The Chevy Volt concept was first unveiled in January 2007 to much fanfare and great national enthusiasm. Soon after, the typically outspoken GM vice chairman Bob Lutz told the world he expected the Volt to be sold for under $30,000. This further stoked the enthusiasm.
Later, he had to take those words back. In a newly published interview, he explains why.
It turns out he figured GM could use off-the-shelf components for everything but the battery.
“When I said I hope to sell it in the 20s, I just thought, well, if a conventional car of that size with a conventional four-cylinder engine, we can sell it for $15,000 or $16,000, then let’s notionally add $8,000 for the battery and we’re at $25,000,” said Lutz. “That’s the way my brain worked on that one.”
It was determined during development that the Volt would need many specialized and custom components including an expensive drivetrain, microprocessor controllers, and electrified AC compressor and brakes. Parts like these were not easy to find or cheap in the supplier market.
“You have to go to suppliers that you think have the experience, the capability and the manufacturing scale to do this,” said GM VP Jon Lauckner, co-creator of the Volt. “In many cases, it’s less than the number of fingers on your hand, with some fingers to spare.”
Another major cost factor for the car is guaranteeing the brand new high-tech battery pack for 10 years, 150,000 miles that is required by CARB. Lutz noted that if warranty costs don’t reach projected values, “the car is OK almost from day one.”
The author if this report claims to know the Volt’s battery pack will be $8000, and that the car will retail for $40,000, with GM selling them to dealers at a loss, in the mid to upper 30s. The average transaction price including tax and destination charges with thus be about $43,000.
It was also mentioned that the $1 billion development cost for the car almost killed the program as that is the same cost to develop three conventional cars. It was the tremendous public pressure, which I daresay this site had a lot to do with, that kept the program alive.
Experts expect the battery pack cost to be cut in half in 5 to 10 years at that point allowing the car to sell for under $30,000. For those future versions, Lutz expects GM to keep the same 40 mile range, using the reductions in battery price instead to lower the vehicle’s cost to consumers.
“I think it’s all going to head in the direction of a smaller, lighter battery at much lower cost delivering the same range,” said Lutz.
Though costs could also be reduced by spreading Voltec into multiple vehicles, like the Orlando we just mentioned, or the Cadillac Converj, these cars remain in limbo. Lutz said he expects GM to move slowly on these, stating “vehicle price is going to be a big issue for a long time to come.”
Source (AdAge)
This entry was posted on Tuesday, August 4th, 2009 at 6:09 am and is filed under Financial. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
+10
Aug 4th, 2009 (6:19 am)First versions of all new things cost more. That is what “early adopters” are willing to pay.
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+8
Aug 4th, 2009 (6:21 am)Once supply chains ramp up production of custom components, or other suppliers are found, prices will fall; its inevitable. 40k is a bit pricey for the average consumer, but with such a limited number going into production, GM will have no trouble selling the first round of cars.
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+11
Aug 4th, 2009 (6:24 am)I’m still daring to hope GM will surprise the automotive world (and delight first adopters like us) by offering the Volt at a base price (before any rebate) of ~$35,000. There’s no reason they can’t keep the MSRP quiet until just before dealers have the first cars.
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-61
Aug 4th, 2009 (6:34 am)(click to show comment)
+1
Aug 4th, 2009 (6:35 am)The Volt looks pretty slick in black. How about photochromic (photo-gray) glass all around. Will tint darker in increased UV. Corning is the manufacturer.
More American jobs… yes we can?
=D~
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-8
Aug 4th, 2009 (6:39 am)“When I said I hope to sell it in the 20s, I just thought, well, if a conventional car of that size with a conventional four-cylinder engine, we can sell it for $15,000 or $16,000, then let’s notionally add $8,000 for the battery and we’re at $25,000,” said Lutz. “That’s the way my brain worked on that one.”
————————–
RUFKM?
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Aug 4th, 2009 (6:49 am)I guess he figured two high powered, high performance motors, power electronics module, charger, control software, display software, etc were $3-4k. So, does this mean a reasonably equipped Cruze will be $16K. I guess he “forgot” that was more like $19k.
LJGTVWOTR!
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+3
Aug 4th, 2009 (6:50 am)If this reporter is correct (about $43K each), the Volt is now priced out of my range even with the Federal incentive. That doesn’t make me too happy.
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+3
Aug 4th, 2009 (6:51 am)So is that $40K price for the base model of the fully optioned LTZ model? If that is the price for a stripped down Tag or Capt Jack model, then the Volt program will have some problems.
I can handle $40K, but it has to be fully equipped to get this one past the wife. We would be having some long and probably very loud “discussions” to even think of us buying a $50K car……….
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+2
Aug 4th, 2009 (6:52 am)“The author if this report claims to know the Volt’s battery pack will be $8000, and that the car will retail for $40,000, with GM selling them to dealers at a loss, in the mid to upper 30s. The average transaction price including tax and destination charges with thus be about $43,000.”
—————–
I must say I am a bit disappointed, as I wanted to be one of those early adopters, but at that price point it won’t happen. Even with the 7500 rebate, we are still looking at an average price of 35,500! I was planning on the 30,000 max price.
I will continue to patiently wait for that initial release of the Volt, but my instincts are telling me I may have to wait for the 2nd or possibly the 3rd generation.
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-8
Aug 4th, 2009 (6:59 am)Guess Maximum Bob sat down to some real serious cypherin’ before he decided to leapfrog the competition.
Maybe we should start calling him Maximum Jethro.
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+1
Aug 4th, 2009 (7:00 am)“…with GM selling them to dealers at a loss, in the mid to upper 30s.”
=======================================================
This is a real problem. GM needs positive cash flow NOW!
You don’t keep your company afloat, by handing out free money. So, how long will it be before GM can actually make a SUBSTANTIAL profit with the Volt? They need to be making more than a couple hundred bucks a copy, otherwise, guess who gets to come in and give them another hand(out).
So, at $43,000, with the temporary $7,500 govt handout, your at $35,000 (yikes!). But worse yet, is when GM manages to cut the battery pack in half, and Uncle Sam is not handing out anymore rebates, your now talking $39,000!
So, somehow GM needs to really get the cost of all the OTHER things that come along with the EREV. Even if the battery were free, the Volt would still sell for $35,000, after the govt’ rebates end.
This is one advantage the BEV will always have over the EREV, and that is it does not add in all the various ICE components, and the price will track the price of batteries. And GM believes the cost of next gen batteries reduces by 1/2.
/coffee breaks over, back on your heads…
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+6
Aug 4th, 2009 (7:21 am)Personally, I think any talk about pricing is smoke and mirrors at this time. The competition needs to believe that the price is $40k or more, so that is the standard story.
The base car at $16k, plus $8k for the battery is $24k. Where is the other $16K being spent? Battery warranty?
I’m with you, Nasaman, I expect a well-equipped Volt (leather, sunroof, GT package, no Nav/DVD) to list for about $35K.
We’ve already seen that GM is building a battery pack assembly plant that can manufacture at least 100,000 battery packs per year, so they must be anticipating higher volumes, which equates to lower production costs.
And to get the sales volume started, you need good pricing.
If the volume is high enough, >50,000 cars per year, GM can sell Volts at $35k and still make money IMO.
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+5
Aug 4th, 2009 (7:48 am)Price is an entirely different thing from cost. At first one says well price really is cost plus 10%, or some such. But it isn’t, as is obvious if one thinks about superbowl tickets, or about yard sales.
So I agree with BillR’s statement that “to get sales volume started, you need good pricing.” GM has some volume of sales in mind, they will plan to make that number, and they are going to pick a price that they believe will allow that volume to be sold. They might be wrong, but that is how they are going to set the price. It has nothing to do with costs.
If $40K is the price, then that is chosen as the price GM thinks is right to sell the first 10,000. It seems reasonable to me. After that, we’ll see what the price is for the next 50,000 Volts or whatever size that next group is.
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+11
Aug 4th, 2009 (7:51 am)It’s not going to look like a failure, it’s going to look like a rare and special car. It will have the aura of something that is hard to find and hard to get. The other side of that mystique is the price tag.
I thought the interesting hard information in this post was about all the non-standard components. In part that’s bad (harder to get parts to fix when broken). But in part it is very good, really a new look at how to do some standard things like AC in a much better way.
