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GM Loses Money On Every Volt Built

timothy posted more than 3 years ago | from the making-it-up-on-current dept.

Businesses 471

thecarchik writes "Doug Parks, vehicle line executive for the 2011 Chevrolet Volt, GM's range-extended electric vehicle, confirmed Tuesday that the company loses money on every Volt it sells. The expensive 16-kilowatt-hour battery pack, which likely costs GM somewhere between $8,000 and $12,000, is clearly too expensive to let the company build hundreds of thousands of Volts right away. Just 10,000 Volts will be built in 2011, though GM is working to increase that number. GM plans to chip away incrementally to lower the costs of the specialized components in the Volt, especially the power electronics. The price of consumer lithium-ion cells has fallen 6 to 8 percent annually since their 1989 launch; the large-format cells in automotive packs seem likely to follow the same curve and as costs are lowered the Volt may stop being a loss for the company."

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This is only temporary (5, Insightful)

BadAnalogyGuy (945258) | more than 3 years ago | (#34426230)

This is only an issue in lower volume production runs.

Although they can never overcome the cost penalty associated with each vehicle, they can make it up in volume.

They Make It Back on Software Sales & Support (4, Funny)

sanman2 (928866) | more than 3 years ago | (#34426682)

It's the razorblade model - you buy it, and they hold a razorblade to your b*lls

Re:This is only temporary (-1, Troll)

Anonymous Coward | more than 3 years ago | (#34426696)

This isn't temporary, government agencies always run in the red.

GM no longer plays by the white mans fiscal rules.

Re:This is only temporary (2)

WalksOnDirt (704461) | more than 3 years ago | (#34426790)

All reports but this are saying that GM is breaking even on the Volt, which is pretty believable given its high price. Whether it's profitable or not probably depends on accounting rules. I expect they're really making a small marginal profit, but using Hollywood accounting to turn it into a loss.

Re:This is only temporary (1)

c6gunner (950153) | more than 3 years ago | (#34426894)

OMG they're Killing the Electric Car! AGAIN! I saw a documentary!!11!11ELEVENTY!

Re:This is only temporary (3, Insightful)

Pharmboy (216950) | more than 3 years ago | (#34427080)

Reminds me of the joke about two guys that selling watermelons on the side of the road. They buy them from farmers for $1, and sell them to customers for $1. The one guys says to the other, "We aren't making any money doing this, you know what we need?" The other replies "Yea, a bigger truck."

Re:This is only temporary (0, Troll)

Anonymous Coward | more than 3 years ago | (#34426842)

they are not going to make it up in volume. GM is a shitty brand and will remain so. the support / warranty is horrible at gm dealerships. the car looks like a 4 door shitbox compared to the sleek demo presented originally. no one is going to buy a $40,000 car which looks like a $20,000 kia made by government motors.

Not Temporary, Microeconomics is stubborn (4, Insightful)

Kurofuneparry (1360993) | more than 3 years ago | (#34426882)

You're misreading the difference between constant costs (overhead) and variable costs (production costs). Volume only works if you can get the variable costs (the costs of producing each item) below the profit of selling each item.

Economies of scale (making each item cheaper to produce by producing more) doesn't work for the Volt: the batteries have a constant cost and making more only makes them MORE expensive if anything. This is because the resources to make them are limited and increasing demand causes prices to increase.

Therefore they can't overcome the cost penalty by making it up in volume. This move only makes sense for GM if the practice and market establishment of selling now will later be useful for them when making the cars is profitable. There's another explanation: the owners of GM are pushing this for political reasons. Considering the rhetoric about making them make cleaner cars [whitehouse.gov] when the bailout occurred, it would be a conspiracy theory to NOT believe that the government had a hand in this.

Then again.... I'm an idiot.....

Re:Not Temporary, Microeconomics is stubborn (5, Funny)

guyminuslife (1349809) | more than 3 years ago | (#34426990)

No, it wouldn't be a conspiracy theory to not believe in a conspiracy. Unless that were the conspiracy. My question is, who is behind this conspiracy to make us believe that there's a conspiracy? Clearly they're doing it to draw attention away from the truth of their non-conspiracy. Perhaps this GM bailout could have absolutely nothing to do with the Illuminati and the Freemasons. Maybe the Volt isn't a coverup for the Kennedy assassination. Once you go down the rabbit hole...you'll probably find rabbits.

That's fine... (5, Funny)

Dr. Spork (142693) | more than 3 years ago | (#34426232)

It won't be a problem. They can make it up in volume.

Re:That's fine... (1)

MrEricSir (398214) | more than 3 years ago | (#34426382)

The best part about this joke is that it's actually true; if you buy enough of something it gets cheaper, therefore the manufacturing cost drops. So in a way they actually WILL make up for it in volume.

Well, assuming anyone will buy a Volt.

Re:That's fine... (3, Insightful)

definate (876684) | more than 3 years ago | (#34426544)

Yes, and no. While most production have economies of scale, without more information we can't be certain if this one does. This requires technology specific information, and business specific information, as to whether they're setup to have economies of scale.

Given this is a new process, it is entirely possible that they are not setup for this.

Without more information, we won't know. However, given they are a desired car, this car has benefits for the rest of the company, and GM has competent management, then we can assume they know all this, and would scale up production if possible.

So, in all likelihood they're telling the truth, or they are really stupid.

Re:That's fine... (3, Insightful)

blackraven14250 (902843) | more than 3 years ago | (#34426756)

Buying batteries for 10,000 cars seems very likely to have no issues with "too small of a scale".

