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Chevy Volt Program is Costing GM Nearly One Billion Dollars
We often discuss how much the Volt will eventually cost us, the consumers, as that’s the bottom line as to whether people will actually buy or be able to buy the car in mass numbers.
We don’t hear too much though about what the program is costing GM.
An article in the Wall Street Journal by the notable reporter John Stoll puts a number to this. He reported that the Volt program is costing GM nearly one billion dollars.
We’ve heard that the introduction of this car is for GM analogous to the “moon-shot” as had been called for by JFK. Not only that, but it seems to have the same budget to boot.
Is this a lot to pay for a company already in the red, and if the initial sales are unlikely to make them a profit?
Source (Wall Street Journal)
68 Responses to “Chevy Volt Program is Costing GM Nearly One Billion Dollars”
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February 15th, 2008 at 6:37 am
I wish I can remember were I read it, but supposedly GM has 38 Billion dollars in cash reserves. If true, 1 Billion spent on the Volt is a drop in the bucket.
If this same technology can be ported to their entire line of vehicles, they will make this money back. It is essential that they price it for the masses. If need be, they can license the technology and make more money that way.
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February 15th, 2008 at 6:43 am
That seems like a lot, without seeing the budget…..but as a matter of survival, Im sure it is justified, or it would not be done.
If they dont do it, their competitors will.
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February 15th, 2008 at 7:02 am
The R&D cost of development of the Volt will be spread out over the life of the model, say 5 years, and over the number of vehicles sold, say about 100,000 average per year. So about $2,000.00 R&D will be embedded in the price of each $36,000 Volt. Does this seem out of line for a game changer? I think not.
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February 15th, 2008 at 7:12 am
Can’t tell from the summary, but this number should be compared with development costs for any other completely new design effort. All new car designs are expensive. Another thing to consider is that GM’s recent losses were mostly one time charges and not operating llosses.
GM has to build this car.
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February 15th, 2008 at 7:18 am
#1 Rashiid Amul nails it: that money isn’t just going toward this one model of car, but toward any vehicle that uses the “E-Flex” drivetrain.
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February 15th, 2008 at 7:36 am
It is a lot of money, but money well spent!
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February 15th, 2008 at 7:54 am
Hybrids “make no economic sense” right?
That’s the nonsense we had to tolerate for years. At what point do we know they are finally being taken seriously? Refusal to call Volt by the official term used for decades to identify that design certainly makes you wonder.
For me, achievement is measured by what you see on the road. Large volume production will be proof that change is indeed our future; otherwise, it’s just good intentions without reaching the actual goal.
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February 15th, 2008 at 7:58 am
#1 Rashiid
Yes, I saw that same number the other day when they were reporting the loss for last year. I think Rick Wagoner made the statement.
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February 15th, 2008 at 8:41 am
GM’s rolling the dice on the Volt, but what does it have to lose? Frankly, it’s about time an American company reverts back to the good ole days where inspiration and drive put us in the lead.
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February 15th, 2008 at 8:53 am
Lyle says above, “We’ve heard that the introduction of this car is for GM analogous to the “moon-shot” as had been called for by JFK. Not only that, but it seems to have the same budget to boot.”
Lyle, you’re the master of understatement. The man-on-the-moon program’s budget was $10 Billion (10:1 more & that was in 1960’s dollars!) But it really did prove to be “….the first giant leap for mankind”, as Neil Armstrong said, because two decades later America won the cold war with the USSR. (Although several men had been launched into space before Apollo, the moon shot is widely regarded as the first critical step that later helped set into motion the dismantling of the Soviet Union.)
Even though Tesla, Toyota & many others have been designing & marketing EVs or partial EVs on a relatively limited scale for over 10 years, I see the “launch” of the Volt as the first *major* step for EVs. It will prove that skeptics who say a sport sedan with excellent acceleration, top speed, handling, safety, reliability, range, etc can’t ALSO achieve near-zero-emissions and 125-150mpg are WRONG! And its very existence will motivate car makers the world over to design & mass produce their own near-ZEV automobiles. So, like the Model T was an impetus to automotive mass production, the Volt will be an impetus to a whole new industry — the electrified automobile!*
*Whether they license GM’s patented technology or develop unique designs
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February 15th, 2008 at 9:08 am
#1 Rashiid Amul & #8 mmcc….
Actually, GM’s cash reserves were quoted as $27 Billion (& the loss for 2007 as almost $39 Billion), but what’s a few Billion among friends?
