By on December 1, 2016

2017 Chevrolet Bolt EV

To play the game, you’ve got to be prepared to kiss off a few bucks.

That’s what General Motors will do with every Chevrolet Bolt that rolls off its Michigan assembly line, but it’s not because the automaker suddenly felt like becoming a masochist.

Thanks to the California Air Resources Board and nine other states that signed on to its zero-emission vehicle rules, losing money on one model is the price an automaker must pay to stay in the game. And lose money GM will.

According to Bloomberg, sources close to the automaker claim that each 238-mile electric subcompact GM builds represents $8,000 to $9,000 draining from its corporate wallet. Of course, it’s not alone in this regard. Other automakers willingly field money-losing vehicles to gain ZEV credits in CARB-compliant states.

In order to sell high-profit, gas-guzzling Rams and Jeeps, Fiat Chrysler Automobiles was forced to take a $14,000 hit on every electric Fiat 500e — a car FCA CEO Sergio Marchionne has expressed a particular hatred for. Because California has no plans to stop being California, its ZEV mandate isn’t going away. In fact, it’s on course to ramp up — reaching 15 percent of sales by 2025.

To make nice with California, Bloomberg — using last year’s sales as a guide — calculated that GM must sell 7,698 Bolts or 10,082 Volts in that state.

It’s not all bad news for automakers. A popular EV can amass a cache of ZEV credits for a company to sell to less eco-friendly automakers (such as, say, FCA) for a profit. It’s hoped that electric vehicle production costs should drop as battery packs become cheaper.

[Image: General Motors]

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108 Comments on “GM to Take a $9,000 Hit on Every Chevy Bolt Sold; Its SUVs Give Thanks...”


  • avatar
    Jerome10

    While I don’t doubt GM, and don’t get me started on mandates like CARBs…

    Why does GM need to lose money on each one? Could they not simply raise the price 9k per unit?

    Or is the problem they have to sell a certain number to meet CARBs ridiculous standards? And at current price plus 9k they’d sell about 5 vehicles?

    So dumb on every level.

    • 0 avatar
      bumpy ii

      GM does have the option of walking away and not selling any vehicles in California. They would lose more money that way, though.

    • 0 avatar
      ToddAtlasF1

      Tell that to the people that voted for Obama. The cost of selling EVs below cost is offset by being able to sell desirable vehicles for a profit. People buying GM vehicles that they actually want and are willing to pay for have to carry the burden of the idiot tax that is Obama’s CAFE mandate and CARB’s continued existence. People that wanted EVs they are unwilling to pay the actual cost of get their participation in democracy trophies for shaking down their betters. Civilization loses. Students of economics recognize that the higher prices needed to subsidize EV parasites reduce the total sale of desirable vehicles, preventing many from getting what they want but can no longer afford.

      • 0 avatar
        87 Morgan

        How is this any different than when the Prius first came out? My recollection was that toyota lost $7500 a unit for the first five years of production.

        • 0 avatar
          VoGo

          Toyota has always maintained that the Prius was profitable. And it was the highest selling new product in the decade in which it was produced.

          So who should I believe, the company that makes the product and is required by law to report to its shareholders honestly, or internet dude 87morgan?

          • 0 avatar
            87 Morgan

            VoGo

            http://articles.latimes.com/2009/mar/17/business/fi-hybrid17

            According to the LA times article, Toyota admitted that it was not until 2008 that the Prius was profitable for Toyota. I will concede that the article does not state the loss per vehicle sold.

          • 0 avatar
            VoGo

            Thanks, 87 Morgan,
            There is a lesson here in that forward thinking companies that are in it for the long haul are willing to lose $ at first to build a market.

        • 0 avatar
          yamahog

          I’ve seen that claim tossed around but I’ve never seen it substantiated.

          And are you talking about the OG Prius or the 2004-2009 Prius?

          Toyota might have lost some money on the OG Prius but the consensus was that Toyota ultimately made money on them in America. The 2004+ Prius cars have been pretty lucrative for Toyota, though they have some capacity issues now with low fuel prices.

          • 0 avatar
            DevilsRotary86

            Keep in mind that there was also the OOG (old old generation) Prius. 1997-2001 model years were Japan only. The one we got in 2001 was in fact a facelifted model. According to wikipedia, Toyota produced 70,000 pre-facelift models.

