Volt Birth Watch 152: Born To Lose

Edward Niedermeyer
by Edward Niedermeyer

Automotive News [sub] dug deep for its latest piece on the Volt project, a sprawling opus which fills in a number of the missing pieces in TTAC’s own Volt Birth Watch. From the birth of the concept (“I was getting so pissed off about reading about how the wonderful, far-sighted Toyota is the only one who understands technology”) to its design (“Within 15 minutes, [John Lauckner] had the vehicle basically laid out”) GM’s Bob Lutz takes us inside GM’s moonshot. So what’s the view like from that tin can now, Major Bob?

After “[Lauckner] did all the calculations, what the vehicle weight would be. I was smart enough to realize this made a hell of a lot of sense,” explains Maxstronaut Lutz. Too bad he wasn’t smart enough to realize that the Volt would cost more than $25,000.

When I said I hope to sell it in the 20s, I just thought, ‘Well, if a conventional car of that size with a conventional four-cylinder engine, we can sell it for 15 or 16 thousand dollars, then let’s notionally add $8,000 for the battery and we’re at $25,000. That’s the way my brain worked on that one.

Even the famously clueless GM management knew from experience that Bob’s baby would be trouble. “One senior executive, senior to me, said: ‘Bob, we lost a billion dollars the last time we tried that [with the EV1]. What do you want us to do, lose another billion?'” To which Lutz’s answer was apparently “Yes.”

The problem wasn’t even that the Volt would need an $8,000 battery pack; almost all of GM’s synergies and efficiencies of scale are useless when it comes to the Volt. “There are no systems synergies in that car; everything is stand-alone,” Lutz explains. “But that was just because the electric guys had to do their job, the cooling guys had to do their job, the hydraulic guys had to do their job, and there wasn’t time to go back through it and say, ‘Wait a minute, how come we have two of these?'” Worse still, GM’s supplier options were extremely limited.

And then there’s the issue of price. Though the Prius, which bugged Lutz enough to launch the Volt program, sells for $22K-25K, the Volt has a projected transaction price of $43,000. Which means GM will have to sell to dealers for a significant loss. Sure it qualifies for a $7,500 tax credit, but that isn’t recouped until tax season and it doesn’t reduce insurance costs.

The Volt project could easily have been killed, says AN [sub]’s GM source. And considering that the program’s billion-dollar pricetag could have developed three new vehicle platforms, it probably should have been. “But the Volt’s high public profile — stoked by a massive public relations effort — made that virtually impossible,” is how AN phrases it. Couldn’t the bailout have had something to do with that decision?

Meanwhile, Lutz admits that “vehicle price is going to be a big issue for a long time to come.” So much so, in fact, that GM engineers are already “beavering away,” (to use the Lutzian phrase) to cut costs out of the car. Which always augurs good things to come at General Motors. Especially for a car that starts at $43K.

Edward Niedermeyer
Edward Niedermeyer

More by Edward Niedermeyer

Comments
Join the conversation
2 of 23 comments
  • Campisi Campisi on Aug 04, 2009

    It appears that one-off components and systems are doing the most to keep the price going up. Such must be why GM is looking at throwing Voltec at that Orlando wagonette they're bringing here; along with the Converj and the Volt itself (and the tax rebates for electric vehicles), the three vehicles should work with the more rapid pace of economies of scale granted by the Voltec system to bring overall costs down in a few years or less.

  • Mkco Mkco on Aug 04, 2009

    From a marketers' perspective: One other mistake was making it a Chevy. $43K for a Chevy??? No way. $43K for a Cadillac? Maybe!

  • ToolGuy "Nothing is greater than the original. Same goes for original Ford Parts. They’re the parts we built to build your Ford. Anything else is imitation."
  • Slavuta I don't know how they calc this. My newest cars are 2017 and 2019, 40 and 45K. Both needed tires at 30K+, OEM tires are now don't last too long. This is $1000 in average (may be less). Brakes DYI, filters, oil, wipers. I would say, under $1500 under 45K miles. But with the new tires that will last 60K, new brakes, this sum could be less in the next 40K miles.
  • BeauCharles I had a 2010 Sportback GTS for 10 years. Most reliable car I ever own. Never once needed to use that super long warranty - nothing ever went wrong. Regular maintenance and tires was all I did. It's styling was great too. Even after all those years it looked better than many current models. Biggest gripe I had was the interior. Cheap (but durable) materials and no sound insulation to speak of. If Mitsubishi had addressed those items I'm sure it would have sold better.
  • Marty S I learned to drive on a Crosley. Also, I had a brand new 75 Buick Riviera and the doors were huge. Bent the inside edge of the hood when opening it while the passenger door was open. Pretty poor assembly quality.
  • 3-On-The-Tree Alan, I was an Apache pilot and after my second back surgery I was medically boarded off of flying status due to vibrations, climbing on and off aircraft, so I was given the choice of getting out or re-branching so I switched to Military Intel. Yes your right if you can’t perform your out doesn’t matter if your at 17 years. Dad always said your just a number, he was a retired command master chief 25 years.
Next