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+7
Aug 4th, 2009 (7:55 am)/friggin Bob Lutz
Didn’t know the concept was a brick in the wind tunnel.
Didn’t know they would have to use model specific parts.
Didn’t know what kind of warranty they were legally required to give.
Didn’t know what the R&D would be to develop it.
/but he can rock the hell out of a pink tie
Nothing new here…but always fun to look back.
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+2
Aug 4th, 2009 (7:58 am)Right Lane Cruiser
Nearly 10% more may put it beyond my reach as well.
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Aug 4th, 2009 (8:00 am)AHAHAHAH…There you go.
You’ve been waiting to post that again for some time now…hehe!
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+1
Aug 4th, 2009 (8:04 am)Another major cost factor for the car is guaranteeing the brand new high-tech battery pack for 10 years, 150,000 miles that is required by CARB. Lutz noted that if warranty costs don’t reach projected values, “the car is OK almost from day one.”
=====================================================
This is the big gotcha – The warranty. Everything we have heard is that the battery is working great. But GM is will only have 2 years of battery testing to prove the batterys will last 10 years – 150,000 miles. The accountants have upped the price to cover their A***, and still think they might lose money. I believe the car will make money for GM in the short term, but it may all be sucked back out when the warranty claims start to hit.
If this car is as reliable as I and other on this blog hope it will be. GM may make money on this car. Lutz was quoted on saying this sometime back on gm-volt.com. But we wont know for 10 years.
I would be willing to let them pro-rate the battery after the first 100,00 miles if it would reduce the initial purchase price by thousands of dollars.
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Aug 4th, 2009 (8:06 am)“It was determined during development that the Volt would need many specialized and custom components including an expensive drivetrain, microprocessor controllers, and electrified AC compressor and brakes.”
—–
How can this be an excuse? It isn’t like this is GM’s first electric car, in fact GM had a plug in hybrid concept back in 1969. Add with the EV-1, all the demo EVs, and all the fuel cell cars they have built they had to be well aware of what it would take to go into production with an EREV. I also find in hard to believe that they didn’t know of the problems Toyota had getting the price down within the supply base for the Prius.
So maybe we can just blame Bob Lutz for speaking about something he didn’t (but should have) known anything about. But I really wonder how disciplined GM’s preliminary design team is. I really worry that in the critical early design phases, they are poorly estimating cost and anticipating the primary engineering challenges. Bob Lutz makes it appear that they go through the same steps in the design process that they have been going through for years and then in the end after they’ve far outspent their development budget finally figure out what the car actually costs them to build.
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+4
Aug 4th, 2009 (8:09 am)The costs of the electric power steering, the electric power brakes, and the electric air conditioning and heater will also drop. So will the electric motor and generator. All of these things are new to the Volt but the normal economies of scale will apply to them.
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+2
Aug 4th, 2009 (8:10 am)When the predicted price gradually (or precipitously) rose to the 40K range, we had an understandable surge of rage here and I believe we even lost some posters, BUT there are still a good group of us here and I think the general public’s reaction will parallel the response here.
The bright side is that if the suppliers are so specialized, they’ll be hiring folks and/or expanding their hardware as the Volt becomes the hit we know it will be.
Be well,
Tagamet
LJGTVWOTR!!**********NPNS!!
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+1
Aug 4th, 2009 (8:13 am)Nasaman said:
“I’m still daring to hope GM will surprise the automotive world (and delight first adopters like us) by offering the Volt at a base price (before any rebate) of ~$35,000. There’s no reason they can’t keep the MSRP quiet until just before dealers have the first cars”
—–
It would be nice to see something like this, from a car buyer prospective (not so much from we’d like GM to stick around for awhile perspecitive, lol).
I think even $37,499 would be a fine number for decent volume (and give GM as much revenue as they can for the buck to achieve it). At $37,499 they can cross promote the $7,500 rebate and let people do the math themselves.
I think many posters here are right, that true volume numbers come when the perceived starting price is a ‘2′ That being said, and if this article is right (and our thinking as well is right), that GM loses money at $40,000 a pop…GM may in fact not want to sell the Volt in any volume right out of the gate at a loss like that.
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Aug 4th, 2009 (8:14 am)It is true…I cannot lie.
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-15
Aug 4th, 2009 (8:14 am)(click to show comment)
+2
Aug 4th, 2009 (8:24 am)If the cost of the batteries are so high, how can GM competitors get around the high price of an all electric car? I take it that the extra amount of batteries used in these all electric cars would cost more than the ICE used in the Volt…..so how can the competitors be selling their all electric cars cheaper? To me the logic is not there, unless the competitors batteries are much cheaper. I doubt if that is the case. Or maybe, GM is going to surprise us by under-promising and over delivering although they do not have a history of doing that. Maybe Lutz original estimate was correct and GM, for once, wants to surprise the world when all the specs are release.
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Aug 4th, 2009 (8:26 am)Meanwhile the Nissan Leaf starts selling for $15k plus another $10k for the battery that you can either lease or purchase.. and some enterprising company starts offering a genset on a trailer for $3k, and in a few years the Uhaul starts to rent the genset out.
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+6
Aug 4th, 2009 (8:28 am)Count your blessings. If Bob and the rest had know how difficult it would be from the beginning they might have just scrapped the whole project. Without rose colored glasses and a sense of optimism a lot less would get done.
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+17
Aug 4th, 2009 (8:28 am)I have to agree with RB about it being perceived as a failure. The price may not be what it shoud be, and the car may not look like what it is intended, but just the fact that it exists will be a feather in GM’s cap.
Sometimes just the ‘green halo’ is enough to declare mission accomplished…and if they can get it out on time, hitting the benchmarks while performing reliably, I think that is the case here for GM.
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+1
Aug 4th, 2009 (8:36 am)http://autos.yahoo.com/articles/autos_content_landing_pages/1035/Revealed-2011-Nissan-Leaf-Electric-Car
“To the degree that price matters, Nissan’s also got a big edge in the EV world. Pricing hasn’t been announced, but the company insists the Leaf will be “affordable” with pricing equivalent to a well-equipped C-class (compact) car.
That’s a European compact, though, and they’re a lot better equipped, and more costly, than compacts in the U.S. so figure $28,000 to as much as $35,000..
Nissan officials say pricing was held down in part by developing the entire powertrain, including the laminated lithium-manganese battery pack — arguably the most expensive single component on the car at around $10,000 — in-house with an eye toward affordability.
But the real trick is that the batteries won’t be part of the selling price: Nissan’s global approach will be to sell the car, but lease the battery pack.
The argument for leasing is that if you buy a gasoline car, the gasoline isn’t part of the deal, and the battery pack in an EV (plus the electricity that it stores) can be likened to the gas needed to make a conventional car go.
The approach in the U.S, where consumers might be leery of buying a car, but having to lease an essential part of its powertrain, may be to simply lease the entire package, said Andy Palmer, Nissan’s senior vice president and head of product planning…”
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+2
Aug 4th, 2009 (8:36 am)Too rich for my blood (whatever that means). I’m out.
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+7
Aug 4th, 2009 (8:38 am)Let’s wait for GM to officially give out the price.Until then it’s all speculation.
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Aug 4th, 2009 (8:43 am)Even if Volt fails, there will be another, namely Hyundai using LG’s 2nd gen PHEV battery pack in Blu-WILL, delivering Volt like capability for around $30,000 by the end of 2012.
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Aug 4th, 2009 (8:44 am)Good post JEC, and that is the problem with the price to the consumer being subsidized on a limited time basis from the government. Basically, the rebate builds in the savings they will achieve down the road, so the odds of the price to the consumer coming down 3-4 years from now isn’t so great.
GM HAS to get at least $7,500 out of the price in the first 3 years just to make up for the loss of the rebate (at 200,000 units sold). So while the economics of scale, and the price of packs coming down is great, for GM it is tempered by the loss of the rebate.
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+7
Aug 4th, 2009 (8:47 am)Statik,
Well put as always. And there’s always a CHANCE that it’ll be less than the 40K. Why tell the competition a year ahead of time.
Be well,
Tagamet
LJGTVWOTR!!**********NPNS!!
