Money-losing Chevy Volt will stay alive even if it can't "pay the rent"
by Sebastian Blanco on Apr 6th 2009 at 2:14PM 
The Chevy Jolt
General Motors doesn't have any money to play around with these days, but new CEO Fritz Henderson is willing to let at least one vehicle program's fiduciary requirements slide. Even though Henderson said recently that all GM models will need to "pay the rent," the money-losing Chevrolet Volt program will not be held to that standard. Apparently, the Volt is kind of like that really cool, constantly broke college roommate that never got kicked out because he had the best music.
No one at GM ever said that the first-gen Volts would make money, but Troy Clarke, president of GM's North American operations, recently told Automotive News (subs req'd) that the second-generation vehicles might also be a red entry on the books. Of course, "as we get a chance to change the generations of technology, we'll lose less and less," he said, adding that, "It's not our intention to lose money forever." Well, that's something.
Gallery: 2011 Chevy Volt
[Source: Automotive News (subs req'd)]
Reader Comments (Page 1 of 2)
jharlan 2:35PM (4/06/2009)
GM is quickly running out of options. When leadership was imperative, they were doing without, and now it's too late. After chapter 11, we can hope for a new beginning.
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paulwesterberg 2:38PM (4/06/2009)
Even though they will lose money on every car they sell they will make up for it in volume... ...and taxpayer funded bailouts.
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mapoftazifosho 2:44PM (4/06/2009)
And the greenies wonder why this stuff doesn't make financial sense...
Tesla is in financial trouble...Toyota doesn't make money on Hybrids and GM was evil for killing the EV1...even though 10 years later this type of vehicle still isn't profitable...
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ShaunneyCakes 2:51PM (4/06/2009)
Man, this rumor just WILL NOT DIE. Toyota makes a profit on EVERY hybrid sold. The CEO has made this very clear and all shareholders know that this is indeed just a rumor. There was a time when the Prius did not make a profit, but this was a WHILE ago. Toyota plans to launch 10 new hybrids soon and ALL will make a profit from the very beginning.
I really thought this rumor was dead, but mapoftazifosho has proven otherwise.
polo 6:55PM (4/06/2009)
"Tesla is in financial trouble..."
You mean a startup in this economy is in trouble?
"Toyota doesn't make money on Hybrids"
LMAO the Prius is a cash-cow. They were sold at a loss initially but they now do make a good profit....which is why..
"GM was evil for killing the EV1"
Not "evil", just incredibly stupid and short-sighted. The EV1 would have been sold at a loss the first couple generations, but like the Pruis, would have started turning a profit while enabling GM to master the particulars of an EV plugin (batteries, drive-train, regenerative braking, etc)...years before any other automaker. They would have been in a much better position to take advantage of the oil-price crisis of '07 and '08, even moreso than Toyota with its Prius. At this very moment GM would have been a market leader in EV tech...instead they sold the battery patents off to Chevron....beyond stupidity.
"..even though 10 years later this type of vehicle still isn't profitable..."
Huh? For almost every new model out, they have to mass-produce a certain number to recoup investment and turn a profit. The same was true for the EV1. People like you are the reason GM is in the trouble its in. GM **HAS TO** start producing vehicles like the Volt (even if at a loss, even its not perfect), otherwise they will continue to lag behind the other automakers and be unable to compete in the near future (less than 10 years) when EVs and range-extenders are widely adopted in a market of high gas prices.
PeterG 3:44PM (4/06/2009)
Basically it is followers of Rush Limbaugh, and his ilk, that actually thinks these talking heads deal in facts that are causing the problem. They don't they just make up "fact" on the fly to support the rant of the day. They are not a source of information.
Prius is making Toyota lots of cash. Pretty soon there will be Hybrid everything from Toyota while detroit falls further behind.
Noz 4:40PM (4/06/2009)
Things like this don't make profit much of the time because people don't give them a chance. We're ready to spend BILLIONS and BILLIONS on crap like fighter jets and invisible bombers that are empty pits of money sucking crap....but things like this...oh no...too much money.
tankd0g 8:09PM (4/06/2009)
Toyota didn't make a profit this year, period. The Prius is being sold by a magical offshoot company that's not on Toyota's books I suppose?
Chris M 8:35PM (4/06/2009)
Toyota paid off the development costs for the Prius with the first 6 years of sales (1997-2003) and has been making a profit on the Prius since 2003! If hybrids had not been profitable, Toyota wouldn't have boosted production or added several new hybrid models. The rumors of "unprofitablility" comes from outsiders trying to spread FUD.
Tesla Motors is on a similar path, it may take several years of Roadster sales to pay off the development costs, but it will eventually turn a handsome profit.
So it isn't at all surprising to realize that it will take several years of Volt sales to pay off the substantial development costs.
Eugene_C 5:17PM (4/08/2009)
Toyota makes profits now, but they didn't maked any profits on the first two generations of their hybrids powertrains either.
polo 6:56PM (4/06/2009)
"Apparently, the Volt is kind of like that really cool, constantly broke college roommate that never got kicked out because he had the best music."
Actually the Volt is like that really smart but really poor college student going to school on a full financial scholarship, but who will go on to start a successful company and donate millions back to the college as an Alumni. Thats why its called an investment.
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tankd0g 8:11PM (4/06/2009)
You got the full financial scholarship part right.
Minny 3:09PM (4/06/2009)
it's so uglyyyy. [wasteful + arogant + substandard + gasguzzlers + mismanagemant + cheap plastic + disobident_offspring(GMAC=(overlending+subprimeMortgage)) + UNION + lazy workers + over paid unskilled laborers] = CHEVYYYY. If Chevy resemble what's going on in the market right now, the VOLT would be it's deveritive.
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Chris 4:14PM (4/06/2009)
Gorr, is that you?
Jubei 5:26PM (4/06/2009)
This product surmises everything that is wrong with GM. Overpriced vehicle with no ground breaking performance to separate it from the crowd of upcoming vehicles. Even if it launches, the track record of GM and quality for cars is so low, one should look for other brands.
Zeus.:God 4:20PM (4/07/2009)
Jubei, you've honestly never, ever in your life, driven a GM vehicle, have you? GM vehicle quality is no lower than any other company. I honestly would like to know what you're smoking, because it must be some good shit.
Minny 6:06PM (4/07/2009)
yeah we own a couple till it broke down, 2 years after purchase...people who love GM so much should reconsider they make the same crap with different lable
Mike 10:30PM (4/06/2009)
Sebastian,
The title and the tone of what you've written is disappointing. Surely, as someone who knows a lot more about what this car represents, you should adopt a lot less glib and mocking tone. I've own a Toyota and two Fords in over 12 years of driving. But as soon as I heard about the Volt, I knew it would be my next car.
As someone who is concerned about our society's extremely high carbon emission, I believe GM's Chevy Volt represents an important, bold step in combating CO2 emission.
I hope all bloggers of this wonderful site will resist the urge the joining the ugly piling on GM, especially at this critical juncture when the survival of the company is hanging in the balance.
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Lad 4:36PM (4/06/2009)
It appears GM's overhead is so high, they can't recoup their R&D cost for any new products. I believe that's why they are concentrating on selling warmed over or modified existing autos, including muscle cars, SUVs and Pick Ups. In order to reduce their debts and overhead, to move their Volt to mass production and make a profit, they may have to go through some form of bankruptcy
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Richard in FLA 4:36PM (4/06/2009)
I don't know why GM wasted so much money on research for this EV as they already figured everything out with the EV1. They used an existing car for testing purposes. Should have just made the car in the beginning. GM will die.
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