At $40,000 the Volt Would Result in No Profit for GM
An article was just published by Businessweek by way of MSNBC, that discussed automakers’ efforts and requirements to be able to reach the new 2020 CAFE standards.
In it Bob Lutz was mentioned discussing the Chevy Volt. Here is a quote from the article:
“The company once targeted $30,000 as the price for a Chevy Volt. But the cost of developing the technology is making that an unreachable dream. Lutz now figures a more realistic price for the Volt would be about $48,000. He reckons that $40,000 might be possible, without making any profit. Only government tax incentives could take the price tag nearer to $30,000. ”
Source (MSNBC)
Lets not get too carried away because it seems major media often publishes errors about the Volt. In fact, on the same day as well, USA Today’s automotive writer James Healey, actually described the Volt as a two-seater! The article was actually about Mercedes’ plans to introduce electric Smarts into the U.S in 2 to 3 years. Keep in mind that USA Today is the highest circulation newspaper in the country.
Source (USA Today)
Popularity: 5%
(4 votes, average: 3.25 out of 5) 
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March 25th, 2008 at 12:32 am
Is there a direct quote from Lutz? If not I call BS.
March 25th, 2008 at 1:53 am
It sounds like $40k factors in the development cost. But it sounds like they planted to just eat a lot of that, anyway, like Toyota did with the early Prius.
March 25th, 2008 at 2:17 am
Note to GM:
I am NEVER going to buy a volt! Why simply because I am not in the market for that type of car(not talking about the power train). I am a regular here visiting most every day not because I am a big fan of GM but because I am a fan of this technology.
Here is my opinion on the pricing. When the Volt first comes out you can price it low or high and sell out all production. Even though I am not in the market I believe it would be smart to bring the price down into the loss column for a couple of reason.
When the car is released it will generate an image of GM products that will carry into the future. By 2012 the GM is going to have a whole lot of competition for all the other manufactures. If the perception is that GM came out with this technology first and GM is expensive, then people will look to the companies like KIA and Toyota when it comes to buying an E-REV for a good bit less…. even if less isn’t a reality anymore.
Conversely if it is priced at a loss and then the cost of production comes down you will have BOTH the impression of being there first AND being there at a competitive price. [b]To WIN you need BOTH![/b]
March 25th, 2008 at 5:46 am
Ouch. Not good news.
March 25th, 2008 at 6:26 am
This kind of stuff is well planned by GM to say this one day: Due to the high cost of R&D, no demand and battery failure, we decide NOt to pursue this project. However, we have a good news: Ladies and gentleman, here is the 2010 Chevy Suburban, which delivers 15 mpg compare to 14 mpg of the 2009 edition. We have used the technology derived from the Volt project and dramatically improved the fuel economy and make US less reliant on foreign oil. One thing always seems to be truthful: The louder guy in the room often under deliver while the quite guy is smirking and work hard in Aichi, Japan.
March 25th, 2008 at 6:32 am
Gentlemen don’t panic! The $40,000 is probably not far off the mark, if you think of over 3 years of development and making only 10,000 Volts. The $40,000 is very dependent on the volume. If GM makes 1,000,000 Volts the breakeven point is very different. Also the breakeven will change if the research cost is spread over the entire product line. GM wants to sell a million Volts so the MSRP certainly will be far less than $40,000, and maybe under $35,000.
March 25th, 2008 at 6:32 am
30 is my number. If I can get it for that, I’m in. I don’t think it will ever be a high volume vehicle at 40.
March 25th, 2008 at 6:33 am
I don’t know what happened to my original message, so I am typing it over again. This is the first time we have heard $48,000, but not the first time that the press has messed something up. Let’s wait until we hear more about it and not bash GM yet. As the news comes out and it turns out that the $48K number is bogus, then we can bash the media.
March 25th, 2008 at 6:36 am
Ouch is right! But, I’ll remain hopeful for a while longer.
March 25th, 2008 at 6:44 am
Political posturing. If the auto manufacturers (with GM speaking first, since they are further along in the development cycle) can get the US Government to implement a credit of $10K per vehicle in time for the 2010 release date, then it is $10K per vehicle they will get to keep, but we are still at the original target price of ~$30K.
Plus, they get to see at what point we all simply say "no way"!
I only say all of this because at this point in time, with the drivetrain, battery, software, exterior, and interior designs not yet finalized and work on the assembly plant not even started, how anyone could have a clue what the "hard" actual costs are going to be? And I can not believe that GM expects to recover ALL of the development costs for the E-REV platform in the first 10K units released in 2010. That just makes no long term sense at all.
If GM wants to know my high price point, why don’t they just ask? For me, it is $40K out the door. But at that price, it has to be Supercar, not some KISS based, no frills, electric Vega. If that is what is produced, then my number falls back to "comfortably under $28K".
March 25th, 2008 at 6:45 am
I have seen other companies pull the same stunts prior to a new product launch. What they are doing is classic, float a new high price out, (sort of released in an unofficial way but by someone official), which is absurdly high and is almost guaranteed to cause a lot of their hopeful early adopters to react negatively. Then they announce that the recently stated price was not correct but that they expect the product to come in at a new price of ‘x’ where ‘x’ is lower than the just quoted ‘high’ price but is still much higher than originally expected. Thus they attempt to condition their target market to accept a price which is now much higher than the starting price.
For proof of this take a look at the stages of the price increases that the Volt has gone through. 1) Originally stated to be "…south of 30,000…." 2) Then a while later it was stated that it could be nearer 40,000. 3) Then a statement appeared from Lutz indicating that it would be around 35,000. 4) And now we are hearing that it may be around 48,000.
Congratulations GM, you’ve just priced yourself out of reach of the average consumer and into the land of the wealthy who would buy it as a toy 3rd car. To have been successful you needed to have nailed the price where approximately 70-75 percent of the car buyers could afford it.