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+1
Aug 4th, 2009 (8:51 am)The electric power steering has been on a lot of the Malibus since 2004.. so I would assume that the cost for this is already down and is available “off the shelf”
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+4
Aug 4th, 2009 (8:52 am)But Wayne, driving that prissy around will get you laughed at ! If you are interested in a low-cost sled that looks great, buy a Camaro that gets 29 mpg and starts in the low 20’s ….if you really want to minimize your gas consumption, however, you gotta pay the piper !
Be the first on your block !
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Aug 4th, 2009 (8:52 am)Sort of off topic, but it applies to the picture above.
Note that in the front of the Volt there is a grey colored “spoiler” or air diverter at the bottom. Also, in the same color you see side skirts under the doors.
We know a lot of work went into the aerodynamic design of the Volt, and that to achieve stellar Cd values, you must not only examine the upper portion of the car, but also the way in which air flows underneath.
What I am wondering is whether this/these parts make up a underbody panel that is used to smooth the air flow underneath the car.
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+2
Aug 4th, 2009 (8:52 am)Bob Lutz said the thing some of us have been saying for some time. Vehicle cost will be a big factor in determining the Volt’s future. It will be the biggest factor in continuing the slow adoption of it in the marketplace. It will be a hard sell after the first year’s hype is over. That first year’s production will sell as fast as the dealers can get them in. Even a large percentage of the second year’s production will sell fairly fast. Unless fuel cost rise at or above last year’s levels the remaining 2012 model year production and the years after will be harder to sell because people will have more options to chose from and the price will be a drag on the vehicle.
This is my opinion. It may conflict with everything most of you believe and hope will happen. Heck, it conflicts with what I want to believe and it most certainly conflicts with what I had hoped would happen. But facts are hard to get around. Logic demands we look at the facts. I don’t want to see really high fuel cost just so I can breath easier about the success of the Volt, but I do want the Volt to be successful. This is just me staring at reality.
For the Volt to be successful GM must get cost savings into the production stream as fast as possible. The battery is where most of the savings can be realized, but can they do it in the first 5 years? They need to do it sooner because 5 years selling at a loss will doom the technology to the back burner.
One bright spot does appear from nearly the beginning. Europe will need a car like the Volt and Ampera and they should sell well there until the competition tries to match or exceed them. Europe may be the saving of the Voltec technology. Maybe.
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+2
Aug 4th, 2009 (8:55 am)Don’t be a stick-in-the-mud, statik – remember, Maximum Bob is going to feed you a big slice of humble pie in about 15 months ( or sooner …. !)!
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+1
Aug 4th, 2009 (8:57 am)Statik,
Given the bailout money, won’t that offset the billion spent in R&D and let them turn a profit sooner? You’re the numbers guru.
Be well,
Tagamet
LJGTVWOTR!!**********NPNS!!
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+5
Aug 4th, 2009 (8:57 am)ThombDBhomb
Me too, but I was out at anything above $30k, but I still like sitting at the table and watching/listening, to all the pro’s and con’s.
“I like to watch…”
All the news on the Volt and other EV’s helps me in understanding where I need to be in a few years. I am now trying to make my best guess on what the future of EV’s are and how I can fit into the equation.
I want to be ready to go “All In”, when the moment is right.
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+3
Aug 4th, 2009 (8:57 am)I guess I choose to look back at it like this:
When GM saw the car had teh aero of a brick…
When GM realized all new specific parts would be required…
When GM realized the warranty for this kind of car would be so extensive…
When GM realized the cost of R&D….
When GM realized they were going to go to Bankruptcy court…
GM kept at it despite all of these revelations, and for that I’m thankful.
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+1
Aug 4th, 2009 (8:57 am)Look for the electric accessories to make their way into non-Volt cars. The absence of today’s belt-driven add-ons would yield much greater freedom in engine-compartment layout (and provides less of a servicing headache for the owner).
Several cars are already sold with electric steering.
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+3
Aug 4th, 2009 (9:00 am)I’ve been out for awhile, but still have hopes for Gen II.
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Aug 4th, 2009 (9:03 am)Yep. I guess that is why this site exists.
If we waited for the official announcement on everything, then what the heck would we talk about? Price of tea in China comes to mind, but I really do not drink tea.
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+1
Aug 4th, 2009 (9:07 am)If this prediction is correct, $40k may not seem so bad.
http://www.bloomberg.com/apps/news?pid=conewsstory&tkr=BA%3AUS&sid=aabdwFGiKH1E
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Aug 4th, 2009 (9:10 am)BTW: Has anyone got a dollar figure on those motors? I believe motors in the 53KW (70 hp) range, for an inverter rated duty would cost at least $1000, and the Volt needs two of these. These would be OTS, but what would the cost of the custom motors rated to run in the harsh environment of a vehicle run?
I think someone answered this LONG ago, but I cannot find the info.
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-2
Aug 4th, 2009 (9:10 am)Things are already starting to look pretty bleak, and the no-name troll doesn’t show up for another 50 minutes.
He might be something of a relief, today.
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+2
Aug 4th, 2009 (9:13 am)“GM HAS to get at least $7,500 out of the price in the first 3 years just to make up for the loss of the rebate (at 200,000 units sold). So while the economics of scale, and the price of packs coming down is great, for GM it is tempered by the loss of the rebate.”
Thanks loads, statik.
Looks like I could be down for the count.
I think you’re whistling past the graveyard, nasaman. When it comes to costing, the news is seldom good; especially these days.
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Aug 4th, 2009 (9:17 am)I’m not trying to be argumentative, but what competitors are you speaking of that are producing and selling a cheaper EV than GM? To my knowledge, there is none.
Tesla Roadster is the only available EV out there and that’s around $92,000. All of the others that come to mind are still in developement, and until they sit in a dealership with a window sticker, we can’t account for them.
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+6
Aug 4th, 2009 (9:17 am)If Volt fails, look for timescales of similar projects to slip. Volt has put much of the haste, if not the overall impetus, into many of these other projects, IMO.
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+2
Aug 4th, 2009 (9:21 am)I have long believed that the end of oil will be the best thing that has ever happened to the US and other energy hungry countries.
We will not go back to the stone age. Our lives will actually improve, as the need for people to once again depend upon themselves and their neighbors, instead of the Wal-Mart;s and Home Depot’s of the world. People will adjust, and for the better. It is an evolution that I hope occurs in my lifetime.
/The future looks bright, get me some sunglassses (made of non-Hydrocarbon based material)
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+14
Aug 4th, 2009 (9:25 am)Wayne, you’re not paying attention. Ask yourself, what can the Volt do that the Prius cannot? When you learn the way the Volt operates, you will see that it is much more than a Prius and therefore not at all in competition with the Prius. The Prius is a gasoline powered car that gets good mileage. Now describe the Volt.
It’s like comparing a Apple iPhone with a Motarola Razr. Both are phones, but one costs a lot more than the other. Does that mean the iPhone is a failure? Did Apple make a bad business decision by producing a phone that initially cost almost $500 when other phones could be had for $100 and less?
Should GM just copy whatever Toyota does or innovate? That is debatable at this point. Personally I believe that GM’s only hope for a future is to innovate beyond Toyota rather than just be a second rate Toyota wannabe. We already have Honda, Nissan and Hyundai for that. The Volt is an opportunity to show that GM can think for itself, pioneer and successfully engineer new technologies and has it’s eyes on the road ahead instead of just somebody else’s taillights.
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-2
Aug 4th, 2009 (9:28 am)What a bunch of children , you keep saying that the price will come down . When is the last time you saw the price of a car come down ?
Sure the cost of the battery will come down as production goes up (a little )but you seem to overlook the fact that the companies are put together to do two things , make a product and make a profit for the shareholders . The shareholders sure will be pissed if the president of the company doesn’t make any money for them .
You as an owner of a car would be very upset if you were to discover that if you had waited for another 60 days that it would have cost you 5,000 dollars less . It just isn’t going to happen , remember the screaming and hollering with the Apple when the price was lowered . Get real people stop living in a dream world of pretend .
This car is way over priced and you all know it .
The technology is great , probably the most important technology of the 21 century , but it sure isn’t worth any more than 35,000 dollars no matter how you slice it .
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Aug 4th, 2009 (9:29 am)JEC,
“OTS stands for…?
