13 September 2012

GM Dismisses Reports of Loss on Chevy Volt

Original article published in USA Today

A media report describing GM's Chevrolet Volt as a money vampire is false, according to the Detroit-based automaker. 

Reuters estimates that GM is losing as much as $49,000 on every Volt. That's $10,000 more than the extended-range electric car's sales price. But the automaker said the wire service's calculations ignored that development costs are typically spread out among all vehicles sold over the course of the model's lifetime.

GM has acknowledged it's losing money on the Volt, but won't say how much. But GM argued that its investment will pay off over time as Volt sales accelerate and the cost of the extended-range electric/generator powertrain comes down and is offered in other models over time.

The car, which can travel up to 38 miles on a battery charge before a gasoline-powered generator kicks in, has missed GM's original sales targets for 2012. It sells for $39,995 as its base price. Sales are picking up after some dealers started offering a cheap lease and California certified that single drivers can drive the Volt in carpool lanes. Chevrolet sold 2,831 Volts last month, its strongest month since its launch.

Reuters wrote that "the loss per vehicle will shrink as more are built and sold."

"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," GM said in a statement. "The Volt is no different, even if it takes longer to become profitable."

It's the latest in a series of publicity challenges for the Volt, which conservatives have criticized as the Obama-mobile, despite the fact that it was in the works years before Barack Obama considered running for the White House. The car was first introduced as a concept vehicle in January 2007, two years before Obama took office, and was first sold in fall 2010.

Sales of gasoline-electric hybrids has risen 65% so far this year with Toyota's Prius leading the market.

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