Late last year, the Internet went wild with the "news" that each Chevrolet Volt that was built cost taxpayers $250,000. That figure was completely untrue, of course, but the question of how much GM is paying to make each Volt is as close to a perennial one as we have 'round these parts when it comes to the new generation of plug-in vehicles. The latest figures, which come to us via "auto industry consultants who spoke with Reuters," suggest that, currently, each Volt costs GM around $80,000, or at least somewhere between $76,000 and $88,000.

That 80k breaks down this way: Each Volt currently has $56,000 in fixed costs – $18,650 in development costs and $37,350 in tooling costs – as well as $24,000 in parts and labor, according to the consultants. With each Volt sold, the $56,000 will drop by a little bit, but it's a slow process. Reuters says GM has invested an estimated $1.2 billion into the Volt program so far and when you divide $1.2 billion by the 21,500 Volts sold in the U.S. so far, you get $56,000. This does not take advertising and marketing costs into account, or the number of Volts (and Opel Amperas) sold overseas. In response, GM issued a statement clarifying just how much Reuters is relying on current sales numbers to get to the $80k number, saying, Reuters' estimate is "grossly wrong." The full statement is available below.

What GM isn't saying is how much, exactly, it costs to make a Volt. But Doug Parks, GM's vice president of global product programs, did admit that the Volt is a losing proposition, financially. He told Reuters, "It's true, we're not making money yet. ... [It] eventually will make money. As the volume comes up and we get into the Gen 2 car, we're going to turn (the losses) around."
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GM Response to Reuters Story on Chevrolet Volt Development Costs

2012-09-10

DETROIT – Reuters' estimate of the current loss per unit for each Volt sold is grossly wrong, in part because the reporters allocated product development costs across the number of Volts sold instead of allocating across the lifetime volume of the program, which is how business operates. The Reuters' numbers become more wrong with each Volt sold.

In addition, our core research into battery cells, battery packs, controls, electric motors, regenerative braking and other technologies has applications across multiple current and future products, which will help spread costs over a much higher volume, thereby reducing manufacturing and purchasing costs. This will eventually lead to profitability for the Volt and future electrified vehicles.

Every investment in technology that GM makes is designed to have a payoff for our customers, to meet future regulatory requirements and add to the bottom line. The Volt is no different, even if it takes longer to become profitable.

GM is at the forefront of the electrification of the automobile because we are developing innovative technologies and building an enthusiastic – and growing – customer base for vehicles like the Volt.


