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GM CEO Wagoner: 2010 Volt Launch Remains On Schedule and Optimism Building and Did He Say $20,000?
May 1st, 2008 | Posted in: Timeline
GM CEO Rick Wagoner spent some time with reporters today in San Francisco after giving a speech at the Commonwealth Club today.
In the not-too-distant past he had said the 2010 Volt launch was not guaranteed.
However today he said "so far we’re on schedule."
And in response to the fact that Volt battery development work was progressing well, he said "our optimism is building."
In his speech he suggested that oil prices were unlikely to retreat and admitted the recent consumer swing from SUVs to compacts cars is "rational."
Did he say $20,000 for the Volt?
Source (Reuters )
Posted by: Lyle
104 Responses to “GM CEO Wagoner: 2010 Volt Launch Remains On Schedule and Optimism Building and Did He Say $20,000?”
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May 1st, 2008 at 8:12 pm
More of the same stuff just posted.
http://tech.blorge.com/Structure:%20/2008/05/01/the-chevy-volt-is-making-some-big-promises-will-its-battery-match-the-hype
Take Care
Arch
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May 1st, 2008 at 8:13 pm
Hey I got a first post!
Take Care
Arch
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May 1st, 2008 at 8:13 pm
I just read something that the Chinese government won’t allow any more gasoline vehicles after 2010… though currently the Chinese are buying lots of big vehicles like SUV’s (currently the government keeps gas prices artificially low… part of “growing” their economy).
I haven’t seen this confirmed however.
In any case, great news that the Volt continues to sound like it’s on time for 2010!!!!
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May 1st, 2008 at 8:18 pm
Well they seem to be talking today. Something must be up.
http://www.iht.com/articles/ap/2008/05/01/business/NA-FIN-US-GM-Electric-Car.php
Take Care
Arch
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May 1st, 2008 at 8:20 pm
However today he said “so far we’re on schedule.”
I don’t see how. Every original timeline has been pushed back…every deadline missed.
Or maybe I’m wrong?
Mr. Wagoner, can anyone other than yourself and Bob actually see this ’schedule’?
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May 1st, 2008 at 8:22 pm
I’m ready to see the Production version. Anyone else??
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May 1st, 2008 at 8:22 pm
They are all talking today.
http://www.news.com/8301-11128_3-9933798-54.html
Take Care
Arch
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May 1st, 2008 at 8:28 pm
#5 Statik
I think the way to interpret what he said is “on schedule to introduce the Volt in 2010″, not “on the schedule” as if it was an agreed on document.
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May 1st, 2008 at 8:36 pm
More talk:
http://www.reuters.com/article/pressReleasesMolt/idUSN0145819820080502
Take Care
Arch
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May 1st, 2008 at 8:39 pm
Whooopeee!!! In the link to comment #4 Mr. Wagoner clearly implied that the Volt will only cost $20K!!!! In all seriousness, we are so hungry for information that we over-analyze everything. Honestly, if the Volt is delivered in January of 2011, will you really refuse to buy it becasue GM “blew the time-table”? It would be great if GM delivered, but the Nov. 2010 goal is a goal. This will be an historic car when it is delivered at a price that many of us can afford, whether it s “on schedule” or not.
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May 1st, 2008 at 8:48 pm
I think it probably means that GM is on schedule to introduce the volt. Or put another way… not behind schedule.
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May 1st, 2008 at 8:58 pm
I’m more excited for my 11 year old girl and the real potential for a cleaner, quieter and certainly, exciting future! (vehicular speaking).
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May 1st, 2008 at 8:59 pm
He did not imply the Volt would be $20k at all. He did imply that they want to build a $20k EV or hybrid.
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May 1st, 2008 at 9:10 pm
It was an international article. It could be he meant 20,000 euros and it got fouled up in translation. Still, that’s pretty cheap, considering we’re reading estimates of $15K for the battery bank.
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May 1st, 2008 at 9:27 pm
Indeed, if the $20,000 mentioned was supposed to be in euros that still has the Volt at $31k
Whatever. If it was meant at $20k US dollars, then GM will sweep aside every car manufacturer out there and truly put a Volt in just about every driveway in North America.
I see the Model T scenario all over again. Yippee….
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May 1st, 2008 at 9:40 pm
He did not imply anything about the Volt price, he simply dodged the question, why is it taking so long to bring out a PHEV, with words to the effect it takes longer is the PHEV is priced so ordinary folks can afford it.
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May 1st, 2008 at 9:41 pm
Here is another of Wagoner’s latest comments. It seems that he will come out with a Volt launch by 2010 and the rest is anybody s guess.
http://www.news.com/8301-11128_3-9933798-54.html?tag=blog.promos
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May 1st, 2008 at 9:42 pm
The article clearly states $20K and it was in San Fran, so he certainly wouldn’t have been talking about Euros. However, I think that’s probably a target price for the Volume Volt and it’s anyone’s guess when we’ll see that. You can be sure it won’t be the first $10-20K produced.