            I am not making an unsubstantiated claim as to whether or not it was profitable, but if there was ever an unprofitable Prius that would be the place to look.

          • 0 avatar
            ttacgreg

            I think they most certainly are making money on them in the USA, they are considerably less expensive in Mexico. I am uncertain about their content is booked the base model is about $18,000 and the deluxe model is $21,000. The base model in the USA is just shy of $25,000.

            I believe this is also true in Canada as well . I note that the surcharge for the pearl paint jobs is in less dollars not to mention the fact those are Looneys

            Toyota is milking the USA market.

          • 0 avatar
            mcs

            One thing is for sure, the service departments don’t make a lot of money off of them.

        • 0 avatar
          pragmatist

          There’s a huge difference between choosing to sell at a loss to establish technology, production scale and market share and being forced to do so by ideological bureaucracy

      • 0 avatar
        heavy handle

        How is Obama to blame for state government initiatives? CARB has been around for almost 50 years in its present form. Almost every country in the world has air pollution regulation, but it’s all Obama’s fault? And it’s also Obama’s fault that GM doesn’t know how to make a buck from passenger cars?

        Todd, even you should realize that what you wrote is delusional. I get that you don’t like Obama, but blaming him for stuff that has been happening for the past half century, all over the world, makes your argument much less compelling. Your rage has made you weak.

      • 0 avatar
        VoGo

        “Tell that to the people that voted for Obama.”

        Toadie,
        The proper grammar is to use the word “who” in place of “that” to show that the people who voted for Obama are actual human beings.

        It strikes me that perhaps if you considered that those with opinions different from yours are actual people, you might actually start to understand what they are writing and saying to you, at which point you might find a way to be taken seriously.

      • 0 avatar
        ttacgreg

        This is off the top of my head, but wasn’t agreeing to higher fuel economy standards part of the bail out agreement?
        I, for one, am somewhat charmed by the idea of SUV and pick up truck buyers subsidizing those more environmentally friendly vehicles.

      • 0 avatar
        April S

        Don’t like how General Motors sets prices?

        Don’t buy a General Motors product.

        (problem solved)

    • 0 avatar
      Syke

      Of course The Donald will fix all that.

    • 0 avatar
      JimZ

      “Why does GM need to lose money on each one? Could they not simply raise the price 9k per unit?”

      because then the Teslaphiles would take even louder and wetter dumps on it.

  • avatar
    PrincipalDan

    So is the Bolt going to be sold nationwide when it is essentially a compliance car?

  • avatar
    Syke

    Sounds like GM is engaging in very un-GM-like behavior: Looking at the long run.

    Yeah, they’re going to lose money on each sale, but for a car that has to convince the public that it’s a viable product, despite being built by a very un-hip automaker, they need to get the units out there. And with improvements in technology, the costs come down, the losses diminish, eventually turning into a profit.

    I seem to remember this company called Toyota doing the same thing about 15-17 years ago on the Gen 1 Prius. And they’re lauded for having faith in the product, far reaching marketing strategy, etc., etc., etc.

    GM does the same thing, and we’re more than happy to call them stupid.

    • 0 avatar
      28-Cars-Later

      Toyota doesn’t have the baggage GM has, I’d also mention Toyota was already hip in Kali when they brought over the Prius. I argue it could have crashed and burned and it would not have hurt their overall brand whereas one misstep by GM and the perception is toast.

  • avatar
    indi500fan

    With gas under 2 bucks a gallon, the economics of electrics (based on life cycle cost, not just operating cost) don’t work for me. The one exception might be a super-depreciated used Leaf as a runabout / kids car.

  • avatar
    Fred

    It’s not just California, but also New York and New Jersey and 7 other states with stricter environmental laws.

  • avatar
    carveman

    Politicians acting as engineers.

    ” Here at this site, Solyndra expects to make enough solar panels each year to generate 500 megawatts of electricity. And over the lifetime of this expanded facility, that could be like replacing as many as eight coal-fired power plants ”

    BHO

    • 0 avatar
      VoGo

      You sent that over the internet. Politicians acting as engineers.

      • 0 avatar

        Ah, “you didn’t make that”. It’s so much fun hearing that from politicians who have never created anything in their lives. Well, Mr. Obama at least wrote a couple of books (or had them ghost written) but I doubt he, or Senator Warren, know how to solder or build a squared wall out of 2X4 and some nails, even if you spotted them the hint that it has something to do with diagonals.

