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Early Volts reportedly cost $40,000 to build
Chevrolet Volt battery pack – Click above for high-res image gallery

How's your math? If you have 240,000 "potential buyers" but only 10,000 vehicles to sell them in the first year, what can you do? If you're General Motos and the item in question is the Chevrolet Volt, then you look for ways to seriously increase the number of Volts you can build (and, of course, sell).

That's exactly what CEO Dan Akerson says his company is trying to do, looking to double or triple production rates of this very important car. The problem, according to GM North America President Mark Reuss, is the bottleneck created by the limited number of battery cells that vendor LG Chem can produce for GM. The current plan is to make around 10,000 in 2011 and 45,000 in 2012. That 2012 number has already been increased from 30,000.

Upping the production numbers is good for GM for another reason. According to Steven Rattner, who was President Obama's former auto bailout chief and worked intimately with GM, "At least in the early years, each Volt would cost around $40,000 to manufacture (development costs not included)." GM won't confirm this number, but increased production will get the company, presumably, better economies of scale and thus lower production costs.


  • A battery engineer checks a Chevrolet Volt battery at the General Motors Global Battery Systems Lab in Warren, Michigan Wednesday, June 30, 2010. The Chevrolet Volt will offer customers an unprecedented standard 8 year/100,000 mile warranty on its lithium-ion battery. GM engineers have completed more than 1 million miles and 4 million hours of validation battery testing since 2007. Each Volt battery pack has nine modules and 288 cells. GM designed and engineered 99 percent of the 155 components in each battery. (Photo by John F. Martin for Chevrolet)
  • A Chevrolet Volt battery at the General Motors Global Battery Systems Lab in Warren, Michigan Wednesday, June 30, 2010. The Chevrolet Volt will offer customers an unprecedented standard 8 year/100,000 mile warranty on its lithium-ion battery. GM engineers have completed more than 1 million miles and 4 million hours of validation battery testing since 2007. Each Volt battery pack has nine modules and 288 cells. GM designed and engineered 99 percent of the 155 components in each battery. (Photo by John F. Martin for Chevrolet)
  • The first Chevrolet Volt battery built at the General Motors Brownstown Battery plant undergoes a dimensional quality check in Brownstown Township, Michigan Tuesday, December 22, 2009. The Brownstown facility is the first lithium ion battery pack manufacturing plant in the U.S. operated by a major automaker. (Photo by Jeffrey Sauger for General Motors)
  • The first Chevrolet Volt battery moves through the assembly process at the General Motors Brownstown Battery plant in Brownstown Township, Michigan Tuesday, December 22, 2009. The Brownstown facility is the first lithium-ion battery pack manufacturing plant in the U.S. operated by a major automaker. (Photo by Jeffrey Sauger for General Motors)
  • The first Chevrolet Volt battery makes its way through the General Motors Brownstown Battery plant on an automated guided cart (AGC) in Brownstown Township, Michigan Tuesday, December 22, 2009. The Brownstown facility is the first lithium ion battery pack manufacturing plant in the U.S. operated by a major automaker. (Photo by Jeffrey Sauger for General Motors)

[Sources: The New York Times, Automotive News – sub. req.]


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    • 1 Second Ago
  • 40 Comments
      • 4 Years Ago
      I guess the first batch will be sold out fast.
      • 4 Years Ago
      Does Honda, Toyota, Have 200,000 people waiting for one of their vehicles? WAY TO GO CHEVY!
      • 4 Years Ago
      If I really had 240,000 buyers for 10,000 vehicles, I double the price. Microeconomics 101.

      So there you go GM, if you only have material to make 10,000 volts, spend $10k more on the interior/styling, call it a Cadillac, and charge $80,000.

      You're welcome, I just got you $30,000 more on each sale. You don't see Mercedes/BMW/etc. putting their latest tech in entry level vehicles, put it in the flagship!
        • 4 Years Ago
        Don't worry, the Chevy stealers are way ahead of you on that one...

        Expect massive mandatory ADP, processing fees, paperwork fees, etc. on the sticker.
        • 4 Years Ago
        Nope, I think I got an A-, but it's been a while. If GM really believes they could sell 240,000 Chevy Volts for $40,000, then they should have no problem selling 10,000 Cadillac Volts for $80,000.

        My suggestion is simply based on their data. In my opinion they don't really have 240,000 potential buyers @ 40k, but hypothesis are only as good as the data provided.
      • 4 Years Ago
      $40,000? If you believe that.....oh boy......
      • 4 Years Ago
      This car is doomed, it's overpriced by about $17K and the cost to build the car not counting R&D is $40K? OUCH, add the R&D and even at the insultingly over-priced MSRP of $41K GM will be losing $20K+ per Volt sold, and since it costs $40K to build they'll never be able to bring it down to the ~$24K the car should sell for.