Ter
March 25th, 2008 at 7:00 am
Is there a quote from Lutz? Didn’t we just see an article the other day about how GM is planning to take a loss at first? I think the 48k figure is too high, just like the under 30k figure was too low. This is a revolutionary car, and until GM can spread the overall costs out over the entire eflex family (they have to start selling more than one model for that to happen) the volt will be a little pricey. So what. So were DVD players when they first came out. Now you can get one for 39 bucks.
Keep up the good work GM, I’m still patiently waiting for my volt.
March 25th, 2008 at 7:01 am
My guess: $35k and they will lose money due to the low volume of the many very new types of parts they are going to be ordering from suppliers, driving up costs. They are going to argue that the extra $10K for the batteries will be recovered in reduced fuel costs over the vehicle lifetime, which will probably be true if gas is $4/gallon.You can’t factor in development costs into the price of the first 10K vehicles. Development costs have to be recovered over many years of production at high volumes.
March 25th, 2008 at 7:01 am
Is there no learning curve at all on this site? Here’s what we know…for sure.
1.) GM is producing the Volt
2.) GM is a exaggerator and a liar
So if you want a Volt, HERE IT IS –> you are going to have to wait (a long time)…and pay (a lot of money). The vehicle will make no sense….other than you are driving a electric car (which for many of us, is really all we care about). As said before, they are using the Volt’s good vibes (and us) to generate publicity to sell ridiculous ‘hybrids’
This GM vs Toyota Hybrid war kind of reminds me of the SNL exaggerating skit:
http://snltranscripts.jt.org/06/06spenelope.phtml
Gina: Yeah I have a card for everyone to sign, some of you might not know this but Mrs. Jacob’s 15 year old cat Whiskers Magee passed away last week…
Penelope: My cat passed away tooo sooo his name was whiskers magee the first sooo, he was 17 years old so just a little bit older than her cat soo it died a few minutes ago too sooo just effects me more soo.
Lisa: That cat was like a child to her.
Penelope: my cat was my child I was pregnant with my cat… I gave birth to it sooo I had my cat baby in the hospital and I had my cat baby shower soo a lot of people there soo.
PS) What car exactly is GM making money on these days? They lost 38 billion in ‘07, 2 billion in ‘06, 10 billion in ‘05
Just pray they last long enough to get this car at all. Looks like they’ve got enough cash to last just about 2 years. http://www.thetruthaboutcars.com/gm-down-to-its-last-34b/
March 25th, 2008 at 7:23 am
I really hope this is a mistake because my upper limit for this car is no more than $40,000 and that itself is streatching it.
Just calculated my monthly payments (6 year loan, probably unrealistically favorable 2% interest rate) at different price points. I won’t have anything to trade in because my current 2002 car will be fully depreciated by the time the Volt comes out. I purposely leave any mention of a tax rebate out because it is unlikely that that the federal rebate will exceed the cost of tax, title and license at the state level which I also don’t attempt to bake in here.
Volt Price Monthly Payments
========= ===============30,000 442.5135,000 516.2740,000 590.0248,000 708.02
Considering that I fill up my car once a week, it looks to me that any financial benefit of driving the Volt vs my current $32,000 car would be lost for the first 6 years at current gas prices. When I factor in the the additional auto insurance required to protect this extra $16,000 investment, the car has no economic advantage for me at the $48,000 price point and really only puts me at a break-even around $40,000.
Sure there are other reasons for me to buy a car, but it gets a lot harder to justify this to my wife considering that I’m not yet fully funding our retirement accounts or our kids college savings accounts yet.
Those that fill up 2 times a week would at least break even at $48,000 for those first 6 years.
Or course, I guess I can defer more payments to later years by leasing to own since I’m able to keep my miles down. I can also start saving now — but that kind of financial wizardry doesn’t alter the true economic value of the car — just when I may opt to pay for it. Sure hope that those batteries really last 10 years instead of just 8.
March 25th, 2008 at 7:27 am
Web site didn’t retain my returns.
$30K Principle = $442.51 in monthly payments.
$35k Principle = $516.27 in monthly payments.
$40k Principle = $590.02 in monthly payments.
$48k Principle = $708.02 in monthly payments.
March 25th, 2008 at 7:45 am
Business Week isn’t a magazine I look to for accurate reporting, and Lutz isn’t quoted as saying that the Volt would be selling for $48,000, so I am not that stressed by the article, but I am begining doubt that GM is going to deliver the goods with the Volt. Lutz can’t be this stupid, this series of gaffes are unbelievable, he must be preparing the market for an overpriced car. If they want to sell more than 10,000 or 20,000 a year, the car has to be less than $30,000.
Thom’s numbers are good evidence that the vast majority of Americans simply won’t be able to afford a $40,000 Volt, even with $4.00 a gallon gasoline, and as he said, he was using a fantastic interest rate which makes the payment artificially low. We can’t, and GM can’t, rely on the government to make up the difference. If GM won’t deliver a car that we can plug in, some other company will, and unfortunately, that company will probably have a headquarters in Japan or Europe.
March 25th, 2008 at 7:45 am
Way too early to be discussing costs… I know people are asking GM every chance they get, but why does Lutz entertain it? Seems like a really good way to fuel the fire. How could they possibly know costs when they don’t know the components, technology, etc.?
JUST WAIT A FEW–MAYBE TEN MONTHS.
March 25th, 2008 at 7:57 am
What we really need is for Congress to step up like it did for the hybrids, and offer significant tax credits for the first X number of production PHEV’s from each company of big auto.
The credit should be relative to the benefit (fuel reduction) of the car, similar to the hybrid credits. With a car that uses zero gasoline under 40 miles, I don’t think $10,000 would be an unreasonable credit to offer for the first, say, 50,000 vehicles, and then decrease to 75%, 50%, etc. of that initial credit.
March 25th, 2008 at 8:05 am
It all depends on the assumed volume of sales, sale price and assumed investment by GM.
I thought I heard Bob Lutz say they were spending $400 million developing the Volt, so if they intend to sell 10,000 of them, then the cost is $40,000, so any price equal or lower than that would be unprofitable.