        The internet’s origins are not so much due to politicians as they were the results of military researchers. The politicians just funded some then promising technologies, they didn’t invent anything. Also, just because the government built the road on which my business is located doesn’t give them credit for the idea behind my enterprise. Does my mailman get to take credit for my business’ success because he delivered the 3D printer I use to make stuff I sell?

        This is a balanced look from the libertarian Mises Institute, which gives credit where credit is due.

        https://mises.org/library/government-did-invent-internet-market-made-it-glorious

        ” almost all of the internet’s current applications — unforeseen by its original designers — have been developed in the private sector.”

        ” today’s internet would be impossible without the heroic efforts at Xerox PARC and Apple to develop a useable graphical user interface (GUI), a lightweight and durable mouse, and the Ethernet protocol. Still, none of these would have been viable without the huge investment of public dollars that brought the network into existence in the first place.”

        “Let us conclude: yes, the government was the founder of the internet. As a result, we are left with a panoply of lingering inefficiencies, misallocations, abuses, and political favoritism. In other words, government involvement accounts for the internet’s continuing problems, while the market should get the credit for its glories.”

        • 0 avatar
          VoGo

          Ronnie,
          Thanks for re-publishing alt right propaganda from a neo-confederate libertarian “think” tank which abhors child labor laws and is known for anti-immigrant rants.

          • 0 avatar

            You believe everything the SPLC says? Have you seen the size of Morris Dees’ house?

            Dees has made a comfortable life for himself scaring liberal Jews into giving his group money by crying wolf.

            As yet, the SPLC has been silent about the Jew-hating BDS movement. In fact, they’ve been silent about any Jew hatred that comes from the left.

          • 0 avatar
            VoGo

            That was from wikipedia, Ronnie. I had to look up SPLC and BDS and I’ve never heard of Morris Dees or been invited to his house. I really am not steeped at all in this alt right lore.

            I just come here for the cars.

          • 0 avatar
            2manycars

            More left-wing duckspeak, and not a single substantive rebuttal of the facts as presented. Par for the course.

            Oh, and just a reminder, illegal aliens are not “immigrants.” Immigrants are people who arrive legally. Protecting our borders is one of the few really legitimate functions of the criminal gang calling itself the federal government. There is now reason for cautious optimism that they will actually start doing so next year.

        • 0 avatar
          tonycd

          “Government involvement accounts for the internet’s continuing problems, while the market should get the credit for its glories.”

          Yes, that most certainly is a “balanced” summary of what a libertarian think tank believes. It doesn’t prove much else, though.

        • 0 avatar
          rev0lver

          “So, we’ll eschew partisan rhetoric unless it’s germane to the story at hand. Otherwise, TTAC will not take part in the dissemination of rhetoric itself.”

          Mark Stevenson

          – http://www.thetruthaboutcars.com/2016/11/spoke-listened-300-comments-well/

  • avatar
    probert

    Isn’t this called “dumping”. Let’s say GM has the deep pockets to flood the market with cheap EVs at a slashed price, and this drives other EV makers out of the market, at which pint GM either discontinues EVs or jacks the price – isn’t this a classic case of illegal trade practices?

    • 0 avatar
      Scoutdude

      No it is pricing it at the point where it will sell well enough to meet their required target. It is either sell them at a loss or buy credits, IF FCA hasn’t bought them all up.

    • 0 avatar
      afedaken

      It’s only dumping when done specifically to hurt competitors in the market.

      The idea that GM has enough clout (even in the burgeoning EV market) to kill anything other than their own stock price or customers is laughable.

  • avatar

    Add the huge tax incentives that have been offered to the lost $$$$ per car by the makers – and you have clear proof the technology is not saleable to the public at realistic prices at the moment.

    • 0 avatar
      VoGo

      Except that Tesla is profitable. Oops, that doesn’t fit the meme.

      • 0 avatar
        Middle-Aged Miata Man

        I’m a fan of Elon Musk, Tesla, and (especially) SpaceX, but Tesla has had two profitable quarters in six years. Just because Q3 2016 was one of them doesn’t make the company consistently profitable yet by any stretch of the imagination. I hope they can get there, though.