Re:That's fine... (2)

jnmontario (865369) | more than 3 years ago | (#34426890)

Problem is, if they follow the same approach as the EV-1, then they don't want the volume and intend to tank the line. I don't want to seem like a tinfoil hat conspiracist, but I don't see any real marketing on the Volt - not like they did on the Saturn line, or really any other GM-made vehicle. It smells suspiciously like intended failure at this point. 1) Let's claim gross loss-per-vehicle. We won't make it obvious it was somebody from the company saying it, but we'll allude to it. 2) Let's not market-the-hell out of it like we do our other cars 3) Let's pull the vehicle once we get sympathy for our losses once our lobbyists have softened up congress.

Al Gore is not going to be happy to hear this (1)

xmas2003 (739875) | more than 3 years ago | (#34426240)

Reality bites ... although yea, the hope is eventually costs will come down, especially with volume. BTW, are those batteries somehow recycled at end-of-life?

Not Surprising (4, Insightful)

pookemon (909195) | more than 3 years ago | (#34426244)

You lose money on every product until you've sold enough to pay off the retooling process, the design process and to force the price of new materials/parts to drop. If you spend $1,000,000,000 developing a product that you sell for $50k then you will make a loss to start with - no matter what.

So why is this news? (Slashvertisement anyone?)

Re:Not Surprising (5, Insightful)

PixelJaded (1904696) | more than 3 years ago | (#34426374)

Obviously you've never worked in a highly competitive mass-market industry. $1 billion R&D / tooling cost is pretty normal for a mass market GM vehicle platform. If you're selling 1+ million vehicles at $50k then $1,000,000,000 is chump change. If you spend $100 million on development / tooling you'll either lose out badly on unit costs, lose out badly on quality or both against someone like Toyota, GM, Ford, Volkswagen, etc. who are plowing the $1+ billion necessary into each platform. This is not news purely because GM went into the volt expecting to lose money the first few years. Its not the million vehicles they sell over the next few years that they care about (that's tiny compared to their pure petrol / diesel volume), its the several million hybrids or all-electric vehicles they expect to be selling every year by 2020 that they're focusing on.

Re:Not Surprising (3, Informative)

definate (876684) | more than 3 years ago | (#34426614)

GM developed the platform in Australia which most of their cars run on around the world. This is why they all have similar configurations, and feel/look the same. Despite the fact that they source parts from the same/similar suppliers, and keep branding consistent. At the time it was a huge undertaking and Holden (GM's Australian Subsidiary), released a movie called 6 Billion Dollar Baby, which was about the development of the platform and how it had cost Holden (not sure about GM, overall), an estimated 6 Billion Dollars to the release date.

http://www.google.com.au/search?q=Holden+6+billion+dollar+baby [google.com.au]

This was likely capitalized and will be depreciated over a very long time.

Duh?? (-1)

Anonymous Coward | more than 3 years ago | (#34426472)

Because they loose money on each vehicle they make. So if total profit = (profit per vehicle) * vehicles - R&D costs, (profit per vehicle) is negative.

Re:Not Surprising (4, Insightful)

bigdavex (155746) | more than 3 years ago | (#34426546)

You lose money on every product until you've sold enough to pay off the retooling process, the design process and to force the price of new materials/parts to drop.

Yes, but that's not what "loses money on every Volt it sells" means. That phrase means that they're taking a loss on each marginal unit completely ignoring the fixed costs. What you're describing is, "GM hasn't yet recouped its development costs."

Re:Not Surprising (2)

pookemon (909195) | more than 3 years ago | (#34426710)

From TFA

Every major automaker spends billions of dollars a year on research and development costs. And they know that when they launch certain new technologies, they will lose money for some years before costs fall and volumes rise to let economies of scale make a particular new feature or technology profitable.

That almost sounds like what I wrote. And, in case you missed it:

You lose money on every product until you've sold enough to pay off the retooling process, the design process and to force the price of new materials/parts to drop

In the Red vs Negative Margin (5, Informative)

Chris Burke (6130) | more than 3 years ago | (#34426588)

If you spend $1,000,000,000 developing a product that you sell for $50k then you will make a loss to start with - no matter what.

That's not what this is about. This is not about fixed or one-time costs. This is about gross margins on each item sold. That means the delta between what you can sell a given instance of the product for, and what it cost to make that particular instance above and beyond any expenses already incurred.

If you spend $1bil to develop a product and tool the factor etc, then prior to making or selling any product you are $1bil in the red. You have lost this amount of money even if you never sell a single product. So this cost alone cannot be used to say that you lose money on every item sold.

If, in addition to those costs, building an instance of the product costs $40k in labor, materials, and energy and you sell it for $50k, then you have a gross margin of $10k, and after the sale your total balance for the project is $999,990,000. You have made $10k on the sale. Sell enough product at this margin, and you'll eventually pay off the R&D expenses and the project as a whole will be in the black.

If, on the other hand, it costs $60k to build that product and you sell it for $50k, then your gross margin is $-10k, and your balance after the sale is $1,000,010,000. You have lost $10k on the sale. Every product you sell is actually costing you more money, not making you money. Unless costs are cut or prices raised, you can never pay back the expenses, because every sale simply costs you more money.

That is what it means to say "GM loses money on every Volt built".

However, TFA itself seems to be slightly confused on this distinction, and does not provide any link to the actual alleged quote. If Doug Park actually said that they are going to lose money on every Volt sold, then the 'gross margin' sense is what he meant. If he said that they don't expect the Volt (as in the project) to be profitable for several years, then that most likely means they are selling the Volt for a profit and hope to make back their expenses in several years.