Thanks.
Be well,
Tagamet
LJGTVWOTR!!**********NPNS!!
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+3
Aug 4th, 2009 (9:29 am)The 1 Billion in development costs was covered by the taxpayers in the form of a bailout. That sounds like a lot, but it’s a drop in the bucket compared to the hundreds of billions given to the banks, and we still have nothing to show for that.
By comparison, investing taxpayer dollars in better technology in the long run will be the better investment.
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+1
Aug 4th, 2009 (9:30 am)Edit to self (I missed this when I originally wrote it, but after re-reading my own post I realized how this could be misunderstood)
When I said end of oil, I really meant the end of cheap oil. Oil will be available for along time.
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+2
Aug 4th, 2009 (9:30 am)If what he said is true, he was using the correct logic. He did not realize the car would require so much new hardware that no one had available for automotive purposes. I would have come to the same conclusion and many of us have over the past two and a half years.
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+8
Aug 4th, 2009 (9:31 am)Considering they’re only making 10,000 of them the first year–I don’t think they’ll have a problem selling them.
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Aug 4th, 2009 (9:32 am)Tag, that is exactly what I was thinking.
With the economy being as bad as it is, and with my employer taking advantage of it, I don’t know how much longer I will be employed. If I lose my job, there will be no Volt for me at $40K.
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Aug 4th, 2009 (9:33 am)There is the old joke about the sales guy who expects to lose money on every unit but make it up in volume. But that’s a joke. If you lose money on every unit there isn’t any “profit” to apply to retire the R&D costs.
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Aug 4th, 2009 (9:34 am)Joe and JEC,
Agreed. I think the Volt will be priced at $33,999 (g). I hope I’m wrong, because if it is they’ll be sold so fast that we won’t have much hope of getting one the first year (or longer). Unless, of course, dealers (or GM) start to actually start their own waiting lists – and take deposits.
Be well,
Tagamet
LJGTVWOTR!!**********NPNS!!
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Aug 4th, 2009 (9:37 am)Rashiid,
Really sorry to hear about your job concerns. I hang onto the green shoots that say that things are turning around even as we speak.
Be well,
Tagamet
LJGTVWOTR!!**********NPNS!!
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+2
Aug 4th, 2009 (9:38 am)The BEV has no real advantage over the Volt. The specialty equipment that is driving up the cost of the Volt is also required in a BEV. The cost of the very cheap old technology of the ICE is probably around $3000 tops. The additional battery capacity to get the BEV up to an acceptable and marginally salable range is probably another $5000-$8000. I see no advantage and only disadvantage with the BEV in the mainstream automotive market.
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Aug 4th, 2009 (9:40 am)DonC,
There is also a saying that “You’ll never go broke making a profit” (even a small one).
Be well,
Tagamet
LJGTVWOTR!!**********NPNS!!
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Aug 4th, 2009 (9:42 am)Now we can see why Nissan decided to lease the battery pack. We also see the thinking behind the Better Place model of spreading out the pain of buying the battery pack (mobile phone model).
Hopefully the government subsidy will put the car close enough for early adopters to jump in. Once we get those volumes up the prices will drop fast, especially with cheaper batteries coming out every year.
If the Volt works anywhere close to how good it looks then this vehicle deserves a helping hand to get going. A true masterpiece that needs to see the light of day. Pull out your checkbooks, fellas.
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+4
Aug 4th, 2009 (9:43 am)Now you understand why I keep telling statik that quoting Bob Lutz on technical issues is not a terribly good idea. (When for example he waves his arms and says “I really don’t know” and then gives a number — guess what — take him at his word that he doesn’t really know). He’s actually decent at SWAGS, and really good at marketing SWAGS, but though he knows all kinds of things about cars and selling cars, technical details are not his forte.
But no one is good at everything. Plus he’s from the sales and marketing side and he WANTS the car to be priced at $30K. Optimism can always color your perception. For example, Tag keeps hoping for a July 4th 2010 release and nasaman keeps hoping for a lower price. Doesn’t seem either of those are likely.
Let’s see what he can do with the advertising before we coin a new nickname for him.
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+1
Aug 4th, 2009 (9:45 am)“GM may in fact not want to sell the Volt in any volume right out of the gate at a loss like that.”
I think you’re right on that one. GM needs a grand slam home run that generates a 2-year wait list. Early adopters, aka Hollywood types, will get to smugly show how environmentally green they are, while the General has time to get the costs down for the ‘13 and ‘14 model years. Then they’ll introduce the EREV Cruze and Orlando.
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+2
Aug 4th, 2009 (9:46 am)Friggin Bob Lutz
Builds cars that are exciting and build enthusiasm.
Is the only bright spot at GM.
Should never have let us watch the development of the Volt or made any comments about it, just like Toyota does so as to avoid the wrath of internet pundits.
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Aug 4th, 2009 (9:48 am)Offer To Sell, IE available off the shelf…..?
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Aug 4th, 2009 (9:51 am)Zel,
Thanks!
Be well,
Tagamet
LJGTVWOTR!!**********NPNS!!
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+1
Aug 4th, 2009 (9:52 am)Geez, Static, you have gone totally native on us. Where’s the old “cup is always half empty” curmudgeon that use to get us all pissed off?
As for the post, I will be sorely disapponted if it takes five to 10 year for batter pack prices to drop. I’ve counting on a much faster decline so that someday I may actually be able to affrod a Volt, or one of its descendents.
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+1
Aug 4th, 2009 (9:54 am)Who is selling their EVs cheaper? Please don’t say Nissan, as they are now at the stage where GM was a year go telling us the Volt was going to be under $30k. Expect to see their price go way up and/or be a battery leasing scheme. Mitsubishi, $47,000. Tesla, $50,000 Aptera doesn’t count. Not a car or even comparable.
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+2
Aug 4th, 2009 (9:56 am)The problem with a $43,000 price tag is it puts the Tesla Model S at a $50,000 price tag as a serious competitor.
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+1
Aug 4th, 2009 (9:58 am)This it the Apple Lisa of the electric auto world.
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+1
Aug 4th, 2009 (10:03 am)FME III
Jeepers, re Statik be careful what you wish for! (lol). I’ll give you credit for mentioning it though. I think a lot of us have noticed the same thing. I have a lot of hypotheses as to why the shift may be occurring but most aren’t publishable (g).
Be well,
Tagamet
LJGTVWOTR!!**********NPNS!!
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Aug 4th, 2009 (10:05 am)If I’m not mistaken, I’ve seen it somewhere that there will be a full-underbody pan to stabilize airflow underneath the car.
On a sorta-related side note, is it just me, or are the gray panels actually colored BLACK on the black IVERs? I wonder when the above photo was taken, and how it jives with the IVER’s look.
Specifically, I refer to this photo: http://www.gm-volt.com/q/vpo2.jpg
On the other hand, this blue Volt, of unknown classification, does appear to have the gray plastic: http://www.gm-volt.com/p/bluevolt.jpg
Ehhh… who knows. I guess it’s all just speculation ’til we see one on the showroom floor, anyway.
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+1
Aug 4th, 2009 (10:06 am)LauraM,
Yep. Darn it.
Be well,
Tagamet
LJGTVWOTR!!**********NPNS!!
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+5
Aug 4th, 2009 (10:08 am)“What a bunch of children , you keep saying that the price will come down . When is the last time you saw the price of a car come down ?”
The VOLT is not ‘over priced’. It is what it is. There are many potential buyers for the VOLT who can easily afford a $40,000 car. Most of them currently shop at Lexus, BMW, and Mercedes.
Those who are complaining here that $40,000 is too high are used to buying $25,000 cars (or less) and probably always have in their adult life. I am one of them.
I would like to buy my next car for about the same price as my last car, and have the benefit of using little or no gas from now on. The fact that I am now SAVING money justifies the purchase. But if I have to ’step up’ to get that savings on gas, well that changes things, doesn’t it.
This site should actually change to “GM- VOLTEC.com”. It’s not so much about the VOLT any more. It’s more about the technology that will eventually save us all money at the pump.
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Aug 4th, 2009 (10:08 am)texas re checkbooks
Amen! I wish they’d start taking deposits or some way to “claim” one. I know it’s unlikely, especially if they do a very narrow regional release, but I can hope.