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May 1st, 2008 at 9:55 pm
Evan #13, I was joking about the “clear implication.” But notice that we now have the $20K in the headline, and actually being seriously discussed. I’m going to go have a beer now and watch the recap of the Brewers beating the Cubs 4-3 in the 9th.
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May 1st, 2008 at 10:02 pm
I expect a GM clarification email at some point soon about this. Wagoner was probably using 100k vs. 20k for the sake of hyperbole.
That said, it’s great to dream.
(If they could roll out the volt for under 20k plus battery leasing, they’d get past a lot of the initial sticker price shock).
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May 1st, 2008 at 10:18 pm
For anyone who really thinks the 1st generation Volt could cost only $20k… see Lyle’s other thread http://gm-volt.com/2008/05/01/if-the-volts-cost-is-about-the-batteries-how-much-do-the-batteries-cost/
Maybe $20k with *out* the battery… and then you have to lease it.
Or as someone else has suggested… they meant Euro’s… just because they were in San Fran when they said it doesn’t mean anything… these guys travel a LOT and often don’t even know where they are… all they see are airports and hotels.
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May 1st, 2008 at 10:21 pm
AES #20
I agree. The price of a 2009 Tesla (’08’s are sold out) is $109,000, not $100,000.
So, if you add $9,000 ($109,000 – $100,000) to $20,000, you get $29,000. But, that may also be a dream.
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May 1st, 2008 at 10:25 pm
“Global warming needs a solution…”
Lutz must think Wagoner is a crazed environmentalist. Wagoner should bring Lutz with him to public meetings to take the flak from the protesting enviros. Lutz could wear a “Global Warming is a crock…” T-shirt.
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May 1st, 2008 at 10:28 pm
Guys, what he said was IMPLICIT about the $20k. That is NOT the same thing as an EXPLICIT statement.
He used the figures as an example. Although it may be entirely feasible that one day, the Volt, or it’s successors, will cost around $20k.
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May 1st, 2008 at 10:44 pm
I am sure that within a few days, there will be a “clarification” released by GM, that says we all misunderstood what he said about pricing……… He was actually using the British Pound, as he was just watching a James Bond movie just before he gave the speech!! That would put the price of the Volt at $39,661.00
As MarkinWI said in #10 above, this is just another case of us reading way too much into every word that is said about the Volt. Soon, I can see us discussing at length about the difference in meaning, based on where a comma is placed in a sentence!!!!
I am excited as everyone else here, but as I have been saying for over a year, until I see a Volt in a dealership with a sticker price, and printed warranty and service information, this is all just a way to pass the time……..
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May 1st, 2008 at 10:54 pm
The chances of a $20k Volt are not as high as a $20k Saturn EV. I personally would like a Saturn Sky EV, but $20k would more likely be an Astra or some similar small vehicle.
Nobody said GM was going to keep the E-REV/E-Flex tech only for the Volt…
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May 1st, 2008 at 11:28 pm
I have to disagree with the “disproportionate share of mind” comment Mr. Wagoner made in the #7 news article:
http://www.news.com/8301-11128_3-9933798-54.html
Lets get real. With India and China entering their industrial age, the demand for oil will continue to rise as supply declines. Getting an extra 3 MPG out of your “Dual Mode” hybrid or driving an E85 Silverado isn’t going to help.
It seems GM still doesn’t realize they’re holding the Golden Ticket.
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May 1st, 2008 at 11:42 pm
I am with number 12. Great way to see the future, through the eyes of our children. Thanks for remind me why I really want this car.
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May 1st, 2008 at 11:50 pm
#22 George
The original base model Tesla was $98,000.00
So in general terms $1000,000 is pretty on the mark.
Maybe Volt version two will be $20,000 +
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May 2nd, 2008 at 12:13 am
If something is too good to be true… I think a $20k Volt falls into that category. Even so, I gives me “affordable” hope.
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May 2nd, 2008 at 12:33 am
I think he was just making a point about price comparisons. But if anyone should get a $20,000 Volt, it should be us vocal pioneers on the waiting list!
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May 2nd, 2008 at 12:34 am
Sorry my link mentioned in #17 carry the same news as that of Arch in #7.
Expecting a $20,000 Volt is reading too much into what Wagner said “Frankly it’s one thing to develop a technology for a car that’s going to cost $100,000, it’s very different for a car that’s going to cost $20,000,”
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May 2nd, 2008 at 2:19 am
And more news today.
“GM has a product program in place working to develop a series production E-Flex extended range electric vehicle for the Opel brand, according to GM Chairman and CEO Rick Wagoner.
The program is based on the Volt program, Wagoner said, and most of the development currently is underway at the GM Development Center in Warren, Michigan, leveraging the Volt work. Wagoner made the remarks after a speech delivered today at San Francisco’s Commonwealth Club.