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February 15th, 2008 at 9:33 am
First, we have to realize that an outsider does not knows how much GM is spending on this new car. This is just another way to start writing anti-GM articles. Second, it’s already a known fact that designing a new car cost a lot. So what’s the point of even of even dwelling on this matter. Just another way to put GM down.
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February 15th, 2008 at 9:43 am
What was the budget for developing the Prius?
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February 15th, 2008 at 10:07 am
That’s chump change. The US government burns through a billion dollars in few minutes on you-know-what around the world.
One small step for man, one giant leap for mankind, eh?
How about one small billion dollars for GM, a trillion dollars in avoided environmental cost for mankind.
How’s that for spin?
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February 15th, 2008 at 10:10 am
>> What was the budget for developing the Prius?
1994 was a different era.
14 years later there simply is no basis of comparison anymore.
Remember, things like computer modeling were only in their infancy way back then.
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February 15th, 2008 at 10:20 am
People always latch onto a big round number like $1 billion, but I suspect it isn’t too far off, above or below.
I remember a few years back when Ford BRAGGED about spending $1 billion on its all new Taurus. I remember saying to someone watching the TV commercial with me – “$1 billion, and they ended up with that?”
If GM moves quickly on the vehicle, iterating and improving systems as they go, they may find that they save money over the old committee / review board approach to design.
Fisker and Tesla have spent way less than $1 billion creating completely revolutionary vehicles, so GM, using this build / evaluate / improve / repeat approach, should also save time and money.
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February 15th, 2008 at 10:37 am
What a lot of people are forgetting is that the bulk of the research and development was done in the nineties…It has become a matter of fine tuning it to the new batteries.. making it do what GM Says it will do 40 + MPC (miles per charge), a decent range extender, and a price that people can afford. As for wipers, heaters, air conditioners…I really don’t think that GM is makiing all new technolgies for this. They already have it..
Just make the car, get one into my hands here in Canada for 35 – 40 K (with all the options up front on the first models of the VOLT). and the car will sell itself.
Let’s go… Let’s go. Let’s go….late 2010 -early 2011. OR SOONER.. I will be buying a new “Hybrid” from some one…
Let’s hope it is still GM.
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February 15th, 2008 at 11:06 am
Hey, at least this time around GM will be/has been spending all that money on designing, engineering, and marketing the Volt! A long ways from the EV-1 where by some calculations GM spent more money trying to kill the ZEV mandate and the EV-1 than they did on building the EV-1’s themselves.
In any case, no sense crying over spilled milk, what a difference a relatively few years make. Go Volt!!!!
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February 15th, 2008 at 11:15 am
That sounds a reasonable cost to recover over the first million vehicles, only $1000 per vehicle.
The ‘96 Ford Taurus development costs are quoted at 2.8 billion dollars (Cases in Contemporary Strategy Analysis By Robert M. Grant, Kent E)
The Saturn development is listed at 5 Billion dollars.
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February 15th, 2008 at 11:33 am
nasaman, #11:
GM showed a $39 billion loss, but over $38 billion of that resulted from changing their accounting practices to write off an asset which they (or the IRS, or the SEC, or who knows?) now deem to be worthless. So no actual cash went out as a result of that writeoff. Either Lutz or Wagoner was quoted to that effect either here or at Fastlane recently.
A billion dollars to develop the Volt sounds like a lot of money. On the other hand, if GM doesn’t develop such products to counter the challenge of you know who, it will cease to exist fairly soon, IMHO. So I think it’s a wise investment.
I realize that this is not exactly a groundbreaking new insight on my part, as witness the many insightful comments above. I’m just trying to add my voice to the chorus.
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February 15th, 2008 at 12:17 pm
#20 Noel
It’s been a few days since I read through GM’s arduously long and wordy report, but I think the bulk of the writedown came because of the writing off the tax credits related to GM’s pension liabilities….which they had to transfered off their books, when it got flipped to the union. I’m not 100 percent though…I’m not going to go back and reread to fact check, lol.
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February 15th, 2008 at 12:52 pm
Statik, #21:
Yeah, I’m not sure where the tax credits came from. I thought it was just carry forwards from previous years’ losses, but it is a pretty big number for that, even for GM.
Anyway, as someone said yesterday (Wednesday?), writing off billions of dollars of tax credits is an admission tha those future profits are never going to happen, which is pretty sad. Still, at least they didn’t actually hemorrage $38 billion of cash, so they have a few billion left to do the Volt.
