Does the Volt Really Cost over $81,000 ?

To the best of my knowledge that figure is about accurate. GM (the American Government) has invested billions of dollars in the development of the Voltec power train. A lot of the more accepted figures I have read put it closer to the cars costing $100,000 per unit when you factor in all the money that has gone in to making them.. Yesterday or the day prior there were a lot of articles saying the figure was closer to $250,000, but those were proved to be false. I easily would say anywhere from $70-100,000 per car. Obviously the more cars they make on the platform, and the more they produce the more that cost gets spread out. Either way sales are not looking good, so not really sure what the future holds for it. Which means I may be buying my lease out in the end if they discontinue the car.

 

on the other hand, it's better than all the money wasted on ethanol research, fuel cell, etc.

 

Damn foo maneuver to push for 35 miles and all electric now ... the stinkin' battery technology is not far enough along yet.

Erica mentioned sales targets for PiP in US next year. wonder what those numbers are. 1.5, 2k / month?

 

Toyota is only sending 15,000 units here so 2k a month is out.

 

Its just bad math. One does not divide a R&D investment over the first car, the first 1000 or first 10000, its over the full expected production run of all vehicles that benefit from the R&D. That could easily be tens of millions of vehicles (not just the volt)

Despite all the negative press tying to destroy it, mostly for political reasons, it is a very good car and will sell reasonably well. The volt has already sold more in its first year than the Prius's first year in the US, and they had already worked out production issues in Japan.



And you do realize the original article was posted on
"POSTED AT 10:50 AM ON AUGUST 1, 2010 BY DOCTOR ZERO"
Dredging up old bad math does come across as a volt hater.

 

As drinnovation says, it's silly to amortize the cost of development over any arbitrary number of units. You need to take the actual cost of building each car and amortize the cost of development plus interest on any loans, including subsidies for R&D and subsidies on the interest on loans, over the entire production run, accounting adequately for the benefits from spin-offs, lease of the developed technology to other companies, etc.

Since R&D is essentially a one-time expense, its impact is reduced when the production run is increased. Lowering the price reduces profit margin but increases sales. Too high a profit margin reduces sales and increases the impact of R&D costs.

I have expressed the opinion before that GM is intentionally trying to sabotage the Volt project by pricing the car so high that sales will not justify the expense.

But it is rare for any business to make a profit during the first few years, so it is unfair to take the first year's production, or even the first 2 or 3 years' production as the measure of the profitability of a wholly new car design concept.

It would be interesting to see the actual per-unit manufacturing cost of the Volt, without the one-time expenses of R&D and plant construction, and compare that number and the retail price with the corresponding numbers for other cars. Then we'd know how many cars must be sold to break even. (Since we apparently know the R&D costs.) The Prius would be a good comparison, since both the Volt and the Prius were entirely new technologies.

How many Volts must be sold to break even, and at realistic sales predictions, how long will it take? Then, how many Priuses had to be sold to break even, and how long did that take?

 

Yet, that is exactly what GM does when promoting "gas saved" numbers. They just pick a basis of comparison and don't even tell you what it is.
.

Don't fall victim to greenwashing. GM already had quite a bit of motor & battery experience prior to starting the design of Volt. Remember EV1, Two-Mode, and BAS...
.

 

ya, its like articles that made the Volt "Car of the Year" and i believe that happened when their were...umm?? how many Volts on the road?? anyway thats another thread.

There is a Green Car Reports article that talks about the same thing with a rebuttal (just as stooopid!!) saying the cost could be $25 per car based on technology gained on Voltec technology being implemented on millions of cars over the next 25 years.

If You Want To Attack The Volt, Try To Get Your Math Right

i mean, wow are we really considered to be that clueless??

 

GM are crooks.

My point was that rather than claiming that every Volt really costs GM $81,000 (or $25) the thing to do is look at the actual manufacturing cost and the retail price to determine per-unit profit, and then figure out how manu units they'll have to sell to recover the investment, and then see how long it will take them to sell that many, based on realistic sales expectations.

Perhaps the Prius is not a perfect comparison if, as you say, GM was able to use a lot of already available technology. But both cars are (were) radical new concepts, requiring substantial R&D. (Prius is no longer new, 15 years after its introduction.)

Everybody who knows me knows my feelings about GM (criminals) and the Volt (overpriced, narrow market niche). But the two extremes of putting the entire development cost onto the first year's production, or of claiming arbitrarily large spin-off benefits, are both silly. I'd be interested to know what it really costs them to build each one, as a way of gauging just how out of line the Volt's inflated price tag is. (Since it's my belief that if they wanted the car to succeed, they could sell it a lot cheaper and still make a profit.)

 

Well reasoned post from someone that clearly dislikes GM, thanks.

Just to clear it up, the article that said $25 was talking about the government investments per car not the actual cost of the car. (Tax credit + other investments/loans R&D costs) per car. (The 81000 was 41000 cost + 40000 subsidy (with a 3 year production + other products that also benefit from the government investments). In 20 years spread the investment over a larger (more realist basis) the investment per car drops to 25 (hoepfully the car will be down to $25,000 as well!)

 

The silver lining on spending all the R&D money ONLY on the first handful of cars, is considering how cheap it is to build the second round of cars!

