Volt Birth Watch 182: Whitacre Projects Volt Profit At "Low $30k" Price Point

Edward Niedermeyer
by Edward Niedermeyer

Subtitle two: we don’t believe a word of it. The report comes from an exclusive interview of GM Chairman/CEO Ed Whitacre at the Volt fanboy site gm-volt.com. GM-volt’s Lyle Dennis asked Whitacre if GM would lose money on every Volt it sells, a fact that GM executives have never tried to substantively deny. Until now. Whitacre’s answer:

“We’re not in business to lose money,” he said. “We did enough of that already.”

The Volt “is going to sell in the low 30s,” said Whitacre. “We’ll get a margin on that.”

Oh really? Because it sure seems that GM plans on selling the Volt for $39,500-$45,500, and that the “low 30s” number is dependent on a tax credit. As for Whitacre’s claim that the Volt will make profit, the lack of time-constraints on his prediction is all you need to know. With enough sales and over enough time, almost anything will create profit, especially if the government is distorting the battery market for you. Meanwhile, GM still has to overcome $40k sticker shock (sorry, but you can’t exactly advertise post-tax break prices) and at least a few years of loss on the Volt. But if the gm-volt comments section proves anything, it’s that you can never go wrong misleading the fanboys.

Edward Niedermeyer
Edward Niedermeyer

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  • Lilpoindexter Lilpoindexter on Jan 18, 2010

    The 335D Starts at $43,950. I know which car I'd rather have.

    • Psarhjinian Psarhjinian on Jan 18, 2010

      Nice as the 335d is, it's not remotely a competitor. That car is for rich Europhile dieselheads who, given BMW's sales of the car and the incentives they're piling on, don't seem to exist in any significant number. The 335d's sales performance should be a lesson to anyone who thinks auto enthusiasts know or represent anything about the market. The Volt is meant for commuters who want to, for whatever reason, be it economic or environmental, not use gas. There are a lot more of these people, if Prius sales and markups are any indication.

  • Psarhjinian Psarhjinian on Jan 18, 2010
    Who spends $30k on a car to save money on gas? This car is a huge mistake. Question: How many people are going to pay the premium for a more powerful engine just to save a few seconds of time? Answer: you're asking the wrong question. A lot of people will pay a premium not so much to save money, but to not use gasoline wherever possible. I know this is very hard for auto enthusiasts to understand, but economy and emissions are just like speed or handling: there's a premium for it, and there's a market for it. There are people who will gladly pay for this level of economy, just as there are people who will pay for a Prius versus a Matrix, RAV or Camry. The problem we have is that since we, as enthusiasts, don't see the value in this car, we assume there's no market. My mother-in-law speaks the same way about anything more elaborate than her Corolla CE, and doesn't understand why someone could make the cost/benefit justification for a Camry, let alone a 3-Series, 911 or Chevy Tahoe. Disclaimer: I like the idea of this car. I think a lot of people who live within the typical commuting radius will find it very appealing, too, as will fleets who can easily support the power infrastructure.
    • See 1 previous
    • KixStart KixStart on Jan 18, 2010

      psarhjinian writes, "A lot of people will pay a premium not so much to save money, but to not use gasoline wherever possible. I know this is very hard for auto enthusiasts to understand, but economy and emissions are just like speed or handling: there’s a premium for it, and there’s a market for it. There are people who will gladly pay for this level of economy,..." Define "a lot." I think this number isn't particularly big. And "gladly pay... for economy?" That's practically an oxymoron. In a note further up, you mention the BMW's sales. Well, look at the price. It's $43K. The median car price is something like $22K. The Prius is pretty well within that budget and even those thinking "Corolla" but who put a premium on major fuel economy can at least consider the car. Ah, yes, those that would get off gas altogether... Have you been inhaling the fumes at GM-Volt? For $22K, you can dramatically reduce your consumption of fuel... and many do... but many don't. And there's a diference between an extra $2-3K (less if you consider the Prius "mid-size") and an extra $13K to satisfy an abstract desire. Especially if you're married, have kdis or other obligations. Psharhjinian also writes, "Disclaimer: I like the idea of this car. I think a lot of people who live within the typical commuting radius will find it very appealing, too, as will fleets who can easily support the power infrastructure." I'm not opposed to the idea, myself. However, GM's implementation of it is extremely expensive (maybe it's just premature... battery prices need to fall) and the engine is way too big. Think of the gas engine, the recharger, as a life boat. You don't expect to use it much at all. On a cruise ship, the lifeboats are practically insignificant, in terms of the total mass of the ship. On the Volt, the "lifeboat" is big enough to propel a Cruze-sized car under normal circumstances. That's way out of proportion to its supposed mission. It's way too big. The entire system suffers as a result. More mass in the engine means more frame needed, more brakes, more everything. More of everything reduces performance and range. This car should have a tiny range-extender and be purely optimized for battery operation. In fact, a better arrangement would be a trailer-mounted extender. Not going too far? Leave the genset at home. Or, better yet, don't buy one... rent one when you need one.

  • Steven02 Steven02 on Jan 18, 2010

    I wonder if the making money statement is because much of the costs of the program went away under bankruptcy. Say the cost on the books is only 500million, and they sell them in Europe and the US, I could see this making money, but only because GM went bankrupt earlier.

  • Cheevie Cheevie on Jan 18, 2010

    maybe he's talkin' euros...

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