Do the tax credits sunset after X number of years, so that this means that they are acknowledging the profits won’t happen before the sunset date? Ot does this mean that they think that they will never happen? Hopefully the former.
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February 15th, 2008 at 12:56 pm
A billion dollars sounds like a bargain to me. Like others have said, the technology will be used in more cars in the future (maybe all of GM’s cars eventually?)
In otehr news, It looks like a die-cast Volt will now cost you $60 on eBay (!)
http://cgi.ebay.com/Chevy-Volt-Concept-Die-Cast-Model-1-32-RARE-Chevrolet_W0QQitemZ260211897156QQihZ016QQcategoryZ2495QQssPageNameZWDVWQQrdZ1QQcmdZViewItem
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February 15th, 2008 at 2:38 pm
#15
The post concerns the Volt’s development cost. Other’s replies to the post compared the Volt development cost to other vehicles’ development costs.
#4 says “…number should be compared with development costs for any other completely new design effort”
#10 compared Volt development cost to NASA moon effort development costs.
#16 touched on development costs for the Ford Taurus, the Fisker, and Tesla.
#19 mentioned development costs for the Ford Taurus and the Saturn.
Respectfully, there is a basis for comparison. The basis is business-related. One would compare costs to benefits, in order to determine product success. One could compare previous cost/benefit ratios (say, for the Prius) to determine if a project is within normal boundaries. The actual means of development may have been different for the Volt and the Prius, but from a bottom-line perspective, the details are irrelevant.
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February 15th, 2008 at 2:39 pm
$1 billion is not a large number for a “ground-up” new vehicle. Considering the amount of technology that is being developed, I would say GM is being economical and might likely be defering some of the cost to contractors who will build parts. Now, while I say $1 B is not a lot for a new car design, it is way more than would be expected to be spent on a “specialty car,” and so this figure tells me that the car is intended as a main stream, high volume vehicle.
I hope its as sucessful as the X car…remember the X car?
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February 15th, 2008 at 2:43 pm
Like Jason M. Hendler said, Ford BRAGGED about spending $1 billion on its all new Taurus several years back. Wikipedia indicates Ford invested $400 Million back in the 50’s to develop the Edsel. So, while $1 Billion is a lot of money it is not all that much in today’s $’s.
GM will get that $1 Billion back and more once the E-Flex vehicles hit the market.
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February 15th, 2008 at 3:58 pm
GM will get that money back, IF they don’t screw up the advertising/sales terms/etc for the Volt like they did with the EV-1
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February 15th, 2008 at 4:46 pm
I want to see GM, Ford, and Chrysler in the forefront for production of automobiles for the USA consumer. It seems that these corporations have been fairly well “beat up” by foreign competition in recent years. But, if they ever expect to take the lead again, they will have to invest in the technology and engineering just like their competition. Electric cars are here to stay – the question is do they want to continue to receive a piece of the action, or even resume a leadership role in answering this need. We were first on the moon – I was one of the engineers who helped us get there. We can be first in car production again if we truly commit to this goal. If not, we will still be importing a major share of our transportation needs manufactured by companies outside the US. Key to the success of the USA in the world economy has been our ability to offer outstanding technology and a free enterprise system to promote. Let’s do our utomost to exploit our advantages for the futures of our children.
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February 15th, 2008 at 6:00 pm
GM stated that it spent over 1 Billion on the EV-1 which generated only about 800 leases. This began sometime back before 1996. The EV-1 was never intended to be sold nationally.
The Volt or its siblings will be sold internationally and the core E-flex technology will inhabit many other GM platforms.
Without crunching any numbers, 1 Billion seems almost like a bargain.
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February 15th, 2008 at 6:24 pm
The big write off GM had in 2007 was from a deferred income tax benefit they had on their books as a result of net operating loss carryforwards on their tax return. Corporations can carry net operating losses on their tax returns forward for 20 years to offset future taxable income. Accounting rules require these tax benefits to be recorded on the books as an asset. If it appears the net operating losses will not be utilized then they should be written down on the books. Their CPA firm must have questioned whether they would have future taxable income to utilize the net operating losses before they would expire (20 years after the year of loss). It could be that GM just said go ahead and write them off.
The net effect is their income in the future will not need to be reduced for book income taxes. I.e. if their pretax income is one billion dollars next year …their net income will be one billion dollars. If they GM not taken the write down in 2007 and their pretax income were 1 billion next year then their net income would have been around six hundred million (assuming 40% tax rate).
Clear as mud!