The same number can be used to make the Volt look *terribly* expensive, or just expensive. But in the end, the rules are different when you introduce an entirely new type of vehicle using new (yes, some of it really is new) technology. I'm far from a Volt apologist, I just don't see any good coming of discussions like this. Waaay too much subjectivity in how numbers are handled.

I was once told that I was partially responsible for GM's fall. The reason? My EV1 that only cost me a few hundred per month to lease cost GM over $100,000 to build. The reason, of course, is that the ENTIRE R&D budget and tooling costs were divided by the 1800 cars made. Forget the fact that heaps of technology from that program has found its way into just about every GM model across the board. And forget the part where they were *supposed* to build more cars and not stop at the bare minimum. Using this logic, if they built one more EV1, it would have been dang-near free!

 

Any car priced above $30K is not designed for the large market. The Volt is a niche car, and will never achieve large volume. It is just too pricey.

Hasn't GM paid back its loans from the government? I know Chrysler has. GM is doing pretty well lately, thanks in part to the government's campaign against Toyota. That saved a lot of UAW jobs, which maybe was what it was supposed to do.

I think the Volt is more a prototype car. Even the Leaf is too expensive for the large market. Basically, the problem is the li ion battery is too expensive--maybe half the cost of the car. They need further breakthroughs in battery technology to get the power up and cost down.

 

The '11 Leaf in CA was pretty cheap once you tacked on the incentives. '11 Leaf SV was $32,780 before $820 dest charge but was (and still is) a $7500 Federal tax credit and was a $5000 California rebate (now only $2500), bringing it down to ~$21K, before tax.

Unfortunately, Nissan raised the price on the '12 Leaf and the California rebate (aka CVRP) is now only $2500.

 

I think when it comes down to it nearly every company/corporation could be considered crooks. When taking engineering courses when I was working toward my degree the one thing they emphasized throughout every class was that engineering was not about designing something to last forever. Merely designing something to meet the customers specifications, and meet their minimum lifetime expectancy goals while staying within budget. Certaintly some companies try harder than others, and I put GM close to the bottom of that list.

There always I think is going to be this talk about the Volt's cost. Obviously I think it is reasonable since I bought one. I think when compared to the competition (Leaf SV@35,200) I think the $39,995 I paid is pretty reasonable for the base Volt. Granted the argument can go any number of ways. I think GM ultimately screwed themselves just by passing so many crappy vehicles over the years, and then taking the easy way out filing for bankruptcy and leaving its "Old GM" customer base out in the cold on warranty work. In all honesty though look at all the people that are going to get shafted with Aptera closing its doors. I think the only company that probably has the most interest in its customers is Tesla since they are a company started by regular people. It will be interesting over the coming years as they get larger with sales of the Model S how long that holds true. I hope it does not change, but as companies get larger the connection with their customers drifts further away only to be replaced with the bottom line.

 

I think that the way GM played fast and loose with employee pension funds is downright criminal. The way they dismantled public transportation when I was a child, was criminal. Their whole business philosophy is "To hell with the customer and the nation." Every business exists to make money, but some are honest about it and some are dishonest. GM is one of the greats at dishonesty.

So what is the actual per-unit incremental cost to build a Volt?

I thought the Aptera reservation-holders got their deposits back. They knew, or should have known, that placing a reservation on a car that had not yet even reached the final design stage was chancy. Certainly, they were disappointed. But I don't think you can really say they were shafted. All they lost was the interest on their deposits. As for the investors, investing in any start-up company is risky. That's why it's called risk capital. You know (or should know) that you are gambling when you invest in a start-up. It's not really "getting shafted" unless the managers intended for the business to fail.

 

I include 'getting shafted' when management looks after their interests first, at the expense of the customer and shareholder. That would be GM

 

Awhile back I started a thread asking if the Volt price was fair.

GM sells the Cruze loaded up with options to be comparable with the Volt for around $23k to $24k. This is competive with other high trim cars in the segment. We just have to determine the cost of the battery, thermal management system, and onboard charger. A wikipedia article on PHEVs listed the battery price for a generic 40 mile PHV as $14k. I've also heard the Volt battery costs $10k.

People are free to do the legwork to narrow down the retail costs, and even figure the wholesale price. At a glance though, the Volt's price doesn't seem far off for what you get. GM nets more profit than on the Cruze, but that's true with any higher price car.

 

Well, you are apparently clueless. Most "Car of the Year" awards are given to vehicles that are all-new or ground breaking...these aren't vehicles with a strong sales record. Journalists get special access to these vehicles long before sales ramp up to the public. Perk of the job!

2009 Nissan GT-R - The 2009 Motor Trend Car of the Year Winner is the Nissan GT-R - Motor Trend

Gee, I wonder how many of these GT-R's had been sold when the award was given out...

I hate GM, but I still want this car to succeed... :cheer2:

 

i thought my post made it very clear that i am "clueless" to the process because if i were not, i could at least explain to someone how the process worked.

well, i cant. i FREQUENTLY disagree with the selection and in many cases find other cars much much more qualified to win.

i am guessing, YOU could guess who my candidate for the prize should be. but this thread is not about that, but based on your statement

i think the "best" car was not chosen.

but i will agree with one thing as well; i also think the Volt is a good car and hope it does succeed to the point that maybe GM will build one for me. unlike most here, i am not in the upper middle class or higher