• Dec 10th 2008 at 5:58PM
  • 44
Click above for high-res gallery of the 2010 Chevy Volt

Although they're a big part of the Congressional pitch to get some federal funds, green cars aren't going to make the Detroit 3 profitable on their own any time soon. Take the Chevrolet Volt for example. When GM CEO Rick Wagoner testified that the Volt is being pushed into production for 2011, he added that, "It will not be at that point fully cost competitive." That statement might seem like the understatement of the century to some.

According to this CNN Money piece, GM has actually spent about $750 million to develop the Volt, much of that in battery research. Apparently GM recognizes the need to stay ahead of (or at least alongside) the competition in developing new technology and is willing to take the risk of spending that kind of money even in desperate times. Of course, some of that money will eventually be spread across the range when the Volt's powertrain and battery advances get shared with other GM models. Still, it's unlikely the Volt will add to rather than bring down the bottom line until a second generation model is introduced, which may not be until 2014-2016.


[Source: CNN Money]


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    • 1 Second Ago
  • 44 Comments
      • 6 Years Ago
      The 750 million was spent in the USA, not in Japan or Korea, which brings the point of the whole present debate on the industry.

      Good paying jobs are in engineering, design, research. Assembling is just putting together what the brain power has created. So we are talking about high paid white collar jobs.

      Japan and Korea have learned this a long time ago and are very protective of their automotive industry. They kept their white collar jobs and exported some of their blue collar assembly line jobs in USA and Canada.

      Even senator Shelby from Alabama tries to spread the myth that the Japanese industry is now American. The real good jobs are in Japan, with Toyota, Honda and Denso (Largest Toyota supplier).

      As far as the Volt, it will be on track for the target date. Ironically, taxpayers will have to pay for the tax breaks and other incentives so the car can sell. The consumer is like this. They say they want something, but in fact, they do something else. I have friends at Toyota and what they sell the most is not the Prius, especially at this moment: Yaris, Plain jane Corollas, and stripped down Camries with plastic hubcaps.

      Depressing, that is. Selling cars and appliances are now two interchangeable careers.
      • 6 Years Ago
      notYou,

      Are you suggesting that current GM products don't sell to the masses? If so, last I heard, GM still sold more cars than any OEM. Not much more than Toyota, but more. In the US, even though sales in the last two months were abismal for all OEMs, especially GM, they still sold more product than anyone. Based on that, I would argue that the masses still want or are buying their product.
      • 6 Years Ago
      Yet more proof of FAILED liberal policies.

      "Throw enough money at something and we can save the world."

      750 million for a car nobody is going to want or can afford and not to mention its more expensive and more complex and harder to dispose of than a regular ol'car!

      I can buy a malibu for 25k and have 20k left for all the gas I can stand and do without the hassles of an electric bill and battery lease payment.

      Why does going green have to cost more?

      Plus, why buy this when VW makes a jetta TDI that gets almost 50mpg on the highway for 22k?

      Failed liberal policies. KISS.

      I seriously question this number BTW, the volt is just a 17Kw generator under the hood, and a lithium ion battery essentially. What is so extraordinary about that? Guys in the 70's were doing the same thing - in there garage with normal batteries. Not impressed GM. The battery is new sure, but if you paid for someone else to develop that - your more stupid than I thought.

      GM doesn't have a patent on the idea of using a generator and a lithium ion battery. ANYONE CAN DO IT. Unless they have some significant patent I don't know about, the volt can be copied and quickly.

      THAT IS THE REASON AUTOMAKERS DON'T RISK BUILDING SOMETHING LIKE THIS!!! Especially now, look what happened - recession and $1.50 gas. Its just like with boeing, they simply cannot afford to take a chance on a radical airplane design so they went with the safe dreamliner.

      GM will have competition from day one. Prius, honda's hybrid, etc. are due to launch around the same time. This is one of the reasons the volt is priced so high - among others. Its also perception.

      When the costs come down over time they will have you convinced that's what a car like that costs - even though they at that time will be building them for the cost of a malibu. So the huge profits, like they saw with trucks and SUVs will once again roll in.

      I am not going to cry for GM, every company spends money on R&D. Its not my fault there playing catch up.
        • 6 Years Ago
        As has probably been explained here a dozen times by now, the Volt is *not* the same kind of hybrid as the Prius or Insight. It is a *series* hybrid with 40 miles of zero-gas range- unique amongst *any* hybrid on the market or in visible development.

        In addition, the Volt will have Lithium Ion batteries, the next generation that Toyota and Honda have not even committed to deploying (with a timeframe) yet. The research in this alone could lead to a dramatic increase in the performance of the other mild-hybrids in the GM portfolio. No, this isn't a hard *idea* but to actually make these batteries viable (both in performance and weight) is a challenge that *every* brand is tackling with, and it would seem GM is on the forefront of the technology.

        So why do we bail out these companies, which are making investments in tomorrow's technology? Gee, I dunno, maybe because the resulting 1mil+ jobs that will disappear would sink us into a DEPRESSION rather than a recession. Even if this government money does nothing but push the demise out 3-4 years, at least it can't compound with our current economic situation to bring the nation to its knees. Don't believe that we're in bad shape? Go check out the current stock indexes, GDP growth, or unemployment rates- all will tell you the same thing.

        P.S. The TDI may be able to do close to 50mpg on the highway (with a *very* light foot, from what I've read) but it does nowhere close in the city. The numbers I've read are close to 33mpg, a number that Ford's new Fusion hybrid can beat handily. And did I mention that gas-engine emissions are generally better for the environment and lacking a urea system or the ultracomplex catalytic converters of diesel?