Be well,
Tagamet
LJGTVWOTR!!**********NPNS!!
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+2
Aug 4th, 2009 (10:08 am)Good point Laura… just hope there is a way to test drive one before they are sold to the few.
=D~
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Aug 4th, 2009 (10:09 am)Yeah, you guys are getting pretty chummy. I think that going through all of these comments every day somehow tends to “Get your mind right”, as the warden said to Cool Hand Luke.
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+3
Aug 4th, 2009 (10:11 am)The most important issue is, can it take the electric car mainstream?
Right now, EV’s tend to either be show-offs like the Tesla Roadster, much zip, but very expensive and not terribly practical, or NEV’s like the G-Wiz and other cars with limited speed and/or range.
The EV1 and RAV-4 are rarities, and even they had issues in climates that the Volt should be able to handle without a problem.
I’m hoping it’s perceived as the first practical electric car.
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Aug 4th, 2009 (10:13 am)Noel,
So who gets to be the Warden? I’m thinking it’d be best if it was Moi (lol).
Be well,
Tagamet
LJGTVWOTR!!**********NPNS!!
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Aug 4th, 2009 (10:14 am)JEC … dollar figure on those motors?
I did a net search and was coming up with $2000 each. When I posted this figure, someone here with an electrical background said that GM should be able to get these for $500-$600 (in volume).
=D~
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Aug 4th, 2009 (10:15 am)Corvette guy,
They already HAVE a 2 year waiting list. It’s here. I know it’s unofficial but it’s got to portend SOMETHING – IMHO.
Be well,
Tagamet
LJGTVWOTR!!**********NPNS!!
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Aug 4th, 2009 (10:15 am)I can understand why they’d want to wait on the EREV Cruze and Orlando. But why not build the Converj? They can probably get $80,000 for it since Tesla’s getting over 100k. That way they can start making a profit from Voltec right away.
And it will help them with cafe standards. And increase the volume on some of those components. (Although admittedly not by very much.)
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+5
Aug 4th, 2009 (10:16 am)I wonder just how many of us have enough time to actually read through these comments. Lately it seems there are more and more comments than before. Maybe it is due to the new system Lyle is employing that lets us reply directly to each comment. Most days I make it through one reading before refreshing my browser page then I find out you guys have submitted another hundred comments. Of course finding those new comments is not as easy as it used to be when you could pick up where you read the last comment. You have to go back through the complete list and look at each and every one to determine if this comment is new to you. It is a hard read at times. I like the new method and I don’t like it. Know what I mean?
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+1
Aug 4th, 2009 (10:18 am)The Lisa led directly to the development of the Mac, these things happen in stages.
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Aug 4th, 2009 (10:18 am)But what I think Lutz was saying is that they’re going to lose money based on marginal costs. I think they are already discounting the R&D and product development costs.That means the more they make and sell, the more money they lose.
Translation, they’ll probably make as many as they need for cafe. Period. At least until they get the costs down.
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+1
Aug 4th, 2009 (10:20 am)Folks with 40K to spend on a car have lots of options. And they probably can afford to gas up a nice 3 series BMW. So, do they want to make a statement by driving an electric car, or do they want to just drive a real nice 40K car? I don’t know. But at 40K, I will probably stick with a nice conventional ride and buy the gas. I was in at 25K. Then it made sense to drive a car like this. But to fork out 40K and be a guinea pig for their numerous recalls on the first model? Nope. Not this guy. 40K buys some nice bullet proof cars. Sure they drink gas, but they are proven technology and alot of fun to drive. C class, 3 series, etc.. I want to flip off the gas stations as much as the next guy. But I don’t want to throw out 40K on unproven technology just to save some money on gas. I am a firm believer in this technology. But you have to get the cars on the road first. Competing with entry level European sports sedans is not the way to do it. My opinion… But I am sure they will sell their first run.
Just my 2 cents.
Ken
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-3
Aug 4th, 2009 (10:20 am)New question:
If the Volt has a “fob” key that automatically activates the car, will the Hollywood types have to “fumble around” to find it for valet parking? Not a problem for most of us (lol). Our hospital just started valet parking though. It seems kinda out of place.
Be well,
Tagamet
LJGTVWOTR!!**********NPNS!!
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Aug 4th, 2009 (10:22 am)My confidence level went down substantially when I heared that they had resurrected (exhumed?) Lutz. How may cars has GM launched behind his “rose colored glasses”, and how many of them have now disappeared? And how many billions of dollars did it all cost?
Not good.
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Aug 4th, 2009 (10:23 am)I just asked about the R&D being covered by the bailout (and the answer was “probably”), so I respectfully hope that you are dead wrong.
Be well,
Tagamet
LJGTVWOTR!!**********NPNS!!
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+1
Aug 4th, 2009 (10:24 am)Dav8or,
Very well said. No matter what you, I and others may say about not comparing the Volt and the Prius it is being compared. Right now the Prius is the only other vehicle that comes close to what the Volt can offer the buying public. Not offer the same thing, mind you, but offer some of the same advantages. Later as more companies start offering some real Volt-like vehicles the comparisons will change from Volt versus Prius to Volt EREV versus xyz brand EREV. Even when starts offering the Prius with a Plug the comparisons will be made, but will still be unfair. So, that’s life.
Thanks for you comments. Again, you said it all very well.
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+3
Aug 4th, 2009 (10:28 am)With so much criticism in regards to the Volt being too expensive and predictions everybody will buy a Prius instead…
…well, who in their right mind would buy a Mini when they could just buy a similarly-sized Yaris at half the price instead.
It’s all in the marketing, people.
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+1
Aug 4th, 2009 (10:29 am)As I read all of this stuff, I remember that we paid $24K + destination fee, tax, etc., for our Impala in 1995. I wonder what that is in 2009 dollars?
It was a lot of money for us, but the car was so cool, and held out so much promise (mostly unrealized, alas) for the future of Chevrolet, that we just bit the bullet and did it. It still has the highest cool factor of any modern era Chevy on the road in SoCal, aside from the Corvette of course.
That’s what has to happen here. I sure hope it does. Otherwise, it’s going to be pretty easy to resist if it’s over 40K out the door.
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+1
Aug 4th, 2009 (10:29 am)I know its just a blog!
….must…refrain….from….comments….on….bad…grammer…use
Sorry for this, Thomas Gilling sir…your homework today is to look up and understand the proper use of the following word
—- “their”
as you were.
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Aug 4th, 2009 (10:29 am)Yes, LauraM, they will “fly off the dealer’s showrooms” as fast as they appear. The real test comes when the initial demand is met. Will it continue to sell as easily or will it become a “hard” sell? If GM does introduce the Volt into Europe in 2011 or early 2012 that will help “sell” that year’s production numbers and probably keep them scarce here at home. Keeping them less available will help to keep the price of the vehicle higher even while GM applies some cost savings to increase the profitability of the line. We will just have to wait and see how all of it comes about. It will prove interesting, if nothing else.
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+1
Aug 4th, 2009 (10:30 am)DonC,
I think your post was spot on – except that I’m also hoping for the lower price too!
BTW although the production release probably won’t be on time for 7/4/2010, there WILL be dozens of PRE release Volts on the road by then. That was stated in one of the chats.
Be well,
Tagamet
LJGTVWOTR!!**********NPNS!!
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Aug 4th, 2009 (10:33 am)Noel,
Yep, uncontested.
Be well,
Tagamet
LJGTVWOTR!!**********NPNS!!
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Aug 4th, 2009 (10:33 am)There is a lot of room for cost reduction after the first couple of years. And there’s a strong chance that congress will extend the subsidies into gen two. And, if you live in a liberal state, it’s entirely possible that they’ll increase the subsidy. So I wouldn’t give up just yet.
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Aug 4th, 2009 (10:35 am)You know, I have thought a lot about how the “buying public” is going to get to test drive the Volt. I am not too sure if they will for the first year or maybe more. As I see it, every Volt sold to a dealer will already have a buyer at the dealership waiting for it to come in. Papers will be signed, money will have passed hands and a schedule will have been established. When that shiny new Volt arrives at the dealership the dealer has no right to let some future potential Volt customer take the vehicle out for a test spin. If I were the customer who put up “up front money” and I found the dealer letting every Tom, Dick and Harry drive my Volt I would be highly pissed. To see the least.