On Tuesday, GM Europe announced it will invest a total of €9 billion (US$14 billion) into Opel through 2012 with €6.5 billion (US$10 billion) to be spent on the development of new vehicles and propulsion systems. The product rollout is to include 17 new passenger cars, including an extended range electric vehicle based on the E-Flex system, and 3 light commercial vehicles.
Opel unveiled a diesel concept variant of the E-Flex architecture at the Frankfurt motor show (IAA) last year. Using a 1.3-liter engine coupled with a 16 kWh Li-ion battery pack, the concept at the time offered up to 55 km (34 miles) of all-electric range. In the announcement about the funding, GM said it is looking at a 65 km (40 miles) electric range for the Opel E-Flex vehicle—i.e., in line with the specifications for the Volt. ”
Source: http://www.greencarcongress.com/2008/05/gm-has-second-e.html#more
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May 2nd, 2008 at 5:22 am
When the technology gets close to $20,000 then OPEC is doomed.
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May 2nd, 2008 at 5:38 am
Volt styling == ? When I go to the link at #7 (Arch) I get Wagonner on the left and a Cobalt ad on the right. Within the Cobalt ad one sees a gallery of pictures of the 2008 model. Looking at the pictures — front, side, back — one might think one is looking at the uncovered version of the several Volt production models that have been shown “a little bit” in earlier threads here. There’s a remarkable resemblance in the grill, the overall shape, and the wing in back.
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May 2nd, 2008 at 5:45 am
#21
So the VOLT will cost $100K? There are only two prices mentioned here. Maybe you are saying…”He said nothing at all”.
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May 2nd, 2008 at 5:46 am
News from GM is great…but I want to hear from the suppliers. And not just the battery pack suppliers…
Does anyone agree?
News from the suppliers will tell the story on schedlue.
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May 2nd, 2008 at 6:44 am
This is really great. Now we know the car will cost at anywhere from
$20,000 – $48,000. Do I hear $60,000.
I agree with #31 Vinayababu. It think the $20K price is being taken out of context.
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May 2nd, 2008 at 7:05 am
Schedules are always parallel. The battery schedule may have been pushed back, the battery is installed at the very end. That doesn’t stop the Tool machining for the car parts at all.
As long as you don’t push back the long lead item the schedule has some room. The long lead items are usually hard tools, like the dies and molds for the body panels and frames, and all the assembly line tools.
We know the car is going to cost over 30k, that was already said by GM. I doubt it’s going to slip over 40k, but that’s my opinion.
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May 2nd, 2008 at 7:16 am
Wow, some people here could find a deeper meaning in a box of lucky charms. I think we need to look at the audience and the speaker. $20,000 Volt was not implied for gen 1.
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May 2nd, 2008 at 7:43 am
Until the Volt is for sale in a GM dealership near you, we will be having this war of words for a long time! Just make the damn car already. By the time the Volt comes out gas will be at $7 bucks a gallon.
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May 2nd, 2008 at 8:04 am
Robert
Why do you think gas will be so cheap in 2010?
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May 2nd, 2008 at 8:48 am
It roll on this morning.
http://www.autoblog.com/2008/05/02/wagoner-says-volt-still-on-for-2010/
Take Care
Arch
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May 2nd, 2008 at 8:56 am
GM might be seeing the light.
http://www.mercurynews.com/business/ci_9129303
Take Care
Arch
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May 2nd, 2008 at 9:04 am
Looks like fun to me.
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/05/01/MT8510FEPF.DTL
Take Care
Arch
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May 2nd, 2008 at 9:14 am
I think it will prove to be a good investment, judging by this news.
http://www.arabnews.com/?page=6§ion=0&article=109522&d=2&m=5&y=2008
Cheers
David
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May 2nd, 2008 at 9:20 am
Arch, thanks for all the links.
The important bits demonstrated by actions are:
1) They understand that future of transportation is electric and that SOME but not all of these electric cars will require range extenders fueled with cellosic ethanol. They fully understand that as time passes, battery/ultracapacitor tech & cost improves and range anxiety subsides, fewer range-extenders will be incorporated into cars.
2) They are on and perhaps even ahead of schedule with their first SERIOUS product offering (Volt) and are increasingly optimistic about E-Flex’s viability.
3) They understand that the Volt must be priced well within the CENTER of the mainstream (well under $30K retail) to have a POSITIVE effect on GMs environmental credibility and allow them to race ahead of competition. Mr. Lutz has been talking about what it will COST them to build the initial cars ($35-40K) and that they, like Toyota are willing to take a loss for the first few years in order to ramp up production to lower costs and ultimately make a profit.
4) CARB & CAFE’ regulations do have a strong effect on GMs product offerings. The stronger the effect, the more they whine and the harder they work to meet or exceed those requirements.
It’s a VERY good day.