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  • 203 Comments
      mikeybyte1
      • 2 Years Ago
      Toyota lost a ton when they created the Prius. There was a lot of speculating over how much they lost on each vehicle. All Toyota would do was acknowledge that yes they were selling it at a loss. As other posters have said, new technology takes a lot of time to recoup. Not just in the auto world but in all products. GM will soon make additional sales with the Cadillac ELR. And the Opel version is selling well. They have always said the Voltech powertrain will find it's way into other vehicles. I have seen quite a few of these on the road, and I am nowhere near a major city. I sat in one at the recent auto show and was very impressed with the build quality. The price is still a turn off for me, but if I were to be in the market to lease a car I would seriously consider it. I can see this type of powertrain evolving over time, with the batteries becoming more efficient and the engine shrinking. Kudos to GM for pushing this technology forward.
        SonataGuy1
        • 1 Day Ago
        @mikeybyte1
        But Toyota was not on welfare like GM is, so when GM is losing money.................we are all losing money. Gillete sells it's razor handles at a loss, but we do not care, no one cares, no one goes on a shaving blog and posts that.................because Gillete is an independent company.
          • 1 Day Ago
          @SonataGuy1
          You may not agree with the bailout, but the car was developed way prior to the bailout. Now that the Gov't is a shareholder, you should be cheering the car on. If they stop selling the car tomorrow, they lost money. If they break 74000 sold, they are past the break even point. Do math, son.
          Spec
          • 1 Day Ago
          @SonataGuy1
          The Volt was developed during the Bush administration long before the bail-outs. It was championed by hard-right climate-change-denier Bob Lutz. The Obama administration car czar actually wanted to kill the program but the GM people insisted it be kept because it was important for the LONG TERM prosperity of GM. Facts!
          mycommentemail
          • 1 Day Ago
          @SonataGuy1
          Yeah, and see how badly those initial years of "loosing money" were on Toyota? Clearly a bad strategy and one we wouldn't want GM to repeat. Especially since, according to you, this is all of our money we are talking about.
          Matt
          • 1 Day Ago
          @SonataGuy1
          SonataGuy1: GM is reporting profits!!! The fact that the Volt is currently a money loser is irrelevant to your argument. Therefore, your statement is completely incorrect, as you are not losing money!!!
          montoym
          • 1 Day Ago
          @SonataGuy1
          Well then tell the Feds to sell their shares and be done with it, then you won't be losing anything any longer. I suspect that's not what you want to happen though.
          Dan Gordon
          • 1 Day Ago
          @SonataGuy1
          SonataGuy1: Welfare? What the hell are you talking about?? I know you're not saying this out of ignorance, but malice. It kills you and your ilk that GM was saved from the vulture capitalists. The fact that GM escaped liquidation and that its name plate wasn't purchased by some venture capital firm like Bain and the workers--or legacy cost, as the business class calls them--weren't given a reduced salary and benefit package is driving people like you insane. It wouldn't surprise me if you are one of those who defends or even advocates for the continuations of the the billions of dollars that flow to that oil companies and military-industrial complex. But GM gets a loan and the government gets a temporary ownership of one of the crown jewel of American manufacturing, you and your ilk rant and rave as if you occupy any moral high ground on this issue. This deep hatred of GM part of a new dangerous trend to see parts of the economy be destroyed so that it can be restructured in favor of the economic elite and the political Right who have developed a level of hostility towards unions that is beyond irrational. Ultimately though, this is a form of economic treason.
          2 Wheeled Menace
          • 1 Day Ago
          @SonataGuy1
          Toyota has been given MANY handouts from the Japanese govt in the past.
          mycommentemail
          • 1 Day Ago
          @SonataGuy1
          Except that you don't seem to understand how business works. I already replied to one of your comments below, but here is a summary: Assuming Gillette builds a new factory for some new blades (note: blades, not handles) to the tune of 10 million dollars, the very first blade out of that factory will represent a nearly 10 million dollar loss! Is Gillette losing money on each sale? Of course not. They simply have not recouped their development and capital costs yet. Once they sell enough blades, they will be in the black. The same with any technology that is new. Development and capital costs need to be amortized over time. Simply "dipping" into any particular point in time and calculating whether all development and capital costs have been recouped is something only a "dip-$#!t" would do (or someone with an axe to grind - often the same thing). Just because unit # N hasn't broken even has little bearing to do with whether producing a new product was a wise investment of resources or not. Over time, building a new razor factory might make sense for Gillette. Just like inventing a new hybrid technology might make sense for a car company.