So, just how will us late comers who want a Volt test drive be able to get one? I don’t have a good answer. I am not sure anyone does.
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+1
Aug 4th, 2009 (10:36 am)And yet… Bob Lutz was also responsible for ramming the project through the usually byzantine approval process that cars have to go through at GM, making sure it had the engineering team(s) and resources to fast-track the development of the car.
I’m still not getting why all the hate for Lutz– the guy’s history is one successful automobile after another, and he’s bringing an EREV to market, even when people are telling GM (incorrectly) that it’s a stupid idea.
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Aug 4th, 2009 (10:36 am)This is exactly the mindset I am in. I have about 35-40K to spend and I am about to buy a 1 or 2 year old Porsche Cayman right now. With depreciation you can get an awesome 1 or 2 year old car right now. I was planning to wait for a Volt or maybe Tesla, but I decided to pull the trigger. Sure it takes gas and I really wanted to get away from that, but the excitement I feel when slipping behind the wheel of the Cayman can’t be duplicated.
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+1
Aug 4th, 2009 (10:36 am)I feel you Rashiid…I’m probably in a similar boat…my job will probably be OK, problem is for us…. its the entire company that is in flat out survival mode.
I’ve got that and a couple other reasons why I’m no longer considering becoming an ‘early adopter’….
still excited to see how this all plays out
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Aug 4th, 2009 (10:38 am)I talked about the genset on a trailer a long time ago, but I have come to believe that it is an oversold concept. It would end up having to meet emissions regulations for starters. I assume that it would take some sort of pretty sophisticated control system to make it interface with the car. How would it know when to shut down because the batteries were charged, or start up when they went down to whatever SOC, for example? Or would one just let it run all the time, thus wasting fuel? Or maybe the driver could just monitor the SOC gauge, and pull over and start the genset when it dropped down, and repeat when it charged up, LOL.
Plus, it would take a pretty stout genset to keep up. Your ordinary 4500 watt Honda isn’t going to get it, IMHO. So there’s a few hundred extra pounds to tow around, thus impacting mileage, AER, and potentially overloading the brakes of the car. But of course you get it all back through regen, right?
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Aug 4th, 2009 (10:38 am)I was not aware Nissan had decided to lease the battery pack. It was my understanding the pack would be sold to the customer as part of the vehicle just as GM is doing with the Volt. Where are you getting this information?
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Aug 4th, 2009 (10:40 am)By “they” I assume you are speaking of GM and not Nissan.
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Aug 4th, 2009 (10:41 am)Don’t look now, but I think he just got here.
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+4
Aug 4th, 2009 (10:41 am)The bottom line $40K is out of reach to the vast majority of Americans. That’s more than the mean US family annual income. So it will be a niche car for those with disposible income.
It won’t make a huge impact or become a “people’s car” simply based on economics. Plain and simple. If the Nissan comes in around the $20k point I think they have stole GM’s thunder on this one. Especially if they get it out first, with over double the range, at half the price.
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Aug 4th, 2009 (10:42 am)There aren’t any shareholders, so maybe that makes it a little easier, LOL.
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+1
Aug 4th, 2009 (10:47 am)Statik
I think GM will want to sell as many as possible. My reasoning is they will have spent a large chunk of the start up money with the first run. Paying the cost for the new Dies, punches, molds, fixturing and programing. All these parts are less costly the second time around. Add to that, the customer demand will be progressive and the additional cost will be spread over a longer time period.
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+3
Aug 4th, 2009 (10:49 am)If you want to laugh at a guy who drives an efficient, practical, and reliable car, go ahead! While you’re wasting your time laughing, I’ll go get some groceries, stop by the hardware store, and I’ll be back in time to mow the lawn.
Our Prius is the best transportation appliance we’ve ever owned! Between the mileage and the reliability, it has the lowest TCO of any car I’ve maintained — and it has the most versatile interior space of any compact car I’ve ever driven. Three of my relatives also own them, and they’ve all been quite happy with the Prius, too.
OTOH, if you’re overly concerned about appearances, I really can’t help you there.
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Aug 4th, 2009 (10:49 am)He also meant that if the battery holds up and they are not having to fork out thousands for battery replacement per each Volt sold, the Volt will be profitable sooner because the buyer pays for the battery replacement cost up front. That up front money becomes free to GM as long as they don’t have to replace your Volt’s battery.
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Aug 4th, 2009 (10:53 am)I am with you on this. GM should be proceeding with the Converj development as soon as possible. I think it should be released in the spring of 2011 to start bringing in some real profit to the corporation. And I agree they could probably get between $65,000 to $75,000 for each one. Maybe not as high as $80,000, but I should not be surprised if they could. The more profit for the Converj and the more units it sells the better for the Volt.
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Aug 4th, 2009 (10:55 am)Nerd shoes
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+2
Aug 4th, 2009 (10:57 am)Agreed — I’d love to be able to do my errands around town without using any foreign oil, or any oil at all! That’s why I want an electric car — beyond the geek-factor, anyway.
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Aug 4th, 2009 (10:57 am)Maharguitar
I agree with you. Once the method of machining has been perfected it is just a matter of adding aditional machine tools and people or robots to operate them. As production numbers ramp up more and more automation will be intigrated and the cost for components will drop.
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+1
Aug 4th, 2009 (10:58 am)Or it means “off the shelf”. As in readily available for purchase.
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Aug 4th, 2009 (10:59 am)They decided to least the whole car:
http://www.allcarselectric.com/blog/1033845_2011-nissan-leaf-sales-in-u-s-may-be-limited-to-leasing-only-until-global-launch-in-2012
In the beginning, at least. I hope it doesn’t turn into another EV1-style fiasco for Nissan.
I’m also not thrilled about the OnStar-equivalent service — I want my car to just be a car. But, it looks like a great form-factor, so it might be a good electric car to drive while I’m waiting for the Voltec Orlando to come down in price, or something.
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Aug 4th, 2009 (11:00 am)No matter what GM says the Volt will list for, you can expect the dealers to add a few more thousand to the final price as long as demand remains greater than supply. Just the nature of the game.
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Aug 4th, 2009 (11:02 am)GM has a problem with this. Their solution with the Camaro was sending each dealer a “dealer car,” which the dealers then proceeded to sell at a substantial mark-up, which created a lot of bad publicity for GM. They cannot let that happen with the Volt.
Maybe with their new control over the dealers they can retain title to the “dealer cars,” so that the dealers can’t sell them? Does anyone know if that’s possible?
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+3
Aug 4th, 2009 (11:03 am)I believe that 50K price tage for the Model S about as much as I did the Volt price tag of under 30k.
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Aug 4th, 2009 (11:03 am)I’d like to see gm-volt.com revert back to the old way.
The new system makes it much more difficult to come back a few hours later and catch up with what’s been posted.
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+2
Aug 4th, 2009 (11:05 am)Good questions. I have the same problem even without involving my wife. If I involve her it becomes unworkable completely. She is usually the one that ends up saying “that just cost too much for us”. I usually keep trying to find alternative methods of making a “deal” work. She just looks at the initial cost and makes a decision right off. I might add that she is right more often than I am in these situations. I see something that I want and the price of it is usually the last thing that gets in the way of my getting it. So, I might have to send her off on a small vacation for a few days while I shop around the dealership. When she gets back, I will have a surprise for her. Hehe.
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Aug 4th, 2009 (11:06 am)Me too.
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Aug 4th, 2009 (11:07 am)There is the joke about second marriages representing the triumph of hope over experience. The seems like what is happening here. On the experience side we have a lot of information over the last few months that the price would be at or above $40K, and we also know that the Automotive Task Force went into shock when it looked at the costs.
The other piece of evidence we have is that GM is only making 10K copies. That tells you a big something. If GM could profitably sell the car in the mid-30s, then, with the rebates, the price would be in the high 20s. At this price you have to believe they’d be ramping up to make more than 10K units.