March 25th, 2008 at 8:30 am
15, 16 Thom; 18 Dave B…..
Your comments here, with projected monthly payment numbers including financing costs are very helpful, Thom!!! BTW, a 2% interest rate isn’t completely unrealistic —as I think I mentioned to you at VoltNation in NYC, I just bought a new CUV* & financed it through GMAC at 2.9% ….two other banks couldn’t even come close, thank’s to the dealer’s factory-sanctioned "march madness" promotion.
And Dave, you’re absolutely right when you say, "How could they possibly know costs when they don’t know the components, technology, etc.?" —I bought one of the very first Camaro Z-28’s right after its complete redesign in 1982 and my dealer in California said he had a very senior, knowledgeable inside source at the nearby Van Nuys Camaro factory who said, "we have NO idea what these cars are costing us, and we won’t know until several thousand have come off the line!"
*My new CUV is an ‘08 Saturn Vue with the new body style (shared by the Caddy Provoq concept) —a car I’ll trade for the plug-in version to park alongside my plug-in Volt in 2010/011. (The Vue’s materials, fit & finish are impeccable, inside & out, and it handles like my daughter’s CUV, a BMW X5!)
March 25th, 2008 at 8:33 am
Lutz shoots his mouth off all the time. I don’t doubt he said it. The good news is that he seems to usually be wrong. The bad news is that he could just as easily still be low.
It sure looks like GM brass pulled the Volt out of their Toyota-Envy bin and asked the PR team for input before the EV1 team. It is painfully obvious that they had NO clue at all about how to build such a vehicle or if it could be built. The only thing they were sure of was the range and that was based on flawed logic operating in a vacuum.
Note to GM: You start off with a small battery/range and increase as the price comes down. Of course, that means you have to research what is possible and feasible before you put a commercial on TV claiming range X.
March 25th, 2008 at 8:52 am
Call me cynical. It feels like a typical car dealer scam. First, he gives me the low-ball price, “$30,000.” Okay, it’s more than I’ve ever paid for a car in my life, but I guess maybe I can swing it. I really want this car. “Where do I sign?” (Too fast! I was too eager. He knows I really want this car.)
The dealer disappears in the back office for a while, and comes back. “I’m sorry. My boss tells me I can’t sell it to you for $30,000, he says it will have to be ‘closer to $40,000.’”
“How much ‘closer to $40,000!?’” I ask, thinking, “can I possibly make that happen?” My friend the car dealer says, “Well, I’m pretty sure it won’t be much over $30,000. We’ll lose our shirt, but we really want to sell you this car.”
“Oh, okay…” It’s nice to know he’s on my side. I guess I won’t bolt out the door yet. He disappears to get a firmer number. “Yeah, alright, my boss says it’ll be about $40,000 (just like I said.) Yup, we’re losing our shirt on this!”
“Now wait a second! You said ‘about $30,000!’” “Did I? If I did, I’m sorry. That was just a guess. You know how bosses are…”
“Okay, yeah, I understand. Alright… I guess maybe I can make $40,000.” “Great! Thanks for understanding. Let me go get the paperwork.” He disappears into the back again, and when he comes back, he’s got an agreement with the number $48,000 on it.
“Here you go! ‘Just about $40,000.’” “Now come on! The way you got me interested in this car was by telling me you could sell it to me for ‘around $30,000.’ Now you tell me it’s going to cost me %60 more than that!? That’s not even close!” “Well, that’s really the best we can do! Like I said, ‘We’re losing our shirt on this deal!’”
I turn on my heel to walk out of the showroom, and he says “Okay, 45,000! But I’m losing my shirt on this! …”
March 25th, 2008 at 9:09 am
Thanks NASAMAN both for the positive response and for the new umbrella [no trouble to send it, I just haven't been to the post office in the last week -- if my meeting gets out on-time I'll be mailing it today].
Don’t forget that talking price and costs are two different things. Price represents the willingness of consumers to buy a certain volume of a product and is based upon the utility gained from the product. The economic price curve has nothing to do with how difficult or costly it is to actually build the product.
Many things still are pending that will determine final total costs: How many and how big of factories are built. tradeoffs of automation vs wages, types of wages required (skilled vs. unskilled; union, vs non-union), the size of marketing and promotion [the more we work on word of mouth, the smaller the budget that is requried], the price that GM must pay suppliers for components, etc.
Agree there are too many open questions to have a true understanding of costs; but talking about price and our willingness to buy at various price points so that GM has a better feel for that side of the supply/demand equation is not a bad thing.
March 25th, 2008 at 9:10 am
First post for me. I cant afford 40 either. if they dont keep the price around 30 then they wont have the volume they need. the oil co. wont have to worry about this car hurting them any if is a low volume car. here is lyle on MSN http://video.msn.com/dw.aspx?mkt=en-us&rf=http://autoshow.autos.msn.com/autoshow/NewYork2008/video_portal.aspx&vid=99e74da4-6226-4c7a-ad91-f4be1fd87f23&t=c520&rf=http://autoshow.autos.msn.com/autoshow/NewYork2008/video_portal.aspx
March 25th, 2008 at 9:10 am
You’ve got to be absolutely nuts if you believe that this is true at this point. 1st of all, BusinessWeek is just that-weekly (or weakly) speculation of businesses, not the auto industry. Next thing they’ll be telling us is that Starbucks will be selling espresso for 15.00 per cup because of a Valdez family revolt in Colombia. C’mon, guys. Think. Everyone who has half an idea of economics understands this. If GM wants to be competitive in a market that is practically in its infancy, they know that on the 1st so-many thousand units they WILL have a loss. At 40k+, they would miss their target customers entirely, causing apathy for them in the future. Can’t risk that.
Then there’s CAFE which states (I hope I got this right) that by 2020 the corporate average has to be 35 mpg. If I understand this correctly, that doesn’t mean that everything they sell has to be a Volt, it simply means that if you add the mileage values of each car together and then divide tham by the number of vehicles, the average has to equal or better the CAFE standard for that year. Also, NHTSA fines the automaker for every infraction. GM cannot at this point stand to lose any more profit.