      Toyota better watch out as they will surely be more witch hunts coming in hopes of propping this turd known as the Volt.
      CheckTheseOut
      • 4 Years Ago
      Any idea when GM plans to use the Volt's technology in their other models?
        • 4 Years Ago
        @CheckTheseOut
        I would presume so, based on what I have read the volt makes ZERO profits for GM,. and thats just not a good business case. By spreading the tech, especially if it IS embraced, costs can be spread out and eventually GM could start making some money on a vehicle that right now I veiw as pure PR, no matter how good it is. And 40k?....thats a tough decision for prospective buyers....even with the temporary tax benefits...after all, one could save 10k for a similar sized IC car which poetentially has more acruments, gets 40 mpgs, outperforms, handles etc etc, and NOT use 10k in gasoline for how many years?
      • 4 Years Ago
      Chevy Colorado...lol. It's a GM and Isuzu truck so hardly an American vehicle to be proud of. Also poorly rated in side impact and they sold 46k last year so it's end is near. The Tacoma is rolling on and #1 in it's class and doesn't need another company helping them
      design it. Good call on the Fusion over the Camry though.

      Chevy Volt? Nothing but a vehicle to show off with. I doubt many owners of this or the Prius practice what they preach away from the vehicle.
      • 4 Years Ago
      Chevy Volt is really garbage compared to the Nissan Leaf.

      Nissan Leaf = +100 mile range on charge
      + Fully Electric and never needs gas
      + Charges Faster
      + Priced at 32,800 - 7,500 tax credit = $25,300 total

      Chevy Volt = - 40 mile range on charge then goes to gas motor
      - Volt has a gas motor and not fully electric
      - Priced at 37,500 - 7,500 tax credit = $30,000 total
        • 4 Years Ago
        Great, let's drive both cars from LA to Las Vegas for the weekend. We'll start 5 pm Friday evening, and plan to be back at work 9 am Monday. How many hours will the Leaf driver spend at the tables?
      • 4 Years Ago
      Do not know the expense for the battery plant machines, but the only way to up those production numbers quickly is to create another (or temp) factory to pump those up. Or get a contract with another battery vendor.

      The 1st course would seem the most expensive, and probably prohibitively so. The 2nd introduces the risk of the new vendor not matching the needed specs and quality.

      Then there is the material resource cost. Lithium is not an endless source, and the US does not have enough on its own (sound like another commodity?). So a spike in need will spike the costs just of the material TO produce the batteries.
      • 4 Years Ago
      I spoke with a long time Chevy salesman and he told me they are not looking forward to selling this car. Yes, a few folks will grab them up for the statement they think they are making, but it's gonna be tough to sell a $22k car for $40k.
        • 4 Years Ago
        With only 10 thousand to go around, dealers will tack on huge markups, fees, and "addons" to bring the price over 50 thousand dollars. Option packages alone can drive up the car to 46k before all the dealer B.S.

        50 grand buys alot of options. Something more desirable than a 4-seat econobox that gets the same mileage as a Toyota Corolla after the 40 volts is gone and the owner doesn't remember to plug it in for the 10 hour recharge.

        Unproven technology, unproven reliability, unproven reputation and being a Government Motors product with a history of FAIL is icing on the cake, er, pile of dog doo doo.
      • 4 Years Ago
      What?? They haven't figured this out yet? Talk about putting the cart before the horse. They have spent untold money promoting this car and it is the supposed "savior" of GM and they haven't figured out how to build enough of a car they really don't much money on. GM Bankruptcy part 2.
        • 4 Years Ago
        The Volt is not GM's saviour - that is just media hype.

        GM sells ~6.5 million cars a year. The Volt will not account for even 1% of that number.

        The Volt is way overpriced, but its a good way for GM to get experience building electric drivetrains. That way, if and when batteries and/or fuel cells become affordable and lightweight enough for the mass market, GM will be ready.

        The USA is not running out of oil any time soon. If were to face a sudden shortage, we would simply declare war on a new "axis of evil" - Canada, Mexico, and Venezuela.
        • 4 Years Ago
        @ Dave

        "The USA is not running out of oil any time soon. If were to face a sudden shortage, we would simply declare war on a new "axis of evil" - Canada, Mexico, and Venezuela."

        Not entirely true. The US reached peak oil production back in the 1970's and therefore we are already heading down the other side of the bell curve graph for oil production. The only reason we aren't seeing the effects yet is because the demand dropped dramatically after the oil shortage in the 1980s. We are definitely sitting on the edge of a large drop off in available oil production but the question is when we are truly going to see the effects.
        • 4 Years Ago
        No Carlo, I didn't read the article. I love to blindly comment. Of course I read it and considering the importance of batteries in an electrical vehicle I would think you would have a real good idea of battery production and increase of production. Just because they don't produce a part doesn't mean they are exempt of understanding their production levels.
        • 4 Years Ago
        @Scott

        Did you bother to read the article? It is the lack of batteries made by LG that is holding back increased production, not GM.
      • 4 Years Ago
      Are you kidding me, cost is 40k, sell for 41k and they want to rush production before getting real world feedback (problems) on the thing! Talk about a bad business plan. Wait for the massive recall that puts GM back in too big to fail territory. BTW 240,000 x 7500 = 1.8b in taxpayer subsidey (deficit ). Would have zero issues with this and any other green idea so long as it can stand on its own.
        • 4 Years Ago
        You know, Toyota lost thousands on every 1st Gen Prius the sold, right?
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