        All said and done, keeping the Big 2.5 alive, if only to further this technology and the jobs, seems like a decent deal to me, compared to paying for AIG's exec's vacations.
      • 6 Years Ago
      They didn't spend it (750m) on styling.
        • 6 Years Ago
        Amen. They surely could have come up with a much smoother, more beautiful body, if this was designed from scratch. Isn't the body borrowed from another new car GM will be introducing?
      • 6 Years Ago
      750m
      thats what?
      a week or two's worth of losses for them?


      • 6 Years Ago
      I guess this is another reason why GM wants a bailout.
        • 6 Years Ago
        Here's an idea how to make Volt profitable starting with the first generation.
        Instead of selling only the plug-in Volt, build together with it a simple serial hybrid version, with an electric only range of 5 miles. Remove the extremely expensive battery pack from Volt, decrease the price with 10k, and sell a very profitable model.
        • 6 Years Ago
        @ Flashpoint

        I didn't know it was that expensive to strip and rebuild an S-class...
        • 6 Years Ago
        I see everytime the word GM or FORD is mentioned, the blog turns into a nasty argument about whether to bail them out or not.

        I don't care what the pundits say...THEY MUST BE BAILED OUT.

        Besides the fact that wrapped into the Big3 is millions of jobs, a huge chunk of the countries payroll and a large amount of taxes that help Americas GDP, we must bail them out because as china and India mature, they are gonna want CARS. If we don't bail out the Big3, we cut America OUT of that market.

        The whole situation has been mischategorized when they say "no one wants these cars". That's BULL. The problem is, the credit crisis. No one can get financing for these cars so they end up turning to Asian markets to get credit and the Japanese almost let them go at a loss to get you in one. after shopping with a girlfriend for an Accord 2009, I see it so clearly now.

        As far as I'm concerned Ford and GM are making better cars than EVER and they are gradually getting as competitive as the German's offerings.

        now chrysler on the other hand... right now they've got nothing on the drawing board and they are making me ashamed to own a 300
        • 6 Years Ago
        @ sergey

        seriously, what on earth would make developing a lux car as expensive as a sports car or a new "radical tech" platform. sure the ls has some very very nice and ground breaking features when it debuted back in the day, but nothing that would ever lead me to believe it would cost that much whether it were in 1989 dollars, 2009 dollars or even 2029 for that matter. Flashpoint, i would love to see that tidbit that shows the 1.5 billion, and where exactly that cash was spent (if it wasn't lost/stolen...cuz it really sounds like toyota got ripped off to me).
        • 6 Years Ago
        Lexus spent over $1.5Billion developing the first LS.

        Look how that turned out :P
      • 6 Years Ago
      The headline should have been:

      "Now we know why GM is broke. They spent $750 million developing the Volt"

      Good grief GM, we could land on the moon for less. A giant lithium battery, a 17kW generator and a small gas engine ate up $750 million???

      HAHAHAHAHHAHAHAAHAHAHAHAHAHAHAHAHAHAHAAHAHAHAHAHAHA!!!!

      • 6 Years Ago
      Chevy Volt > Pruis
      • 6 Years Ago
      Wow. Just wow.

      First, GM didn't just say "hey we need a battery" and A123 and LG chem popped up and said "here you go, it's all done!" GM definitely had to do a lot of work and research alongside these companies.

      Second, let's completely ignore what I just said. Let's assume that like you've implied that GM did not develop the batteries at all. It was all A123 and LG chem. Allow me to point out the fact that A123 and LG Chem are not 501 nonprofit organizations!!!! Did they do this battery development for free? Heck no! They charged GM money for the work! Are you suggesting the money GM paid another company to work on their vehicle doesn't count as money they spent developing it? If you wanted to know how much it cost to build a car, would you say you can't include the price of the tires, radio, seats, etc because they were purchased from a supplier? Ridiculous!

      And let me clue you in on something else genius. GM is the number one make in the US too, but they need tax dollars to survive. It's about the margin, not the volume.

      Go back and get your GED and then enroll in the community college. Maybe then we can talk.
        • 6 Years Ago
        this was supposed to be in response to Tetrong's post
      • 6 Years Ago
      It has already been known that american car manufacturers were left behind in the late 90s early 2000s. At the time neither care because big suvs and trucks were selling pretty good. The american costumer is getting more demanding for their dollars. this is why they would rather buy a honda civic than a pontiac. Most of us have the perception that Japanese cars are efficient, with good long lasting engines. European cars have the luxury, while American brands have the raw power, gas thirsty perception that not that many people want to buy anymore. What GM is trying to do now, should have been done in the 90s. Ford has a better at keeping up since they have good reputation in Europe with the focus, fiesta, KA, Kuga, All they need to do is bring those cars and Americans will know this are good cars. GM has a tougher job to do and this is why they need money. I don't about chrysler, but it seems like its the most likely to go down. this I say is what the population in America as a whole think about any kind of car.
        • 6 Years Ago
        For American cars to have been left behind in the late 90s, they would have had to keep up through the 80s and early 90s.
      • 6 Years Ago
      Chrysler spent $300,000,000 just to design stow n' go seating.
      • 6 Years Ago
      The economics of this car and any hybrid are looking bad with dropping gas prices. GM will have to have a plan for alternating periods of high and low gas prices and be able to adapt to quick changing markets.
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