Which brings us to the law of supply and demand. The reality is that it doesn’t matter what price GM sets for the car. The MSRP could be $25K or $35K or $45K and if the market price — set by the number of Volts and the demand for those Volt — is $43K then that will be the transaction price. So a $35K MSRP doesn’t really help a potential buyer. The only two things that will bring down the price are more Volts or less demand. Put another way, hoping for a low price for a first gen Volt is really hoping the car will flop. Obviously there is some tension when someone is wearing their consumer hat and when they are wearing their EV proponent hat.
When you look at it this way, $43K for the first generation may be just about right. That’s a lot of money to pay for a Cobalt with an EV powertrain — so many will want to wait for Gen II or pass — but there are probably 10K people out there who will be willing to pay this price. But maybe not a lot more. In this regard, the Mini-E was not terribly oversubscribed, no way could they have leased 10K of them, although the lease price was very high and the one year term very limited.
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Aug 4th, 2009 (11:07 am)That’s true. And if the battery outperforms their expectations, they could increase production, and lower the price much faster.
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Aug 4th, 2009 (11:08 am)I hope so too.
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Aug 4th, 2009 (11:09 am)IMO you would be right if that investment was only for U.S. companys. Giving our tax money to other countrys really jerks my chain.
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Aug 4th, 2009 (11:09 am)Here is a thought , have the American government send $10,000.00 directly to GM like the Ontario government is going to do in Canada on every Volt sale . Just to help GM get over the bump . After all GM is part ours since we already put billions into the company to keep it afloat and we must protect our investment.
It would just be good business and the other tax payers shouldn’t mind helping out again .
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+3
Aug 4th, 2009 (11:13 am)Once the $7500 rebate stops being available, the price will go down by approximately $7500.
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+1
Aug 4th, 2009 (11:14 am)I dunno man. If I tried that with mine, I would quite likely get shot. Or worse.
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Aug 4th, 2009 (11:14 am)I tend to agree with you on this. I see no real advantage of the BEV model over the EREV initially. I also agree with JEC about the future cost of the Volt after the government rebate has been terminated. One thing you have to keep in mind when you are dealing with the government. You can not trust the government. That is the only thing about the government that is set in stone and will never change.
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Aug 4th, 2009 (11:15 am)But at the same time, GM will allegedly be selling the car to dealers for a loss. Doesn’t that sound like stupid business practices? Is the government really going to allow that?
What other company sells their newest most highly anticipated product at a loss? I remember when Blue-Ray players and 1080P HDTV’s and such first came out. They were incredibly expensive. Sure, that’s a little different of a market, but that can also be compared with the construction industry. NEVER EVER would we intentionally sell a product at a loss, especially a new one that required all new engineering.
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Aug 4th, 2009 (11:16 am)“……he was using the correct logic. He did not realize the car would require so much new hardware……”
—————-
Somebody help me out here.
If you’re an auto company exec., and you’re thinking about launching a whole new type of propulsion system for a car, would you not get a team of at least 6 or 8 engineers to work for several weeks (if not months) on a detailed proposal that involves cost estimates BEFORE you pull the trigger on it (or start flapping your yap on what the vehicle is going to cost )????????
I mean, really . . . how nutty is all this “back of the napkin, that was what was going through my mind at the time” stuff??
What does this say about Lutz?
What does this say about GM’s management in general?
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Aug 4th, 2009 (11:16 am)More like the Statik that we have come to know and … Hmm, just what else I can’t say on this blog. LOL.
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Aug 4th, 2009 (11:18 am)Good points about leasing the battery. I’d agree that leasing the entire car (with battery) would be one solution. However, after the EV1 fiasco many people looking at an EV would want the standard option to buy at the end of the lease term, at which point you’d have the same “buy car lease battery” issue as you have now. Seems like this would postpone rather than solve the problem.
On the cost side, as has been pointed out before, the Leaf will be a BEV so it doesn’t have the warranty issues GM has to deal with for the Volt. Without the warranty problem the Volt would be priced significantly lower.
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+2
Aug 4th, 2009 (11:19 am)SSR, GTO, G8, hybrid Malibu, hybrid Tahoe, and how many others? Wrong cars at the wrong time. I don’t hate him. I just think he’s past retirement age/mindset.
I’m a car guy through and through, but I don’t presume to understand what 20-30 somethings want in cars. I knew from the day one that no one would buy a Scion, for example. It’s way past time for new blood.
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+1
Aug 4th, 2009 (11:21 am)Are we to assume that the failure of these cars as you indicated by them disappearing was all due to Bob Lutz or could it be that others in GM took what he suggested, rolled it this way and that way and what came out had no resemblance to what was recommended? How many bean counters does it take to ruin a car’s design and replace “quality” with “sub-par”? I am just not ready to lay all the blame for GM’s failures onto Bob’s shoulders. Some of you here seem ready to make that choice, but not me.
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Aug 4th, 2009 (11:24 am)Well I answered my own question. According to the little calculator I found on line, $24K in 1995 equals about $33.6K in 2008. That’s all the farther it went, but I don’t think there’s been much inflation this year. So that’s $41.1K before the tax credit. Although I guess the sales tax gets charged before the tax credit comes out, so maybe it’s $40.5K.
I wonder what inflation will do by the time we can get our hands on a Volt?
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+2
Aug 4th, 2009 (11:26 am)These two phrases are soo contradicting that it points GM all back to failure….
“I think it’s all going to head in the direction of a smaller, lighter battery at much lower cost delivering the same range,” said Lutz.”
And
“Experts expect the battery pack cost to be cut in half in 5 to 10 years at that point allowing the car to sell for under $30,000.”
It’s obvious they do not intend to increase AER even if batt tech increases PERIOD
This tells me in 5-10 years when a batt pack can get you over 300miles of AER GM will still be building a partially polluting Volt product and the rest of the mfgrs will have full on BEV’s. This sounds more like they will guarantee OPEC is still fed by the US $$$..
“Though costs could also be reduced by spreading Voltec into multiple vehicles, like the Orlando we just mentioned, or the Cadillac Converj, these cars remain in limbo. ”
WTF? I have been in manufacturing R&D and this is soo damn false I don’t know where to start. Once you have a developed a product all costs of R&D have already been spent AND in the BK it should’ve been all wiped out. Now he also states that most if not all (paraphrased a bit) of the parts are propriety to the Voltec design. This was a ground up engineering tastk. The Orlando is not ground up design for Voltec. This means they will have to do more R&D to “Retrofit” the Orlando. Which also means MORE parts that are proprietary to the Orlando that wont fit/work for the Volt which by his definition wil increase cost anyway.
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Aug 4th, 2009 (11:27 am)Without Bob Lutz ramming the project through we would have a bankrupt GM that would have gone through Chapter 7 and not Chapter 11. There would have been no real sense that GM could turn around and be successful. The vision of the Volt gave us all that belief and that belief was echoed throughout some of the media and the government. Without the Volt, GM would be history. And that would be a shame. Plus jobs would be lost to an untold degree. Not a happy thought.
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Aug 4th, 2009 (11:27 am)Yeah, if they can pump another $2 billion into
“Cash For Clunkers”, they can sure extend the Volt credit.
Did you hear the US Rep. from Texas on NPR this AM proposing “Cash For Cluckers”. He said that the chicken farmers in his district are going broke, so he wants to pay people to eat chicken.
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+2
Aug 4th, 2009 (11:32 am)My guess is that if they do price it that way–the dealers will stick on a $10,000 mark-up. Personally, I’d rather GM gets the money.
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Aug 4th, 2009 (11:35 am)I agree the battery is the great unknown here. But even though GM has only had two years or a little less to test the batteries the testing has been going on 24/7. You and I will not use our Volt battery anywhere nearly as much as the test time accumulated by GM’s testing lab. They are going to be feeling pretty good about the battery and they have stated so several times. If batteries of the first two years production holds up in public use, I believe GM could reduce the Volt’s cost by at least one half of the cost of the replacement battery cost (or about $4,000) built into the Volt’s cost. Maybe more. They will have real world numbers on probably 100,000 Volts on the road to help them decide if they can reduce battery cost or keep it up. We will see. We just may not know why GM is reducing the cost. They may not tell us the exact reason, but more faith in the battery could be a big factor.
