GM (GM) Could Be Losing Two Chevy Volts for Every One Sold
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General Motors (NYSE: GM) is lacking some much-needed electricity today, following reports its flagship EV -- the Chevy Volt -- may be cutting deep into profits.
Typically, when someone says a company is losing money on each unit produced and sold due to it being a new product or material costs far outpacing original estimates, you might be expecting a 10 percent to 20 percent loss on each. That's not the case here.
Reuters reports that GM might be losing a staggering $49,000 per Volt.
With a suggested retail price of around $40,000 to $45,000 each (or more, depending on where you live), the Volt's assembly and sales price of about $89,000 is no where close to being met. We hate to think about those consumers paying just $5,050 per year on lease for a Volt.
Surely, as techonology improves and more units are produced, the loss at GM is likely to ebb and even turn into profit at some point. But, realistically, that turning point is still years off.
The pace is improving on Volt sales; GM reported a record 2,831 units were sold in August, bringing the year-to-date total up to 13,500. GM was expecting to sell about 40,000 in 2012, a goal it's not likely to reach.
Cost of ownership and changing day-to-day habits are probably two of the biggest factors in determining whether a consumer will opt for a Volt over something like a Spark, Sonic, or Corvette (kidding).
So, unitl technology and volume improve significantly, GM is likely to be hampered. Good thing the near-3,000 sales mark and expected loss are more than offset by 25,975 Chevy Cruze models sold in the month. Or is it?
GM is down about 0.6 percent early Monday.
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Typically, when someone says a company is losing money on each unit produced and sold due to it being a new product or material costs far outpacing original estimates, you might be expecting a 10 percent to 20 percent loss on each. That's not the case here.
Reuters reports that GM might be losing a staggering $49,000 per Volt.
With a suggested retail price of around $40,000 to $45,000 each (or more, depending on where you live), the Volt's assembly and sales price of about $89,000 is no where close to being met. We hate to think about those consumers paying just $5,050 per year on lease for a Volt.
Surely, as techonology improves and more units are produced, the loss at GM is likely to ebb and even turn into profit at some point. But, realistically, that turning point is still years off.
The pace is improving on Volt sales; GM reported a record 2,831 units were sold in August, bringing the year-to-date total up to 13,500. GM was expecting to sell about 40,000 in 2012, a goal it's not likely to reach.
Cost of ownership and changing day-to-day habits are probably two of the biggest factors in determining whether a consumer will opt for a Volt over something like a Spark, Sonic, or Corvette (kidding).
So, unitl technology and volume improve significantly, GM is likely to be hampered. Good thing the near-3,000 sales mark and expected loss are more than offset by 25,975 Chevy Cruze models sold in the month. Or is it?
GM is down about 0.6 percent early Monday.
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This article is trash like the Reuters article
Paul on Sep 21, 2012 04:48 PMMark as Spam | Reply to this comment
You morons are just parroting a debunked hit piece. All of Reuters cost per vehicle figures are based upon GM not selling any more Volts.
So Sherlock, what do you think are the odds of that happening? Based upon your logic, if Ford created a new vehicle with $200 million in R&D and tooling costs, the cost of making that vehicle would be $200 million per unit if I chose to take measurement when only the first car came off the assembly line. Next time, give your hit pieces a little more effort, because some of us can do math.