Then the EV-1 fiasco left a bitter taste in the mouths of anyone who ever trusted GM to deliver on a project of this scope. With a slightly damaged reputation, they cannot afford the backlash. I believe GM is serious to deliver, but once again, you cannot possibly expect anyone to know the price of a car that the platform has never before existed. Microsoft lost money on EVERY Xbox it made, but you will not go into a Wal-Mart or GameStop and not see one. Let the speculators on Wall St. say what they want. After all, they’re the ones who halfway got us into this economic train wreck we’re in. So you’re gonna believe them?
March 25th, 2008 at 9:12 am
22 GXT….
I have to respectfully disgree when you say, "It is painfully obvious that they had NO clue at all about how to build such a vehicle or if it could be built. The only thing they were sure of was the range and that was based on flawed logic operating in a vacuum." —WRONG!
I’m a physicist & electrical engineer (as well as a car enthusiast) and in my 45-year career have chaired hundreds of rigorous design reviews of complex space hardware & software, from black boxes to complete spacecraft. One thing these hundreds of reviews had in common is that they all involved missions that had NEVER BEEN DONE BEFORE and employed hardware/software approaches that had NEVER BEEN USED BEFORE —and the countless missions they supported (Apollo, near-earth satellites, Shuttle, Int’l Space Station, etc) were all successful!*
Before and after the formal session at VoltNation I spoke at length with the key designers & engineers on Volt (and recorded ALL of those conversations, some hours in length, all of which I’ve reviewed.) I assure you GM had MUCH MORE than mere clues before the actual design efforts even got under way and that they are extremely talented, highly motivated people who I believe number among the "best & brightest" people in the automotive industry. Remember, GM has the backing of the board of directors in establishing the EFLEX program in general & the Volt in particular as the "number one priority throughout GM globally", as they stated publically in NYC!
*However, the first launch of a communications satellite I was responsible for experienced a Delta II launch vehicle partial failure that left the satellite in an unusable low orbit; by expending some hydrazine fuel to lift the satellite to it’s intended geosynchronous orbit, we were able to salvage the mission, although the mission lifetime was shortened somewhat due expenditure of some of the hydrazine needed for on-orbit station keeping.
March 25th, 2008 at 9:15 am
Besides, if that were the case, then GM would’ve lied to Lyle, you, me and the other 9,997 people who’ve committed interest in the Volt. Trust your own knowledge of the auto industry, not that of a stockbroker who doesn’t know a Limited-Slip Differential from a illegal narcotic. (By the way, everybody-Happy Late Easter)
March 25th, 2008 at 9:18 am
Nasaman speaks for me as well with comment #27
March 25th, 2008 at 9:37 am
Wait-N-See! There is still a long road ahead.
March 25th, 2008 at 9:40 am
26 - Firefly,
The market is no longer in its infancy. The Prius is in its 8th year of US sales. Toyota has several models of hybrids. Ford has one. Honda has one. Nissan has one. By late 2010, a new generation of Prius will likely be on the road and I believe Honda will have a new introduction, too (more of a Prius-like purpose-built vehicle design than a hybridized variant of an existing product).
People are well conditioned to accept hybrid technology and are now looking for value in this market. If the Volt has a high price tag, it’s going to be a very tough sell. GM’s got to be creative in managing costs.
March 25th, 2008 at 9:42 am
I wonder how many of the more expensive components ( battery , electric motor ) will be imported . What will the Dollar be worth vs. other currencies by 2010 ? Was any of that discussed last week ? Falling Dollar may have already contributed to moving price target ?
March 25th, 2008 at 9:43 am
nasaman #27:
I agree with everything you have to say, but there is one major difference between what GM is doing and what NASA is asked to do by the US government:
GM has to report to the share holders, who have invested their money, and expect a return on that investment. That simple fact has to make them think differently than an engineer at NASA, who just has to get the job done, regardless of the costs.
March 25th, 2008 at 9:47 am
I think a LOT depends on where gas prices are going to be in 2010. If gas is $5/gallon or more in 2010, I bet a lot of people will stretch their budgets with higher car payments than they are used to. A lot of people would do it just for the satisfaction of sticking it to OPEC and the big oil companies. I can visualize a lot of Volt owners with big grins on their faces as they pass gas stations on their commutes to work every day.
I think with some good incentives from the government and GM doing it’s best to put out a high quality Volt at a good price, they’ll somehow manage to keep it under $40,000. Lutz may be pretty close to the final price with incentives …. around $35,000. Maybe they’ll blow everyone’s minds and get it down to $30,000. Let’s hope so. I want these cars to be a huge hit. GM will get a LOT of invaluable prestige and good press if the Volt is a smash hit with car reviewers and everyone else.
People love to have a choice. With gas prices, people don’t have that choice. It’s either pay it or take a bus or something. Americans in particular aren’t going to give up the freedom of having their cars, SUVs and trucks anytime soon. The whole American lifestyle depends on the freedom we get from our cars and trucks. It’s like football, baseball and hot apple pie and all that. We’ll work hard to keep it.
SUV and truck owners ought to be cheering GM on bigtime for getting into hybrid technology in a big way like they are now. In maybe 5-10 years, battery prices will come way down and everyone can "have their cake and eat it too" …. reliable 250+ horsepower SUVs and trucks that run on clean, relatively inexpensive energy … more electricity and a lot less damned gasoline. In 5-10 years from now, the SUVs and trucks will probably be much lighter but just as tough and safe and so forth …. because of cheaper, advanced lightweight materials like carbon fiber, aluminum, high strength steel, etc.
People need to think about the "value equation" and "total costs of ownership" with cars like the Volt. The maintenance costs for things like oil, timing belts, oil filters will be a lot lower. Since electric motors are generally much more reliable than mechanical ICE engines/transmissions, you are going to see some very nice reviews from Consumer Reports about quality and reliability.