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February 15th, 2008 at 6:24 pm
23 Brian M, 26 Wise Golden, 27 Estero, 28 Silver Blade, 29 Andy, 30 Grizzly:
I could not agree with you more. Well done guys. GM is damn lucky to have so many people who are so interested in its survival and success.
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February 15th, 2008 at 6:50 pm
The real question is what happens if the DON’T Spend the billion on development of the Volt. NOTHING.
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February 15th, 2008 at 6:55 pm
Moon Shot!!! I think not. Moon shot was a gamble… trying to do something virtually unthinkable at the time. Developing the Volt is nothing earth shattering in my opinion. Sure the batteries will be cutting edge but they don’t make or break the car as has been put forward.
The volt is nothing more than and electric motor (nothing new there) and a generator to supply electricity if the batteries are low. Hmmm… I think trains have already been doing this for decades just without the batteries.
Not “Moon shot”… more like about time.
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February 15th, 2008 at 7:23 pm
That is not that much money when you realize that they will use the E-Flex system in many different cars and product lines. It seems like a good investment. You have to spend money to make it.
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February 15th, 2008 at 7:31 pm
This number was pulled out of a HAT!!!!
The Wall Streeet Journal also recently did a report that lithium batteries are not ready for cars.
The reason the Wall Street Journal said lithium not ready for cars?
Laptop computers are catching on fire.
Do your homework WSJ.!!!!!!!!!!!
What ever happened to
WHO WHAT WHERE HOW and WHY.
Laptop fires are due to old lipo chemistry not LiFePO4 chem that the Volt is using
Why not do some math and try to get a better guess at this figure.
Lets start with WHO and HOW
WHO is being paid to work on the Volt
HOW many of these people are there
WHAT are the cost non labor an labor.
WHEN did they start working on the project.
HOW much time have they spent.
WHY is GM spending this much money.
Go ahaead and tell me that next that investigavite reporting does not sell. People don’t care to here this or don’t want to know these facts.
Anyone thats ever paid me money ask these questions.
I ask people under me these question,
My superiors ask me these questions.
Maybe that is why this site is popular is because we get more of the who what where when how and why about the Volt than anywhere else.
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February 15th, 2008 at 7:44 pm
Considering that the cost of the Delta Global Platform and E-Flex systems are going to spread over several vehicles, is GM really going to invest a billion in the Volt ?
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February 15th, 2008 at 8:17 pm
Well,
If the Volt can change the mind set of my 14 yr old Algebra Class (I am going to introduce the idea of going to work, without burning gas.) next week, including changing the mind set of reuse, recycle, instead of throw away, then I think it a very well spent Billion.
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February 15th, 2008 at 8:39 pm
It’s money well spent as they will not be able to sell pure gas cars soon. There simply will not be enough fuel for them all, unless prices are allowed to go through the roof. Peak oil is here now. I just hope production can hold up until 2011.
I note biofuel production is set to increase 370,000 barrels per day to a total of 1.5 million BPD this year. (Source:GCC). I just hope it can keep up.
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February 15th, 2008 at 9:02 pm
MIght get there.
http://www.farmfoundation.org/projects/documents/SDSTLemmeethanoltechers07.pdf
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February 15th, 2008 at 9:24 pm
I think by 2011 GM will have a huge list of folks prepared to pay almost anything for the ability to move. I hope forum users get to go to the top of the list. The following quote was lifted from Syntec’s website. http://www.syntecbiofuel.com/issues.html
“The peaking of world oil production presents the U.S. and the world with an unprecedented risk management problem. As peaking is approached, liquid fuel prices and price volatility will increase dramatically and without timely mitigation, the economic, social and political costs will be unprecedented. Viable mitigation options exist on both the supply and demand sides but to have substantial impact, they must be initiated more than a decade in advance of peaking.”
The Peaking of World Oil Production: Impacts, Mitigation & Risk Management, Feb, 2005.
Prepared by SAIC for the US Dept. of Energy
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February 15th, 2008 at 10:13 pm
I didn’t read all the coments, and if somebody touched on it, this just amplifies our point. GM with the EV1 program wasted something like a billion dollars on the program, built the cars, then destroyed them, it was their own fault people didn’t catch on like GM expected them to, the car was considered a “freak of nature!”
Now GM cries like a baby, “we lost a billion dollars over something people didn’t want” booo hooo hooo…. If they would actually putt their head out of their a**, and build a pure EV again, and marketed it like every other car they make, they’d sell like hotcakes!!
