[ad#post_ad]Bob Lutz may have retired on May 1, but my exit interview with him lives on (for a little while anyway).
What factors go into pricing the Volt, and why have you’ve said the car won’t turn a profit?
We have to find that sweet spot between trying to make money and having it at a price where nobody will buy it. We could very easily do that. And coming up with a price where we could break even or not lose too much per unit in the first generation.
Now we obviously have very solid plans on how to get down the cost of the second version and the third version, and these are all being worked on.
How do we get the cost down without in any way diminishing the value of the car in the eyes of the customer? By just doing some more elegant engineering than we did the first time around where we inadvertently did some belt and suspenders stuff because we wanted to move fast. Now as we look back at the car we say ‘gee I wish we’d done his different,’ …’ gee I wish we’d done that different’ because this is a very expensive solution and we could have done that for a lot less money.
Gen two will have all these intelligent cost saving things built in. Ultimately there’s no question that we will make some money on the Volt.
On pricing, its going to be higher than people would normally expect to pay for a car of that size, but on the other hand there’s a federal credit of $7500. Many states are now talking about credits, some cities are talking about credits, and some employers are offering credits, like Google.
So that at the end of the day if somebody has a federal credit, a California credit or whatever state, a major urban credit, and she works for Google, she’ll wind up writing a five thousand dollar check and getting a Volt.
You had once said the cost of the car would include a second battery, because of the warranty, baked into the car. Is that still the case?
We were adopting a very conservative approach at the time. We now think, from our experience with the battery during the life of the car, it is going to be way better than what we initially assumed.
So that very very large provision for battery warranty I think that’s going to give us some daylight for potentially lowering the price a little bit, or potentially making a little money on the car, or how about all of the above.
That’s good news.
Yes it is good news, because our experience with battery aging and thousands of cycle on the battery is actually considerably better than what we had planned.
Achieving a ten year 150,000 mile goal is something it sounds like you’re very confident in now.
Without committing to it being ten year or 150,000 warranty basically we are very very confident in the capability and the life of this battery in all but the hottest climates.
So it could be that in certain very hot climates where people leave this thing in a baking supermarket parking lot all day, these lithium ion batteries, if they get much over 95 or 100 degrees Fahrenheit, they quickly start losing life. So we may have to adjust warrantees, but we really haven’t decided how to do that yet.
This entry was posted on Monday, May 3rd, 2010 at 6:32 am and is filed under Financial, Original GM-Volt Interviews. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.