      PeterScott
      • 2 Years Ago
      We don't price other cars this way (or any product). All cars cost major automotive companies hundreds of millions (if not billions) in R&D and Tooling. Those are sunk costs by the time you are running production. The actual product profit magin of the cars is based only on actual production costs, not on sunk costs. Here they only list $24K in parts and labor, and it's selling price is near $40K. That means there is a profit margin on the car. Now as far as the whole program being profitable, that is when you calculate in the R&D and Tooling costs and of course as a new and still low volume product, the program as a whole is not profitable.
      tump
      • 2 Years Ago
      I'm still replacing my mom's older PT Cruiser with a Volt next year because it's exactly perfect for her.
      carfan
      • 2 Years Ago
      well then, that means that at 40K a car, the "american taxpayer" has a fantastic deal...1/2 off Whoever wrote this article is obviously a moron
      dan1malk
      • 2 Years Ago
      The Volt is a halo car. The success of the unprofitable Volt is actually represented in the killer sales of the profitable Cruze. People come in to see the Volt, leave with a Cruze. This is how Halo cars work people.
        Spec
        • 1 Day Ago
        @dan1malk
        No. The current Volt may be a Halo car but that misses the bigger point. The Voltec technology is critical for GM's long-term product development and will be used in many other GM cars. It is already being used in other cars.
        Spiffster
        • 1 Day Ago
        @dan1malk
        I wanted a Volt, but it wasnt available yet in CO (at the time)... so I got a Cruze and am waiting for the next gen Volt. Love my Cruze though.
        sirvixisvexed
        • 1 Day Ago
        @dan1malk
        The entire "halo car" psychological process is a weak minded process that gets way too much credit and is assumed to have way too much power over people. One should only fault themselves for going to a dealership to look at one car, and then letting that car "make them" buy a different car. "I got a Cruze instead of a Corolla because.....because.....IT'S THE VOLT'S FAULT!"
          Julius
          • 1 Day Ago
          @sirvixisvexed
          No, but I'm sure the Volt got people who would NEVER have set foot in a Chevy dealership to actually LOOK at a Cruze...
        Pinhead
        • 1 Day Ago
        @dan1malk
        Logic is spoken. . . and promptly ignored by the haters. Oh well.
      MTN RANGER
      • 1 Day Ago
      My Volt has been 100% perfect and is definitely the best car I have ever owned!
      Rob J
      • 2 Years Ago
      How much does it cost to build a Veyron or LFA again? Either way, anti-volt, anti-GM, anti-alt fuel people are just going to love this.
        nsxrules
        • 1 Day Ago
        @Rob J
        Right because the Veyron and the LFA are the cars the Volt (supposed to be a mass marktet car) competes with......
      Spec
      • 2 Years Ago
      Reading the comments after the Yahoo! News version of this story is sad. Endless rants of hatred, sillyness, and above-all misinformation: http://news.yahoo.com/insight-gms-volt-ugly-math-low-sales-high-041323264--finance.html What a nasty hit-piece by those authors.
        • 1 Day Ago
        @Spec
        What do you expect? After YouTube, Yahoo News is the dumbest general interest community on the Internet -- a natural result of making 1/3rd of your news coverage about the Kardashians.
        ak47
        • 1 Day Ago
        @Spec
        wow....those people who hate the government's involvement in the market should go live somewhere else...if you hate the govt. so much go live in a place where there is no govt. so that others can live peacefully without hearing their crap all the time
      MAX
      • 2 Years Ago
      There seems to be cottage industry built around lying about GM. I bet if one followed the money it would lead back to Romneys at this point failed campaign.
        2 Wheeled Menace
        • 1 Day Ago
        @MAX
        What a short memory you have. GM has been a 'political punching bag' since before Obama took office and way before Mitt Romney was ever being considered the republican nominee.
          Spec
          • 1 Day Ago
          @2 Wheeled Menace
          There is no way to rationally analyze Romney's policies. All his campaign gives out is vague contradictory information. One day they say one thing and the next day they say something else. But they never give detailed policy proposals. And they lie . . . proudly claiming "We will not let our campaign be dictated by fact-checkers". They talk about cutting taxes, spending more on the military, not cutting social security or medicare, and cutting deficit. The math just doesn't work. So it is impossible to really analyze what they say other than to say it doesn't make sense.
          2 Wheeled Menace
          • 1 Day Ago
          @2 Wheeled Menace
