Reuters: GM Losing Around $49,000 Per Volt Sold
General Motors sold a solid number of Chevrolet Volt sedans in August. However GM is still losing as much as $49,000 on each Volt that they built according to a report compiled by Reuters industry analysts and manufacturing experts. Americans are paying only $5,050 to drive around a Chevolet Volt for two years that costs as much as $89,000 to build. GM is still years away from making money on the Volt too.
Dennis Virag, president of Automotive Consulting Group said that “the Volt is over-engineered and over-priced.” GM is still researching ways to increase sales volumes of the Volt so that they can spread their $1.2 billion investment in the Volt while reducing manufacturing component costs.
The Volt costs $39,995, which is out of range for the typical American household. The car uses lithium-polymer batteries, sophisticated electronics, an electric motor, and a gas engine.
GM knows that the Volt is losing money and they believe it will not break even on the vehicle until the next-generation model in about 3 years.
It costs GM “at least” $75,000 to build the Volt including the development costs. This is nearly twice the base price of the Volt before a $7,500 federal tax credit is provided as part of President Barack Obama’s green energy policies.
Toyota is now making a profit on the Prius. They launched that car in 2000 and they are now on their third generation of the vehicle. The price of the Prius is as low as $19,745.
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[NBC News]This article was written by Amit Chowdhry. You can follow me at @amitchowdhry or on Google+ at +AmitChowdhry