Re:In the Red vs Negative Margin (2)

blackraven14250 (902843) | more than 3 years ago | (#34426786)

If, on the other hand, it costs $60k to build that product and you sell it for $50k, then your gross margin is $-10k, and your balance after the sale is $1,000,010,000. You have lost $10k on the sale. Every product you sell is actually costing you more money, not making you money. Unless costs are cut or prices raised, you can never pay back the expenses, because every sale simply costs you more money.

They could also produce it as an introduction of all-electric cars for the mass audience, with the intent of pretty much using it as a gigantic ad campaign for GM's long term future, and to get people to associate electric cars with GM rather than let someone else take that spot (as they did with quite a few other labels in the past 20 years, like "reliable" and "hybrid").

Re:In the Red vs Negative Margin (1)

c6gunner (950153) | more than 3 years ago | (#34426928)

They could also produce it as an introduction of all-electric cars for the mass audience, with the intent of pretty much using it as a gigantic ad campaign for GM's long term future

Yep, I'm pretty sure that's exactly what they're banking on. These next few years are crucial for automakers because whoever gets established as The Electric Car Maker will have a huge advantage over the coming decades. Not to mention that getting a jump on the technology will likely put the quality of their products ahead of the competition. If they can get established in the market now, they'll be raking in the cash for a long time to come.

And computers used to cost millions of dollars (4, Interesting)

Enry (630) | more than 3 years ago | (#34426270)

This whole 'new technology is pricey and scary' has to stop. It's new, it's expensive, we get it.

Someone (GE in this case) will step up and start buying. As production increases, volume drives the cost down. Technology improvements drive the cost down even further.

It stinks that GM is losing money on these, but they're putting the effort into it, and I have to applaud them for it. Then again, didn't the PS3 and Xbox 360 cost more to make at launch time than they were selling for? Maybe GM is on to something...

Re:And computers used to cost millions of dollars (4, Insightful)

tirefire (724526) | more than 3 years ago | (#34426338)

It stinks that GM is losing money on these, but they're putting the effort into it, and I have to applaud them for it. Then again, didn't the PS3 and Xbox 360 cost more to make at launch time than they were selling for? Maybe GM is on to something...

(emphasis mine)

Oh, they're on to something, alright. GM is "too big to fail". This makes it easy for them to start risky, costly ventures, because they'll either succeed and make GM rich, or the gov't will bail GM out with more loans until GM is profitable again.

Re:And computers used to cost millions of dollars (1)

Anonymous Coward | more than 3 years ago | (#34426542)

Privatize the profits; socialize the losses.

The American Way - according to the politically connected.

Anyone who blames one party over another for this is a complete moron and a partisan stooge.

Re:And computers used to cost millions of dollars (1)

Jeremi (14640) | more than 3 years ago | (#34427012)

or the gov't will bail GM out with more loans until GM is profitable again

... or not. From what I've seen, the political will to bail out anyone has been tapped out for at least the next 5-10 years.

Re:And computers used to cost millions of dollars (4, Funny)

longacre (1090157) | more than 3 years ago | (#34426370)

didn't the PS3 and Xbox 360 cost more to make at launch time than they were selling for?

GM should have built an augmented reality gaming system into the windshield so they could make up the loss by selling new software.

Re:And computers used to cost millions of dollars (4, Interesting)

jmorris42 (1458) | more than 3 years ago | (#34426410)

> Then again, didn't the PS3 and Xbox 360 cost more to make at launch time than they were selling for? Maybe GM is on to something...

It made economic sense for Microsoft and Sony to sell at a loss because there was other revenue streams available to make up the initial loss. They get about $10 per game sold even if it isn't one of their own. Lose $100 on the console, sell ten games over the life of it and you are good. Factor in that they KNOW the production cost will drop quickly and it makes more sense. Finally add in the battle for market share angle and it makes enough economic sense that the shareholders aren't going to want blood and souls at the next stockholders' meeting.

None of those arguments are available to GM pissing away tax dollars subsidizing yuppies who want bragging rights for being greener than thou. Selling a Volt today at a loss doesn't open up any future revenue streams. The biggest cost is batteries and they are going to slowly drop in cost whether GM build the Volt now or when they are economically viable. And unless you count the market share of unprofitable green cars (ALL hybrids are currently selling at a loss with the possible recent exception of the Prius) as something valuable there isn't a market share building angle to justify it. It is pure politics.

Re:And computers used to cost millions of dollars (0)

Captain Splendid (673276) | more than 3 years ago | (#34426498)

other revenue streams available

Like OnStar?

Re:And computers used to cost millions of dollars (3, Interesting)

MBCook (132727) | more than 3 years ago | (#34426834)

I doubt the Prius made money when it was first released, at least in Japan. At a certain point, GM will have to learn to design and build electric cars. It may make sense for GM to get this learning experience going, so that they won't be far behind Nissan and will be ahead of some of the other manufactures because they'll be on generation 2 or 3 when Honda is on generation 1. This will also get their name out there. For a long time, Toyota was hybrid car. Honda had one, but it didn't sell as well and didn't get the mind share. Heck, despite the fact many people sell them, Toyota is still the hybrid car thanks to the Prius, just to a lesser degree.

If GM hadn't needed a bailout, I think people would be applauding the move. It's risk taking, trying to move forward past what they've been doing for 50+ years. The problem is it's not their money anymore so people are unhappy with them risking it.

I wasn't a fan of the GM bailout. I would have liked to see them split up and sold out to other car makers or something else. I'm just not sure GM needed to keep being GM.