        • 0 avatar
          VoGo

          Me too. But it’s always odd to see so many criticize Tesla for government handouts (none of which were anything that wasn’t offered every entrenched ICE automaker), but are so silent on the billions spent bailing out GM and Chrysler.

      • 0 avatar
        DeadWeight

        Using traditional GAAP accounting standards, Tesla has done nothing but hemorrhage money in every quarter of its complete existence.

        It will now have an even higher cash-burn rate due to its hook-up with the very hemorrhaging Solar City, also.

        I wish someone would come out with a “Tesla Accounting For Dummies” book in time for Christmas.

        (The same is true for Uber, which has essentially burned through 2 billion USD per year since inception, still living off the 13 billion it received in initial funding, yet has a market cap of nearly 70 billion USD, and literally loses money by a rough % of 40% on every single mile of passenger transportation it provides. 1999-2000 will very much rhyme soon with the adoption of cook-your-own-books accounting on acid tripping for tech stock and other companies such as Tesla.)

      • 0 avatar
        dash riprock

        Neither does Tesla’s cutting $400 million form their Q3 Capex budget to be “profitable” for that quarter

        • 0 avatar
          VoGo

          Tesla was profitable in Q3. It’s a fact, whether it complies with your worldview or not.

          This is the same Tesla that reports a sale only when an actual human being buys one of their cars. Not when they ship it to a dealer to sit on a lot for 2-3 months. Not when they sell it to the ‘sales bank’ or stuff the channel, or whatever it was Chrysler claimed they were doing when they lied about 200 sales.

          • 0 avatar
            jkross22

            “This is the same Tesla that reports a sale only when an actual human being buys one of their cars.”

            That’s true, but then why the need for non-GAAP accounting? The SEC wants to know, too.

            http://fortune.com/2016/11/30/sec-tesla-earnings-cooking-the-books-resale/

          • 0 avatar
            dash riprock

            Not sure what you think my worldview is, or how that applies to a company manipulating every aspect of their business just to show a profit for one quarter.

            I want to own a BEV one day. A couple of years ago I was very pro Tesla, loved the narrative. But the business of Tesla is not good. Tesla followers are very devout, I just believe that their convictions make them blind to the financial realities of the company

      • 0 avatar
        krhodes1

        Tesla has only been profitable when they have saved up then sold energy credits. They are no where near profitable on selling cars alone.

        • 0 avatar
          VoGo

          Tesla did not have any credits in Q3, and yet were profitable, even as they invested to increase production by 5X.

          • 0 avatar
            dash riprock

            Tesla used 130 million dollars of ZEV credits in Q3.

            They slashed Capex in Q3(they are far far behind their reduced full year guidance as well) so they invested much less than planned for their increased production targets.

            VoGo, you really should take a harder look at the financial shenanigans Tesla is doing to prop up they share price before their next capital raise. Defending Tesla’s today is like defending GM in 2005

  • avatar
    VoGo

    Given the recent election, it shouldn’t surprise me how easily the less well educated are duped. And yet, let’s look a little deeper here.

    “Sources close to GM” – what does that mean? Well, typically it’s the lobbyists and proxies who GM pays to make its case. That may not be the most ‘fair and balanced’ source, is it?

    And what are they claiming? That GM loses money on the Bolt. Is that true? There certainly is no evidence presented. But some people want to believe that, so no evidence is necessary. Really?

    Did anyone ask why this “news” was dropped today, just one day after the EPA confirmed its intent to keep CAFE at the same levels? Hmmmmm.

    And, remind me, what exactly is GM? Oh, it’s that company that lost so much money long before the Bolt existed that it required a bailout for $11 BILLION. So maybe they lose money on other models? Does GM break out the ‘profitability’ of the ATS? CTS? Verano? Regal?

    Funny how that works. GM has its proxies attack the Bolt’s losses, but not the losses on so many of its ICE cars. It’s as if GM is trying to influence Federal policy, in advance of a change in leadership.

    But no one on the alt right ever questions that.

    • 0 avatar
      shaker

      “And what are they claiming? That GM loses money on the Bolt.”

      It could very well be that they’re counting the development costs of the unique platform, which is markedly different than the Volt.

      If that’s the case, then it may be an unfair statement as all new platforms theoretically “lose money” for a period if you add in the development costs.

      GM is just looking for sympathy, and look at the haters calling them stupid.