The Volt is a start, and I will give credit where deserved, but this should of been done YEARS ago!! It’s also a shame, you guys ever noticed, things simply don’t happen if it’s not mandated. Start with seatbelts, now ABS, Airbags, along with other things. Now if the feds, and OEM’s wern’t in bed with big oil, I could see a lot of good things happen much faster, but I think they’ll still happen, just a matter of time.
The questions to ask is: what will the dollar be worth when the time comes? What condition will the o-zone be in? What will happen to big oil? I can think of more, and if I was gypsy, I’d dig out my crystal ball from the chinese workers for Wal-Mart. I could probably read it, and ask it these questions, but the response would be “the bird”…………
Oh well. -Peace!
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February 15th, 2008 at 11:13 pm
GM is currently worth -$38 Billion. IF they are lucky enough to get to a point where they can make .5 Billion per year (might not happen), they might be worthless (i.e. net worth of $0) in 100 years. 1 Billion is a lot of money for a company that has trouble making money.
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February 16th, 2008 at 12:17 am
Lead or lose. Only one American car company will be left standing no more than 10 years from today. The Volt is the defining difference between GM and the other two. Confining the time ten years from now is where will the product be that runs today’s cars? Scary.
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February 16th, 2008 at 12:24 am
Oil is running out. Gas is running out. What other option is there other than the path GM now leads. Electricity generates from nuclear, gas, bio, oil, wind, solar, and is the only single common denominator for a world dependent on oil. I plan on buying a Volt if they don’t overprice the car. With Democrats likely to take over the White House, I’m counting on tax rebate incentives to break the oil dependency to help me jump toward the purchase. GM is lining up with the stars and the times with the Volt.
As for GM’s worth, never forget, they are in debt to the tune of $300,000,000.000.00 ($300 billion). Toyota has no debt. Blame GM I suppose, but also blame your neighbors driving Kia, Hyundai, Toyota when your government’s inability to pay your social security check dries up some day. Hopefully they can eat their car.
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February 16th, 2008 at 1:45 am
# 42
February 15th, 2008 at 11:13 pm
GXT
GM is currently worth -$38 Billion. IF they are lucky enough to get to a point where they can make .5 Billion per year (might not happen), they might be worthless (i.e. net worth of $0) in 100 years. 1 Billion is a lot of money for a company that has trouble making money.
====
GXT,
You’re fired. You have no idea what you’re talking about and the paragraph above says it all.
There are profits and extra normal profits. These are different for publicly held and private and even so called “non profit” companies.
Not to mention that the $38B was a one time charge for accounting and was not related in any way to operations.
The income statement measures performance over a short period. Because it shows a loss does not mean the company is “worthless”.
OMG…did…did… I just feed a troll?
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February 16th, 2008 at 2:47 am
GM WILL WIN with the VOLT. Gas prices will balloon soon.
“1. World total liquids production (Fig 1) remains on a peak plateau since 2006 and is forecast to fall off this peak plateau in 2009. Increasing numbers of oil experts are forecasting impending peak production plateaus. According to the International Energy Agency (IEA), the current peak production of 87.2 mbd occurred on January 2008. As long as demand continues increasing then prices will continue increasing.
show significant declines for Mexico, North Sea and Saudi Arabia and significant increases for Russia, Azerbaijan and Angola. As Russia is likely to be on a production plateau and Saudi Arabia, Kuwait and the UAE have probably passed peak production, the world C&C production will continue to decline slowly.
2. Forecast world crude oil and lease condensate (C&C) production retains its 2005 peak (Fig 2). The forecast to 2100 shows declining C&C production, using a bottom up forecast to 2012 (Fig 3). The forecast to 2012 shows a slight decline to 2009, followed by a 3%/yr decline rate to 2012.
3. World oil discovery rates peaked in 1965 (Fig 4) and production has exceeded discovery for every year since the mid 1980s. Discoverable reserves in giant fields also peaked during the mid 1960s (Fig 5). The time lag between world peak discovery in 1965 and world peak production in 2005 of 40 years is similar to the time lag of 42 years for the USA Lower 48 (Fig 6).
4. World C&C year on year production changes to October 2007 and November 2007 (Figs 7 and
5. Saudi Arabia retains its 2005 C&C peak (Fig 10), which is the same as the peak year for world C&C (Fig 2). Saudi Arabia C&C production has dropped to 9.0 mbd which is 0.6 mbd less than its peak in 2005. It is now almost a certainty that Saudi Arabia passed peak C&C production of 9.6 mbd in 2005 (Figs 9 and 10).