When you don’t have to change your oil every 3,000 miles, it’s going to make cars like the Volt have a lot less wear and tear. I bet more people screw up their cars and trucks than you’d think purely because they don’t seem to get around to changing their oil and filter at a Jiffy Lube or whatever. Convenient, 30 minute Jiffy Lube oil change places aren’t exactly close by for everyone you know. Some people in rural areas still have to do it themselves you know. With the Volt, people will manage to get the scheduled maintenance for the ICE range extender done once or twice a year. Every little old lady in America could get that taken care of when it is time to do emissions inspection (which will be interesting to see if that is even required for the Volt).
The less you have to rely on the owner to maintain the car, the better the "value equation" is going to be. Resale values will be higher and all that good stuff. That’s why Hondas and Toyotas have been popular. Until recently, they have tended to maintain their value over time better than the Big Three Detroit carmakers. GM needs to try to do that bigtime with the Volt. I want to see GM win lots of those Consumer Reports, J.D. Power, Car and Driver, and Motor Trend awards for quality, value, initial quality, and reliablity, etc.
March 25th, 2008 at 9:49 am
#26 Firefly
I agree with the CAFE discussion, and I’m sure this puts GM in a dilemma.
I’m sure GM still wants to sell trucks and SUV’s. Even with 2-mode and smaller engines, theses large vehicles will be challenged to get 35 mpg. Therefore, by selling the Volt in large numbers, they still may be able to meet the CAFE standards.
However, without the right pricing, the Volt will not sell in large numbers. Therefore, I don’t believe anything that is said regarding Volt pricing at this stage of the game.
March 25th, 2008 at 9:50 am
Ok Lets talk costing… do not all the "new" hybrids for GM use the same "motors" that the Volt will be using… The only additional costs involved with this project will be with the battery and its’ "software" and bit of hardware to put it all together.. 90 per cent of the parts are probably "in stock". It is the body and interiors that will have to be produced. Not a big deal as GM already would have the locked in design by now and it could be a retool in a single plant… 6 months to set up and get into production.
You are hearing about 3rd party companies doing "electric" crossovers to your current vehicle for $6,ooo - $8000. Granted the battery life may be shorter but… if I converted my 07 Maxx to the "electric" version for say $8000.00 and drove it for another 5 years… My costs would be recovered in 3 years or so with just the gas savings.. There is so much BS and fear mongering over the pricing that GM… if they are not careful… will be not be selling the Volt except as a "rich boy toy" Come On People… GM Just give us some STRAIGHT Facts… not speculation….
March 25th, 2008 at 9:58 am
40k is just too much. I really hope that GM considers a slightly scaled back version with a 20 mile all electric range. That would cut the battery cost in half and still allow many drivers to commute on electric power only. Throw in solar panels built into the roof and maybe on a good sunny day you could get a few extras miles for free.
March 25th, 2008 at 9:58 am
One of the values of the GM Volt and what makes it unique compared to Telsa and other specific EV companies is the potential pricing. The whole message of making a Chevy Volt and not a Cadillac Volt was that customers expect a Chevy car to be within $20K to 30K and not $40K. If GM would of announced the initial vehicle will be a Cadillac, then customers would expect and accept a $40K price and it would expect it to be smaller volume vehicle. So GM needs to figure out their market position. I fully understand the pricing complexity and return on investment issues, but the message of calling it a Chevy and pricing it around $40K for small number does not add up. It could result in negative market reaction based on expectation of the brand name.
March 25th, 2008 at 10:09 am
Competition will solve this problem for us in the long run.
March 25th, 2008 at 10:17 am
1st of all I like GM and I would with them if the company would be runed by smart leaders… it is not!
Wake up people! GM has tons of suvs, pick-ups and other things they call car on every dealers’ lot to sell first.. it is not their interest to bring out a shiny new car on low price which runs on electricity. These people ruined their own business in order to get more - temporaily - profit for the bosses. The CEOs and chiefs couldn’t care less about a car which uses only a few drops of gas.
Americans are EXTREMELY naive. They swallow everything. This whole Volt thing is nothing but advertisement for GM. Just think a sec., if Honda, Nissan could come out with a hybrid how come GM couldn’t so far? They do not want to! They already had the EV. They got scared or they had been shut down from above, as they realized if the people will find out that they can buy an EV who will buy the pickups? Who will buy the gas? The country cannot afford to loose billions of dollar profit.
They want to sell gas cars as they are connected to BIG-OIL unlike the Japanese who are interested in selling more cars.
40K for a hybrid?? Prius is soon to be out with a plug in version for less than 30, with a redesigned body. Volt has no chance unless it is sold for less or about the same as the prius.
Until the Volt is out check the cars in Europe. Look up their mpg! Those are gas cars not hybrids. See the vw golf tdi, or a fiat bravo and there are tons more.. they do 40-50 mpg easy. How many of those you can see here? NONE.
GM needs a REAL revolution to survive.
Someone should fire all the idiots in main positions who has less than an IQ of 140. Hire only the best people for marketing. So far their strategy is a joke. The design department is another one. Send some people to Japan, Europe and learn! Japanese used this many times. They learned from the leaders in the field (this is not the US anymore, so stop kidding yourself) then reverse engineer what they had and made it better, cheaper, more interesting.
If GM will not change their attitude they will be washed out of their own market. (no problem for the CEO’s though.. they will get a bonus :))
March 25th, 2008 at 10:32 am
There is no mention whatsoever what volume this price is based on. We know there will only be 10K released the first year. And as has been mentioned we know that GM plans to take a loss as did Toyota in the beginning with the Prius. So my take is that there are just too many unknown variables to worry much about an article like that.