      Oh, I forgot:

      SOLYNDRA hurr hurr.

    • 0 avatar

      It seems to grate on you that those you consider to be your moral and intellectual inferiors have the right to vote. Perhaps in an alternate world you’d have the title, Commisar, and get to tell your inferiors how to vote.

      As for “the less well educated” being “duped”, I’m close to four people who voted for Trump. One is a physics major (one course shy of his degree) who got a perfect score on the math section of his SAT. Another has a degree in English from a fairly left wing liberal arts college in Ohio, works in IT and was offered a job by Nicholas Negroponte at MIT’s artificial intelligence lab. The third has a degree from a highly regarded university music program. The fourth has both masters and PhD engineering degrees from Princeton.

      Keep assuming that you’re smarter than your political opponents, please.

      Also, it’s worth noting that the average grade in the Ivy League is now an A-, which means that those who are actually C students end up graduating with close to 4 point GPAs. I wouldn’t put much stock in actually how well educated the average “well educated” voter is these days. Well indoctrinated by a predominantly leftist and feminist educational system? Yes. Well educated, not likely.

      • 0 avatar
        shaker

        Well, Ronnie, I guess we’ll have to see what constitutes “intelligence” these days.

        I think that we all need our heads examined for trusting politicians as much as we do, but unless we’re going to step up and do it ourselves, well…

        I can only hope that this all works out, and that the old, the poor and the protestors aren’t turned into Soylent Green once they express outrage against the Republicans destroying Medicaid, Medicare, then Social Security as their method of making government “small”.

        Goldman Sachs hurr hurr

        • 0 avatar
          VoGo

          Booo on learning, advancement and civilization!

          Yay for inventing things I never said!

          Keep it up Ronnie! And for the record, I don’t regard anyone to be my moral or intellectual inferior. I claim to be no better than even a seamstress with a broken down 3D website no one cares about, too poor to buy a subcompact without his mommy’s money and who takes refuge in alt right propaganda, never realizing the people he promotes will slap a yellow star on his sweater in a heart beat.

          • 0 avatar

            Keep it up with the ad hominem, you think you’re embarrassing me, but you’re only embarrassing yourself.

            I’m quite sure that if I applied the “too poor to buy” comment to any of those you consider to be your exotic pets you’d call me a racist.

            You’re a functional illiterate about Judaism and Jewish history, and likely know less about both of those topics than any fourth grade yeshiva student, but please, feel free to lecture me how Jews haven’t suffered most when Jew haters had the power of the state behind them.

            I’ve actually spent some time reading what the white nationalists the media likes calling alt-right have to say. They have nothing to do with American conservatism or libertarianism since they explicitly reject the premises of the Declaration and Constitution. As nationalists, they’re collectivists and probably belong more on the left than the right. Considering the historic racism and Jew hatred of both the American and European left (KKK, National Socialism), their bigotry would also put them on the left.

            But keep warning me about a few hundred cut rate Aryans with their lame Nazi salutes while the BDS crowd is welcome on the left.

          • 0 avatar
            VoGo

            Ronnie,
            You are as accurate in portraying me as you are in your political views. Just FYI, 10 years in Yeshiva or Hebrew school, 4 years at Seminary, fluent in Biblical Hebrew and Aramaic (and knowledgeable in Ugaritic, Greek and Latin) with a BA in Jewish literature.

            I guess that’s what you’d call a “functional illiterate about Judaism and Jewish history.”

          • 0 avatar
            OldManPants

            “10 years in Yeshiva or Hebrew school, 4 years at Seminary, fluent in Biblical Hebrew and Aramaic (and knowledgeable in Ugaritic, Greek and Latin) with a BA in Jewish literature.”

            And yet you’ve done quite well! I bow in your general direction.

          • 0 avatar
            Whittaker

            VoGo wrote: “I don’t regard anyone to be my moral or intellectual inferior.”

            I also can’t think of anyone.

            j/k

          • 0 avatar
            corntrollio

            Yes, because disliking Israel’s *politics* is that same as being a Nazi. Nice strawman, Ronnie.

      • 0 avatar
        tonycd

        Ronnie, it grates on me that those who are expected to vote against Republicans are systematically denied the right to vote.

