I drove a Volt today.

If you are concerned about American wealth transfer to other countries you probably shouldn't buy a vehicle manufactured outside of the USA, by a foreign company, in a country that waged a direct war against America. Hopefully the Prius family will be manufactured in the USA soon. We are going to be moved to FHOP if we continue on this particular topic.

 

We are all in competition, but Japan is our friend and Allie. The problems in the ME are not in Japan. I agree lets not get political but the EV electric is a domestic source of energy so the wealth stays in America and is not exported.

 

If it helps my wife purchased a Acura ILX hybrid and it was made in Kentucky but with 60% Japanese parts. The good news is you can buy Honda or Toyota stock if you want ownership.

 

EV allows for multiple sources of energy which is the strategic advantage. It can move from nuclear, to coal, to gas, to wind, to hydro, to petroleum, to solar, etc... as needed or as economically viable. If we achieve as little as 10% EV we will probably lower energy costs for everyone in the country just by flexing the demand.

 

That Reuters article started out laughably bad but became somewhat more balanced if you read all the way to the end.

GM has now sold over 33,000 Volt/Amperas and has manufactured over 50,000

Model Year 2011 -- over 4,000
Model Year 2012 -- over 28,000
Model Year 2013 -- over 19,000 so far with another 8 months to go

Model Year 2013 began manufacturing in the summer so they are now making Volt/Amperas at the pace of around 5,000 per month. I assume this rate will ebb and flow based on seasonal demand but sales and manufacturing have been gaining over time.

In a later post, you claimed the Volt's battery plant closed in South Korea. Do you have a link to a story about that? I'm inclined to disbelieve that. LG Chem built a battery factory in Michigan last year to supply the Volt and the Ford Focus EV but have chosen to continue supplying cells from Korea until more demand picks up.

Aside from pricing issues, the Volt is new technology and many potential customers will take a "wait and see" attitude for several years before taking the risk of buying one themselves. The same is true for the PiP, which has far lower sales than the Liftback, and will also be true for the Ford Energi models. Same was true of Toyota hybrid tech during the past dozen years. As sales pick up, battery prices will drop and energy densities will rise. The new generations of battery technology look to be on track for commercialization to double price/performance over the next 5-7 years. Meanwhile, gas prices will go up through both demand/supply and carbon tax schemes.

It's all good. People will generally buy the specific plugin that works best for their driving pattern, climate, and utility grid. Volt works best for me but for others PiP, Energi, or an EV-only car work best.

Enjoy!

 

Reuters uses erronaneous accounting to arrive at the $96,000 figure. They took the R&D costs and divided it up among the cars sold up to the date of the article. If it was published today the number would be lower. In time, the R&D portion will be $0.

But no company accounts for the R&D costs that way. Toyota didn't with the Prius. The price of a product is based material costs, labor costs, overhead, and what the company wants in profit. R&D isn't factored into that. It's an investment that can apply to more than the first product. GM is applying the knowledge gained from developing the Volt into the new PHV Caddy, and other hybrids and EVs. There is also hard to quantify returns on it, like publicity and sales of other models by drawing people to the dealer to see the Volt.

 

Jeff they need to make 120,000 per year to brake even. 5K per month is half what is needed. Now there is more competition. The lease at $200 is driving volume but at what cost?

 

If I decide to not factor in gas or insurance with my car payment that expense does not go away. I still have to pay for it.

 

We agree on something.

 

Do you factor the cost of your driving lessons and license into the cost of owning your car?

 

120,000 units per year seems readily achievable, perhaps even by MY2014 especially if you include the other vehicles that will use the Voltec powertrain.

 

Lol. Funny but when I was in HS many decades ago drivers Ed was a elective and the tax payers paid for it. My kids had to take private lessons. Times have changed. The Prius required a Dealer walk through since I did not know what B stood for on the shifter which the young kid said Joy Stick you mean. Times have changed and perhaps for the better.

 

Well when you release the Spark in Oregon only I have to wonder. Also the unit break even is based on full price less rebate befor GM offered the $200 lease. With the new lease t $200 per month the units most likely increased by 75%

 

Did you not get the difference between GM and the banks doing the leases?

Ally or USBank pay the dealer for the vehicle. The dealer buys the vehicle from GM at the invoice price minus any current dealer incentives. The bank then claims the $7500 federal tax credit and leases the vehicle to the leasee.

On a 24 month lease, the bank gets $7500 + 24 payments of $200, plus some lease fees, or about $13,500. At the end of the lease the bank sells the vehicle and if you read the KBB report the resale value is pretty good.

GM pretty much gets the full invoice price for the vehicle regardless of how aggressive the leasing programs are.

The leasing programs are aggresive because of the federal tax credit and the good resale values. The banks are making good profits and the federal tax credits are an instant credit for them. After the KBB report, they might get even more aggressive with the leases.

If you are only paying $7/day for a car with fuel you can go roll through a Starbucks.

 

Those are on going expenses, like labor and material costs. R&D would be the driving lessons John H. brought up. You aren't still sending checks to your driving instructor are you?

But this has nothing to do with the thread. The Reuters article was already discussed here:
GM losing $49,000 on every Volt sold, but will make it up on volume! | PriusChat
and here:
Chevy stops Volt production (temporarily ...) | Page 13 | PriusChat

 

False.

I realize that's how Green Car Reports incorrectly summarized the Reuters story, but that's not what Reuters actually said -- go back and re-read the original Reuters report.

Reuters said GM would need to sell a cumulative total of 120,000 cars to bring down the per-car R&D expense to $10,000 -- in other words, 120,000 x $10,000 = $1,200,000,000 R & D.

That $10,000 would then roughly equal the per-car operating profit and would therefore be the break-even point (not counting the benefit of the R & D being spread across other vehicles like the Cadillac ELR, Spark EV, and future derivative cars).

 

I'm not sure where you got "in Oregon only". The Spark EV has been announced for initial availability in California, Oregon, Canada, and South Korea with other markets to follow later.

 

That was in a GM press release from the LA Auto show via twitter yesterday.

 

You cannot count future sales that have not occurred. If you are saying they made a investment they are in the red but hope to apply those investments to future products and we forecast break even in 5 years but with unforeseen risks than you may be close. We know the Volt is a money loser. We know that R and D still needs to occur. We know Prius is a market leader. We know that GM needs to overcome a history of poor products. We know that GM has labor problems. The list goes on. You cannot put lipstick on a Pig. We can both agree that if GM can make this work it may be it's only hope and guys like John early adopters need to continue to evangelize Volt as the best car. Gentlemen I wish you luck, you are the canary in the coal mine but your still cher ping strong, and in 3 years when my Prius is ready to sell I may buy a Volt and it you can get more of me you may have a winner.

 

Johnny Keurig makes Starbucks coffee for 50 cents a shot.