That said, I think this is a good move. While they are risking money, they are taking risks. The Volt is interesting, and if they just spent the next 10 years waiting for other manufacturers to make electric cars common, they'd just be wasting a big opportunity. Getting ahead of this market could be quite a bit easier than taking back a big chunk of the normal ICE car market. Plus they are only selling/making 10,000. It's not like they are starting with 200,000. It's a good toe-dip start.

Re:And computers used to cost millions of dollars (1)

CityZen (464761) | more than 3 years ago | (#34426852)

They just need to figure out a way such that only properly GM-licensed car mats, seat covers, etc. will work on the Volt. :-)

Cars actually offer tons of revenue streams (accessories, service/maintenance, financing, insurance, gasoline, etc.). The problem is that most of these have numerous providers. They're doing all they can to make service/maintenance first-party only, though...

Re:And computers used to cost millions of dollars (2)

rsborg (111459) | more than 3 years ago | (#34426470)

Apple deals with this chicken-egg problem by going to part manufacturers and offers them a deal they can't refuse with prices that allow Apple to create the product at a decent price.

Obviously, their attention to detail and hype-machine allow them to actually meet or exceed their sales targets.

Were GM to create a vehicle that had such attention to detail and if they had a cash hoard with which they could not be reliant on the bank-sharks, then they might be able to use this strategy to create such a compelling vehicle that people would fulfill the marketing.

Re:And computers used to cost millions of dollars (1)

chrb (1083577) | more than 3 years ago | (#34426594)

Then again, didn't the PS3 and Xbox 360 cost more to make at launch time than they were selling for?

Exactly this. Each PS3 originally cost an estimated $690.23 [slashdot.org] New technology is expensive. Over time, economies of scale and other cost reductions take hold, and products get cheaper. Having paid $x billions of dollars for design+factories+retooling+manufacturing, yes, it costs, and initial sales do not meet costs - that's why we have the economics concept of a breakeven point [wikipedia.org] .

Re:And computers used to cost millions of dollars (1)

Almost-Retired (637760) | more than 3 years ago | (#34426814)

One thing that no one has acknowledged so far in this discussion, is just how tight a grip on GM's gonads the Chinese have, a grip that gets ever tighter as the Chinese cut back on their Lithium exports because they need more and more of it themselves.

We do have, here in the US, some promising Lithium deposits, but only one mine, now nearly abandoned, has actually been slightly developed. Bringing these online and producing the usable Lithium to build these batteries with will take an estimated 10 years if the industry is left to its own devices.

This is clearly a place where some federal dollars to underwrite the cost of machinery etc to get this up to speed in say 3 years, would be taxpayer monies very well spent as it will remove one of the bigger hammers the Chinese are holding over our heads.

That may have a bearing on why we are still in Afghanistan since there is millions of tons of ore just waiting for a willing worker to shovel it into his donkey cart and get it to where we can load it on a boat without the Taliban blowing everyone all to hell. Since that, while attractive, is not a good bet for the Afghan workers lifespan, we'd be far better off to develop our own known reserves, which I'm told are actually quite considerable.

Why its not being done as we speak, is fscking beyond me.

--
Cheers, Gene
"There are four boxes to be used in defense of liberty:
  soap, ballot, jury, and ammo. Please use in that order."
-Ed Howdershelt (Author)
Q: How many IBM CPU's does it take to do a logical right shift?
A: 33. 1 to hold the bits and 32 to push the register.

Price vs gasoline. (4, Insightful)

olsmeister (1488789) | more than 3 years ago | (#34426304)

If gasoline were to suddenly become significantly more expensive, the asking price could be adjusted accordingly.

Re:Price vs gasoline. (1)

Meshach (578918) | more than 3 years ago | (#34426524)

If gasoline were to suddenly become significantly more expensive, the asking price could be adjusted accordingly.

If people have not changed their driving habits given where the prices are now I do not see any more increases changing those habits.

Re:Price vs gasoline. (2)

Stiletto (12066) | more than 3 years ago | (#34426596)

Wait for $20/gal gasoline and watch driving habits change.

Re:Price vs gasoline. (3, Funny)

Black Gold Alchemist (1747136) | more than 3 years ago | (#34426736)

Wait for $20/gal gasoline and watch driving habits change.

By riding motorcycles with no emissions controls.

Re:Price vs gasoline. (0)

Anonymous Coward | more than 3 years ago | (#34427008)

I don't think you get the quoting tags... :-P

Re:Price vs gasoline. (1)

Meshach (578918) | more than 3 years ago | (#34426738)

Wait for $20/gal gasoline and watch driving habits change.

That would change driving habits. But any change that people can absorb will not change anything. Gasoline will not go up to $20/gal. But it will go to $5-8/gal and people will give up other things to afford it. Our society is addicted to the convenience of vehicles.

Re:Price vs gasoline. (1)

Jeremi (14640) | more than 3 years ago | (#34427030)

Our society is addicted to the convenience of vehicles.

True, but that doesn't mean society is addicted to gasoline. If and when non-gasoline-powered vehicles become cheaper than gas vehicles to purchase and run, people will switch. It's not as if people care (much) what their car is running on under the hood, what they care about is that it gets them where they want to go.

Re:Price vs gasoline. (1)

dgatwood (11270) | more than 3 years ago | (#34426822)

Won't happen. You're boiling a frog. Increases occur incrementally, so people just learn to deal with the new normal. If you saw gas prices double overnight, it would change driving habits (and would make the cost of food, clothing, and pretty much everything else go way up, too), but that's not likely to happen. Gradual change? It changes car buying habits far more than driving habits, and even then, only if the increase is fairly rapid as it was during most of the second Bush administration.