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May 2nd, 2008 at 9:29 am
44 Tim
It is a very good day. Take a look at this!
http://online.wsj.com/public/article/SB120969297862161675-nLln4YoPruBbuw7MmgVgXSr3KgE_20080601.html?mod=tff_main_tff_top
Take Care
Arch
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May 2nd, 2008 at 9:51 am
Please read this with care. It is all about the Volt. Its just a bigger picture of the game.
http://frontpagemagazine.com/Articles/Read.aspx?GUID=7DFE9F38-493C-4887-9E33-4D267570E830
Take Care
Arch
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May 2nd, 2008 at 9:56 am
Well it looks like main stream press is on board. We never had that in the 70s.
http://blogs.wsj.com/environmentalcapital/2008/05/02/car-crunch-pricey-oil-boosts-small-car-sales/
Take Care
Arch
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May 2nd, 2008 at 10:06 am
My reading of his comment that design of a $100k car compared to “a car that’s going to cost $20,000″ relates to their original design targets, and that the Volt 1.0 is an early milestone on that journey…
But seriously, if they can manage to get it under around $25k I’ll be taking two, please!
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May 2nd, 2008 at 10:06 am
Well… Yes, he said 20K but he was not talking about Volt. You have to read it in the context. He said that to make environmental difference electric cars have to be offered at 20K. It does not mean that Volt will be offered at that price, at least initially. It is simply the goal from the environmental point of view.
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May 2nd, 2008 at 10:09 am
Looks like we are on a roll today.
http://usnews.rankingsandreviews.com/cars-trucks/daily-news/080502-Chevy-Volt-on-Track-for-2010-Debut/
Take Care
Arch
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May 2nd, 2008 at 10:13 am
Yep. Smart utility meters will provide even more motivation to plug in at night when grid usage is low. Actually, I think the electric utilities need this to control peak usage, even without plug-in cars. It surprises me that it’s taken them this long to do it.
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May 2nd, 2008 at 10:26 am
An ‘08 Prius MSRP is about $22,500, to start.
http://db.theautochannel.com/db/newcarbuyersguide/show_car.php?car=Toyota-Prius-4-Door-Liftback&id=22899
Sorry to say, but there is no way the E-Flex 40 electric mile Volt will sell for less than a hybrid Prius at 48/45 mpg.
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May 2nd, 2008 at 10:40 am
I did not take his comments to mean that the Gen I Volt will be $20k. I think he is just saying that in order to make an impact, electric cars have to be affordable for all, not just the Tesla roadster crowd.
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May 2nd, 2008 at 10:40 am
A 20K USD Volt, what are you guys smoking and is it legal? Lyle you should have had our resident graphic artist who makes out bumper stickers tweak a picture of a Volt battery & just slap four wheels, one seat & a steering wheel to it as that is the only Volt you are going to get for 20K USD. Doesn’t anyone read these posts, common we just had a lengthy discussion on battery costs yesterday. Is alzheimers that common? Without the battery I can see it and to sell to the masses that is the only way they are going to do it is by separating the two to bring cost down.
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May 2nd, 2008 at 11:08 am
George K (#54)
Yes, the Extended-Range Electric Vehicle will have a larger and more expensive battery, but it will also lack an expensive, complex and heavy “Hybrid Synergy Drive” transmission and economies of scale will QUICKLY lower the cost of the batteries.
http://en.wikipedia.org/wiki/Hybrid_Synergy_Drive
E-REVs are NOT like “hybrids” because they don’t NEED gas for normal operations, only for EXTENDED operations. In fact, many E-REV drivers will NEVER use gas at all. Now, what if there was a $1,500.00 “battery” which could power the EV for 400 miles, never degrade and could be recharged in 15 minutes?
http://en.wikipedia.org/wiki/Eestor
“Lockheed was “very impressed” with EEStor, noting “they are taking an approach that lends itself to a very quick ramp-up in production.” The two companies look to complete joint product testing over the course of 2008.”
The “BATTERY” electric car resonance is JUST beginning and their simplicity will leave “hybrid” (series or parallel) technology to heavy-duty vehicles like trucks, busses, trains, heavy equipment etc.
http://peswiki.com/energy/Directory:Batteries
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May 2nd, 2008 at 11:29 am
George K @ 54
Your link says the Prius mileage is 40mpg, not 48mpg. There is a big difference.
I’m getting 32-33mpg right now in my Grand Am.
I’ll wait for the Volt.
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May 2nd, 2008 at 11:32 am
#39 Dave B:
Lucky charms, LOL. I heard a story on NPR this morning about a woman who predicted the future based upon the color of the yarn and thread scraps which stuck to the hem of her dress while she was sewing. Maybe we could get her to help us out.
#40 Robert:
If you’re lucky.
#41 NZ David:
!@#$%^, you beat me to it again. It’s damn near that in NZ already, isn’t it?
Arch:
Awesome links. You must have been up all night. #47 is spectacular. All killer and no filler. Well done and thanks.