        There is ample mainstream documentation, not just crackpot theories, of a concerted nationwide campaign to deny voting rights to those expected to vote for Democrats. Republican officials in at least two battleground states, Wisconsin and North Carolina, are on record as stating outright that the purpose of these restrictions was not to prevent fraud, but to help Republicans win elections. A Federal judge in North Carolina concluded that its new restrictions had been designed expressly to disenfranchise minorities “with almost surgical precision.” It’s also been estimated that the number of voters deterred from voting in Wisconsin this November is 10 times as many as Trump’s margin of victory there.

        I am not the most educated person in America, nor the least. This should not matter in determining whether I have the rights of an American. As a citizen, I should have them. Full stop.

        Ronnie, I am grateful and admiring of your automotive writings. I hope that on this automotive website, you continue to provide them.

    • 0 avatar
      ajla

      “one on the alt right ever questions that”

      I’m guessing the alt-right just thinks GM is run by the same Jewish Illuminati that they believe controls the rest of the world.

    • 0 avatar
      ttacgreg

      Wow, that’s quite an incendiary first sentence you wrote there. I won’t deny there’s more than a grain of truth in it however. I rather expect an incendiary response as I scroll on down the thread here .

  • avatar
    OldManPants

    everybody shut up i like it!!!

  • avatar
    heavy handle

    GM can’t make a profit from anything other than pickups, what’s new?

    The Bolt was not designed to make a profit. LG admitted that they were only asked to supply 30,000 batteries per year, max. It is, and I am being generous, a half-assed attempt at making an electric car that nobody will want, just so they can whine about it later.

    Would you make a sub-compact that looks like that if you wanted to make money? You wouldn’t. You would pick a segment that Americans are interested in, and then try to make the best car you can.

    • 0 avatar
      Scoutdude

      The Bolt absolutly is designed to make money for GM, or rather save them from having to spend money which is the same in the long run. For 2018 they need 4.5% of their sales to be in one form or another of ZEV credit. Note one car is not one car when it comes to ZEV credits. For pure battery electrics the number of credits earned is higher the longer the range. Hitting that 200+ mi range means that each Bolt sold will generate over 3 ZEV credits. So for each Bolt sold that means that they can sell over 65 other vehicles. So they are taking a $140 emissions compliance charge on all of the other vehicles they sell, not loosing $9000 for every Bolt they sell. Just another aspect of the higher cost of “California emissions”.

      Also it is important to note that credits can be banked and sold if desired. So building up a healthy balance of them now to be prepared when the rules get even tougher is a good idea. From what I’ve read Toyota and Ford have banked enough ZEV credits that they could not sell a single EV in CA until 2022 and still be compliant if their annual total sales number stay around where they are currently.

      Edit: oops I forgot that for every ZEV credit earned in CA they earn one in the NE ZEV states. So the reality is that they can sell a total of at least 130 other vehicles in those ZEV states for each Bolt they sell. So $70 per vehicle compliance cost.

      Also note that they go a long way in meeting CAFE They should qualify for something in the neighborhood of 120 mpge or better for those accounting purposes. So each Bolt sold will mean that something like 60 or 70 other vehicles will not need to eek out another mpg to be compliant.

      • 0 avatar
        heavy handle

        Exactly.
        GM knows how many they need to make, which is a tiny amount by their standards. They designed it to fail in the market. They couldn’t actually build enough of them if it was popular.

        • 0 avatar
          Scoutdude

          No if it was more popular they would just raise the price to the level needed to make their credit quota.

          So no they didn’t design it to fail in the market place. They designed it to meet the gov’t requirements and are pricing it at a level that will let them meet their goal.

          It is not about whether the vehicle would be a failure at the real cost to build but rather about the gov’t manipulation of the market and the necessary response.

        • 0 avatar
          Caboose

          This is the part I don’t get. Why wouldn’t they want it to be wildly successful? I understand that there must be some point of diminishing returns on a car that loses money but earns ZEV credits. Nevertheless, if the Bolt takes off and there is demand for more, why not build and sell them? You guys are making it sound like losing $9k to make 3-ish ZEV credits is like spinning gold from straw, especially since the credits can be banked and don’t suffer inflation (indeed the opposite: they can be sold at profit).

          If every ZEV credit pushes back the timeline for the next truck/SUV drivetrain redesign, that’s potentially hundreds of millions of dollars in saved/delayed development costs.