March 25th, 2008 at 10:35 am
I would gladly pay $48k if they release something resembling the Concept Volt. I guess it’s a small price to pay to stop sending money to rouge nations who are using the oil revenue that we send them to sponsor terror and buy up American companies that have been weakened by the slowing economy (and are thus devalued and cheaper to buy up). Add to this the fact that they helped create the problems with the economy (we, obviously, are most to blame), and I am pretty sure they are aware of what they have done. A weak US economy is great for our enemies. In a couple of decades, we will all work for companies owned by our enemies that they purchased with our money. In the words of Warren Buffet, we will be "colonized by purchase rather than by conquest."Sorry for the political rant. All that being said, if Chevy releases a $50k electric Cobalt, I will buy another plug-in, which will almost certainly be offered by a competitor, and watch GM file bankruptcy and be bought up by the same tyrants that are investing in the rest of America. If they do it right, however, they will revolutionize the industry, and I will be their biggest advocate. Let’s just hope they don’t strip any more features while at the same time adding to the cost. I can handle paying more if I am getting more, but things don’t seem to be looking like this is going to be the sporty/luxury car I had hoped for. I know most here disagree and would settle for manual windows and no windshield wipers, but I fall into the non-price-sensitive category of buyer; I will pay $50k for a car that makes me want to drive it, but I do expect some creature comforts for my $50k. I’m still a fan, but my faith is tested anytime I hear anything new about the Volt: it usually involves higher prices, fewer features, complete redesigns of the car I fell in love with, or delayed road tests. I would just like some good news for a change. I know, I know: the batteries seem to be working like they should, and I should rejoice at that. I know it is a major victory, but considering GM has already committed to building some version of the Volt, I think working batteries should be a given at this point. That’s it for today. I’m braced for the response for my unpopular positions….
March 25th, 2008 at 10:46 am
Give me the option for an ICE delete. Without all that extra weight, the range will probably go up to 50 miles. If I have to go more than 50 miles I’ll use my other car.
March 25th, 2008 at 10:48 am
33JimI….
I don’t want to belabor the point, Jim, but unlimited NASA & contractor budgets is a popular misconception. Although in the early days of the space program CPFF (cost plus fixed fee) development contracts were common, by the mid 1960’s virtually every NASA contract became FFP (firm fixed price) or a variant of FFP. Also, by far most of the design & construction of space hardware/software is done by NASA’s contractors, not by NASA agencies themselves. NASA people conceive, specify & design-review most equipment —this was true of the Apollo program, Shuttle & the Int’l Space Station as well as a multitude of other high-risk spacecraft). NASA has actually been on a "strangulation budget" for decades, and NASA’s contractors have almost always been forced to observe severe cost penalties in event of cost or schedule overruns. If overruns DO occur, the contractor earns a black mark on their record that makes it harder for them to stay on a qualified bidder’s list for subsequent NASA development work. My 45-yr career hasn’t been a bed of nothing but roses –there have been a lot of thorns. It’s been tough ….but no regrets!
PS: Regarding EFLEX & the Volt, GM bought Hughes Aircraft, the worlds largest private maker of space hardware, around 20yrs ago & many Hughes engineers & executives moved to the Detroit area from southern California. Those guys designed the first ABS systems, heads-up displays, etc in the automotive industry. Equally important, perhaps, the space program’s "strangulation budget", risk-acceptance and breakthrough culture was infused into GM & I believe it’s alive & prospering within the hundreds of people on the EFLEX/Volt team at every level. I like to think even Bob Lutz & Rick Wagoner have been "infected"!
March 25th, 2008 at 10:50 am
At 48K, our ’stripped down’ Volt has to go against Tesla’s Whitestar sedan which is aimed at competing with luxury manufacturers like Mercedes and BMW.
The White Star is expected to market late 2009, in both a ‘all too familiar’ 50 mile electric/gas REV version with a range of 400 miles and a all electric 150-200 mile version (apparently there will be a two battery option, regular and extra pricey) Cost goes from base at 50k, to all out tricked at 70K.
I wouldn’t mention it other than the fact they are ACTUALLY PRODUCING electric cars now, so they are the only ones you can take seriously.
Then there is the BlueStar, slated for 5 years out at 30K (provided the White Star sells well).
/just saying
March 25th, 2008 at 10:55 am
This is getting really old.
March 25th, 2008 at 11:06 am
As gas prices increase (and they will) and OEM electric (non-NEV) cars are priced out of the market (and they are), there will be a dynamic market for local converters of highway capable commuter electric cars. http://www.evhelp.com/ http://www.electroauto.com/gallery/other.shtml
March 25th, 2008 at 11:07 am
Yawn…
March 25th, 2008 at 11:09 am
I think the cost of Volt is indeed 30000$. But Government would like to support the Plugin vehicles by giving tax rebates for political reasons. But they would have thought if the customer is ready to buy the VOLT for 30000$ why should we give tax rebate. But there is a way… Jack up the price to 40000$ and give tax rebate to make it 30000$. I think GM and Government are both involved in deciding the price.
If the VOLT is 40000$ with no rebates, it will be a commercial failure though not a technical failure.
March 25th, 2008 at 11:10 am
44 Statik,
I really wouldn’t take Tesla too seriously at this point. They just started production a few days ago, we are still to see how well their cars hold up (but wait, anyone who can owns a 100,000 dollar car is going to treat it like gold, so maybe it’ll be a little difficult to get real world reliability and performance stats on them).
I’ve been following Tesla since I first heard about them in early 07, and I’ve been optimistic but skeptical ever since. The first video I ever saw of the roadster it broke down and Mr Eberheardt and the reporter had to PUSH it down the road….it was actually on tape. NOT a good press release.
March 25th, 2008 at 11:11 am
They already said {GM} it would be produced at a loss.
Did any of you stay awake in school. Does this magazine really know for sure how much the battery pack will cost. They don’t even know the chemistry in the battery. Sheeesh everyone thinks if it’s on the web or in print it must be true. Wake up!
March 25th, 2008 at 11:13 am
Oh and it’s being built on a Cobalt platform. They already know at $40K it’s a flop. They will not spend 400M to build an over priced vehicle.
March 25th, 2008 at 11:16 am
48 Talks
Do you live in a country where the government fixes prices on consumer goods often??? That doesn’t happen in America my friend. The last time it did, Nixon was in office and it lasted less than a year.