#50 MC:
Me too.
You guys are the greatest. In the words of one of my heros, Telly Savalas/Kojack, “Who loves ya baby?”
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May 2nd, 2008 at 11:37 am
#57 MetrologyFirst:
Yeah, that’s an eye opener all right. Thanks for pointing it out. It would have gone right over my head. See #58 above!
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May 2nd, 2008 at 11:45 am
I think the point about the $20K car is that designing and mass producing a car at an affordable price for a profit is a whole different kettle of fish than building a car for $100K. If you have an unlimited budget you can build one of almost anything you want.
I have always thought GM lost money on every EV1 they made.
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May 2nd, 2008 at 12:32 pm
Get your mind off $20,000 because “it ain’t gonna happen”. But wouldn’t it be great if it was close. Actually I would like any price at or under $30,000.
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May 2nd, 2008 at 1:26 pm
My comment in #62 has gone into moderation as I experimented with a word. I was correct to assume that the word (w) (o) (w) without parentheses and in all caps, forces the comment into moderation.
So try avoid using that word. If your not sure what I am talking about, wait for my #62 to show up. When I post this message it should appear as 62 but will be bumped to 63 later when my message comes away from moderation.
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May 2nd, 2008 at 2:16 pm
http://wot.motortrend.com/6245414/auto_news/opel_set_to_unveil_20_new_models_by_2012/index.html
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May 2nd, 2008 at 2:19 pm
WOW!
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May 2nd, 2008 at 2:20 pm
I sent the word ending with an exclamation mark & it went into moderation also.
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May 2nd, 2008 at 2:22 pm
World of Warcraft is what it stand for, among many other things, of course. Seems silly, but I guess our language should be “watched over”.
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May 2nd, 2008 at 3:21 pm
Metro-F #57
Just curious, what year and which engine do you have in your GA?
My 2000’s got over 200K and with cruise I still get 30 highway with the V-6.
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May 2nd, 2008 at 3:52 pm
I would guess $20K WITHOUT the battery. Be realistic.
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May 2nd, 2008 at 4:14 pm
NZDavid, the original price of the Tesla Roadster was actually less than $98k… I think it was something like $92k if you got in before the announced price increase which was announced with several months notice.
Of course those folks are still waiting for delivery, and you had to put 50% down I think (some put 100% down).
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May 2nd, 2008 at 5:05 pm
Hey, if the Volt’s $20K, I’ll put 100% down! In fact, I’ll take 2. Write it down, Mr. Lutz.
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May 2nd, 2008 at 5:15 pm
Dont get your hopes up. I think he meant getting a PHEV out for 20K does not mean its the Volt (ie the PHEV Saturn) or at least not at the begining of its life. Or maybe he meant the base cost of the Volt is 20K plus the battery (10K). But iether way the Volt will NOT be 20K.
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May 2nd, 2008 at 5:37 pm
$30,00; $40,00; $48,000; $20,00 – am i the only one who has noticed the correlation between the current guestimate price and the phase of the moon? When the moon was waxing, the price reached $48,000. Now the moon is a waning crescent and the price is down to a low of $20,000. We have a lot of Haitians down here in FL and some of them are quite handy with chicken bones. I’ll ask one for a definitive price and get back to ya.
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May 2nd, 2008 at 5:46 pm
Noel Park says, “Hey, if the Volt’s $20K, I’ll put 100% down! In fact, I’ll take 2. Write it down, Mr. Lutz.”
I’m with you Noel. Actually, I will buy two….cash!
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May 2nd, 2008 at 5:47 pm
akojim, That is funny. You had me cracking up. Make sure those people throw those bones high enough.
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May 2nd, 2008 at 6:22 pm
If we speculate on the cost of the battery pack, a guess of $750.00 per KWH seems in the ball park. And lets assume the Volt without the battery would cost about $18,000. So with a $12,000 battery pack, the vehicle would cost about $30,000. So why say the cost will be closer to $40,000 than $30,000? Answer, the battery pack costs more than $750.00 per KWH. A quick fix would be to reduce the size of the battery, from 16 to 12 KWH and use 9 KWH of that reduced capacity.
Time will tell, but that is what seems to how the chicken bones shake out.
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May 2nd, 2008 at 6:23 pm
#68 wow:
20K + lease the battery maybe? Maybe that could work. Desperate times call for desperate measures. I thought that one of the rationales for leasing the EV1 was that the customer didn’t have to assume the risk of failure of a high $$$ battery. Would that make any sense here?
I know that this idea has been beaten to death here. I don’t really like it that much myself, to tell you the truth. I’ve never leased a car in my life. But I’m getting to the point where I’d try anything once.
#71 DG:
I know, I know. It’s Friday PM. I just have to have my little joke. I mean, I can go along with the gag.