Re:Price vs gasoline. (1)

MightyYar (622222) | more than 3 years ago | (#34426924)

If people have not changed their driving habits given where the prices are now I do not see any more increases changing those habits.

Gas is hovering around $3/gallon... that's pretty cheap - or at least not high by historical standards. [inflationdata.com] But anyway, people DID change their habits. Back in 2007-08, gas was near $4/gallon and SUV sales went through the floor.

Alternative, natural energy source solution. (3, Funny)

maxrate (886773) | more than 3 years ago | (#34426306)

Electric eels.

Re:Alternative, natural energy source solution. (0)

Anonymous Coward | more than 3 years ago | (#34426810)

I think the cost of replacing eels to pull my horse-less wagon will be too much. I would be better off with several heat engines.

Re:Alternative, natural energy source solution. (1)

compro01 (777531) | more than 3 years ago | (#34427066)

Think they'd provide enough power for a hovercraft? ;)

Then raise the price. (0)

Anonymous Coward | more than 3 years ago | (#34426314)

If they're only making 10,000 the first year, demand will surely greatly exceed supply. So raise the price and make a tidy profit from the early adopters.

YOU7 FAIL IT?! (-1)

Anonymous Coward | more than 3 years ago | (#34426316)

to predi3t *BSD's any doubt: FrreBSD

If we care about GM, we'd stop buying them (1)

shanipribadi (1669414) | more than 3 years ago | (#34426322)

If we care about GM, then we should not buy Volt from them. Every Volt we buy causes GM to lose money, so if we don't buy any Volt (boycott them) then GM won't lose any money, hence a nett positive for them. Yay on a more serious note, I don't see why GM would market a car that causes them to lose money. How can they recoup their investment? From selling battery replacement or services? anyone care to explain?

Re:If we care about GM, we'd stop buying them (1)

unity100 (970058) | more than 3 years ago | (#34426342)

read first few posts in this thread.

Re:If we care about GM, we'd stop buying them (1)

khallow (566160) | more than 3 years ago | (#34426344)

They're probably tossing a bone to their government part-owners. A token green program looks good for Washington politicians and is cheap for what GM gets out of it.

Re:If we care about GM, we'd stop buying them (1)

maxrate (886773) | more than 3 years ago | (#34426348)

Providing the same shit service they give to anyone who buys a new car and has trouble with them. They sell you a warranty that doesn't cover anything. Purchased 3 GM's (2 brand new - all, 'high end' GM) - always problems with the dealership doing a poor job on repairs/warranty work/etc. I'm done buying anything GM.

Re:If we care about GM, we'd stop buying them (0)

Anonymous Coward | more than 3 years ago | (#34426650)

90% of the reason people by Toyota's is how simple dealership servicing is (yes their cars are general well built, but this is something Honda still fails at too). They do it quick, well, and kiss your ass the whole time so you are scared to go somewhere else and don't care how much it costs. I had a bad Goodyear a couple months after buying and they just gave me a new one. Speaking of which, I bought a new set of BFGs last year at a discount place, it was fairly obvious from the manager that they don't see too many Toyotas.

I have looked into buying a GM truck since Toyota doesn't make diesels and every time I have contacted dealers they treat me like they are trying to pull a fast one on a moron that is wasting their time. It is almost impossible to find a vehicle on the lot with a reasonably priced set of options. I like fixing up old GM cars, but I would be more than happy for them to go away no matter what quality or price their vehicles are at.

Re:If we care about GM, we'd stop buying them (1)

El_Oscuro (1022477) | more than 3 years ago | (#34427010)

Service depends on the dealership much more than the make. You must have had a shitty one. My dad did too - with a Toyota. Less than 15k miles on his new Corolla and it is affected by the engine oil sludge [toyotanation.com] . They said "well, our records show that you didn't change the oil, so it is your fault, so it is not covered under warranty. And you need a new engine". My dad produced receipts from the scheduled oil changes he had performed by his mechanic, but the dealer and/or Toyota refused to honor the warranty claim. He had his mechanic clean out the motor for about $500 and has been able to keep it from blowing by using synthetic and changing it every 2,500 miles.

I bought a new Chevy S-10 about the same time and didn't have any problems for the first 2 1/2 years until the front brake pads started wearing out. At about 2 weeks before my 3 year warranty was to expire I took it into Midas for new brake pads (they are not normally covered under warranty). Midas said there seemed to be a problem with the brake caliper as well, and I should take it to the dealer. If I was lucky, they might cover some of it under warranty. I took it to the dealer, and not only did they cover everything, but provided a free rental car as well.

Re:If we care about GM, we'd stop buying them (4, Interesting)

clarkkent09 (1104833) | more than 3 years ago | (#34426366)

You don't have to make a profit when you are too big to fail and your controlling shareholder is the US government.

Re:If we care about GM, we'd stop buying them (2)

larry bagina (561269) | more than 3 years ago | (#34426468)

their business model is to give away cards and sell t-shirts and coffee cups at lectures.

Re:If we care about GM, we'd stop buying them (1)

raodin (708903) | more than 3 years ago | (#34426556)

It is right there in the summary... they're selling at a loss now, but they're betting on component prices coming down. Presumably as a result of volume ramping up and the tech maturing.

Re:If we care about GM, we'd stop buying them (1)

phoebus1553 (522577) | more than 3 years ago | (#34426962)

There was something like this going on with hybrid Altimas too. The 'Synergy drive' models were using Toyota's technology and they had to pay them each time they sold a vehicle. There was a dealer that told me that they were losing money every time they sold one, but they did it anyway to get credit for making a LEV in places like California where there's some rules about that stuff... ask a Californian what they are, I don't know exactly. They wouldn't let you order them in places that didn't care, like N. Dakota or Minnesota, the only way they get here is used.

