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.”
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.