6. Kuwait retains its 2006 minor C&C peak (Fig 12). Kuwait C&C production has now dropped to 2.5 mbd which is less than its peak in 2006. There is a strong likelihood that Kuwait has passed its minor 2006 peak (Figs 11 and 12). Kuwait’s major peak was 3.3 mbd in 1972.
7. UAE retains its 2006 C&C peak (Fig 14). UAE C&C production has now dropped to 2.6 mbd, adjusted for maintenance, which is just less than its peak in 2006. There is a reasonable likelihood that UAE passed its 2006 peak (Figs 13 and 14).
8. World natural gas plant liquids is forecast to increase due mainly to new OPEC projects (Fig 15). World ethanol and XTL production is forecast to almost double by 2012 (Fig 16). World processing gains are forecast to decline slowly to 2012 (Fig 17).”
Source: http://www.theoildrum.com/node/3623#more
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February 16th, 2008 at 3:56 am
When the Volt is launched or strategically before, I’m expecting Opec and all her cohorts to try and drop the bottom out of the price of light-sweet to pull another in a long line they’re famous for.
Problem is, “Wolf” has been cried one too many. While I hope my fellow citizens reap the temporary rewards of this ploy with their ICE vehicles, I’m on to the next technology that may never ever have to listen to them again.
Does anyone really think the Volt is all that big a gamble?
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February 16th, 2008 at 5:00 am
http://online.wsj.com/public/article/SB119948828539568677-bxmpgN2SUZ_nvqEp2UK1mA0GWnE_20080205.html?mod=tff_main_tff_top
I looked at the above mentioed article for Volt info (agreed that the $1B will be money well spent for reasons already mentioned), but found the car that drives itself – DARPA – also in the same article.
I think most people like to drive (I do!) and cars that drive themselves will not do well (just a guess). People like to be in control (back seat drivers included) and the benefits of better gas mileage (see all the Volt fans here lined up), less congestion on the crowded roads and less accidents will all lose out to the pure fun of driving. That’s why we want fun cars like the Volt. There’s more to it than gas mileage and clean air – but if we can get them in a great car too…., where do I sign up? But to let the car drive itself, (boring!) – might as well take the train or bus to save even more oil and preserve more clean air and then take a nap on the way to work.
I want to drive the car. It’s the American dream.
Prius is boring – look at it. Don’t want it. The Volt looks exciting. Looks like it wants to go somewhere. Looks like it wants to be driven. It looks fun and the technology and it’s green benefits make the fun even better.
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February 16th, 2008 at 7:11 am
I think the volt is very timely. Its EV1 that was early. The battery technology just began to appear in higher current lipoly in the early 2000’s. Truly high-current A123 batteries just appeared recently, and talk began of an automotive battery.
And I think the range extender is perfect solution in the interum battery development.
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February 16th, 2008 at 9:51 am
“That’s chump change. The US government burns through a billion dollars in few minutes on you-know-what around the world.”
8 hours actually
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February 16th, 2008 at 9:55 am
GM is doing it right. We can’t afford another Chevette. With that kind of quality, the entire E-Flex line will get a black eye from which it may never recover.
Fit, finish and quality will win the day. Even if we must wait for it!
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February 16th, 2008 at 12:06 pm
Grizzly, #47. I completely agree. I fully expect OPEC to drop the price significantly once these PHEVs take off. The Volt is not the gamble.
The gamble is our continued reliance on an energy supply that is disappearing. The sooner we are off oil, the better for all of us.
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February 16th, 2008 at 12:27 pm
On the other hand, I hope that Senator Feinstein’s staff does read this thread, because the discussion is outstanding. Well done again.
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February 16th, 2008 at 4:02 pm
Grizzly, Rashid — it’s a nightmare scenereo – $1 per gallon gas, and I promise you, it’s going to happen, within 2 years.
Our Government needs to be working right now to regulate the bottom cost of oil, through a flexible tax, to ensure that oil does not reach consumers at a cost that would be below $100/ br. If they do not do this, they will dig us into a greater hole.
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February 16th, 2008 at 4:43 pm
Wise Golden, 54,
If gas does drop to a $1.00 a gallon, then I believe the EV revolution is over. I will admit, I hate paying these high prices for oil and gas, but the time grows nearer when I don’t have to. Volt in 2 yrs, 9 months.
