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  • The Chevy Volt's Staggering Losses

    As Mark Twain might have put it, the reports that General Motors is alive are somewhat exaggerated.

    “Nearly two years after the introduction of the path-breaking plug-in hybrid, GM is still losing as much as $49,000 on each Volt it builds, according to estimates provided to Reuters by industry analysts and manufacturing experts,” the news agency reports.

    Talk about a loss leader: Is the car company hoping to make up the difference on floor mats and rust proofing? It would cost GM half as much to shut down Volt production and give everyone who wants to buy one a new Honda Civic hybrid (MSRP $24,800) instead.

    This isn’t what we heard in Charlotte, of course. The auto bailout “saved more than one million middle-class jobs all across America,” insisted Michigan’s former governor, Jennifer Granholm (D). “All across America, autos are back! Manufacturing is rebounding!”

    Sadly, the purported manufacturing rebound turned into a dead cat bounce in August, as the country lost 15,000 manufacturing jobs.

    Meanwhile, the GM bailout simply spotlights the danger of cronyism—where the federal government determines winners and losers instead of a free market. “This growing partnership between business and government is a destructive force, undermining not just our economy and our political system, but the very foundations of our culture,” warns Charles Koch in The Wall Street Journal. “Profiting from government instead of earning profits in the economy, such businesses can continue to succeed even if they are squandering resources and making products that people wouldn’t ordinarily buy.”

    Such as Chevy Volts.

    The joke, regrettably, is on taxpayers: The government bailout of General Motors (GM) and Chrysler between 2008 and 2009 will cost taxpayers approximately $25 billion—which went to the United Auto Workers, Heritage’s James Sherk writes. You’re paying for that Volt even if you don’t get to drive it.

    Given the news about the Volt, it’s no surprise that GM “is once again losing market share, and it seems unable to develop products that are truly competitive in the U.S. market,” as Louis Woodhill notes at Forbes. The only surprise is that so many are still eager to point to the auto bailout as a success.

    Posted in Featured [slideshow_deploy]

    15 Responses to The Chevy Volt's Staggering Losses

    1. jude folly says:

      do my eyes deceive me?! is heritage enjoying a tall glass of shadenfreude at an american car company's expense?
      http://judefolly.com

    2. John says:

      Some time ago I vowed never to drive a GM car. I'll drive a Schwinn first.

    3. rightbill says:

      We've seen this car before… The Homer…

    4. PaulE says:

      The Chevy Volt is an example of crony capitalism at its worst. Here you have the federal government pushing a company to build a product that clearly there is no great market for even at a deeply subsidized price. The vast majority of Chevy Volts were purchased by the government itself to give the public the impression that the car is more popular than it actually is.

      So in essence, you have taxpayer dollars that were used to bail out GM to keep the UAW whole and then you have the federal government exerting its influence to force GM to build a car that there is no viable market for. To top it all off, more taxpayer money is used to subsidize the sale of these vehicles, most of which are being purchased by the government using still more taxpayer dollars.

      Can someone explain to me how this makes any economic sense and isn't crony capitalism at its finest?

    5. @voltdriver says:

      You know, as a Republican and Volt Owner, I'd like to think people that work with conservative organizations use their brain. This guy obviously isnt. When I read the very slanted Reuters article, it was immediately obvious to me that they were using an accounting 'trick' to assign a loss to Volts sold at 55k. Attention Rich: If you want to make a point, at least make a valid one, otherwise you look like the fool.

      Discussed and refuted in these two articles: http://www.forbes.com/sites/boblutz/2012/09/10/th
      http://media.gm.com/media/us/en/gm/news.detail.ht
      http://content.usatoday.com/communities/driveon/p

      If you want to find out more information on the Volt, from a real owner with real numbers and data, visit:
      http://voltowner.blogspot.com

    6. Relf Baker says:

      according to fox news the chevy volt has been discontinued.True or not??

    7. Minu De Icaza-Ramsey says:

      The biggest scam perpetrated on the American Taxpayer

    8. Mike says:

      Maybe you should look up GM's response to this article, which it calls "grossly wrong". It costs about $20,000 to $32,000 to manufacture a Volt. This study just takes into account all of the research and development money General Motors spent on its electric vehicle and battery technology which will can be applied to a number of future products. This 'loss' will occur until they reach a sales threshold in a few years when they have actually made more profit than they spent on R&D. This was true of the highly profitable Prius in its first years. We have a societal obligation to invest in technology such as this and these dollars are better spent researching the future of auto drivetrains to compete globally as opposed to how GM spent its money building its embarrassing models pre bailout.

    9. C Belknap says:

      If you own a Volt, you didn't pay for that car, somebody else did!……the American taxpayer did!

      • Charles Ward says:

        GM repaid the bailout in 2010

        • Stirling says:

          That GM add was a distortion of the truth – They still own 33% and the taxpayer 20+ Billion of dollars left on the original ammount. GM stock has to get to 44 in order to break even. (currently at $23.20). What GM did was move money from one pocket to annother to say they repaid the debt. If you actually do the research, rather then belive the media and propaganda spin the facts show the real story.

    10. Jim Illo says:

      I never thought I’d see the day when a political party actually cheered for the destruction of a major American company. It is absolute madness. — Christopher Demorro

      How much does the Volt COST TO BUILD? Like, to pay the workers, to pay for the factory, and to pay for the actual total cost of the sum total of the parts? Reuters never gets too specific on that, instead just clumping up a whole bunch of costs related to the development and tooling, but not the building, of the Volt to get that additional $56,000. The actual spread on the cost of the Volt to build is between $20,000 and $32,000. That is a huge gap on a car that GM sells for $39,995 that leaves plenty of potential for profit in the future. Instead of going with that story, Reuters went the sensationalist route, and damn them to hell for doing it.

      Gas 2.0 (http://s.tt/1n43p)

    11. Charles Ward says:

      My combined power/Natural gas Budget us $238 a month, down from over $400 and the main reason on that is my Geothermal furnace airconditioning. Yes I don't live in the USA, I live in a city with the name of Winterpeg which is in Manitoba Canada.__The comment on who paid for the Volt being the taxpayer? You must have missed the news annoucement?__GM paid back the bailout money 5 years ahead of schedule. Yes the US public still holds 61% of shares. But if sold today they would turn a very tidy profit for the tax payers.__So on one hand you have a very poor report which is fueled by politics.__My only complait with my Volt is I wish they had gone with the small Diesel instead.__I often hear people say, well Electric sucks for long rang driving, look how much better you can do with an Econo box. My comment on that, is really? Really would you pack a family of 4 with the often dog, and all your supplies for a long road trip in an Econo Box? Part 3 coming

    12. Charles Ward says:

      We have an F250 Diesel that we use for large shopping trips and long family trips with boat or trailer. The 2-3 weeks a year that.. that vehicle see's its heavy usage still makes our choice a money saver. That diesel truck with most likely last me 20 years with maintenace.__I expect my volt to last me 10-15 years, and I expect the break even to be at the 4 year mark. My Geothermal break even is 7-8 years my Urban windmill 4 years. But the nice part is when Gas shoots up.. I just drive by. When disel is cheap I stock it up, and often only need to buy once a year. __Now if I could find a way to save fuel with my pontoon boat I would be happy._

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