I'm guessing there's some sort of regulatory shenanigans like that going on here too, aside from saying HEY! We made an electric car!

Not a problem (0)

Anonymous Coward | more than 3 years ago | (#34426332)

Sure, they are losing money now, but they will turn it around and make huge profits. This is GM, they have experience at this.

Wait, never mind.

Next question (0)

reboot246 (623534) | more than 3 years ago | (#34426356)

Who is building all the new power generating plants we'll need when millions of drivers have electric cars? Now is the time to start. You can't build those plants overnight.

Re:Next question (5, Informative)

Black Gold Alchemist (1747136) | more than 3 years ago | (#34426690)

Who is building all the new power generating plants we'll need when millions of drivers have electric cars? Now is the time to start. You can't build those plants overnight.

No one is, because no one needs to. Four big EV denier myths:

More electricity needed - debunked [futurepundit.com] . Here's the link to the original [ornl.gov] Oak Ridge Nation Laboratory Report (currently down).

More global warming - not true. DOE estimates average of 1.3 lbs CO2 per kWh. Coal (the worst CO2 emitter) emits 2.1 lbs CO2 per kWh. Electric cars get between 4 and 10 miles per kWh. Worst case, that means 0.5 pounds of CO2 per mile. 1 gallon = 19.4 lbs of CO2. So, that's around 38 mpg CO2 emissions equivalent in the absolute worst case scenario. In the average case, we are looking at around 59.7 MPG. Diesel emits more CO2 than gasoline, by a factor of about 1.15. So, worst case is 43.7 MPG diesel, and average is 68.7 MPG diesel. These numbers are EPA testing of Tesla roadster and Rav4EV.

Rare lithium - peak lithium is a Li [gas2.org] .

Toxic batteries - lithium-ion is largely non-toxic. Tesla was working on recycling before the cars even hit the streets. Lead acid (which is toxic) is 97% recycled.

GM loses money? (1, Interesting)

horatio (127595) | more than 3 years ago | (#34426362)

GM Loses Money On Every Volt Built

Technically, sure. In reality, because the government owns GM, the tax payers lose money on every Volt. Labor unions made off like bandits at the recent IPO, so I guess someone wins.

Here is my other problem: where do the tree huggers think the electricity to power these "zero-emissions" vehicles comes from? Magic unicorns? No, usually fossil fuel burning power plants, along with all the associated loss of energy down the transmission lines etc along the way. Oh right, and we can't build clean(er) power plants like nuclear because the same environmentalists, w/ their friends 'OMG teh nukeclear!' alarmists, tie up everything in so much red tape it isn't worth it. Like the Prius, this isn't about the environment. It is about status, and acting like you're so much better than your filthy neighbors driving that BIG OIL powered global-warming causing piece of crap.

Re:GM loses money? (0)

Anonymous Coward | more than 3 years ago | (#34426486)

Here here! I personally am a little skeptical about the whole 'environmentally friendly electric vehicle' thing. The electricity has to come from somewhere, and the same tree huggers who like to see these 'friendly' vehicles are also the same tree huggers demanding that the filthy smoke belching evil coal burning plants be closed - with no real viable alternative methods of producing electricity for their electric cars.

Re:GM loses money? (4, Insightful)

Chris Burke (6130) | more than 3 years ago | (#34426622)

The electricity has to come from somewhere, and the same tree huggers who like to see these 'friendly' vehicles are also the same tree huggers demanding that the filthy smoke belching evil coal burning plants be closed - with no real viable alternative methods of producing electricity for their electric cars.

Um, yes, because coal plants are nasty too. The awesome thing about electric cars is that you can have them powered by coal today for a modest improvement in environmental damage, and then if the coal plant is replaced with something better, then your car automagically becomes "greener". Without having to replace the entire vehicle fleet again.

And sure some tree huggers are against them, but this tree hugger thinks fission is a very viable method of producing electricity.

But even in the meantime, electric cars are better. And the tree huggers do not have the power to shut down coal plants if there is nothing to replace them. So I'm not sure why you're worried.

Re:GM loses money? (0)

Anonymous Coward | more than 3 years ago | (#34426652)

the same tree huggers who like to see these 'friendly' vehicles are also the same tree huggers demanding that the filthy smoke belching evil coal burning plants be closed - with no real viable alternative methods of producing electricity for their electric cars.

The US has enough alternatives to shut down its coal plants and keep up with demand (wikipedia has a nice table of this, go look it up if you doubt, I'm not accounting for locality though so I might be a bit off on this) but won't because coal is still cheaper.
If environmentalists have so much power, how come most of the US electricity still comes from coal, instead of at least oil (which is still a dirty way to generate power)?

Re:GM loses money? (1)

presidenteloco (659168) | more than 3 years ago | (#34426602)

Where will we get the electric power?

1. Slap a massive carbon tax on fossil fuel electricity production.

2. Wind farms all up the Eastern seaboard

3. Solar all over e.g Nevada

4. Look up the Sahara Solar Breeder project.

By the way, you might consider substituting
"those who care about Earth's ecosystems and
humanity's future" for the term "environmentalists"
in your post.
And of course substitute "those who don't give a rat's@ss for Earth's ecosystems or humanity's future" for those proud transam owners and other non-environmentalists of whom you speak.

Truth in Labelling, I say!