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February 16th, 2008 at 4:46 pm
Grizzly, Rashiid, Wise Golden:
Yeah, right. They don’t even have to drop it down to $1. I got really excited the other day and ran back to the shop to tell the guys, “Wow, gas is down to $2.99 at ARCO!” They have our brains washed.
Drop it down to $1.99, or even $2.25, and we all go back to sleep and buy new Suburbans. Not me. Not this time. Actually, last time it spiked up I got rid of my Suburban and got an S-10. I figure I have saved 8000 gallons in 8 years. Now we have to take it to another level.
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February 16th, 2008 at 7:53 pm
Noel, #56, You are right. But like you, I am through also. If the E-REVs can get off the ground, I will buy one. I’m not saying at $35K though. It will have to be less than that.
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February 16th, 2008 at 10:18 pm
We all know, the government would be nuts to let us have fuel for anything less than $2.50/gallon. My business relies on a lot of gas, and like everybody else who makes a living on the road, we’d LOVE to see cheap fuel again. I’m fortunate though, I’m able to do my job in a car, most other folks out there do it in a 18-wheeler.. (or in my case, many more wheels)
I’m really am having a VERY hard time forgiving GM, and the bull they pulled a few years back. Right now, I can’t say that I would purchase a Volt.. I do have my eyes on the Volvo Recharge. I like the way it’s setup, but in reality, it depends on GM’s attiude toward the Volt, and the price range they intend to hold it at.
I’m waiting for the day OPEC comes, begging us to use their oil.. “well, ok opec… I need 10 gallons for my dad’s ‘70 buick gs..”
I do find it very hard to believe that we’ll get completely off petrolium. A lot of plastics use it, along with many other things, but not at the rate that we use it now.. This car is such a big jump, GM better not kill it like the EV1.
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February 16th, 2008 at 10:53 pm
No one, not even OPEC has the power to control the worldwide price of oil. To those who would advocate a tax to regulate the price of crude, don’t we have enough government intervention in our lives. The fact that oil is going away cannot be denied. If the price does fall, it will only be because the demand has fallen. This will happen and not GM, the federal government or OPEC can do anything to stop it. Our addiction to oil will stop one way or another.
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February 17th, 2008 at 11:39 am
59 – The United States consumer controls the world price of oil. When we cut our oil usage by 5%, the price of oil will fall dramatically. We are on track to dramatically reduce usage with ethanol booming, small cars booming, hybrids booming, plug hybrids and EV’s in the pipe. Even LPG, CNG and other fuel types are booming. This will cause the bottom to fall out of the oil market in under two years — I’ve seen it before.
I’m with the others — I’m buying electric and I’m doing it for reasons other than payback, but I gotta tell you, it’s going to suck to pay all this money for an electric and watch gas go down to $1, or $1.50 — I’de like to see it go the other way, $4, $5 per gallon. The only way this can happen is if the government steps in and does it’s job. I’m as anti-government as they get as far as having the government regulate my life, but Energy, Defense, Environment, Food standards, Road building and infrastructure is where the government should be regulating — that’s where it makes sense. Our government does all of these fairly well, except energy — it seems to be “hands off” for some reason.
Hillary and Obama need to stop talking about health care and start talking about energy because that is where the need for regulation exist — not healthcare.
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February 17th, 2008 at 5:08 pm
Man, I hope GM has a big hit on their hands with this new Chevy Volt. It needs to be an ALL AROUND good car. A car that Motor Trend, Car and Driver, Consumer Reports and those guys all say is a good car. It doesn’t have to be perfect, but it would sure be nice if won a few awards for quality and value and so forth like they’ve done with the new Chevy Malibu and the Cadillac CTS.
GM shouldn’t try to reinvent the wheel TOO much when it comes to features that come with the car. Hell, just get some of the same people who designed the Malibu and the CTS to help design the interior and exterior, etc. It is going to have to LOOK GOOD.
The exterior of the EV1 was, er, “ok”. GM needs to make sure they focus enough on ALL aspects of the car and not too much on just the battery and powertrain and so forth …. even though those things are going to be very critical.
I want GM to have a homerun car when it comes out in 2010 … or at least a triple. Hopefully, they’ll blow the car magazine guys’ mind and the rest of us when it finally arrives. I’ll be following the development of the car every step of the way. I can’t wait to test drive one and buy one. 2010 can’t get here fast enough.
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February 18th, 2008 at 9:37 am
This article brings to mind a commercial once released by Apple Inc.