          As was pointed out elsewhere, the Bolt’s competition isn’t the P90 or the Prius; it’s the Leaf and *maybe* the (vaporware) Tesla Model 3. With a decent product (i.e.-decent range), they have a chance to make the market for intermediate-range, affordable BEVs.

          Even if the Bolt blows up…not, I mean, Galaxy 7 “blows up” but, like, “gets popular” blows up… surely it won’t cannibalize sales from the SUVs and trucks. Help me understand why they’d want to deliberately hamstring the market success of a car that they just spent a ton of money to develop.

      • 0 avatar
        MrIcky

        @scoutdude nice- thanks. Had to wade through a lot of BS political posts and posts about tesla to find a nugget of wisdom. I’m guessing they’ll take whatever paper loss it takes on each bolt to make sure they sell because it’s still a net positive on the backend.

  • avatar
    Whittaker

    So, every time someone buys a Bolt, GM loses $9,000 and the taxpayers lose $7,500.
    Good plan!

  • avatar
    Speed3

    This little toadlet (sorry I think it looks like a toad) still does 0-60 in less than 7 seconds.

    Do we know 9K is accurate? Are EVs all the way there yet? No.

    And most likely all 2gen EVs will still have significant shortcomings. But battery costs and charging times are falling quickly. Have you driven a Tesla?

    One day EVs (and robots) will take over. But sure, bet against technology.

    • 0 avatar
      Caboose

      …’Bet against technology’
      The guys who bet against BetaMax, LaserDisc, steam-driven cars, and 3.5″ floppy discs did pretty well and turned out to be right.

      Just because a technology is new doesn’t mean it’s a better solution. Even technologies that have been around for awhile don’t necessarily turn out to be better; analog modems hung on for a pretty long stretch, and they never didn’t suck.

      But sure, keep making bombastic statements that conflate the value of all “technology”.

      • 0 avatar
        mcs

        @caboose: The guys who bet against BetaMax, LaserDisc, steam-driven cars, and 3.5″ floppy discs did pretty well and turned out to be right.

        When I was a student, I visited McDonnell Douglas Electronics in St. Charles Missouri. In 1977, I had a chance the play with a refrigerator-sized machine that digitally recorded voices and could play them back. No magnetic tape, the voice was stored on cmos memory chips and if I remember correctly, maybe a Digital Equipment RS04 fixed head drive. That machine pre-dated 3.5-inch floppies, LaserDisc, etc. I knew it had potential and over time I got to watch that technology evolve into what we have today. People said it would never happen. All sorts of reasons. Lots of discussions about it. But, over time it evolved and displaced other technology.

        What was super expensive and impossible to ever make it to the retail market eventually became the dominant technology. I watched it happen. I see the same thing happening with electric cars. One of the reasons I think they’ll succeed. I’ve seen this before. Heard the same arguments before.

  • avatar
    dukeisduke

    “We lose money on every car, and make up for it on volume!”

    • 0 avatar
      Scoutdude

      Exactly loose $9000 on every Bolt so they can sell 130+ other vehicles and not have to make them get as good of MPG as they would if the Bolt wasn’t generated CAFE credits in addition to the ZEV credits. GM can make a lot more than $9000 moving 130 other cars and not spend as much on them trying to eek out an extra 1/2 MPG per.

  • avatar
    SCE to AUX

    That figure is ridiculous.

    To accept the $9k figure, you have to believe that GM is essentially building a Chevy Sonic (which is sold today for ~$20k) for $47k, but selling it for $38k. No way.

    The 60 kWh battery probably costs GM about $9k (given recent reports about their battery pricing from LG).

    I’m guessing these ‘sources’ amortized the plant costs into the first year’s production. A little more accounting detail is needed to substantiate this wild claim.

  • avatar
    mfennell

    The “source” article offers absolutely nothing in support of this $9000 claim. It cites Sergio Marchionne’s $14,000 claim from 2.5 years ago about the limited production 500e (~4000 sold so far this year) but the Bolt will be a mass-produced car with the lowest battery cost in the business.

    At $37500(ish), a Bolt is about $16k more expensive than a Cruze LT. The raw cell battery cost is known: about $8700. I’m going to go ahead and just assume the battery represents ALL of that $16k once you integrate the cells into a pack but there are other parts of the car that are cheaper. An electric motor and single speed gearbox has to be less expensive than an ICE+transmission (and exhaust system, fuel system, additional cooling, and so on).

