-putt electric cars will have their place among the high-end commuter users. However, as a primary vehicle for those who have to rely on a single vehicle to do their bidding, they will opt out of the electric / green market and continue to rely on proven gasoline-driven technology well into the future especially now that the economy is tanking rapidly.
I also believe that their contribution will be limited when overall ecological impact -- manufacturing costs, usage, and disposition factors are taken into account.
There's a world of difference between having a handful of drivers plugging into an already strained electric grid versus a nation full. The same effect that E85 is having on feeding the world today, and that's peanuts (err... corn) compared to what it could be.
That said, the Volt has the makings of a great little car for a handful of upscale urbanites, but it's no "utopic" answer to Algore's dreams.
BoneHeadOtto 9:13AM (12/10/2008)
@mmstowes
mmstowes is vaguely similar to EESTOR... coincidence
voltare 11:50PM (12/09/2008)
Torb,
They'll buy it because of the $7500 tax credit.
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Torbjorn 2:35AM (12/12/2008)
The $7,500 is a limited. Other Manufacturers are going to beat the VOLT out for some of this money as well. Besides, 38-39k plus tax and such minus $7,500 is still not in the range for the masses. Why do we need to put public money toward this product anyway. Who is going to risk loaning money out?? If someone can afford $35k for a toy then they can afford to pay the xtra $7,500 on their own as well. That being said, it is a good idea and I love the new technology.
In the meantime, bring on the tiny diesel ICE/simple battery hybrids to buy more time until ever cheaper longer lasting battery technology unfolds in due course.
californiacuda 12:05AM (12/10/2008)
I think all of GM's cars should be electric, then they could continue to not make any money another 5 to 10 years.
I wish they had started the Volt project 5 years ago and extended it to all models. Then, they would "really" be out of business now.
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Robert 12:44AM (12/10/2008)
At 15 billion to the taxpayers I think we should mandate that we see full PHEV by all three, and now partially taxpayer owned, entities. If our dollars our going to be spent, I'd like to see them guaranteed to something I fell is a good investment of my money.
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Stubborn 1:52AM (12/10/2008)
just a tip... Million in the title is spelled wrong "milllion" is most likely a typo.
I know, I know, sorry... grammar tyrant
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BlackbirdHighway 3:04AM (12/10/2008)
The first generation Volt is not going to make money, just like the first generation Prius, EV1, Tesla, cell phones, VCRs, microwave ovens, and just about every other high technology product. It takes at least a second, and more likely a third generation product to get the cost down to the point where it becomes practical. But, you can't get to those successful products until you pay your dues by putting that first gen product out in the marketplace.
We'll know GM is serious this time if they get the Volt on the road, develop a second generation that is cheaper to produce, and get that on the road. Giving up at any point before then means it was a nice try, but not enough follow through to make a successful product.
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