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Aug 4th, 2009 (11:38 am)I understand completely. 40k gets you into the entry level car enthusiast category. They are going to be selling an unproven electric sedan for the same money as a very refined European import thrill ride. If it was a 40K truck, it would be different. But they are jumping right into the middle of a competitive sports sedan category. They need to be in the middle of the ” I just need cheap transportation ” category. But I think there are enough folks with 40K that want to have something different and make a political statement to sell out the first run. But after that, slim pickins for round two.
Ken
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Aug 4th, 2009 (11:43 am)The “cool factor” will sell a lot of Volts. After that the sheer technology will slowly convince others.
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Aug 4th, 2009 (11:44 am)Plus 1 Gary. Well said.
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Aug 4th, 2009 (11:48 am)“…well, who in their right mind would buy a Mini when they could just buy a similarly-sized Yaris at half the price instead.”
Funny. The Yaris I think outsold the Mini. I could be wrong though.
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Aug 4th, 2009 (11:48 am)At the rate they plan to be selling Volts the 200K limit doesn’t appear to be a big problem for the first three years. In addition, I believe there is a phase out period, isn’t there? Plus this is just the number at the moment — it can change. Last year at this time the number was 250K for all manufacturers. I mean Cash for Clunkers last week was a $1B program, now it seems likely to turn into a $3B program (which is OK by me, just saying).
But if you think about why Lutz is saying he was wrong — special parts — then it’s not unreasonable to assume that five years into the process GM might get to Lutz’s original SWAG price. The battery costs will come down more slowly because they are based on raw material costs, but the parts are not. They’re more like any consumer electronic part whose costs drop quickly as you move up the learning curve and out with the production numbers. And a $30K Volt with a smaller incentive should sell in larger numbers than a $40K Volt with more incentives.
As an aside, one thing which is weird in the auto area is the lack of the “pioneer preference.” In the wireless world the FCC frequently grants companies who step up and take the early risks a more permanent advantage. That has proven to be a pretty big carrot. In the auto world they seem to want to give the same incentives to every company, no matter how late they start.
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+1
Aug 4th, 2009 (11:49 am)I think they said $43,000.00 and you have to add the Dealer markup stuff, Tax License Doc fees and some other crazy shit used to getcho $$$.
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Aug 4th, 2009 (11:51 am)On Gen I you’re doubtless right. But Gen II may get close to Lutz’s initial SWAG. Gen III will definitely get there.
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+2
Aug 4th, 2009 (11:53 am)So if they’re selling the cars for $40,000 and still taking a loss if battery prices go down half in 5 – 10 years they actually might start making money on the cars why would they drop the price? I don’t see the price of the car dropping. Not to mention inflation for 5-10 years from now. When have we ever seen a price drop on anything? Everyones talking woulda, coulda, shoulda for 5-10 years from now. What about the first 5 years buying a 4 door standard car for $35,500 ($43,000-$7,500 rebate). I’m 100% possitive they will be very hard to come by the first 6 months for the people that have the money and want to be the first one to own one but just like the Honda Insight after the rush now they’re just sitting on dealers lots. Right now everything just ASSumptions and only time will tell.
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+6
Aug 4th, 2009 (11:54 am)Live by the thesaurus, die by the thesaurus. With that said: Dearest Murray – your homework today is to look up and understand the proper use of the following word:
—- “it’s”
I’ll overlook “grammer” as a mere misspelling, not a misuse.
Hehehe.
And yes, I know there is a 99% chance that I made a typo in there somewhere…
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+9
Aug 4th, 2009 (11:55 am)Actually, this article is really encouraging to me.
We’ve known for a while that the Volt battery pack costs around $8K, and that a Chevy Cobalt costs around $16K, and that’s the same platform they’re using for the Volt, so it was always a mystery to me why the Volt was costing $40K.
This article says that it’s not so much the battery, but the other specialized components that are costing a lot, like the electric motor, electric A/C, etc.. The article further highlights that these parts are expensive because they are not being produced by mainstream suppliers.
So my interpretation is that the cost of these other types of parts will drop really fast once sales volumes ramp up, and more mainstream type suppliers start making them.
So I see this as really good news. EREVs are not inherently expensive due to battery prices. It’s just that EREVs are not mainstream, so the parts have to come from specialized suppliers. So the cost issue will be solved…
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+2
Aug 4th, 2009 (11:55 am)Personally I think Nissan cares less about the dependability of the battery pack than they do about getting the public interested in spending extra money each month on leasing the battery. I believe Nissan already knows or at least figures the battery will be dependable and that they can make a lot more money on leasing than selling. A cautious public can be a real sucker when they don’t know all the facts. And at this point no one knows all the facts. Nissan is just taking advantage of people’s concerns while offering battery security at a price. Smart marketing, yes.
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+1
Aug 4th, 2009 (11:56 am)You talk about Hybrid pricing remember this is a full electric car. No way to compare pricing.
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Aug 4th, 2009 (11:56 am)If you want to help out with the program your more then welcome to let the government reach into your pockets but speaking for myself (which is what I like to do) I don’t want the government reaching their hands into my pockets any more then they already do.
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+1
Aug 4th, 2009 (11:57 am)I sure hope the $1 billion in development cost isn’t being offered as a reason for the Volt’s high cost. My rationale? The way I understand it, there’s this thing called bankruptcy, where you can write off your debt….
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-1
Aug 4th, 2009 (11:57 am)Would anyone really want to be pulling around something like that? Wouldn’t that remove most of the “cool factor” of the BEV? I know some people would buy one of these, but not me.
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Aug 4th, 2009 (11:58 am)Biofuels would be competitive with gas at $8/gallon gas and in five years might be competitive with $3/gallon gas. Today if you’re willing to pay $8K for a microfueler you can get biofuel for $1/gallon which, after adjusting for energy density, works out to gas at $1.50 per gallon. So at $8/gallon both Volts and Impalas would be popular!
/I wish GM would make more of its fleet E85 capable
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+1
Aug 4th, 2009 (12:01 pm)“They are going to be selling an unproven electric sedan for the same money as a very refined European import thrill ride.”
——
Very much a problem for the Volt, when a base price of $44,700 gets you a fuel efficient (real world 35mpg+, my guestimate) very torquey BMW.
http://www.youtube.com/watch?v=e-tG4gCXT5Y
For me, It’s one thing to say you’re an enthusiast, but when it comes down to signing the bottom line on $40k +, it better be something that you really enjoy driving. So if on decision day you test drive a Volt in the morning, and then go test drive a 335 d in the afternoon . .. . . .
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+1
Aug 4th, 2009 (12:02 pm)Economic reality may just catch up to some of the liberal states and the U.S. government by that time. You have to ask yourself just how can we continue to afford government hand-outs like this? And is it fair to all the people who are unable to take advantage of some of these hand-outs but have to help pay for them in higher taxes? I say no it is not fair. It is even possible you may see a wide spread taxpayer revolt that could side track a lot of government hand-outs. Here’s hoping we see a massive change in elected officials in 2010 and 2012. I am going to be working to see it accomplished.
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+3
Aug 4th, 2009 (12:02 pm)We’ve already given GM about $50 billion. How much more must we give them before they figure out how to build cars at a profit?
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Aug 4th, 2009 (12:04 pm)Agreed.
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+1
Aug 4th, 2009 (12:05 pm)Let me get this straight; Bob Lutz thought that an electric car could be built almost entirely with off-the shelf components used for ICE cars? Really Bob? How many parts did the EV1 share with the Chevy Corsica? This revelation seals the deal once and for all that Bob Lutz is in no way the “Father of the Volt.” Somewhere in Michigan are some pissed off engineers grumbiling about an executive in a pink tie who thinks he “invents” stuff and then takes credit for it.
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Aug 4th, 2009 (12:08 pm)Speculation, yes. But isn’t that why we are here each day? I believe the Volt will have a covered front under body that helps channel the air from the engine compartment and the air passing underneath. But who of us really knows and GM is apparently not talking. Ask them, Lyle, if you get the chance. And you will.
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+2
Aug 4th, 2009 (12:09 pm)One can hope that when cheap batteries are available, that cars like the Volt will be offered with different battery (and price) options. An extended range 100 mile Volt for $38,000 vs a standard 40 mile Volt for $30,000 for example. It would be simple to do just by plopping in the bigger battery and tweaking the battery management software. GM would be crazy to not at least try it to see if it sells. Or make the Caddy version with greater electric range, etc.
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