Skip to comments.GM Should Shut Down Volt Production Until Car Makes A Profit
Posted on 09/11/2012 6:55:36 AM PDT by SeekAndFind
Reuters reports that General Motors "is still losing as much as $49,000 on each Volt it builds." This is no shocker, but it should be an alarm to voters who think this president deserves another term.
A little more than two weeks ago, the Obama administration released rules mandating a near-doubling of gas mileage standards for cars sold in the U.S. The mandate will not be met at no expense.
The industry can't magically build fleets that average 54.5 miles per gallon by 2025 without steep cost increases just because politicians and bureaucrats demand that it does.
If automakers are to comply with the more restrictive rules, they will have no choice but to build more electric cars, such as the Chevrolet Volt, a plug-in hybrid that gets 60 miles a gallon.
While that might satisfy the environmentalist lobby and most Democrats, it isn't practical.
If GM is losing nearly $50,000 on each Volt it makes, how much will all the carmakers be required to lose when Volt-like cars have to be the main models in their fleets in order to obey strict, new mileage standards?
Or, more appropriately, how much will taxpayers be forced to lose to subsidize the administration's unwise but politically correct fuel economy rules?
And cost isn't the only problem. The public doesn't like today's high-mileage "green" cars.
Yes, the Toyota Prius sells well. It's an easily identifiable car that's ideal for those who want to advertise that they've gone green and therefore are morally superior to the rest of us.
But other green cars don't sell so well. Reuters notes that "Nissan, Honda and Mitsubishi have been struggling to sell their electric and hybrid vehicles."
Put the Volt on that list.
(Excerpt) Read more at news.investors.com ...
Reuters reports that General Motors “is still losing as much as $49,000 on each Volt it builds.”
Still funny how Hussein’s freaks were touting his negatives as positives last week.
“Barack doesn’t CARE about low poll ratings” the wookie excreted.
The only one buying the damn thing is Obama!
If the car was worth anything, the Japanese would have a car just like it on the market and Korea would have one the next month.
I’m glad this kind of thinking was not used on companies like amazon.
The progressives, don’t really want the masses in electric cars, the want them on bicycles, trains, busses or preferably their feet living in tenements within walking distance of their government designated job.
Will GM have the guts to shut down the VOLT manufacturing
line until after O'Bozo is defeated and gets the boot in November?
But that was was voluntary PRIVATE money, not my confiscated money (tax).
The Volt wouldn’t turn a profit if the production cost dropped to $27 and you could buy one off the dealer’s showroom for $100. The Volt is not the car Americans want to buy. I think even Ford’s Edsel was bigger in the market than the Volt
Do Harley’s get that kind of gas mileage?
And, at the same time, GM is making money on the Chevy Cruze, the gas-engine version of the Volt. The Cruze will soon be available with a clean diesel engine that gets 50 mpg on the highway, without the hassles associated with an electric car.
I truly believe that if Obama loses the election, the Volt will die a quick death and the Cruze diesel will take its place in the GM line-up. Even with the diesel, the Cruze will sell for less than half the sticker price of the Volt. Why lose $50,000 on a car no one wants when you can sell a bunch of gas and diesel-powered Cruzes and make money with each sale? Currently, the only thing saving the Volt is Barry Zero in the White House. Maybe he can buy one of the last of those turkeys to drive around in retirement.
This Volt program appears to be in a death spiral. If GM is losing $40-50,000 per unit at this production/sales level, it will only lose more if it closes down the production line.
How many folks will want to buy an expensive model that has been forced out of production because of lack of interest?
And keeping the production line open at a miinimum number of units only raises the cost per unit to the point where they could lose much more than $50,000 per sale.
The problem is that now GM is Government Motors and politicians are making the decisions that this electric car is what the US needs. But the government can’t buy enough of them as ‘company cars’ to keep it competitive in price if the public doesn’t want to buy it.
I understand the sentiment in that suggestion but the suggestion is counterintuitive.
Competition and the economy of scale causes the most technologically advanced product to be available at the lowest possible cost.
If GM believes they can achieve sales levels that will produce a profit they should continue production. If GM feels they cannot reach those sales levels then the project should cease.
However, there is no way the Volt could become profitable by ceasing production.
The fact of the matter is that economic realities are not a part of decisions taken by an entity unconstitutional controlled by government.
You have a point. I remember when Amazon was selling for $8 a share, and Bill Bonner and his crowd were derisively calling it "The River of No Returns."
They don't do that anymore.
Nevertheless, AMZN did it without government subsidies. Yes, They Built That.