Even 35-40 k doesn’t put this car out of reach for most Americans. If you think about it, next time you drive down the road, count all the BMW’s and Mercedes, and then add in all the SUVs. All of those people can afford a 35-40k volt. The trick is to convince them they want one. But I think that by 2010 the oil companies and wall street speculators will have done that job already.
March 25th, 2008 at 11:20 am
Uh Yeah…look at oil genius
March 25th, 2008 at 11:23 am
#35 Ray - The Volt motor needs to be significantly larger/more powerful than a normal sedan hybrid motor because it needs to power the car on its own up to highway speeds, and with decent acceleration. In most hybrids the motor is only assisting the gasoline engine, and if the motor can move the car alone it is only at low speeds. Unless I am mistaken, GM does not currently have a motor is can just pull from another vehicle to drop in the Volt…though the motor in the fuel cell Equinox (which is not a mass-production vehicle anyways) could be close.
As for the battery pack, that is most certainly not an off-the-shelf affair. The concept is sound but it is the first pack of its kind. Proprietary software/hardware must be developed.
#39 Adam - Sure we can take what GM management says with a grain of salt, but the indication I’m getting is that they have a lot of renewed enthusiasm and brain power among the management, and much involvement by management in the Volt project.
March 25th, 2008 at 11:27 am
nasaman #43:
OK, with what you had to say and your firsthand knowledge, you convinced me to change my position!
And I do agree with your statement about the Hughes Aircraft acquisition by GM. I wonder how many other cool toys they came up with that are sitting on a shelf somewhere…
If they could just install a decent phaser so I could take care of the guy in the left lane with his left turn signal on, that decides to turn right at the last second!!! Now that is an option I would pay for………
March 25th, 2008 at 11:58 am
I won’t believe anything unless I see it here. So for now I’ll just repeat my plea:
The batteries have the capacity
The engineers have the sagacity
To end our useless toil for oil
Deliver the Volt (<35,000)
Don’t let the momentum spoil
March 25th, 2008 at 12:09 pm
I spent some time talking with Ed Piper (Chevy President) at Volt Nation. Because I had a check in my hand that I told him I would write it out on the spot for $10K deposit we ended up talking about pricing a lot.
I told him that if I gave him the check I would write two restrictions on the back: MSRP <= $40K, and delivery on or before 1 March 2011.
He was very interested to talk price, rebates, marketing, lobbying, grass roots support. He was hoping that $40K would be after Gov rebates, but I told him that I had assumed by then there there would be $4K in tax deductions and was assuming before tax credits (i.e. MSRP). But of course I couldn’t depend on a tax credit if he accepted the deposit.
He certainly understands that it will only be enthusiasts that will shell out $40K. Now I was talking $40K in todays dollars, I should have made that clear to him, what’s your guess about inflation 1 to 20% by then.
He certainly was thinking in the $40K area, and was clearly hoping more like $45K however price is something that they have UNDER CONSIDERATION and thus everything is subject to change.
He wants to keep the Volt a premium vehicle for a couple of years at least. At $40K plus for a small car, that would be premium.
March 25th, 2008 at 12:21 pm
The best course of action is this:
Start saving money for the Volt.
When it is finally for sale, then decide if you want to buy it.
As far as tax credits go, here is my opinion. Tax credits should be applied toward an American car purchase and not a foreign one. We should encourage purchases of American cars.
BTW, I haven’t owned an American car in since the 1986 Pontiac Sunbird I bought when I got out of college.
March 25th, 2008 at 12:29 pm
It’s like you people never learn. The popular media and technology news is an oxymoron. If you are going to get upset every time someone, somewhere publishes an unsubstantiated claim about the Volt, your blood pressure will be better off visiting other web sites and other technologies. There are no significant cost differences between the automakers when we’re talking vehicle development. Anything that can be said about GM can be said with pretty much equal validity about any of the other 20 automakers. There are no magical ways to develop a car more cheaply than anyone else. It’s labor costs that differentiate the automakers cost structures.
First off, there is no "Volt cost" - you can make all kinds of assumptions and come up with all kinds of pricing structures. It all depends on many things - how many copies of the vehicle, how long a period are you pricing the car for, etc.? Price the car for the first year and amortize all the development costs and any car can be claimed to cost a fortune. There are further complications with the Volt, which is using an expensive component (the battery) whose future costs are somewhat uncertain, but certain to go down.
That alone will make accurate estimates of the costs of a Volt hard to come by.
Let’s all do the reasonable thing and wait for Lyle to find out
what’s what.
Lyle : a suggestion : don’t mention these media claims without getting some input from the Volt team. I’m getting fed up with all the extraneous nonsense such articles provoke.
March 25th, 2008 at 12:34 pm
An earlier poster mentioned that even at 40k it’s not out of the reach of most Americans. Look at all the BMW’s and Mercedes on the road. The flaw in that logic is the folks who can afford those aren’t the ones that really need a VOLT from an economic perspective. Yes, it does help ease our dependence on oil no matter who buys it but those that can afford a $40k+ car aren’t as financially affected as the average working guy who spends a larger and larger percentage of his/her income on fuel just getting back and forth to work with no other option. The vast majority of working class folks will still be forced to drive much cheaper ICE vehicles and thus the paradigm will not shift until prices come WAY down for EV’s.
March 25th, 2008 at 12:39 pm
Kent #60:
What you say is true, but on the other hand, it keeps the traffic count high on the site, and that help with the income Lyle receives from the advertisers………………..
March 25th, 2008 at 12:43 pm
I would love to get a poll of the people on this site that have spent 40k or upward on an auto. Most of your 40K cars are leased not purchased. Between payments and insurance we are talking close to $900- $1000 a month. GM is not going to sell the car for a loss and have GMAC finiance it at a loss also. It will be 2-3 years after the initial release before most consumers will even think about purchasing the Volt. Let’s get real, you have to pay for cutting edge technology.