          I meant exactly what i wrote, which you did not fully read, indicated by your post. If you REALLY believe that Romney is following the Bush-era playbook, then you have not been paying attention to this election at all. And you were not paying attention in 2000 either. Or perhaps you are talking about the marketing of candidates and not the proposed policies, which is a grave mistake for anyone researching who to vote for commonly does. Luckily we have youtube now, so you can search for 'bush campaign 2000' and see how he contrasts with Romney. Romney does not follow traditional republican lines of thinking ( even though he markets himself as such - his record indicates otherwise. ) Aaahhhh.. more time wasted replying to someone who does not read or pay attention..
          PR
          • 1 Day Ago
          @2 Wheeled Menace
          2WM, What are you trying to say here? Are you saying that it can't be Romney backers behind all the anti-GM propaganda, because those exact same folks were bashing GM before they joined the Romney election campaign? All you have done is to show that Romney is just another hack following the same old Bush-era republic party playbook.
      2 Wheeled Menace
      • 2 Years Ago
      Same type of crap we heard about the Prius being dirtier than the Hummer. The oil industry doesn't mind hiring a few liars here and there to produce things like this. That's good ol' 'merica for ya. At best, it does indicate that said products being attacked make them nervous. So go milk the taxpayer for a quarter grand.. ravage the earth with that prius.. or even better.. get yourself one of those coal operated fully electric cars! Leave this country a poverty stricken, mad max-esque smoking crater. Just to see the sour face on all those Birkenstock-wearing environmentalist Hummer drivers.
        2 Wheeled Menace
        • 1 Day Ago
        @2 Wheeled Menace
        ( ps. i mean quarter million, not a quarter grand. But you get the idea )
        Spec
        • 1 Day Ago
        @2 Wheeled Menace
        And how are the Prius and the Hummer doing these days? ;-)
      EJD1984
      • 2 Years Ago
      My point is that GM should have seen the early success Toyota was having with the first generation Prius, and developed a similar car for the market 10+ years ago.
      2 Wheeled Menace
      • 2 Years Ago
      Sales numbers for the Chevy Volt have been higher than these other notable GM cars: Chevy Caprice Chevy Corvette Cadillac Escalade Buick Regal Buick Lucerne There are a few models of Cadillac that are selling in the low hundreds figure; the DTS, EXT, and STS.. By the same criteria, you could call about 1/6th of GM's lineup a failure and waste of money. You'll never hear the oil industry backed criticism of the Chevy Volt ( and other hybrids/EVs ) mention this. You can look up GM's monthly delivery numbers here, FYI: http://www.gm.com/content/gmcom/home/company/investors/sales-production.content_pages_news_us_en_2012_sep_gmsales.~content~gmcom~home~company~investors~sales-production.html
        Ford Future
        • 1 Day Ago
        @2 Wheeled Menace
        Exactly, why isn't the right wing CRYING for the Corvette to be put down? It guzzles Tons of Exxon Gas.
        2 Wheeled Menace
        • 1 Day Ago
        @2 Wheeled Menace
        From all the monthly Volt sales numbers i've seen, they have been above 1000 for a very long time, have touched 2,000 per month multiple times. Look up the Escalade EXT's production numbers if you want to know what a sales failure looks like. That vehicle has been around since 2002. It's been selling about 100 units a month for a while now. Yup, GE is an Obama backer. Both candidates are corrupted by corporate influences pretty hard. Obama's received more corporate money this time around though. What i find funny is that both Mitt and Obama have received money from Goldman Sachs. ( source for my info: opensecrets.org )
        Revis Goodworth
        • 1 Day Ago
        @2 Wheeled Menace
        The VaporVolt did not sell that many retail units - what you have are GE fleet sales now being counted into the sales figures in time for the election. GE said it would purchase 10,000 VaporVolts and there haven't been enough sold yet to make that happen - now SUDDENLY we have a HUGE INCREASE in sales. You do the math - time for GE, a major Obama campaign contributor and a company that has avoided paying any taxes last year (!), to come to its Candidate's rescue. You also now stand correct, Government Motors, buttmunch!
          Julius
          • 1 Day Ago
          @Revis Goodworth
          Umm, what? "In July, just 55 — or 3 percent — of [the total of 1,849] Volt sales were to fleets." From The Detroit News: http://www.detroitnews.com/article/20120801/AUTO01/208010415#ixzz266offFdn And even Fox News had to put an "update" to their story saying GE heavily influenced Volt sales: "In fact, initial concerns that the record sales number posted by the Chevy Volt in March was driven by a big fleet purchase from GE(GE) were premature and didn't reflect just how quickly the Volt's fortunes shifted in March". Read more: http://nation.foxnews.com/chevy-volt/2012/04/19/fishy-ge-behind-record-chevy-volt-sales#ixzz266petABg
          mapoftazifosho
          • 1 Day Ago
          @Revis Goodworth
          You're an idiot.
          MTN RANGER
          • 1 Day Ago
          @Revis Goodworth
          Hahaha. The Volt has been in non-vapor status for oh like two years now. Fleet sales have been routinely only 5% of total Volt sales.
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