Re:GM loses money? (1)

Black Gold Alchemist (1747136) | more than 3 years ago | (#34426730)

DOE estimates average of 1.3 lbs CO2 per kWh. Coal (the worst CO2 emitter) emits 2.1 lbs CO2 per kWh. Electric cars get between 4 and 10 miles per kWh. Worst case, that means 0.5 pounds of CO2 per mile. 1 gallon = 19.4 lbs of CO2. So, that's around 38 mpg CO2 emissions equivalent in the absolute worst case scenario. In the average case, we are looking at around 59.7 MPG. Diesel emits more CO2 than gasoline, by a factor of about 1.15. So, worst case is 43.7 MPG diesel, and average is 68.7 MPG diesel. These numbers are EPA testing of Tesla roadster and Rav4EV.

But it's the taxpayers that bailed them out (1, Insightful)

Francofille (1864714) | more than 3 years ago | (#34426378)

After you "borrow" billions of dollars from taxpayers you kind of have a responsibility to use your second chance wisely.

They have a proven track record of running a business which cannot support itself.

What a shocker... (0)

Anonymous Coward | more than 3 years ago | (#34426406)

...GM losing money on one of their vehicles. They're pretty used to that.

Make a pure ev (1)

presidenteloco (659168) | more than 3 years ago | (#34426438)

That would save them the cost of the engine and all it's secondary components (cooling system, exhaust system, etc etc)

Re:Make a pure ev (1)

Black Gold Alchemist (1747136) | more than 3 years ago | (#34426720)

And have a bigger, more expensive battery pack, as well as range issues.

They're using the razor model (1)

noidentity (188756) | more than 3 years ago | (#34426452)

Sell the car at a loss, make up for it by selling the electricity at a markup. Er, wait...

Re:They're using the razor model (1)

DudemanX (44606) | more than 3 years ago | (#34426620)

No, they'll make the money back in all the games they'll sell for it.

It's just a loss leader... (3, Insightful)

Aphrika (756248) | more than 3 years ago | (#34426456)

Nothing new in manufacturing really, but it might be the first time it's been seen in production cars I suspect. You make a bunch at a loss initially, tweak the technology, the manufacturing process, streamline the design and eventually you start making a profit on them.

In some situations, those early losses will be spun back into R&D costs on the budget and targeted as profit that has to be made on future units.

Hopefully they'll stick with it and start driving costs down so that the technology can be made cheaper and is more efficient, rather than pulling the plug (no pun intended) and giving up on it.

Meet the new GM same as the old GM (0)

jchawk (127686) | more than 3 years ago | (#34426458)

Bad decisions and producing vehicles that most Americans don't want.

The execs of GM will pay huge bonuses after hitting goals that they help set.

The unions will continue to demand ever increasing pay and the common share holder will get screwed.

Thanks but no thanks GM you suck and so do your cars.

WRONG WRONG WRONG (-1, Offtopic)

ChrisCampbell47 (181542) | more than 3 years ago | (#34426520)

AAAAARGH. I need mod points, because I don't have time to explain what's wrong with this story, but eventually someone here will. However it'll be buried under a bunch of yammering nonsense. Like yesterday's story about the Comcast / Level3 peering agreement story. Grrrrr.

This no big deal (5, Insightful)

Howard Roark (13208) | more than 3 years ago | (#34426534)

It's a well known fact that all hybrids lose money at first. Toyota lost something like $5000 on each early model Prius. This will all work out.

Re:This no big deal (0)

Anonymous Coward | more than 3 years ago | (#34426772)

Aren't you supposed to be busy designing great buildings ?

Ahh, union labor ... (3, Interesting)

The AtomicPunk (450829) | more than 3 years ago | (#34426538)

... is there anything you can't screw up?

Ummm ... (3)

damn_registrars (1103043) | more than 3 years ago | (#34426724)

Back on planet earth, the UAW actually bought a portion of GM. Why would they intentionally screw up the profits of GM when they have their own money invested in it? After all, you can't extract money from a company that doesn't exist...

People lose money on every car they buy (0)

digitaldc (879047) | more than 3 years ago | (#34426548)

Paying for gasoline when they can just as easily use a battery and save tons of money over the lifetime of the car.

Re:People lose money on every car they buy (2)

CaptainPatent (1087643) | more than 3 years ago | (#34426686)

Paying for gasoline when they can just as easily use a battery and save tons of money over the lifetime of the car.

That's kind of a short-sighted economic summary.

For instance, the extra gasoline cost of a 30 MPG car over an electric car is around $9000 after 100,000. I'd say this is about the limit to the reliability of a gasoline car.

With that being said there are many more factors which would make electric cars more or less advantageous. For instance:
How much more does a battery conversion or battery-powered car currently cost? The Volt's Hybrid-grade batteries are already (currently) $16,000 and a pure-electric car would need at least that equivalent. How much more or less maintenance will an all electric car need? They may not need oil changes (depending on design) but if the battery or electric motor has far more or less life than an average car engine, that can vastly tilt the equation. What is the longest trip that you plan to take and do you have 2-10 hours to take a break every couple hundred miles? Refueling a gasoline car takes much less time than charging an electric car so if you intend to go 200+ miles in a single trip, you will either need to rent a gas car, buy a hybrid, or buy another full gasoline car. The all-electric solution only remains ideal for short and mid commuters.

I'm not saying all-electric could never be a good solution, but just because it's electric does not mean you'll save money.

Re:People lose money on every car they buy (1)

blackraven14250 (902843) | more than 3 years ago | (#34426970)

I doubt the Volt is using "hybrid-grade" batteries. A Prius is about $4,000 to change for the end consumer. Plus, the Volt isn't a parallel hybrid like everything else on the road today - it's full electric until it drains the batteries completely, and only then does it turn on the gas engine. That means it needs much more battery capacity than a Prius, which currently can't drive over 20 mph without turning on the gas engine, and whose upcoming plug-in incarnation is going to only be able to go 12 miles on electric only, vs the Volt's 35 miles. Further, that's proven by the kWh ratings of the cars. The Volt is 16 kWh and 10.4 usable, while the Prius is 1.3 kWh.