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May 2nd, 2008 at 6:41 pm
I was at the speech yesterday at the Commonwealth Club. (Lyle, please feel free to email me if you have specific questions). The $20K mention in the linked article is taken out of context. It was a response to a question about what was taking so long, the implication being that it’s a lot easier to design a $100K electric carf like the Tesla than a $20K electric car. Clearly GM is targetting an electric car at a $20K price point some day, but he was very clear that the intial price of the Volt would be closer to $40K.
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May 2nd, 2008 at 7:07 pm
MH #76 , thanks for the inside poop!! That makes sense ,
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May 2nd, 2008 at 7:07 pm
Well, so much for that. Cancel my order(s).
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May 2nd, 2008 at 7:43 pm
Just received the June issue of Car & Driver mag with front cover lead “24 Cars Worth Waiting For”. Guess what… no mention of the Volt. Unbelievable. Beam me up Scotty.
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May 2nd, 2008 at 8:18 pm
I never thought I’d get one of the initial 10K anyway and knew the price would be high. The question is what will they charge for a second year release on the order of 100K Volts?
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May 2nd, 2008 at 8:19 pm
Maybe the VOLT without the battery pack would be about $20k. Then the battery pack could be leased or sold for $10k or whatever.
I’m ready to pull out the old Raven Claw and do a few chants of my self.
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May 2nd, 2008 at 8:43 pm
I’ve gone back and forth on leasing. The car market looks like it will parallel the copier market in its transition from analog to digital copiers. Before digital copiers it didn’t make any sense to lease the machines unless you couldn’t afford to buy. Analog copiers were mature and their pricing and features gradually increased. Digital copiers were a paradigm. They had declining prices as functionality increased rapidly. Because of the uncertainty, it made some sense to lock in the residual value up front with a lease to make it less expensive to take advantage of new technology 3-4 years later.
E-REV’s and BEV’s pricing will decline and functionality will increase rapidly similar to digital copiers. The difference I see is in the residual value. Since the car market is so large, vehicle lifetimes are so long, the purchase is typically so large portion of buyers expendable income, and gas prices will almost assuredly rise significantly I see residual values being very strong. If gas prices rise and battery technologies improve as expected, I’m confident that after buying the first generation Volt I could step up to the 3rd generation E-REV in 3-5 years without losing too much value. Of course, if the battery costs decline too rapidly then leasing is a better option. Either way, I’m confident I’ll be in a heck of a lot better situation than if I had bought an ICE drive train vehicle.
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May 2nd, 2008 at 9:29 pm
Okay imagine that GM surprises everyone and prices the Volt at $19,999. There are lines around the corner and down the block and they sell 100,000 of them in the first 6 months. Wouldn’t it be worth it to lose a few million to have the most popular new car introduction in the history of the automobile?
The battery doesn’t really cost $10,000 I don’t care what anybody says. The majority of the cost of anything is the research and development and the labor. Material is almost next to nothing. If they eat the development cost of the battery then the batteries themselves cost almost nothing.
I predict a VERY affordable Volt.
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May 3rd, 2008 at 12:08 am
Letter from the Chairman of GM
Dear shareholders,
The good news is I can finally see the light at the end of the tunnel.
The bad news is the light I see is shining from the front of a huge freight train. It’s heading right for us. And the name of that train is “GM’s bankruptcy.”
As the chairman and CEO of General Motors, I will go down in history as the executive who bankrupted the greatest industrial company of the 20th century. Even if I quit now, I’ll still get the blame. My reputation has no escape. But each year I can hang on to my job, my pension fund grows by millions – no matter what happens to our poor shareholders. Besides, it’s clearly not my fault.
My hands are tied, as I’ll explain.
The larger lesson you should learn from the events now unfolding at GM is a company cannot suffer 40 years of bad decisions, bad ideas, and bad debts and expect to compete with the rest of the world’s automakers.
And the same thing is true, on an even larger scale, of our nation. It used to be said, “What’s good for GM is good for America.” But in about a year, when we file for bankruptcy, that motto will be turned around. People will say, “What killed GM is killing America.”
As I have told you repeatedly in these letters, what’s killing us is a legacy of debts and obligations we cannot possibly repay. Managers of GM now decades in the ground made promises to our workers without any understanding of how expensive those promises would become. The profits we made in the ’50s, ’60s, and ’70s were very much borrowed against our future earnings in the ’80s, ’90s, and 2000s. And now we simply cannot afford them anymore, nor do we have any pleasant way to repudiate our promises. The only answer is bankruptcy. (The same thing is true, by the way, of all of the social welfare promises the U.S. government has made since the 1930s: There is no real way to pay for Social Security and Medicare without utterly bankrupting the United States.)
Our obligations have made it impossible for us to invest in the capital equipment we need to build more efficient, more reliable, and more comfortable cars. Our aging plants and infrastructure make it impossible for us to compete with our foreign competitors. Have you ridden in a BMW lately? Or the new Honda? Those cars are exceptional – built with new tools to incredibly small design tolerances. We simply cannot build cars approaching that quality anymore. To do so would require $50 billion in new investment – and that’s $50 billion we don’t have.
