GM Losing $49,000 for Each Chevy Volt With Taxpayers on the Hook
While General Motors (and the White House) are touting "record" sales of the electric hybrid Volt, leading economic experts say it's racking up red ink.
Reuters News Service is reporting that, according to manufacturing experts and auto industry analysts, GM is losing as much as $49,000 per car for each Volt manufactured. The base price of over $39,000 for the car, plus its very complicated technical and electrical components, are causing buyers to shy away.
Reuters goes on to report:
"Cheap Volt lease offers meant to drive more customers to Chevy showrooms this summer may have pushed that loss even higher. There are some Americans paying just $5,050 to drive around for two years in a vehicle that costs as much as $89,000 to produce.
And while the loss per vehicle will shrink as more are built and sold, GM is still years away from making money on the Volt, which will soon face new competitors from Ford, Honda and others."
According to industry experts, after an initial modest wave of interest that was viewed as a promising start for electric cars in the U.S., it appears to have cooled. Nissan, Honda, and Mitsubishi are having difficulty selling their electric models. The Toyota Prius, however, has shown an increase in demand.
Sandy Munro of Munro and Associates (an automotive industry analysis firm) says, "I don't see how General Motors will ever get its money back on that vehicle." His company performs detailed tear-downs and examinations of car components for foreign-based car companies and the U.S. government.
Perhaps some of the issue with sluggish Volt sales (which have resulted in two temporary shutdowns of GM Volt manufacturing facilities) are due to the sagging electric market. Again, from Reuters:
"Nissan's pure-electric Leaf, which debuted at the same time as the Volt and retails for $36,050, has sold just 4,228 this year, while the Honda Insight, which has the lowest starting price of any hybrid in the U.S. at $19,290, has sales this year of only 4,801. The Mitsubishi i, an even smaller electric car priced from $29,975, is in even worse shape, with only 403 sales."
Toyota reports they are making money on the Prius, which first debuted in 2000. It has taken 12 years, numerous refinements, and hundreds of millions in marketing dollars to turn the profit. It also helps that depending on which Prius a consumer buys, the price is as much as $20,000 less than a Volt.
With taxpayers still footing the bill for the GM bailout, these costs could end up costing Americans hundreds of millions of dollars.