So the Volt business model LITERALLY is: (1, Funny)

CaptainPatent (1087643) | more than 3 years ago | (#34426550)

Step 1) Sell the car at a loss.
Step 2) ...
Step 3) Profit!!!

Wow...

Wait for it ... (0, Flamebait)

damn_registrars (1103043) | more than 3 years ago | (#34426666)

Slashdot conservatives will come to tell us how this is the personal doing of Obama in 3 ... 2 ... 1 ...

Well if it wasn't a "hyrbrid"... (0)

Anonymous Coward | more than 3 years ago | (#34426692)

If GM had not decided to add direct gas engine drive (for speeds over 70MPH), then:

- the design would have been simpler
- the manufacturing costs would have been reduced (perhaps allowing them to make money...)
- the car would be more easily repaired
- the car would not be a "hybrid". It would be an electric with a gas powered generator.
- the car would be limited to more efficient ( and often more legal ) driving speeds. 70 MPH?
- some, including myself, would have considered purchasing one

It's life span (0)

Anonymous Coward | more than 3 years ago | (#34426706)

So what is the average life of this $8000.00 battery ? How many miles does this equate too?

Maintenance Licensing (0)

Anonymous Coward | more than 3 years ago | (#34426718)

Microsoft makes money off of their xbox line even though it loses money per sale. Game licenses more than make up for the lost cost of the console.

Maybe if GM dealers are the only place for maintenance, they'll recoup the costs that way. If not, Uncle Sam is already standing by. I'd buy stock, but that didn't work out so well for the last set of shareholders.

Vital stats (1)

Twinbee (767046) | more than 3 years ago | (#34426750)

Some vital stats:

* Gas/petrol usually costs about 15 cents per mile. This (and other electric cars presumably) will cost just under 4 cents per mile (based on current electricity costs), so the overall cost is only 4x cheaper (I was hoping for a full 10x or even 100x cheaper, but it's still good).

* It takes 10 hours to do a full recharge to do a full 40 mile recharge on 120 volt, but only 4 hours with a 240 volt supply. Maybe America et al. should switch to the 240v power like Europe to get faster charging (our kettles boil in half the time too). I'm not sure if anyone in the world has 480 volt mains, but that sounds as though it could be useful.

Most info obtained from here: http://gm-volt.com/chevy-volt-faqs [gm-volt.com]

Oh well, serves them right to lose money. (0)

Anonymous Coward | more than 3 years ago | (#34426754)

Well, considering they are one of the ones responsible for killing the NiMH Battery in the electric cars over 10 years ago with the help of Cheveron (Well Texaco which was bought out by Cheveron. Bought the company holding the patent and mothballed it for anything big enough to run a vehicle) and stalled the entire industry for this long, they deserve to lose some money.

I am wondering how much of this talk about all these electric cars coming out now has to do with the fact that the patents on that old thing is actually supposed to be up soon and then anyone will be able to make and use them as they see fit so they have to start giving us something or someone else will.

3 words: (1)

Dexter Herbivore (1322345) | more than 3 years ago | (#34426804)

Economy of scale.

GM versus Sony (4, Insightful)

damn_registrars (1103043) | more than 3 years ago | (#34426866)

We may recall that when the PS3 first came out Sony was losing money on each unit sold. That didn't exactly bring down Sony in the process; nor did it cause people to scream out that it was the result of some great conspiracy.

how much pollution from making the battery? (1)

Dan667 (564390) | more than 3 years ago | (#34426876)

if making the battery is more toxic than operating a regular car for 20 years it seems like this is the wrong direction. Honestly it still seems like fuel cells are a better option to pursue.

Just 10,000 Volts will be built (0)

Anonymous Coward | more than 3 years ago | (#34426892)

So they will be making 10 kilovolts?

You know who else lost money on every car? (4, Interesting)

Man On Pink Corner (1089867) | more than 3 years ago | (#34426964)

Japanese manufacturers such as Toyota/Lexus and Honda. They've been selling hybrids worldwide for around ten years now, and you can bet that they, too, lost money on every sale for at least the first few years. In doing so, they bought themselves ten years to refine their processes, tooling, and supply chains, iron out bugs, and discover (and patent) non-obvious efficiencies and improvements.

Meanwhile, the American auto manufacturers chose to stick with the same old profit-heavy SUVs, elderly sedans, and rental-grade compacts they'd been selling for the past twenty years.

The history of alternate-fuel technology is yet another demonstration of US companies' skill at trading the next decade's earnings for the next quarter's. I have zero sympathy for Chevrolet and whatever learning curve they (and their customers) are about to climb with the Volt, because with any competent management in place they would already have several years' experience manufacturing these cars by now.

Good thing they're "too big to fail," I guess.

Skeptical (0)

Anonymous Coward | more than 3 years ago | (#34426982)

I don't have the access, know-how, or time to investigate,
but my gut reaction is not to believe these kinds of stories.
It all comes down to creative accounting.
If you want to put out a story that you lose money on each one,
you just mess with the numbers and say it.
If you want to put out the opposite story, you mess again and do that.
You might even do both things in different news stories.

Re:Skeptical (1)

Ismellpoop (1949100) | more than 3 years ago | (#34427068)

You might even do both things in different news stories.
Like suck and blow?
At the same time?
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