March 25th, 2008 at 12:52 pm
Before we get too upset over another inaccurate big media story, could they just be misquoting this information from the NY auto Show?
http://www.leftlanenews.com/bob-lutz-saturn-vue-plug-in-chevrolet-volt-to-be-more-expensive-than-originally-thought.html In this blog, Mr. Lutz is quoted as saying the Saturn Vue plug-in would be $48,000: "the two-mode hybrid system will add about $8,000 to $9,000 to the price of the Vue, with the plug-in technology adding another $8,000 to $9,000 on top of the cost of the hybrid system." When all costs are tallied, Lutz says the Saturn Vue will list "for about $48,000" Now take off the $8,000 for the two-mode hybrid system, and with all else the same, we have the same $40,000 for the Volt we keep hearing everywhere (yes, very oversimplified, I know). What’s even more interesting about this blog is it has yet another mention of the 40 mile electric range of the Vue, so take it with a grain of salt as well…
I’m with Dave (18) and Tim (30) - I’ll just wait and see, and let capitalism take its normal course. In three years, who knows how many options I’ll have to choose from?
March 25th, 2008 at 1:00 pm
#50 Will
I remember the early Tesla vids, lol. Course I remember seeing the Volt being pushed around it’s fair share too, hehe.
Here is production car #1 being put thru it’s paces by Jay Leno…alot of good footage.
http://www.jaylenosgarage.com/video/video_player.shtml?vid=229378
Honestly, if the Volt is coming in at 50k, I would have to think real long and hard to not say, heck another 48k to have that, lol. 0-60 sub 4 secs…200 mile range…and wicked awesome.
It’s funny how the value is hard to get out of electric at sub 40k…but there is nothing, absolutely nothing that comes close to matching this thing at 98k.
I guess thats the real benefit of electric cars…the cost is all in the platform, once you get past that, the ’super-car’ power is hella-easy to get out of electric. If a major automaker was bankrolling that car, it could probably be put out at 60k…maybe thats why they don’t.
March 25th, 2008 at 1:04 pm
I guess I think of it like any sales deal (I recently had to go through that for my Prius).
So, they say 40K. Then I’ll have to stick with 30K and see where we land.
Hong.
March 25th, 2008 at 1:15 pm
#60
I think Lyle has been fairly unbiased putting up quotes from 3rd party sites about the Volt. For the most part, (other than a chevron snafu) they have almost always turned out to be 100 percent accurate…something which cannot be said about GM’s ‘official quotes’.
I’d wager that of all the posts for 2007, that were ‘goal’ oriented out of GM’s mouth ie) production, price, volume, style — maybe 10 percent were true.
As for most American’s can afford 40-48k…this is impossible. According to the US census, the median income per household member (including all working and non-working members above the age of 14) in the year 2006 was $26,036.
70.95% of American wage earners earn less than 50k (Census Bereau.
Compound these numbers with the housing recession (today biggest drop in 20 years reported) and these numbers are just getting worse.
I would put maybe 5-10 percent of the population can afford a Volt north of 40k. On top of that, a good portion of people that have money…have it because they are cheap.
March 25th, 2008 at 1:19 pm
If the Volt turns out to be a disaster because of price, GM did it to themselves. The new design studio, the new body style, the unnecessary new low-power parts like windshield wipers, etc.
When the Prius was released in the US, it was a butt-ugly cheap-o model. And Toyota still had the foresight to sell it at a loss. People bought it because of the important part, the drivetrain. And now look where they are.
All GM had to do was release a Cobalt with a battery and a motor and call it good, but every other week we hear about some new self-inflicted disaster like this.
March 25th, 2008 at 1:30 pm
#68 Tom
I agree with you 100 percent, slap a battery in a Cobalt…just get it out there. The Prius was sin itself when it first came out…not exactly a looker now, lol…but it was out there.
Honestly, we just want a fricken 4 seater with a battery here. A electric Cobalt at 25k…they could sell 100k easy. If you give people a car they can understand it’s value…they will buy it, big time.
March 25th, 2008 at 2:01 pm
#68 Tom, #69 Statik:
Right.
March 25th, 2008 at 2:02 pm
#27 Nasaman:
I haven’t worked at GM or NASA, but watching the two companies operate clearly shows that they have some very significant differences.
People do things that haven’t been done all the time. But your argument seems to be that since the Volt hasn’t been done it will be done. That doesn’t follow. And it certainly doesn’t follow that it will be GM to do it.
Based only on the items that GM have actually ADMITTED to you can see that they had a surprising lack of knowledge. Refer to comments on weight/aerodynamics, component power draw, etc. These would have been obvious to the EV1 engineers… yet for some reason they were incredible surprises worthy of public disclosure.
I have no doubt the GM Engineers want to make this work and are trying to make it work. What a great opportunity! But that doesn’t change the fact that this certainly appears to be a GM exec/PR driven project and GM’s management has tended towards incompetence. If examples such as GM’s financial situation, their downplaying of hybrids, and their hybrid bus fiasco (they justified GM staying out of the hybrid car market and were supposedly incredible right until the day that they turned out to be so bad) don’t convince you, witness the putting of the cart before the horse that has become the Volt.
March 25th, 2008 at 2:11 pm
#27 Nasaman,
Regarding my range/vacuum comment, consider this.
If the range of the volt were halved, it would still cover (IIRC) 50% of the daily commute of most drivers, shave perhaps $5,000+ off the price, allow GM to build twice as many, provide for more interior volume, and provide better fuel economy by not having to haul around the extra battery all the time.
Tell me, which would be more successful?
Of course they could have adjusted the range as they actually started learning about the Volt IF they hadn’t picked the range based on the PR benefits (80% of consumers are covered!!!… way farther than stupid Toyota!!!!) and if the PR department wasn’t already airing commercials well before GM knew what they were getting into.
Perhaps I don’t fully comprehend the problems with "being GM", but it looks like incompetence to me.
March 25th, 2008 at 2:12 pm
I believe that Mr. Lutz even said something to the effect that $Millions in R&D could bring $Billions in new sales due to good PR and they didn’t want to make the “let others make the Prius” mistake again. GM will have to realize