    The gotcha might be scale of production but it’s still hard to believe it costs THAT much to make.

    • 0 avatar
      krhodes1

      I doubt the electric motor and associated high-voltage control electronics are any cheaper than an ICE powertrain. Sheer economies of scale will make it cost more – making 30K of them vs. a couple million a year. And then you add that $8700 “gas tank” to the electric.

      I do agree that the accounting is fishy. It’s the same silliness that makes the papers trumpet the $180K a shot cost of the Zumwalt’s fancy gun ammunition. Yup, that’s what they cost if you include the R&D and building the factory into the cost of a small number purchased, but that is most assuredly NOT the cost of making *one*.

  • avatar
    stingray65

    I’ve seen no credible reports that any current EV is profitable for its manufacturer, and most of those have far smaller (and less expensive) batteries and electric motors (Leaf, eGolf, 500e, etc.) or much higher prices (Tesla) than the Bolt. Dividing a $1 billion development cost across the typically low volume EV sales, add in expensive batteries and construction materials (aluminum, carbon fiber), marketing expenses (included subsidized leases) for a product few people actually want, and it would be more suspicious if GM or any other EV maker was actually claiming a profit.

  • avatar
    krhodes1

    We could always ditch CAFE altogether and just directly tax cars (or fuel, or both) to a level that achieves whatever socially desirable result that CAFE is aimed to achieve. Would be a lot simpler, no? But Dog forbid we should ever pay taxes on anything *directly*.

    Honestly, I would love it if Trump just dismantled the whole stupid mess. Even a broken clock is right twice a day.

    • 0 avatar
      Luke42

      I’d be in favor of gradually replacing the income tax with a carbon tax over a decade or so.

      But that’s even less likely now, what with the new administration trying to bring back everything bad about the 1950s…

    • 0 avatar
      genuineleather

      I’m sympathetic to the idea of a gas tax in lieu of more complex regulations like CAFE: charge a price for fuel that appropriately values its external costs, then allow the public to decide how much of it they’re willing to pay for.

      However, aside from the fact that a sufficient gas tax is politically untenable, high fuel prices would disproportionately affect lower income people, who would be forced to pay more for the basic necessities that depend on fuel for their production and distribution. At least with CAFE, the (claimed) burden falls on the new car-buying public, a far more affluent demographic than the American public at large.

      However, even that theory has not held up: cars are faster, safer, more efficient, more luxurious, more reliable, AND cheaper than they were two decades ago. I have seen no evidence that existing environmental vehicle regulation has been a net burden on consumers, manufacturers, or the public interest. Thus, I find the hand-wringing over CAFE generally misplaced.

      • 0 avatar
        brandloyalty

        I appreciate your thoughts on this matter, but disagree on the “poor” people angle. Poor people should not have the right to pollute more than anyone else. Yes, rich people do because they can afford to. That is, the rich people who don’t know any better. Public sentiment will catch up to them.

        I was poor once. I did not consider myself to have an inferior lifestyle. I got around using transit and by cycling rather than take taxis or drive a nasty old car. The cycling was healthy exercise as a bonus. For virtually every objection that could be raised to this scenario there is a reasonable solution.

  • avatar
    genuineleather

    On the issue of CARB, I am continually surprised to hear people who do not live in California dismiss it as some kind of arbitrary, feel-good sop to environmentalism. California’s climate is integral its prosperity, a piece of the economy critical enough to warrant unique regulation. Tourism, farming, and real estate are major California industries dependent on a stable, clean, appealing environment that is directly related to the state’s carbon footprint. Even local sectors only tangentially connected to the weather like tech, fashion, and finance utilize the imagery of a perceived “California lifestyle” to market their wares at home and abroad. Add to this tremendous population density, expensive coastal real estate, and the continued growth in knowledge industries, and it becomes easier to understand why state policy favors something critical to local industry (carbon emissions and climate change) over something less directly beneficial (automotive production).

  • avatar
    brandloyalty

    This is exactly why the patchwork of debatable and clumsy programs such as CARB, other mileage regulations, ev credits, cash for clunkers etc. needs to go away and be replaced by a carbon tax. A carbon tax high enough to have the effect of all these programs but without the silliness and gaming.


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