In a very real way, our debts are strangling us and killing us, bit by bit, a little each year. They bound us up, causing our muscles of innovation to atrophy since we did not have enough money for new investment. And now these cancerous debts are eating the marrow of our business, sucking our cash reserves away one bad quarter at a time.
Last year, we suffered the biggest annual loss of any carmaker in history – $38 billion. And now we’re well on our way to another disastrous year. We lost $3.3 billion in the first quarter, mostly due to losses in our U.S. mortgage business, but also because a strike disrupted our U.S. operations. As you know, we sold 51% of GMAC, our finance company, a few years ago. We should have sold all of it. We “think” it’s still worth about $5 billion. But, truth be told, we are eventually going to have to write off the whole thing.
The real problem with our business, though, isn’t bad mortgages. Quite simply, we cannot make enough money selling cars to afford the service on our $33 billion debt load. This year we will spend close to $4 billion simply paying interest – not including any principal. That’s also not including the estimated $47 billion we owe to fund our retirees’ health care. Or the $11 billion we owe in cash pensions. These debts are killing us. And given that every year our competitors produce better cars, using newer tools, it seems extremely unlikely we will ever turn a real profit selling automobiles.
Take the last quarter. We made $1 billion in our overseas operations, where we don’t face nearly as much competition as in the United States. These profits, unfortunately, are not nearly big enough to keep us above water. In fact, we lost three times that much money on our North American operations in the last quarter.
The only way to save GM would be to increase our global market share substantially by selling a lot more cars. And yet, every quarter, our global market share declines and our revenues fall. We’re now at 12.5% of the global market – below 13% for the first time. And the number of cars we sold in the first quarter fell by 1%.
I think we’ve finally entered the end stage – the death spiral. Our cash balances are now eroding quickly. We lost more than $3 billion in cash in the first quarter, more than 10% of our total reserve. We now have just more than $20 billion in cash on our balance sheet.
Given our current burn rate, I estimate we will declare bankruptcy in a little more than three quarters. We can’t operate this business with less than $10 billion in cash. Our suppliers will stop offering us credit, the banks will pull their credit lines, and the whole thing will finally collapse.
At least you’ll know it’s coming.
Please invest accordingly,
Your Chairman
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May 3rd, 2008 at 12:25 am
All very encouraging. Hopefully they are serious about following through with the volt. My gut tells me that they will sell the car for $25K although it costs them $40K to produce. Half of California will order one and the queue will extend into years, GM will realize they can’t buy enough batteries because Toyota has secured every bit of materials and capacity for the next generation plug-in Prius. The Prius comes out the following year and the volt is relagated to another chapter in GM’s failed EV history.
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May 3rd, 2008 at 12:35 am
No way would I trust GM to lease a vehicle. Anyone remember the EV-1. Sell it to me is the only option. At $20,000.00 sell me 2. At $40000.00 don’t sell me one. At $35,000 I will buy one. TED
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May 3rd, 2008 at 12:15 pm
One possible way would be two offers from GM, one a $20,000 Volt ( If in deed that a slip of the tongue by Wagoner) with a leased battery valued close to $15,000 and another offer for an out right buy at $35,000 battery included.
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May 3rd, 2008 at 12:57 pm
I just flipped through the latest Automobile Magazine. Car prices are sort of eye-opening:
Subaru Forester $20,660/$26,860
Honda Pilot $28,000/$40,000
Mazda CX-9 Base $34,470 – As tested $39,357
Chrysler Town & Country $42,570 (!)
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May 3rd, 2008 at 1:38 pm
Could someone with a chemistry background tell me why we are talking 10 to 16 thousand dollars for what is basically a scaled-up laptop battery? It would be interesting to see a breakdown of the manufacturing materials and processes involved, to determine why this battery is so costly. ( Please no flaming like “because it’s new, stupid” – I know it’s a prototype. I just never see any information on how L-ion batteries are made. How do we know if we are being gouged on price, if we know little about the batteries? )
GM’s future is riding on this technology – see # 86 above, it’s a good read. They are going nowhere with their current offerings. They need to fast-track the Volt. Once the Volt proves itself, the Volt technology can be used in other vehicles. Volt’s too small? Get a Malibu-V. Need a pickup? Get the Sierra-V. Like the HHR? Try the HHR-V. If they lease the technology, you could buy a Dodge Magnum-V or a PT-Cruiser-V. America needs the Volt – asap.
