GM discounted the Volt How Much!?

September 24 | Posted by mrossol | Debt, Economics, Environment

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DETROIT (AP) – General Motors rolled out the Chevrolet Volt two years ago with lofty sales goals and the promise of a new technology that someday would help end America’s dependence on oil.

So it seemed like a good thing in August when sales of the $40,000 car set a monthly record of 2,800. But a closer look shows that things aren’t what they seem for the cutting-edge car.

Sales rose mostly because of discounts of almost $10,000, or 25 percent of the Volt’s sticker price, according to figures from TrueCar.com, an auto pricing website.

GM’s discounts on the Volt are more than four times the industry’s per-vehicle average, according to TrueCar estimates. …

…It costs $60,000 to $75,000 to build a Volt, including development, manufacturing and raw materials, estimates Sandy Munro, president of Munro & Associates, a Troy, Mich., a company that analyzes vehicle production expenses for automakers. Much of the cost comes from an expensive combination of two power systems — electric and gasoline. With a sticker price of $40,000, minus the $10,000 the company pays in incentives, GM gets roughly $30,000 for every Volt. So it could be losing at least $30,000 per car.

The automaker says Munro’s estimate is high because it doesn’t spread the Volt’s costs far enough into the future,…

U.S. Volt sales totaled just 7,700 in 2011, short of GM’s goal of 10,000 and a fraction of the 136,000 for the Prius hybrid, the world’s best-selling alternative fuel vehicle.


The Volt is now the top-selling electric car in the U.S. — 7,400 ahead of the Prius Plug-in. Nissan’s Leaf is a distant third, and analysts say Volt sales could reach 20,000 this year.

The carpool problem, which had cost sales on the West Coast, also was resolved. California has 1,500 miles of freeway lanes that can be used only by cars carrying two or more people. But there are exceptions allowing lower-pollution vehicles with one person. Initially, the Volt didn’t qualify because its gasoline-powered generator didn’t meet the pollution standards.

Keller, 82, who volunteers to take senior citizens to the grocery store and medical appointments, says he’s driven more than 1,100 miles in his Volt, and hasn’t bought any gasoline. Charging the car has boosted his electric bill by about $40 per month, but he used to spend $200 a month on gas for the Lexus.

“I don’t go to the (gas) station and I don’t have to worry about the price,” he says.

AIMING FOR THE MAINSTREAM

While the Volt isn’t helping GM’s bottom line, it’s not in danger of being canceled anytime soon.

GM can subsidize the Volt’s cost from profits on other cars, says CapStone’s Driscoll. But eventually GM will have to get closer to breakeven or make money, he says. …

GM’s Cain says the company wants all cars and trucks to be profitable, but some take longer than others.

“Its prime purpose was to introduce a new generation of technology,” says Lutz, the former vice chairman. “And at the same time … demonstrate to the world that GM is way more technologically capable than the people give it credit for.”

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