“Here’s to the crazy ones…” (Queue montage of various geniuses and great folk in their own right.) “The misfits, the rebels. Troublemakers. The round pegs in the square holes. The ones who see things differently. They are not fond of rules and they have no respect for the status quo. You can quote them, disagree with them, glorify or vilify them. About the only thing you can’t do is ignore them. Because they change things. They push the human race forward. And while some may see them as the crazy ones, we see genius. Cause the people that are crazy enough to think they can change the world… are the ones that do.”
-Apple’s Think Different campaign
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February 19th, 2008 at 8:54 am
Oil will always have significant value–a barrel of oil produces hundreds of things. But as someone else said, just a 5 percent structural drop in gasoline consumption will drive a serious decrease in prices.
But…the governments (I use this term loosely) of the oil countries are addicted to 80 dollar a barrel oil. To prop up their economies to stay in power, they can’t live with less than 80 dollars a barrel anymore. The minute the spot price dropped to just over 90 a couple weeks ago, they issued statements that they’d cut production to keep it above 80.
The 50 year period of oil being just cheap enough to prevent the Volt from being produced may finally have come to an end.
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February 19th, 2008 at 10:43 am
My oh my, what a coincidence!
Luminant will spend $1 billion to cut emissions (Fort Worth Star Telegram)
By JIM FUQUAY, Star-Telegram Staff Writer
“Luminant, the power-generating unit of Energy Future Holdings, detailed a $1 billion pollution control program Monday that will outfit its older coal-fired power plants with new technology and equipment to cut emissions.”
A billion here, a billion there, pretty soon the air will be fit to breathe.
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February 19th, 2008 at 1:35 pm
To all of those that think the price of gas will drop to $1.00 a gallon once 5-10% of the market moves over to electric of some form.
I think what your not taking into account is the price of oil in 2010. If it happened today that statement is probably correct. But with the dramatic increase of middle class car owners in China & India, i think we will be paying $4.50 a gallon on average by then. So if it does slide it will only be to maybe $2.00/gal.
This is the problem once we get off oil, there’s 2 main countries under us (china,India) which represent like 2/3 of the world’s population just wating to get hooked. If there economies ever balance off enough to have a thriving middle class (which is already happening in China) they will be in the same place we were in the early 80’s.
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February 22nd, 2008 at 3:17 pm
JohnP you nailed IT
Its all about China , for the last five years they have been adding 1 million cars a year and 200million more gl of gas every year(just China), and with over 1.5 billion people (low side ) this trend will not slow down for some time to come. Plus other Third world countries are watching US TV on satellite and seem to want a piece of pie ( the good life ) .Gas just peaked today at $3.20 gallon (low season) in Bg ky yesterday , I fear $4.00 to $4.50 at summer time during peak summer time driving season . For those of you wishing for $5.00 gallon , you just might get your wish but it will come with a Hugh price . ie. you can forget about a recession the U.S. could easily slide into a full blown depression . Its all about the cost of moving goods around the country , plus milking $200 dollars more out of a two car family monthly budget that is already struggling to make ends meat no more dinners out no more family trips ,no getting that bigger house plus that HD TV , on &on & on….It will just trickle down faster and faster. Our economy is not ready or setup to run on plus $5 gal . My cost $100 a fill up 3 tanks a month =$300 plus wify $85 x 2 = $170 ,, at $ 5.00 I will be paying $470 monthly , four years ago we here paying $145.00 .ouch. I just hope GM volt is for real , we as a nation really need this technology ASAP. IMO
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February 22nd, 2008 at 8:08 pm
At the rate we are using up oil supplies we as people are setting ourselves up for an inevitable deppression. Gas prices are litteraly increasing about 2/10 a cent per gallon a day. At this rate prices will hit over $5.00 a gallon by 2010 and thats if production stays steady! I really am angry that the generation before me has ignored the problems of oil and are not doing anything to keep a global deppression from happening. You see these major car companies coming out with hybrids, big deal they still use gasoline and cannot run soley on electricity or be charged at home. Or the E-85 ethanol cars, these are good but still burn gasoline.
I really hope that our economy holds out till the volt is up for sale. Our economy can not operate with gas prices past $5.00 a gallon. If i have to sell everything I have to buy the volt I will. Then I will laugh when the Middle East says they cut production and gas prices will be going up! So hurry up GM because we need these cars today not just 3 years from now!
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February 22nd, 2008 at 10:12 pm
I hope GM has the sense not the release the Volt before it is ready. If it bombs like the Citation did, it will put us back 20 years and GM may never recover.
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