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May 3rd, 2008 at 2:12 pm
#91 Terry
“Could someone with a chemistry background tell me why we are talking 10 to 16 thousand dollars for what is basically a scaled-up laptop battery? It would be interesting to see a breakdown of the manufacturing materials and processes involved, to determine why this battery is so costly. ( Please no flaming like “because it’s new, stupid” – I know it’s a prototype. I just never see any information on how L-ion batteries are made. How do we know if we are being gouged on price, if we know little about the batteries? )”
My laptop battery is rated at 11.1 V, 3600mAh. This is roughly 40Wh. The Volt’s battery will have roughly 400 times the capacity. $30 for the cells in the pack doesn’t seem unreasonable since a replacement pack on EBay directly from a Chinese source is $45. These are a different Li chemistry but the cells are made in very high volume. My understanding is that the raw materials for the A123 cells cost less than the laptops LiCo cells, but the volumes are orders of magnitude apart. I can’t speak for the manufacturing process but it is probably not very mature yet for this newer technology. I’ve seen a lot of concerns about GM, it’s dealers, or the battery supplier possibly gouging. How can somebody price “gouge” you for something that is competing in the market? If you don’t like the price, don’t buy it. GM, A123, LG Chem, Continental, and CPI are for profit entities. They will charge what the market will bear.
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May 3rd, 2008 at 7:25 pm
Right now most of the new Li-chem batteries which will all be going over to LiFePO4 chemistry (much safer) are basically “hand-made”, i.e. the factories that make them are just scaled-up laboratories.
In order for there to be fully automated mass-produced cells, there first has to be orders for them. Then it takes investors to back the building of modern factories to make them, scientists to pay, engineers to insure quality, original patent holders to be compensated, and raw materials suppliers to be brought onboard.
You can’t expect the price of these new batteries to go down until all these factors come into play as in “the perfect storm” which is right now just being formed out over the ocean of pain that is finally being felt by the masses with the dwindling of fossil fuel.
As the price of gas continues to soar and it will not stop – the market will then be ready for the EV. The time is NOW!
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May 3rd, 2008 at 10:40 pm
Don’t forget that the “pack” is a lot more than just raw cells. It has a battery mgmt and cooling system and unlike the cells the manufacture process may be by hand for quite some time. Don’t get me wrong, the price will come down as manufacturing becomes more streamlined, but comparing an EV’s batt. pack to laptop cells is a stretch.
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May 5th, 2008 at 5:04 am
I don’t think “hand made” describes the A123 cells. Maybe the ones for the car but they are used in both the DeWalt and Black and Decker power tools. I break down the packs and use them for flying electric powered model airplanes.
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May 5th, 2008 at 5:09 am
Here is a link to a forum on batteries and chargers used for model airplanes. There are folks that have charged and discharged the A123 cells over 500 times and at very high rates. They hold up well. I would buy a volt with A123 cells but not anything else that is now available.
http://www.rcgroups.com/batteries-and-chargers-129/
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May 5th, 2008 at 9:19 am
EEstor is still a dream, until they provide a mule, just like GM is about to. When EEstor and Zen have a mule, I’ll believe.
meanwhile, I may be able to hold on long enough for a Flextreme before I have to buy another car.
another of life’s ironies. I have to keep my cursed Pontiac running long enough to buy a Flextreme. It might make it four more years. If I don’t have to make another major repair, I’ll keep it. If I have to spend another 1,000 dollars on it, it’s history, and I’m off to the Nissan dealer.
Who will win, the new innovative GM, or the “quality control is for other companies” GM?
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May 5th, 2008 at 12:32 pm
here’s the latest on the Tesla….
http://www.cnn.com/2008/TECH/05/03/electric.car.ap/index.html
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May 5th, 2008 at 6:46 pm
#94 Don Harmon:
As to “the perfect storm”, Amen. Wait for it!
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May 10th, 2008 at 2:26 pm
I thik thet GM finally noticed that the OIL COMPANIES has betrayed the car builders, oil is making a ton of money and the car makers are starting to loose a lot.C’mon we had electric plug in’s in the 1800, who you kidding. It does not take that much to build and electric , they ran them with six volt batteries and got a 50 mile range.Add a magnetic motor to recharge and it does not cost anything to run.Europe produces electricity with magnet motors why cant we.The attack in nigeria looks to me like it was planned by some one to raise the price even more , but the oil companies are going to regret it ,cause we will be running on electric and wont need oil anymore. Thanks Roger
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May 10th, 2008 at 2:32 pm
China is building a lion battery plant for cars dont worry the price will come down as soon as they go into production. By the way china is building 4 door sedans for taxis and guess what they are electric.Roger
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May 10th, 2008 at 2:37 pm
Hillary just mentioned Lithium Batteries and “Green Bonds” to subsidize the car companies to the tune of $ 10K per vehicle if she is elected. Now I have to re-consider my vote again. I suggest we take her on her word and all visit her website to register our support.
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May 10th, 2008 at 2:39 pm
And why is the Volt small , Japan built a huge 4 door sedan running at 370 KPH on electric motors built in to the wheels. I think GM can build a Suburban with built in motors on the wheels like japan or are the just better than we are HHMMM.
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